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One of our primary goals is to bring you the latest and greatest news in the drug and device litigation world. But sometimes we don’t learn of a case at the time it’s decided. So, then we need to move on to another of our guiding principles – if it’s good for the defense, we talk about it. So, while today we happen to have come upon a case that was decided in 2017, it dovetails with our recent post Taking Out the Laundry With TwIqbal where we talked about plaintiffs’ attempts to bluff their way to a valid parallel violation claim. And that’s exactly what the plaintiff in Rand v. Smith & Nephew, Inc., 2017 WL 8229320 (C.D. Cal. Apr. 5, 2017) tried to do. Plaintiff put together a “laundry list” of allegations that the defendant’s device violated with no hint of what exactly the defendant did that was in violation. In our prior post we commented that “most courts are willing to use TwIqbal to call bull$%@&! on these types of allegations.” Fortunately, Rand can be added to that list.

The device at issue in Rand is a hip resurfacing prosthesis that underwent pre-market approval from the FDA. That’s why we are talking about parallel violation claims. Following a nice Riegel analysis, the court looked at plaintiff’s allegations for each cause of action.

Strict liability: Under California law, this is a claim for a design, manufacturing and warning defect. Because the FDA reviews “device design, manufacturing processes, and device labeling” as part of the PMA, “the MDA preempts state-law claims against these three aspects of PMA-compliant devices.” Id. at *4. So, plaintiff made 2 laundry lists – one of “various federal regulations” and another of defendant’s alleged misconducts. Double the nonsense.

First, plaintiff included regulations that go to the adequacy of defendant’s PMA application. “But FDA’s approval demonstrates the agency’s reasonable assurance of [the device’s] safety and effectiveness based on the application.” Id. So any claim premised on those regulations is preempted. Second, the court moved on to TwIqbal finding some allegations so poorly pleaded that it is “impossible to determine whether they add to federal requirements and hare hence preempted.” Id. Finally, some allegations were completely conclusory.

Plaintiff’s second list wasn’t much better. Not only did it include conclusory allegations – basically just speculation – but plaintiff also included alleged misconduct that was irrelevant. For example, plaintiff alleged wrongdoing regarding device components used in off-label combinations but plaintiff was implanted with such a combination. In other words, plaintiff was tossing pasta at the wall and just hoping something stuck. That’s not good enough under TwIqbal.

The only allegation that made the cut was failure to report adverse events. Id. This is California, so it’s to be expected.

Negligence: This largely mirrors plaintiff’s strict liability claim and suffers the same fate. The only new “misconduct” included in the negligence count was about defendant’s withdrawal of the device for “demographics groups” to which plaintiff didn’t belong. Irrelevant. Id. at *5. And, plaintiff surmised that defendant’s breach proximately caused his injury but provided no support for that allegation. Id. The entire negligence claim was dismissed.

Breach of express warranty: Again, most of plaintiff’s allegations are insufficient:

Without more details, the statements that [defendant’s] devices are of merchantable quality, safe, effective, and fit and proper for its intended use are no more than an affirmation merely of the value of the goods or a statement purporting to be merely the seller’s opinion or commendation of the goods. Such unspecific statements do not create a warranty.

Id. (citation and quotation marks omitted). The court did find that a press release cited by plaintiff created an express warranty but plaintiff failed to allege how the press release violated any PMA requirement. Without that, the claim was dismissed without prejudice.

Breach of implied warranty: This claim was preempted:

Both types of implied warranties involve an assertion that the goods are fit for then intended purpose. Implied warranty of merchantability further imposes labeling requirement and requires that the goods conform to the statements on the label. But these conditions are precisely what a PMA entails. Thus, unless the defendant violates these conditions under the PMA, § 360k(a) expressly preempts this claim.

Id. at *6 (citation omitted). Since plaintiff used the device for the purpose the FDA approved – no breach of implied warranty claim.

Fraudulent concealment: Here again plaintiff attempts to rely on a failure to report adverse events to state his claim. But essential to a fraud claim is that defendant had a duty to disclose the concealed fact to plaintiff. Id. We think this negates failure to report as a basis for strict liability as well and we’ve made our views on that clear many times. Here, plaintiff didn’t allege that federal regulations require defendant to report adverse events to plaintiff – nor can he because that’s not the law. That means that this would be an “additional requirement” which is preempted. Id..

The claim also failed for no allegation of intentional concealment by defendant and for not satisfying Rule 9(b)’s heightened pleading requirement for fraud. Id.

It may not be the latest and greatest, but it adds to the wealth of decisions tossing plaintiffs’ multi-paragraph list of violations which are a lot more bark than bite.

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In the early days of the Blog, in 2009, when Bexis and Mark Herrmann were operating in relative obscurity, we posed the question whether it was ethical to remove to federal court a case that may well be non-removable and hope that opposing counsel is “asleep at the switch”:

“Heck, I’ll remove it anyway.  Opposing counsel may be asleep at the switch and not file a motion to remand within 30 days.  If plaintiff doesn’t timely move to remand, the objection to removal is waived, and my case can be tried to judgment in federal court.”

Is that ethical?

We received one response, which we discussed, that an:

attorneys’ first obligation should be to the integrity of the legal system, and not to their clients’ interests.  Even so, I’m not sure I’d say ‘no’ to either question, given that a yes answer means that incompetent attorneys who don’t realize they are violating the rules would have an advantage over competent attorneys.

With that the issue dropped off the radar.

That question returned to our minds when we researched our recent post on removal before service.  We came up with case after case holding that the so-called “forum defendant” rule was waivable, not jurisdictional, and thus that failure to move for remand in a case that featured complete diversity of the parties – but a defendant located in the forum state – was waiver so that the case stayed in federal court.  That means if a defendant is savvy enough to remove before service in accordance with the express terms of 28 U.S.C. §1441(b)(2), and opposing counsel is, as we said before, “asleep at the switch,” the removal succeeds regardless of a court’s substantive views on removal before service.

For example, in one of our removal before service cases, Selective Insurance Co. v. Target Corp., 2013 WL 12205696 (N.D. Ill. Dec. 13, 2013), the court held:

Plaintiff asserts §1441(b) (2) − the “forum defendant rule” − as a basis for remand, arguing that because defendant . . . is an Illinois citizen, removal was improper.  This rule is statutory, not jurisdictional, and thus may be waived or forfeited.

Id. at 1 (citing Hurley v. Motor Coach Industries, Inc., 222 F.3d 377, 379 (7th Cir. 2000)).  The cited Hurley decision held just that:

We must decide, therefore, whether the forum defendant rule is jurisdictional, in the sense we have been using the term, or if it is of a lesser status.  That question has been bouncing around the federal courts of appeals for more than 75 years, yet oddly enough it remains unresolved in this circuit.  The overwhelming weight of authority, however, is on the “nonjurisdictional” side of the debate.

