This guest post comes courtesy of Jonathan Hoffman, a Senior Partner at MB Law Group LLP, in Portland, Oregon.  Jon, a long-time member of the Product Liability Advisory Council (“PLAC”), originally circulated a version of this post to PLAC members.  Bexis, also a long-time PLAC member, saw it, thought blog readers would be interested, and successfully importuned Jon to submit a longer version here.  Access to these kinds of alerts are one reason, among many, why we encourage drug and medical device manufactures confronted with product liability litigation to join PLAC.

As always our guest bloggers deserve 100% of the credit (and any blame) for their posts.  Onward to the Hague Convention.

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Although most drug and medical device litigation is purely among domestic individuals and defendants, many manufacturers of these products are based outside the United States or are domestic subsidiaries of overseas companies.  In recent years, the US Supreme Court has trimmed many excessive impositions of personal jurisdiction in suits brought against foreign and other non-local defendants, most recently, in BNSF Ry. Co. v. Tyrrell, No. 16-405, 2017 WL 2322834 (U.S. May 30, 2017).

[editor’s note − see our BNSF post here]

However, it may have become easier for plaintiffs to invite foreign manufacturers to the party here in the US based on the Court’s recent liberal interpretation of the Hague Service Convention, 20 U. S. T. 361, T. I. A. S. No. 6638 (1965), which governs service of process on foreign entities.  Until now, effecting service upon a defendant based in another country has been an inconvenience, if not an outright impediment.  Many US courts held that the only proper means of service under the Convention was to serve the complaint upon the “central authority” of that country, requesting that central authority to then serve the complaint upon the defendant in the manner under which service is customarily performed under that country’s laws.  The Convention also provided that the Convention “shall not interfere with—(a) the freedom to send judicial documents, by postal channels, directly to persons abroad.”  Many US courts concluded that this provision, Article 10(a) of the Convention did not authorize service of process by mail because it only referred to the right to “send” documents, not to “serve” them.

But the Supreme Court disagreed late last month.  Water Splash, Inc. v. Menon, No. 16-254, 2017 WL 2216933 (U.S. May 22, 2017), arose from a seemingly simple dispute between the manufacturer of playground equipment and a former employee.  The employee was allegedly working for one of Water Splash’s competitors while still employed by Water Splash.  Water Splash sued in Texas state court, but the former employee lived in Canada.  Water Splash served her by mail, in accordance with Texas law.  She did not appear.  The trial court entered a default judgment.  She then moved to set aside the judgment, but the court denied her motion.

The Supreme Court held that, as long as service by mail is performed in compliance with the forum’s law, Article 10(a) of the Hague Service Convention permits such service by mail on foreign defendants unless the country in which service was made has objected to this type of service.  Article 10(a) provides that the Convention will not interfere with “the freedom to send judicial documents, by postal channels, directly to persons abroad,” but does not expressly refer to “service.”  For decades, the lower courts had split over whether this provision extends to service of process or is limited to service of other documents and pleadings.  Compare, e.g., Bankston v. Toyota Motor Corp., 889 F. 2d 172, 173-74 (8th Cir. 1989) (holding that sending summons and complaint to defendant in foreign country does not constitute valid service under Hague Convention) with Brockmeyer v. May, 383 F. 3d 798, 802 (9th Cir. 2004) (holding that the meaning of “send” in Article 10(a) includes “serve.”).

The question whether the Hague Convention permits service by mail has now been answered.  The answer is a qualified “yes,” as long as such service complies with the forum’s service requirements and that the country where the defendant is located did not object to Article 10(a).  This broader acceptance of international service via mail may, by lowering procedural barriers to entry, have the unfortunate effect of haling more foreign manufacturers or foreign parent companies into US Courts.

Water Splash does not eliminate all opportunities for defendants to avoid claims brought against foreign manufacturers, however.  A variety of other remedies are still available to a foreign defendant.  Most notably, Plaintiffs may mistakenly try to extend this ruling to effect mail service on a defendant in a country that has not ratified the Convention, or that has objected to such service.  Or, the plaintiff may fail to effect mail service in compliance with forum law.  The Hague Convention does not render such service sufficient.

Moreover, even if a US Court upholds service against a foreign defendant under the US’s liberal interpretation of the Hague Service Convention, a judgment might be unenforceable in the courts of the foreign defendant’s domicile.  Foreign courts may refuse to enforce a judgment entered in the US by deciding that the American court lacked personal jurisdiction over the local defendant.  Or, in some signatory countries (most notably Japan), that did not object to the Hague Service Convention, courts may not enforce a foreign judgment where service did not comport with the Hague Service Convention by including a copy of the summons and complaint in Japanese.