Id. at 379. Hurley cited the following “overwhelming” precedent supporting the waivability of the forum defendant rule.  Snapper, Inc. v. Redan, 171 F.3d 1249, 1258 (11th Cir. 1999); Korea Exchange Bank v. Trackwise Sales Corp., 66 F.3d 46, 50 (3d Cir. 1995); In re Shell Oil Co., 932 F.2d 1518, 1522 (5th Cir. 1991); Farm Construction Services, Inc. v. Fudge, 831 F.2d 18, 21-22 (1st Cir. 1987); Woodward v. D. H. Overmyer Co., 428 F.2d 880, 882 (2d Cir. 1970); Handley-Mack Co. v. Godchaux Sugar Co., 2 F.2d 435, 437 (6th Cir. 1924), with only Hurt v. Dow Chemical Co., 963 F.2d 1142, 1145-46 (8th Cir. 1992), going the other way.

Another pre-service removal case reached the same conclusion.  The court in Almutairi v. Johns Hopkins Health System Corp., 2016 WL 97835 (D. Md. Jan. 8, 2016), stated:

I am unaware of any specific guidance from the Supreme Court or the Fourth Circuit concerning whether a motion to remand based on the “forum defendant rule” constitutes a procedural or a jurisdictional challenge to removal.  See Councell v. Homer Laughlin China Co., 823 F. Supp. 2d 370, 378 (N.D.W. Va. 2011) (recognizing that the Fourth Circuit “has yet to rule on this question…”).  However, “[o]f the ten circuits that have spoken on the issue, nine have found that removal by a forum defendant is a procedural defect, and thus waivable.”  Id.

Almutairi, 2016 WL 97835, at *5.  In addition to the cases previously cited by Hurley, Almutiari added:  Lively v. Wild Oats Markets, Inc., 456 F.3d 933, 939-40 (9th Cir. 2006), Handelsman v. Bedford Village Assocs. Ltd. Partnership, 213 F.3d 48, 50 n.2 (2d Cir. 2000), Blackburn v. United Parcel Service, Inc., 179 F.3d 81, 90 n.3 (3d Cir. 1999), and Pacheco de Perez v. AT & T Co., 139 F.3d 1368, 1372 n.4 (11th Cir. 1998).

So at least in the context of removal before service, we now unhesitatingly answer our question from 2009 in the affirmative.  By all means remove before service, even in the face of adverse precedent in some district courts.  At best, the plaintiff will miss the issue entirely and will waive any reliance on the forum defendant rule (which is waivable everywhere but in the Eighth Circuit).  At worst, (1) the case is randomly assigned to a federal who has already ruled adversely, and (2) the plaintiff seeks remand in a timely fashion.  In that situation, as our recent removal-before-service posts demonstrate, the defense side has both the upper hand in the argument, and significant appellate support.  See, e.g., Encompass Insurance Co. v. Stone Mansion Restaurant, Inc., ___ F.3d ___, 2018 WL 3999885, at *4-5 (3d Cir. Aug. 22, 2018); Novak v. Bank of N.Y. Mellon Trust Co., 783 F.3d 910, 912, 914 (1st Cir. 2015); La Russo v. St. George’s University School, 747 F.3d 90, 97 (2d Cir. 2014).  A combination of persuasive argument and recent arguments might get a fair-minded judge to change his/her mind.  Even the worst possible result – remand accompanied by an order to pay counsel fees – isn’t all bad, since the sanctions order would be immediately appealable.

But we want to make one thing perfectly clear.  Pre-service removal involves only statutory language relating to diverse “forum defendants.”  There is nothing in the statute, or in the case law, that allows the presence of a non-diverse defendant to be avoided by pre-service removal.  Pre-service removal does not make non-diverse cases diverse.  Any counsel who screws up this fundamental distinction deserves whatever sanctions a court hands out.

 

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You haven’t heard of Blue Car syndrome?  Remember the last time you went car shopping. You found a particular make and model (a “blue car”) and then, like magic, you see that same “blue car” 10 times in the next week. It’s in the parking lot of your gym. It pulls up next to you in traffic. It’s even parked down the block from your house. The blue cars didn’t just suddenly appear. So what happened? It’s sometimes called the Baader-Meinhof phenomenon or frequency illusion. It occurs when something you’ve just noticed, like a new car, suddenly crops up everywhere. You really are seeing more blue cars, but not because there are more blue cars, but because you are now noticing them more.

That might not strictly speaking be true for us and pre-service removal — we’re pretty sure we’d notice whenever the issue came up – but it certainly feels like out of nowhere pre-service removal became a hot topic last month. No sooner did we update our research on the issue, then the Third Circuit makes a favorable ruling allowing pre-service removal. Just five days after that decision, the Northern District of Illinois does the same thing.

In Cheatham v. Abbott Laboratories Inc., — F. Supp. 3d –, 2018 WL 4095093 (N.D. Ill. Aug. 28, 2018), plaintiff, a citizen of Louisiana sued Abbott, a citizen of Illinois and Delaware, in state court in Illinois. Before the complaint was served on defendant, it removed the case to federal court and plaintiff promptly moved for remand arguing the forum defendant rule. Id. at *1-2. As with any pre-service removal case, the dispute turned on the interpretation of the “properly joined and served” language of 28 U.S.C. §1441(b)(2). If a “properly joined and served” defendant “is a citizen of the State in which [the] action is brought,” removal is not permitted. Id.

Defendant’s argument: Under the plain meaning of the statute, as defendant was not served at the time of removal, the forum defendant rule does not apply. Cheatham, at *3-4.

Plaintiff’s argument: Allowing pre-service removal undermines the purpose of the forum defendant rule to preserve the plaintiff’s choice of forum where there is no prejudice to an out-of-state party. Id. at *2-3.

That’s the debate: purpose v. plain meaning. And that is the split among the courts to have decided the issue. Although, as our recent update points out, plain meaning has been gaining ground in the recent circuit court decisions on the issue. The Cheatham decision does a nice job of setting out both arguments with citations to cases going both ways before ultimately concluding that “the statutory text must control. Courts must give effect to the clear meaning of statutes as written.” Id. at *5 (citations omitted).

Courts that have applied the “purpose” interpretation believe that it is necessary to look beyond the language of the statute to be “faithful to Congressional intent.” Id. at *3. Those courts seem to be particularly concerned by “snap removals” – where a defendant learns of the filing of a lawsuit from monitoring the docket and then immediately removes the case. In the age of online filing, docket monitoring is not new or uncommon. Plaintiff called it both improper and strategic gamesmanship. Id. at *2. But just because something is strategically advantageous to one side doesn’t make it improper. Nor does it make it gamesmanship in the sense that it is a dubious tactic.

When Congress completely re-wrote 28 U.S.C. §1441(b) in 2011 it left the “properly joined and served” language intact. If you want to talk about Congressional intent, the buck stops in 2011. In fact, the Cheatham court, like others applying the plain meaning of the statute, acknowledge that “Congress will rewrite the statute if it feels that removal where an in-forum defendant has not yet been served constitutes an abuse of the judicial system.” Id. at *5. Having left that provision in place, the forum defendant rule does not apply where the forum defendant has not been served at the time of removal.   Defendant learned of the action “before it became a forum defendant that was both properly joined and properly served,” id., and promptly removed it. There was no bending of the rules required. Diligence isn’t gamesmanship.

And, we actually don’t think pre-service removal is not a frequency “illusion” – it’s real and going in defendants’ favor.

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Today’s guest post is by frequent contributor Dick Dean of the Tucker Ellis firm.  This time, Dick is sharing some insights on Wyeth v. Levine, 555 U.S. 555 (2009), which we consider the single worst prescription medical product decision since we started blogging.  Not surprisingly, Dick shares our views of Levine.  We agree with him.  Further, if Levine had been decided the way Dick advocates, all of the subsequent preemption focus on “independent”action, “major” changes and “newly acquired” information could have been avoided, and a more rational system turning on the substance of the conflict would have ensued.

As always, our guest bloggers are 100% responsible for the contents of their posts, deserving of all the credit (and any blame) for what they have written.

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Cases involving the “purposes and objectives” obstacle part of the implied preemption doctrine are rare.  The recent decision in Fontana v. Apple, Inc., ___ F. Supp. 3d ___, No. 2:18-cv-00019, 2018 WL 3689044 (M.D. Tenn. August 3, 2018), is a reminder of the efficacy of this powerful, but little used, defense.  Plaintiff brought a personal injury action claiming he developed cancer from the use of a cell phone.  In the 1990s these claims were addressed by extensive Daubert practice.  But this claim was dismissed at the pleadings stage because it interfered with the FCC’s ability to carry out its mission of setting radio frequency emission levels established by the Telecommunications Act of 1996.  It was specifically based on “purposes and objectives” obstacle preemption.  That is good for the cell phone industry but does it “speak” to us in the pharmaceutical defense world?  Indeed it does.  Fontana relied heavily on Farina v. Nokia Inc. 625 F.3d 97 (3rd Cir. 2010) [ed. note: blogged about here], finding a similar claim obstacle preempted, and Robbins v. New Cingular Wireless PCS, LLC, 854 F.3d 315 (6th Cir.2017) (barring an attempt to prohibit the building of a cell tower based on health reasons finding obstacle preemption).  The rationale of Fontana, Farina and Robbins is straightforward:

The reason why state law conflicts with federal law in these balancing situations is plain.  When Congress charges an agency with balancing competing objectives, it intends the agency to use its reasoned judgment to weigh the relevant considerations and determine how best to prioritize between these objectives.  Allowing state law to impose a different standard permits a re-balancing of those considerations.  A state-law standard that is more protective of one objective may result in a standard that is less protective of others.

Farina, 625 F.3d at 123 quoted by Fontana, 2018 WL3689044 at *2.

Allowing juries to impose liability on cell phone companies for claims like [plaintiff’s] would conflict with the FCC’s regulations.  A jury determination that cell phones in compliance with the FCC’s SAR guidelines were still unreasonably dangerous would, in essence, permit a jury to second guess the FCC’s conclusion on how to balance its objectives.

Farina, at 125-6 quoted by Fontana at *3.

Of course, the parallel to FDA determinations about efficacy and safety of drugs and the sufficiency of labels is striking.  The FDA engages in a classic weighing process as to whether a drug can come on the market and what its label should say.  Its processes are far more detailed than those of the FCC which played out in these three cases.  But jury second guessing of pharmaceutical labels is permitted by the Supreme Court in Wyeth v Levine, 555 U.S. 555 (2009), where the Court rejected preemption because of the manufacturer’s ability to submit a change in the label.  But that leaves the second issue in Wyeth—who should decide adequacy.  The three-Justice dissent (Alito, Roberts and Scalia) fully adopted the “purposes and objectives” argument—that the FDA should make these decisions and not be second-guessed by juries as to labeling decisions.

It should first be noted that even given Wyeth, there are areas within the pharmaceutical area where “purposes and objectives” preemption has been applied.  That is exactly what happened in Buckman Co. v. Plaintiffs’ Legal Comm., 531 U.S. 353 (2001) (finding state law fraud on the FDA claims to be impliedly preempted).  It also happened in Zogenix v. Patrick, No. 14-11689, 2014 WL 1454696 (D. Mass. Apr. 15, 2014) [ed. note: blogged about here], where Massachusetts state rules made it impossible to market an opioid approved by the FDA.  These rules were struck down since they interfered with the FDA’s ability to carry out its mission of regulating drugs.  Specific reliance was placed on the purposes and objectives portion of implied preemption.

The power of the reasoning in Fontana, Farina and Robbins merits a review the of Wyeth analysis of “purposes and objectives” preemption.  The Wyeth majority’s rejection of the “purposes and objectives” claim is thin and wanting.  It is an afterthought to an opinion that deals primarily with impossibility preemption given the provisions of the “changes being effected” provision.  It is at odds with prior Supreme Court precedent on “purposes and objectives” in Geier v. Am. Honda Motor Co., 529 U.S. 861, 881 (2000) (finding obstacle preemption based on a general rule of the Department of Transportation favoring a “mix of seat restraints), and with subsequent precedent in Arizona v. United States, 567 U.S. 387 (2012) (an immigration case).  In Wyeth, the Court first noted that Congress had long recognized a role for state law causes of action under the FDCA.  Id. at 574–75.  But the fact that some state actions may be “complementary” does not mean that others may not be at cross purposes. Second, the court coupled the “complementary” argument with the fact that there was no express preemption provision in the FDCA.  Id.  But the Supreme Court itself has consistently held that the lack of finding of express preemption does not bar implied preemption.  See Geier, 529 U.S. at 869; Buckman, 531 U.S. at 352.  Third, it refused to consider the “new” FDA legal position on preemption.  An agency position is certainly not conclusive to whether there is “purposes and objectives” preemption, since the position of the United States on this issue is a changing one dependent on the politics of the administration in power. Moreover, implied preemption is not dependent on the FDA advancing that position.  PLIVA, Inc. v. Mensing, 564 U.S. 604 (2011) (where implied preemption was found over agency objection).  But the major failure was that the Wyeth majority did not compare the entire federal regulatory scheme to the state jury system on the issue of who should decide adequacy; it demanded a specific regulation at odds with the jury system.  Wyeth, 555 U.S. at 580.  It distinguished Geier finding there was a “specific rule” in conflict with state tort lawsuits, but that rule was only that the Department of Transportation allowed a “mix” of restraint systems.  The generality of that “rule” does not begin to compare with the detailed federal regulations on drug approval and labeling decisions.  Simply put, the majority in Wyeth used an incorrect legal test to determine whether there was “purposes and objectives” preemption.

Wyeth, however impaired, is still the law.  But precedents do get changed.  And the Supreme Court’s treatment of this issue after Wyeth helps to demonstrate that Wyeth was wrong in its “purposes and objectives” analysis.   In Arizona v. United States the Supreme Court confronted a preemption challenge to a number of Arizona statutes involving immigration.  One such statute, section 6 of Arizona S.B. 1070, provided that a state officer could arrest someone if the officer had probable cause to believe that a person was “removable” from the country.  The United States argued that this statute was an obstacle to the “removal” system created by federal statutes and regulations.  Section 5 of the state legislation made it a misdemeanor for an unauthorized alien to apply for work in Arizona.  The government argued that was at odds with federal legislation making a specific choice not to impose criminal liability for this conduct.  The Supreme Court agreed that these statutes did create an obstacle to the full “purposes and objectives” of Congress.  567 U.S. at 406–07, 410.  It looked at what was provided for by each regulatory scheme and determined whether there was a conflict between them.