More traditional errors, too, can still render mail service on foreign companies ineffective to sustain a lawsuit in the US.  For example, a plaintiff serving a foreign entity may underestimate the time required to serve that entity, even if the service is performed by mail.  If the complaint is not properly served within the time provided by the forum state’s state statute of limitations and whatever state-law tolling provision allows for relation back of service, the claim can be dismissed.  See Walker v. Armco Steel Corp., 446 U.S. 740, 750 (1980); Bancorp Leasing & Fin. Corp. v. Agusta Aviation Corp., 813 F.2d 272, 274 (9th Cir. 1987).

But in significant cases, where the stakes are high and the plaintiffs’ counsel is more competent, the Water Splash decision suggests that more foreign manufacturers may have to learn to swim in American waters.

The Eastern District of Pennsylvania recently entered a fraudulent joinder order that is worth highlighting because it applies a fraudulent joinder standard that we think should apply more broadly. It has always puzzled us why courts are hesitant to find non-diverse or local defendants fraudulently joined.  You know what we mean.  A plaintiff from State X files state-law claims against a defendant from State Y in some place other than State Y.  That is a removable case, except that plaintiffs will frequently name a bogus defendant from either State X or the forum state to defeat the defendant’s right to remove.

That is fraudulent joinder, and it is a type of forum manipulation that we see all too often. Sure, we remove the cases anyway, and federal judges sometimes agree with us that the non-diverse or forum defendants are fraudulently joined, leading them to retain jurisdiction.  But more often than not, they don’t, depending on the facts and the applicable standards

The facts and the applicable standards. That is why we like the order in Bentley v. Merck & Co., No. 17-1122, 2017 WL 2311299 (E.D. Pa. May 26, 2017).  In Bentley, ten plaintiffs from Pennsylvania, Nevada, and Missouri sued a New Jersey pharmaceutical company in Pennsylvania state court. Id. at * 1.  That’s removable based on diversity of citizenship, right?  Well, to avoid federal court, the plaintiffs also sued a company employee who happened to reside in Pennsylvania.  The problem was that the plaintiffs had no claim against the local employee and had no intention of actually pursuing a claim against her.

That played into the fraudulent joinder standard in the Third Circuit, where fraudulent joinder exists if

“there is no reasonable basis or colorable ground supporting the claim against the joined defendant,” or no real intention in good faith to prosecute the action against the defendant or seek a joint judgment.

Bentley v. Merck & Co., 2017 WL 2311299 at *2 (citing Boyer v. Snap-on Tools Corp., 913 F.2d 108, 111 (3d Cir. 1990); In re Briscoe, 448 F.3d 201, 216 (3d Cir. 2006); Abels v. State Farm Fire & Cas. Co., 770 F.2d 26, 32 (3d Cir. 1985)).  Focus on the last part, the part that the court underlined—“no real intention in good faith to prosecute the action” against the non-diverse or forum defendant.  The first part is similar to standards that some other circuits apply, i.e., whether there is a reasonable basis for the claim.

But the “no real intention to prosecute” standard cuts right to the core—are the plaintiffs genuinely seeking redress from the non-diverse or forum defendant, or are they just manipulating the forum? It is a fair question to ask, and while courts in other circuits will consider such evidence, the Third Circuit’s standard makes it express and places it front and center.

What then happened in Bentley?  It turns out that the same plaintiffs’ attorney had sued the same defendants in federal court, too.  But in the federal case, called Juday, he voluntarily dismissed the Pennsylvania employee. Id. at *2.  That is to say, when the presence of the Pennsylvania employee made no difference to the forum, the plaintiffs did not care about her and let her go.  They kept her in in the cases only where her presence purportedly would defeat diversity, which lay bare exactly what their intentions were.  The district court viewed it this way:

We note that in Juday which was initially filed in the federal court, the presence of [the employee], a Pennsylvania citizen, would not defeat this court’s diversity jurisdiction since the plaintiffs were citizens of Indiana.  Thus, her dismissal had no effect on federal subject matter jurisdiction.  In contrast, if plaintiffs’ arguments against fraudulent joinder and against removal of cases with an in-state defendant are correct, her continued presence as a defendant in these ten cases would require remand.

. . . .

We find that the only reason plaintiffs have joined [the employee] as a defendant is to defeat this court’s subject matter jurisdiction and that they have no real intention in good faith to prosecute these actions against her to judgment. We reach this compelling finding in light of the stipulation of dismissal of [the employee] in Juday and the plaintiffs’ retention of [the employee] in the other similar cases where the same counsel represents all the plaintiffs.  Plaintiffs’ attorney conceded this inconsistency at oral argument and offered no explanation for it . . . .

Id. at *3.  The evidence in this case thus was particularly stark, and counsel candidly acknowledged that the plaintiffs had no intention of pursuing judgments against the individual defendant since they had a large corporate defendant already in the case.  On that record, the district court had only one justifiable path—denying the plaintiffs’ motion to remand.