Presuming that Judge Gorsuch would follow the Scalia position in Wyeth—that has three Justices supporting that position.  Justice Thomas does not generally agree with “purposes and objectives” preemption.  But U.S. v. Arizona may be viewed by new Justices as a basis to reevaluate the Wyeth position of “purposes and objectives” preemption.  Justice counting aside, the reasoning of this part of Wyeth makes no sense.

That said, a note of caution is in order.  Cases where this defense is advanced in the pharmaceutical area should be carefully chosen with careful consideration given to the facts and the judges involved.  Enough bad law has already been made in this area.  In the short term, fact patterns like Zogenix where the state tries to intrude into the regulatory area cry out for this defense.  Using it now in a typical failure to warn claim is not likely to succeed.  But Wyeth’s reasoning is subject to challenge.  As other industries get the “cell phone” treatment on “purposes and objectives” preemption, this disparity will increase the focus on that reasoning.

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Recently Rudy Giuliani was broiled for saying that the truth isn’t the truth.  Denying a tautology won’t typically earn one high marks for logic.  Add in the callback to Pontius Pilate’s “What is truth” question, and it sounds like bad epistemology in service of bad morality.  But we’re not here to talk politics.  Nor are we here to try to answer Pilate’s question.  Maybe the Drug and Device Law Daughter, who is just starting her second year at Harvard Divinity School, can field such questions.  We cannot.

As a former prosecutor of mail frauds and wire frauds and as a current defender of companies accused of consumer fraud, the question we have faced is usually more along the lines of “what is a lie.” It is not merely the opposite side of the street, though it surely is in the same neighborhood.  Liars are everywhere.  They overstate their income when applying for a loan.  They understate their income when reporting to the IRS.  They use sucker lists to lure retirees into investing in nonexistent oil wells.   They loot companies via creative accounting.  They tell us our table will be ready in “just a few minutes.”  They tell us our flight is “On Time.”  They check the box saying they have read and they accept the terms and conditions.  They pretend not to want the last slice of pizza.

What makes something a lie that leads to liability?    Even putting aside the difficult issue of discerning a defendant’s intention to prevaricate, how does the law tackle claims that someone did wrong by uttering something at odds with the truth?  The police are not the truth police, and civic dockets could not bear the strain if every lie led to a lawsuit.  So the law has introduced concepts of materiality and detrimental reliance.  A lie is actionable only if it made a difference. It had to have fooled someone who is not a fool.  It had to have caused harm.

One summer, between our junior and senior years in college, we worked in the New Jersey legislature.  It was the summer of the FBI’s Abscam investigation (see American Hustle).  A couple of politicians, including a U.S. Senator, six members of the House of Representatives, a New Jersey State Senator, and the Mayor of Camden, did perp walks on their way to corruption convictions.   But the legislators and staffers we worked with were a competent and honorable group.  One of them focused on consumer fraud matters.  He told us that anytime a state investigator wanted to ring up some citations, all that was required was a visit to a nearby supermarket.  Weigh some packaged meat, compare to the stated weight, and – voila! – there would almost certainly be a discrepancy.  Evaporation and the passage of time produced a lie.   Thankfully, a rule of reason prevailed.   Nobody was really deceived or hurt.   Let’s be grownups about this.   There are plenty of real frauds to pursue.  It wasn’t cynicism; it was realism, aided by a set of reasonable priorities.

Years later, we found ourselves in Southern California.   It’s hard to say why it’s so, but it quickly became clear to us that folks on the west coast were a lot less tolerant of puffery or even the slightest deviation from their idea of truth and purity.  Is it a state of innocence?  Does life under perpetually sunny skies foster a heightened sense of entitlement?  Look at the lawsuits alleging that a company incorrectly called its product organic or natural.  They are not all filed in California, but it seems that most of them are.  Even so, most of those lawsuits don’t get much traction in the courts, because a regulatory agency had made a determination  of what could and could not be put on a product label.  In such cases, courts don’t need to engage in science, or semantics, or epistemology.  It turns out that sometimes Pontius Pilate’s question is preempted.

Today’s case originated in Southern California: Welk v. Nutraceutical Corp., 2018 U.S. Dist. LEXIS 135595, 2018 WL 3818033 (S.D. Cal. Aug. 10, 2018).  The plaintiff had purchased liquid vitamin B12 and complained that the packaging overstated its contents.  The claim centered on test results from a “reputable supplement analysis center located in California” showing that, once opened, the liquid vitamin B12 “undergoes degradation at an unknown rate.”  After only 11 days, a sample of the product weakened from 255 ug/ml to 213 ug/ml.  The plaintiff contended that the amount of B12 eventually “becomes negligible and ineffective.” Thus, the bottle’s label was “untrue, false, and misleading.”  The complaint included various actions for misrepresentation, and did so on behalf of a purported class of consumers.

Tell the truth: this claim does not exist unless it is a class action, right?  And what does that tell you?

Stepping back for a moment, doesn’t this claim remind you of the statement on cereal boxes about how the contents may have settled? When you are a child, this statement might possibly have arrived as unpleasant news.  Open a box of Cap’n Crunch, and one is greeted by almost as much air as nuggets of cavity-inducing goodness. But as adults, we read this statement with calm resignation.  Perhaps that is because we, too, our bodies and our minds, have settled over time.

The defendant in Welk moved to dismiss the claim for various reasons.  The best of those reasons was that the claim was preempted by the Food, Drug, and Cosmetic Act, as amended by the Nutrition Labeling and Education Act.  There is an express preemption provision barring state law food labeling requirements that are “Not identical” to federal regulations.  The FDA regulates the labeling of the “quantitative amount” of nutrient supplements such as vitamin B12, and decrees application of a specific testing methodology.  The defendant’s labeling complied with the FDA’s labeling and testing methodology.

How does the plaintiff endeavor to evade preemption?  The plaintiff argued that the defendant improperly failed to disclose the fact of degradation.  But that assertion of degradation rests upon a testing methodology that is certainly not “identical” to the one mandated by the FDA.  Accordingly, the court, in a very short, very to-the-point decision, held that the plaintiff’s misrepresentation claims were preempted and must be dismissed.  Was the vitamin label a lie?  Not really.  As with many of the cases we encounter, the alleged lie was one of omission.  Tell me more, says the plaintiff.  One can always think of more.   How to decide?  There’s a scientific test.  Who decides?  The FDA.

We cannot count ourselves surprised by the result in Welk.  It is consistent with several others we have seen in food and nutraceautical cases.   But we do count ourselves as envious.  Most of our cases involve drugs and medical devices.  (No surprise there; take a look at the title of this blog.  Please don’t accuse us of false advertising because today’s case involves neither a drug or device.  We’re about to tie it together, okay?  Okay.  Here goes.). The preemption language for medical devices is there, but it’s been unduly watered down by a couple of courts.  The logic for preemption of drug labeling is there, but it, too, was overly cabined in some regrettable judicial decisions that are starting to collapse from their contradictions. (Many of those decisions indulged in a presumption against preemption – a presumption that has since been discredited.) Imagine if food preemption rules applied to all the products regulated by the FDA. Think of the logic, consistency, clarity, and efficiency.  We could use a little more of that in the DDL world.

That is no lie.

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Stop us if you have heard this before. A novel or movie depicts litigation in which a large corporate defendant is sued for causing a plaintiff or plaintiffs significant injuries through a frivolous or non-beneficial product. In defending the litigation, the corporation and its unscrupulous lawyers hide important documents from the scrappy plaintiff lawyer, who, depending on the fiction’s direction, never discovers or miraculously discovers the key evidence. Perhaps informed by this view of corporate defendants and their lawyers as less than honorable, a number of courts have imposed significant sanctions against defendants when, despite producing millions of pages of documents created well before the litigation started and gathered from around the world, fail to preserve and produce some number of documents that the plaintiffs contend should have been produced. The importance of the documents to the case and the overall merits of the case tend not matter to the award of sanctions. To the contrary, the sanctions can themselves affect the outcome of the litigation. We know you have heard about these litigations, as we have described them in a number of posts through the years.

The situation where a plaintiff is sanctioned for her refusal to disclose information and produce documents in litigation is far less common. Mind you, we do not think the conduct is less common. We think it happens all the time, but rarely goes to motion let alone a published decision about a bellwether plaintiff in a product liability MDL. In re Taxotere (Docetaxel) Prods. Liab. Litig.¸ MDL No. 2740, 2018 WL 4002624 (E.D. La. Aug. 22, 2018), presents a sanctions order that may not signal a trend toward equal treatment for plaintiffs and defendants on discovery obligations and sanctions because this plaintiff’s conduct was just so obviously bad.

The plaintiff was suing over hair loss from a chemotherapy drug for her cancer. She was also a medical doctor and bellwether plaintiff. (We pause just on these facts in case our readers want to ponder how litigation now is different than the “old days,” whenever that might have been.) The MDL had a Plaintiff Fact Sheet requirement and an order explaining discovery obligations for electronically stored information apply to them too. After bringing her suit and for over a year thereafter, the plaintiff treated with, or at least sought advice from, a physician on how to regrow her hair through an unspecified regimen.  She documented her progress with photographs and, when the treating physician asked for permission to use them to promote his treatment, squarely stated she “[w]ould rather not have the lawyers for the other side put two and two together just yet.” She failed to identify this physician on her fact sheet, provide authorizations for him, or identify the treatment she was receiving at his suggestion. When she realized that her produced emails—like we said, the court realized plaintiffs have to produce ESI too—included information about this undisclosed physician, she directed him to resist discovery: “just tell them that you weren’t really my doctor . . . you don’t have any records [and] you never saw me.” Meanwhile, plaintiff (who had a lost wages claim) directed her former employer, a particular Veterans Affairs Medical Center, to refuse to produce any employment or medical records.

The decision focused on the plaintiff’s conduct regarding her undisclosed physician. Plaintiff’s primary defense was that the doctor recommending her a treatment regimen she was utilizing and corresponding with about its progress was not really “her doctor.” She supported this argument with an affidavit from the doctor to the effect that he did not consider the plaintiff to be his patient. This argument did not hold water because the PFS required disclosure not just of treating physicians, but any healthcare provider consulted over the prior eight years, including any “hair loss specialist.” It also required disclosure of “over-the-counter medications, supplements, or cosmetic aides for your hair loss.” We assume it also required production of photographs documenting the extent of any claimed injury (i.e., hair loss over time). It was easy to find that plaintiff had failed to comply with her discovery obligations, especially because “she has encouraged at least [two] potential witness[es] to be less than forthcoming in this litigation.”

What was the sanction? She had to produce the stuff she was supposed to produce anyway, sit for further deposition on the withheld evidence, and pay the defendant’s cost for the motion for sanctions. Yawn. The order was supposed to be a warning for her or “any other plaintiff who might be considering adopting evasive tactics like those discussed in this opinion.” We think she got off light and, particularly in the context of a big MDL—this one has more than 9000 pending cases—the sanction lets plaintiffs and their lawyers make calculated decisions about whether it pays to avoid discovery obligations. We cannot see a defendant in a litigation like this getting off nearly so lightly had it done anything like what plaintiff did here.

 

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On August 17, 2018, we observed in our latest comprehensive post on pre-service removal, that “[w]ith Court of Appeals decisions now breaking in our favor, we can start trying to change the minds of district courts that have previously gone the other way.”

And how.

On August 22 – less than a week after that post (and while Bexis was on vacation) – the Third Circuit came down strongly on the “plain meaning” side of the ledger in a removal-before-service case and flatly rejected the “absurd result” rationale that some district courts in that circuit had developed.  See Encompass Insurance Co. v. Stone Mansion Restaurant, Inc., ___ F.3d ___, 2018 WL 3999885 (3d Cir. Aug. 22, 2018).  The court first examined the purpose of the “forum defendant” exception to removability of diverse cases and Congress’ amendment adding the “properly joined and served” language that supports pre-service removal:

We therefore turn to section 1441, which contains the forum defendant rule.  Section 1441 exists in part to prevent favoritism for in-state litigants, and discrimination against out-of-state litigants.  The specific purpose of the “properly joined and served” language in the forum defendant rule is less obvious.  The legislative history provides no guidance; however, courts and commentators have determined that Congress enacted the rule to prevent a plaintiff from blocking removal by joining as a defendant a resident party against whom it does not intend to proceed, and whom it does not even serve.

Id. at *4 (citations and quotation marks omitted).

Next, the court examined the competing arguments – “plain meaning” on the defense side, and “absurd result” on the plaintiff side. The facts were rather stark – after initially unconditionally agreeing to accept service, defense counsel notified plaintiff that he would not do so until after he had first removed the case to federal court.  Id. at *1-2.  Although “not condon[ing] this conduct between and among legal practitioners,” the district court denied remand given the express language of 21 U.S.C. §1441(b).  See Encompass Insurance Co. v. Stone Mansion Restaurant, 2017 WL 528255, at *2 & n.1 (W.D. Pa. Feb. 9, 2017).  The Third Circuit affirmed:

Citing this fraudulent-joinder rationale, [plaintiff] argues that it is “inconceivable” that Congress intended the “properly joined and served” language to permit an in-state defendant to remove an action by delaying formal service of process. This argument is unavailing.  Congress’ inclusion of the phrase “properly joined and served” addresses a specific problem − fraudulent joinder by a plaintiff − with a bright-line rule.  Permitting removal on the facts of this case does not contravene the apparent purpose to prohibit that particular tactic.  Our interpretation does not defy rationality or render the statute nonsensical or superfluous, because:  (1) it abides by the plain meaning of the text; (2) it envisions a broader right of removal only in the narrow circumstances where a defendant is aware of an action prior to service of process with sufficient time to initiate removal; and (3) it protects the statute’s goal without rendering any of the language unnecessary.  Thus, this result may be peculiar in that it allows [defendants] to use pre-service machinations to remove a case that it otherwise could not; however, the outcome is not so outlandish as to constitute an absurd or bizarre result.