We note that proving fraudulent joinder would not require evidence this strong. As in Bentley, plaintiffs tend to fraudulently join the same defendants over and over again, and they never make any genuine effort to proceed to judgment against them.  That history is evidence in the next case that the plaintiffs have “no real intention in good faith to prosecute the action.”  Voluntary dismissals and candid concessions of counsel would seal the deal, as they did in Bentley.  But less should be sufficient.  The order in Bentley is the right result for the right reason, and the standard applied is one that courts should apply more broadly.

 

In the annals of history, June 6 gets prime billing.  That’s understandable, because the successful Normandy landings on D-Day (June 6, 1944), probably saved Western Civilization.  (Or maybe that heroic endeavor simply preserved liberal democracy for another 75 years, now that we seem encircled by fanatics both home and abroad who view the Enlightenment with disdain.)  But June 7 is no slacker.  On June 7, 1776, Richard Henry Lee introduced the Lee Resolution, which later became the Declaration of Independence. 364 days before D-Day, the American Navy decisively won the Battle of Midway, which turned the tide of the Pacific War.  On June 7, 1892, Homer Ferguson refused to leave the whites-only part of a train.  He later lost his Supreme Court case, Plessy v. Ferguson.  That opinion upheld “separate but equal,” a nasty judicial stain that would not be scrubbed away until 1954.  (SCOTUS Lesson #1: Horrible Supreme Court precedents can be overturned, but it can take a terribly long time – almost as long as the interval between NBA Finals games.)  One year later, on June 7, 1893, an Indian barrister offered a very similar refusal in South Africa.  That refusal is usually counted as Gandhi’s first act of civil disobedience.  And on June 7, 1965, the Supreme Court issued its decision in Griswold v. Connecticut, holding that married couples have a constitutional right to contraception.  Maybe there are people in 2017 who regret that decision (see our overly political parenthetical above) but we’d be surprised to meet such people, just as we’d be surprised to meet people who regret Brown v. Board of Education.  Still, the High Court arrived at that sensible result via a fuzzy analysis (e.g., “penumbras” and “emanations”) that could justify just about anything.  (SCOTUS Lesson #2: Good results and good reasoning do not always operate in tandem.)

In the passage of time, whether viewed as a Hegelian movement of ideas or as merely One Damned Thing After Another, June 7 is a significant date.  Now here comes the inevitable strained segue: today’s case, In re Cook Medical, Inc. IVC Filters Marketing, Sales Practices and Product Litigation, 2017 U.S. Dist. LEXIS 82761 (S.D. Indiana May 31, 2017), is about the passage of time.  More specifically, it is about how statutes of repose apply in drug and device litigation.

We do not often get a chance to write about statutes of repose.  We get more opportunities to discuss statutes of limitations, though we infrequently seize those opportunities, because the issues are usually fact-specific and obvious.  By contrast, statutes of repose present interesting legal issues, and their force can be devastating to tardy claims.  In the In re Cook Medical case, the defendant made a motion on the pleadings to dismiss claims on the ground that they were precluded by statutes of repose.  The court wrestled with three different statutes of repose:  Georgia, Tennessee, and Texas.  The differences among those statutes resulted in different dispositions of the claims by the various IVC Filter plaintiffs’ claims.

Georgia

The Peach State bars claims for strict liability, negligence, or breach of warranty if the suit is not brought within ten years from the date of the first sale.  The Georgia plaintiffs’ claims in this case were filed more than ten years after the sale.  Buh-bye, right?  Not so fast.  Georgia’s statute of repose contains an exception if the defendant manufacturer engaged in conduct manifesting “willful, reckless, or wanton disregard for life or property.”  The plaintiffs argued that they had alleged such conduct.  How? it is not clear from the opinion.  Please excuse a slight rant.  It seems far too easy for drug and device plaintiffs to allege that any failure to warn equals reckless or wanton conduct.  Courts need to clamp down on this all-too-easy way to maintain settlement leverage or exploit jury anger.  Not adding a warning in the face of controversial or mixed studies should not be the stuff of punitive damages.  Maybe someday courts will wake up to this nonsensical hole in product liability law.  End of rant.  The In re Cook court was not such a court.  But it did limit the damage. It held that that the willful/reckless/wanton exception applied only to negligence claims, but not to strict liability and warranty claims.  Thus, the court dismissed the strict liability and warranty claims per the statute of repose.  The negligence claims remained.  So did the consumer fraud claim, which the court held was not subject to the statute of repose.