2018 WL 3999885, *4 (footnotes omitted) (emphasis added).

The omitted footnotes are also significant.  First, the “general rule” that “by interpretation we should not defeat Congress’ purpose of abridging the right of removal” was “not sufficient to displace the plain meaning of the statute.”  Id. at *4 n.3 (citing and quoting Delalla v. Hanover Insurance Co., 660 F.3d 180, 189 (3d Cir. 2011)).  Second, the argument that advanced technology allowing improved docket monitoring was more properly directed to Congress than to the courts:

We are aware of the concern that technological advances since enactment of the forum defendant rule now permit litigants to monitor dockets electronically, potentially giving defendants an advantage in a race-to-the-courthouse removal scenario. . . .  If a significant number of potential defendants (1) electronically monitor dockets; (2) possess the ability to quickly determine whether to remove the matter before a would-be state court plaintiff can serve process; and (3) remove the matter contrary to Congress’ intent, the legislature is well-suited to address the issue.

Id. at *4 n.4.

The Encompass Insurance court therefore unanimously concluded that §1441(b) said what it said when it predicated the forum defendant exception on such defendants being “properly joined and served” and that courts must respect what Congress enacted:

In short, [defendant] has availed itself of the plain meaning of the statute, for which there is precedential support.  [Plaintiff] has not provided, nor have we otherwise uncovered, an extraordinary showing of contrary legislative intent.  Furthermore, we do not perceive that the result in this case rises to the level of the absurd or bizarre.  There are simply no grounds upon which we could substitute [plaintiff’s] interpretation for the literal interpretation.  Reasonable minds might conclude that the procedural result demonstrates a need for a change in the law; however, if such change is required, it is Congress − not the Judiciary − that must act.

Id. at *5.  Finally, the defendant’s previous agreement to accept service did not preclude it from delaying such acceptance until after it removed the case to federal court.  “[W]e are unconvinced that [defendant’s] conduct − even if unsavory − precludes it from arguing that incomplete service permits removal.”  Id.

Thus, the debate is over in the Third Circuit, notwithstanding the prior decisions of some district judges in Pennsylvania, New Jersey, and Delaware to the contrary, and it is perfectly proper for defendants, whether “forum defendants” or otherwise, to monitor state-court dockets electronically for new lawsuits, and to remove diverse cases preemptively to federal court before the plaintiffs (often litigation tourists) can serve in-state defendants whose presence would otherwise preclude removal under §1441(b)(2).

The sound you hear is one more nail being driven in the coffin of litigation tourism.

One last thought.  Query whether, if a defendant in a case in the Third Circuit were unfortunate enough to have removed before service and suffered remand under the “absurd result” rationale rejected in Encompass Insurance, the Third Circuit’s opinion constitutes an “other paper” creating grounds for removal that would support a second removal.  While we don’t know the answer off-hand, it is a question that attorneys representing clients in that situation may want to address.

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We confess – when we first considered the spate of eye drop class actions a few years ago, we had trouble taking them seriously.  It was tough to get excited about penny-ante allegations that the size of eye drops warranted the attention of federal courts, or warranted class action status.  We were not alone in that assessment.  See Eike v. Allergan, Inc., 850 F.3d 315 (7th Cir. 2017) (discussed here).

But the judicial skepticism engendered by pathetically weak and blatantly lawyer-driven litigation can produce collateral benefits – like favorable preemption decisions.  We hailed the first of those, Thompson v. Allergan USA, Inc., 993 F. Supp.2d 1007 (E.D. Mo. 2014), in our “Mensing – It’s Not Just About Generics Anymore” post over four years ago.  Thompson held that the plaintiffs’ attacks on the size of the eye drops was a challenge to the FDA-approved dose of that product.  Dosage alterations, however, were “major changes” that required FDA pre-approval.  The need for such pre-approval, however, barred the claim under the impossibility preemption rationale of Mutual Pharmaceutical Co. v. Bartlett, 570 U.S. 472 (2013), and PLIVA, Inc. v. Mensing, 564 U.S. 604 (2011).

We also considered Thompson as proof that we hadn’t been “baying at the moon” in our 2013 “‘Major’ Drug Labeling Changes That Require FDA Prior Approval” post, where we listed a bunch of drug-related changes that the FDA considered “major” and argued that they should all be preemptive under the Mensing/Bartlett rationale.

Thompson didn’t go any further, but a Massachusetts district court reached essentially the same result in Gustavsen v. Alcon Laboratories, Inc., 272 F. Supp.3d 241 (D. Mass. 2017):

FDA regulations, as interpreted by the FDA, now prevent defendants from changing the “size and/or shape of a container for a sterile drug product” unless and until the FDA determines that its benefits outweigh any harms.  The decision whether such a change should be made is, therefore, reserved for FDA, and the Supremacy Clause prohibits judges and juries from displacing or second-guessing the FDA based on the laws of Massachusetts or other states.

Id. at 255-56 (citation to same FDA guidance cited in our 2013 post omitted).  Oddly, Thompson was not cited in Gustavsen.  We blogged about that decision here.

A few days ago, the First Circuit affirmed, in Gustavsen v. Alcon Laboratories, Inc., ___ F.3d ___, No. 17-2066, 2018 WL 4057381 (1st Cir. Aug. 27, 2018), and that decision is a preemption home run.  Gustavsen decided a “single question” – “Can manufacturers of prescription eye drops change the medication’s bottle so as to alter the amount of medication dispensed into the eye without first getting the FDA’s approval?”  The answer to that question being “no,” “state law claims challenging the manufacturers’ refusal to make this change are preempted.”  Id. at *1.

The major dispute in Gustavsen wasn’t the law.  Even plaintiffs appeared to concede that preemption flowed from a “prior agency approval” requirement under Mensing/Bartlett:

The principles of federal preemption that control our disposal of this appeal are not in dispute.  If a private party (such as the manufacturers here) cannot comply with state law without first obtaining the approval of a federal regulatory agency, then the application of that law to that private party is preempted.  Conversely, a private party’s ability to do without prior agency approval that which state law requires defeats a preemption defense even if the federal regulatory agency retains authority to reject the changes, unless the defendant establishes by clear evidence that the agency would, in fact, reject the changes.

Id. (citations and quotation marks omitted).

The disputed question was whether a tort-required change to the dispenser of a drug (here, eye drops) that had the effect of reducing the size of the drop – and thus the dosage of the drug in that drop – required FDA prior approval.  The pertinent FDA regulation, 21 C.F.R. §314.70 (another part of which, (c)(6)(iii), is Levine’s notorious  “CBE regulation”),

divid[es] changes into three categories: major, moderate, and minor changes.  The classification of the manufacturer’s anticipated alteration into one of these three categories dictates the manufacturer’s ability to unilaterally implement its change.  Major changes require approval from the FDA prior to implementation, while moderate and minor changes do not.

Gustavsen, 2018 WL 4057381, at *5 (emphasis added).

Controlling case law is clear − and plaintiffs here concede − that if the change they contend state law requires qualifies as “major,” then federal law preempts plaintiffs’ cause of action because defendants cannot lawfully make such a change without prior FDA approval.

Id.  That’s the key.  Gustavsen’s main takeaway is its holding that “if the change [plaintiffs] contend state law requires qualifies as “major,” then federal law preempts plaintiffs’ cause of action.”  Id. (emphasis added).  That’s precisely what we first argued back in 2013:  that where certain “changes are considered sufficiently ‘major’ that they require FDA prior approval . . . those sorts . . . [of] changes should be preempted” by Mensing/Bartlett.

Much of the remaining preemption discussion in Gustavsen was to reject plaintiff-side pettifoggery.  The First Circuit ruled that §314.70(b) was properly read to include subsection (b)(1)’s “broad category of qualifying changes” as “major” – including “sections (b)(2)(i) through (viii).”  2018 WL 4057381, at *6.  Rejecting plaintiffs’ attempt to parse the regulation in a cramped fashion, Gustavsen “conclude[d] that, if a change fits under any of the categories listed in section (b)(2), that change necessarily constitutes a ‘major’ change requiring FDA pre-approval.”   Id. (emphasis added).  One of those categories, §314.70(b)(2)(vi), was a “comfortable” fit for the plaintiffs’ dosage claims, thus mandating preemption.  Gustavsen, 2018 WL 4057381, at *7.  Like the district court, the First Circuit in Gustavsen relied upon, inter alia, the same FDA guidance that we did back in 2013.  Id. at *8.

Finally, the First Circuit rejected each of the plaintiffs’ three “retorts.”  First, “[w]e do not share plaintiffs’ reading of the preamble” to the Federal Register notice that finalized §314.70, id., and “[i]n any event, it is well-established that a regulatory preamble is incapable of altering regulatory text’s plain meaning.”  Id. (citation omitted).  Second, the dosage was not “one drop” of any size.  Id. at *9.  Third, allegations that the FDA had, in practice, not always enforced the pre-approval requirement as to eye drops did not trump the regulation itself, since “the regulatory actions to which plaintiffs point” were “made by mid-level FDA scientists, or even a single ‘reviewer,’” and thus did not “reflect” the FDA’s “fair and considered judgment.”  Id.

We think Gustavsen is a big deal, since its logic extends far beyond the rather trivial allegations ginned up by the class action lawyers who have pursued the eye drop litigation.  There are a lot of potential drug-related changes that the FDA considers “major” under the regulation and guidance documents relied upon in Gustavsen.  These include “changes in the qualitative or quantitative formulation of the drug product, including inactive ingredients, or in the specifications provided in the approved NDA.”  §314.70(b)(2)(i) (emphasis added).  In other words, as we concluded when we first discussed Thompson, “We hasten to add that the same argument preempts all design defect claims against FDA-approved products since all design changes require pre-approval.”  Plaintiffs also frequently assail defendants for not more thoroughly testing their products.  Well, “major” changes also include “[c]hanges requiring completion of studies” and “[c]hanges to a drug product under an NDA that is subject to a validity assessment because of significant questions regarding the integrity of the data.”  Id. §(b)(2)(ii) and (viii).  A number of label changes, including to “highlights” and to “medication guides” are also “major.”  Id. §(b)(v)(B-C).

The Gustavsen rationale – “major” change = FDA pre-approval = preemption − should also apply to medical devices, since modifications to devices follow a similar regulatory framework:

(a) . . . [E]ach person who is required to register his establishment . . . must submit a premarket notification submission to the Food and Drug Administration . . . days before he proposes to begin the introduction or delivery . . . of a device intended for human use which meets any of the following criteria:

*          *          *          *

(3) The device is one that the person currently has in commercial distribution or is reintroducing into commercial distribution, but that is about to be significantly changed or modified in design, components, method of manufacture, or intended use.  The following constitute significant changes or modifications that require a premarket notification:

(i) A change or modification in the device that could significantly affect the safety or effectiveness of the device, e.g., a significant change or modification in design, material, chemical composition, energy source, or manufacturing process.

(ii) A major change or modification in the intended use of the device.

21 C.F.R. §807.81(a) (emphasis added).

Finally, the Gustavsen rationale – being a basis for implied preemption – is not necessarily limited to the FDCA.  To the extent that other products are subject to federal pre-approval, they, too, may have a preemption defense available.  We don’t claim to be experts in such products, but one example that comes to mind is aviation, where FDCA “conflict preemption principles” have already been applied in at least one case.  See Sikkelee v. Precision Airmotive Corp., 822 F.3d 680, 702-03 (3d Cir. 2016).

Sometimes bad litigation can make very good law.

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It’s vacation time for many of our colleagues.  Bexis shrewdly commenced a hiking holiday in Kauai, just in time to greet a hurricane.  We were less adventurous.  For us, it was enough to knock back poutine and ice wine and walk the old city walls in Quebec.  There was one excursion to watch the Drug and Device Law Heirs zip-line over a 272 foot high waterfall.   We did not participate.  Our courage is weak, our girth is large, and our parenting skills are sub-par.  Meanwhile, a leading Philly litigator shared photos from his African safari, proving he got within a paw’s swipe of a leopard.  Yikes.  And then there was our cherished friend, an esteemed in-house lawyer, whose family cruise along Alaska included close encounters with whales, wilderness, and  eerie blue ice bergs.  It all looked marvelous. 

 

We’ve been to Alaska once ourselves, but it was only a business trip.  A couple of oil companies, one of which was our client, had a slight disagreement as to who owned how much of certain tracts.  A few inches here or there meant billions of dollars.  The stakes were high but the issues were dull.  We visited  Prudhoe Bay (mile marker zero of the Trans-Alaska pipeline) and the Captain Cook Hotel in Anchorage, where an enormous stuffed Kodiak bear stands guard.  A popular t-shirt said, “Split Alaska in Two and Make Texas the Third Largest State.”  Alaska is full of wild, wonderful things, but not so much litigation.  Our fossil fuel battle was in arbitration, not the court system.  What sane Fortune 100 executive would entrust complex geological issues to twelve jurors?   

 

Maybe there are some riveting cases from Alaska, but we are hard-pressed to think of many.  In any event, when we think of Alaska, we think of its stunning beauty and the rugged individualism of its residents.  (That last sentence is a bit of ham-handed foreshadowing.) 

 

Quick: name the greatest Alaska television show.  (Answer below.)

 

Today’s case, Cole v. Gene by Gene, Ltd., 2918 WL 3980308 (9th Cir. Aug. 21, 2018), originated in Alaska.  It’s pretty interesting, as it involves the intersection of two increasingly important issues: genetic testing and disclosure of private information.  It’s also pretty good, as it resulted in rejection of class certification.  But the issues must have seemed pretty obvious to the Ninth Circuit, as the panel members felt no need for oral argument and determined that the opinion was unworthy of publication in the West Reporter.  The plaintiff, suing on behalf of a putative class of 900 Alaskans, alleged that a company had disclosed DNA results without informed consent and in violation of the Alaska Genetic Privacy Act.  From the very short opinion, we cannot tell much about the nature of the genetic testing that occurred.  We don’t know whether it was of the broadly available spit-in-a-test-tube, mail-it-in, then learn-with-surprise-that-your-family-actually-hails-from-Transylvania sort, or whether it was of a higher order of complexity and significance.  No matter, because genetic testing is going to become more and more prevalent and more and more crucial.  Selection of future drug and device therapies are likely to become more targeted with the help of genetic testing.  Genetic information is valuable information.   But, like all information, it can fall into the wrong hands and be misused. 

 

Back to the case at hand.  In Cole, because there were too many differences among the class members on important issues, the district court declined to certify the class.  Common issues did not predominate over individual issues, and individual litigation looked to be the superior mechanism for resolving the claims.  The plaintiff appealed.   The plaintiff lost.

 

The Ninth Circuit, applying an abuse of discretion standard or review, affirmed the district court.  It held that individualized determinations predominated with respect to the key issues of disclosure, consent, and damages.  For instance, whether a particular customer had private information disclosed varied depending on the terms of release signed by the customer, which of the thousands of genetic “projects” the customer may have joined, the terms of the specific project a customer joined, and what privacy settings the customer chose.  The district court was right that individual issues outnumbered the broad-brush general issue.  Moreover, the district court did not abuse its discretion by denying class certification on superiority grounds. The plaintiff had failed to carry his burden to show that “a class action is superior to other available methods for fairly and efficiently adjudicating the controversy.”  In particular, the damages available to aggrieved customers under Alaska law would be plaintiff-specific.  Couple that intractable fact with the “difficulties inherent in managing a class action featuring such distinct and individualized issues, the limited resources to be saved by certifying a class, and the absence of other pending or duplicative lawsuits in the Alaskan courts, “ and it becomes clear that “individual litigation is a superior mechanism for resolving” the case. 

 

(It is equally clear that Northern Exposure was the best tv show ever set in Alaska.  It was filled with original, sharply drawn characters.  Individuality certainly predominated.  The main character was a doctor from New York who made it through medical school on a loan funded by the state of Alaska.  To repay the loan, he had to practice medicine for a couple of years in a remote Alaska town.  Other characters included an ex-con who was the ultra-philosophical disc jockey in the town’s only radio station, a bush pilot whose former beaus all died gruesome deaths, a cantankerous ex-astronaut, and the owner of the town tavern who was at least 40 years older than his wife, but worried he would outlive her because the men in his family invariably lived past 100 and invariably spent a decade or so as lonely widowers.   The show ran on CBS from 1990 to 1995 and won many awards.  Among those were Emmy and Golden Globe awards for best drama.  The producers were grateful for the awards, but felt obligated to mention that they thought the show was actually a comedy.  In fact, Northern Exposure was one of the first “dramedies,” containing both comedic and dramatic tones.  After the first couple of seasons, a new producer-writer named David Chase joined the staff of Northern Exposure.  Perhaps you have heard of Chase.  Earlier in his career he had worked on The Rockford Files.  Later, he created another show with quirky characters.  It was called The Sopranos.)       

 

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On the same day the Seventh Circuit overturned the verdict in Dolin v. GSK, the court handling the coordinated New York state court Plavix Litigation dismissed the claims of all remaining plaintiffs on the grounds of conflict preemption. Oh happy day!

Plavix is a drug prescribed to inhibit the formation of blood clots. As such, ever since it has been on the market, its label has included warnings regarding the risk of bleeding. In re: Plavix Products Liability Litigation, 2018 WL 4005859, at *2 (N.Y. Sup. Aug. 22, 2018). It is that same risk which plaintiffs in the litigation allege was insufficient. Defendants moved for summary judgment arguing plaintiffs’ failure to warn claims were preempted because defendants could not independently have changed the Plavix warning and plaintiffs’ design defect claims were preempted because defendants could not have changed the design (i.e., the chemical composition) of an FDA approved drug. Id. at *3.

Since we led with the result, you know already that defendants’ arguments held the day. So, usually at this point in our posts we comment on plaintiffs’ arguments and why they failed. In this instance, however, plaintiffs didn’t make any substantive arguments. They instead only made a procedural argument about whether the New York plaintiffs’ generally had designated Dr. Randall Tackett and Dr. Lemuel Moyé as generic experts for all cases. It really isn’t worth delving into other than to say that the court wasn’t swayed by plaintiffs’ counsel’s attempt to disassociate themselves from the “the “Dynamic Duo” since they relied on the experts’ reports and defended them at deposition. Id. at *6.  And, since now was the time for plaintiffs “to either prove it or lose it,” id., relying on a “mere procedural technicality” was insufficient to meet a substantive challenge to all of plaintiffs’ remaining claims. Id.

So, we’ll get right to the court’s analysis which starts with the holding that “federal preemption presents a question of law.” Id. at *7. We like checking off that box. The court then dove into whether the plaintiffs’ failure to warn claims were preempted under Wyeth v. Levine. Wyeth said no preemption where a defendant can unilaterally, without the permission of the FDA, change its label via CBE regulations. When is that possible? When the manufacturer has “newly acquired information.” But,

NY Plaintiffs have not produced any evidence that Defendant was in possession of “newly acquired information” after the FDA approved Plavix in 1997 which would have enabled Defendant to make any unilateral changes to the Plavix warning label without further FDA approval.

Id. at *8. The court also observed that plaintiffs did not challenge that defendants fully complied with FDA regulations in obtaining the approval of Plavix. Id. at *7. In other words, there is no allegation that defendants concealed any information from the FDA when it submitted its New Drug Application (“NDA”) or at any time thereafter during the course of the drug approval process. Id. at *6. FDA had all available information in 1997 and nothing new has developed since. And post-approval label changes, if they are based on information known to the FDA prior to approval of the label are preempted. For more on this issue see our posts on In re Celexa & Lexapro Marketing & Sales Practices Litigation, 779 F.3d 34 (1st Cir. 2015) and Utts v. Bristol-Myers Squibb Co. here, here, and here.

As to design defect, the court looked at the opinion of plaintiffs’ expert, Dr. Moyé which was essentially that Plavix was defectively designed from its inception and that defendants either had to re-design the drug post-FDA approval or stop selling it. Id. We already know the Supreme Court has rejected these arguments as the answers to conflict preemption.   Mutual Pharm. Co., Inc. v Bartlett, 570 US 472 (2013). Which the court summed up nicely here:

If Defendant did the former to avoid state tort liability, it would be creating a new drug requiring an NDA and FDA approval. Moreover, to have stopped selling Plavix, as this generic expert suggests, to “escape the impossibility of complying with both its federal and state law duties . . . [would be] incompatible with . . . [US Supreme Court] pre-emption jurisprudence.

Id. (citations omitted).

As if preemption wasn’t enough, the court also pointed out that Dr. Moyé’s conclusion that Plavix does more harm than good had to be excluded as it “achieved no consensus in relevant medical and scientific communities.” Id. at *9. His opinion was “grounded on a consensus of one.” Id.

 

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