Tennessee

Tennessee also has a ten year statute of repose, though apparently not the willful/reckless/wanton exception.  At least no such exception was raised in this case.  The Tennessee plaintiffs conceded that the strict liability claims were doomed, but they tried to keep their negligence and warranty claims alive.  Nice try, said the court, but Tennessee’s Product Liability Act defines “product liability action” to include all of the plaintiffs’ claims.  That did not quite end the debate. The plaintiffs pointed out that Tennessee extended the statute of repose to 25 years for asbestos and silicone gel implant claims.  Why should those claims get such special treatment?  Never you mind, said the court, which applied the rational basis test and concluded that the Tennessee legislature was allowed to make such distinctions.  Sure, IVC Filters might pose risks of latency, but the constitution does not compel legislators to treat all latent defects the same.  Put another way, “[i]t is no requirement of equal protection that all evils of the same genus be eradicated or none at all.”  In re Cook Medical, IVC Filters Prods. Litig., 2017 U.S. Dist. LEXIS 82761 at *14, quoting other cases.  The court dismissed all of the Tennessee claims.

Texas

“T for Texas, T for Tennessee.”  Those two states go together musically (see Guy Clark, Willie & Waylon, Lynyrd Skynyrd, etc.).  Here, they also go together legally, as the defendant prevailed on the statutes of repose from both states.  The Texas statute of repose is for 15 years.  (Of course it is bigger.  This is Texas.)  But there is an exception if the manufacturer/seller explicitly warrants that the product has a useful life longer than 15 years. The Texas plaintiff attempted to save her claims by filing an affidavit, wherein she said she was told that the device was permanent, and the Patient Guide, which stated that the IVC Filter was “safe and effective as either a permanent or temporary device.”  But this was a motion on the pleadings.  Outside materials are not allowed.  Looking just at the complaint, there was no allegation that the IVC filters were marketed as permanent devices.  That is very, very bad for the plaintiff:  “As this is a motion for judgment on the pleadings, the omission of her specific warranty allegations is fatal.”  Id. at *18.  You might think that is an extraordinarily severe result.  No matter. The court observed that even if the allegations of permanence were included in the complaint, the claims would still not fly, because the plaintiff nowhere alleged any specific person who warranted permanence, and nowhere alleged any reliance on such warranty of permanence. As for the Patient Guide, the plaintiff did not allege in either her complaint or her affidavit that “she read the Guide before her surgery, much less that she relied on the Guide rather than her own doctor’s recommendation.”  Id. at *20.  Accordingly, the exception to Texas’s statute of repose did not apply, the statute of repose did apply, the claims were timed-out, and they had to be dismissed.

With the Phillies stinking the joint out – off to their worst start since World War II – and both of Boranian’s local teams in last place, too (not as deeply buried as the Phillies), use of baseball imagery might seem a bit painful right now.  Only our DC-based blogger has had anything worth cheering about lately, and with what’s going on there recently….  Baseball must be a welcome distraction.

But a one-two-three inning was what came to mind in looking at the new decisions that turned up last week. We were struck by three relatively easy wins for defendants.  Individually, they would not warrant separate post, but under a “totality of the evidence” standard, when added together, we found them worth discussing

The first is N.K. v. Abbott Laboratories, 2017 WL 2241507 (E.D.N.Y. May 22, 2017), a Depakote/birth defects case.  There are a number of these cases around, and we have already commented on several.  But we have to say, if the other side’s experts are as poor as they were in N.K, this litigation deservedly isn’t going anywhere.  N.K. went away on summary judgment after all of the plaintiff’s “experts” – and the term deserves to be in quotes – were excluded from testifying.  The first purported expert was the minor-plaintiff’s treating pediatrician, who was totally out of her depth:

[The witness] has never conducted research on Depakote or valproic acid. Nor has she researched the effects of in utero exposure to valproic acid (“valproate exposure”).  Prior to [minor plaintiff’s] first visit, her knowledge of Depakote was limited to refilling prescriptions for epileptic patients.  Since that initial visit, she has conducted little to no additional research on Depakote, valproic acid, or valproate exposure.

2017 WL 2241507, at *2 (record citations omitted).  Unsurprisingly, the court found this witness “not qualified to testify that Depakote caused [minor-plaintiff’s] injuries.”  Id. at *3.  She possessed no applicable medical experience nor had she bothered even to review the relevant literature.  Id. (she “did not perform any research or make any additional investigation that might qualify her as an expert on valproate exposure”).  Instead, “[h]er attempts to understand the cause of [minor-plaintiff’s] injuries were limited to a single review of a single medical book, the day of his first visit.”  Id.  This is hardly the kind of expert we would expect to see in litigation where a strong causation case is present.

The second expert in N.K. “ha[d] a more substantial background” – it could hardly have been less – but was not even a medical doctor.  Id. at *4.  Again, we would not expect to see this kind of “expert” in a strong case.  Lack of a medical degree is a problem.  “[C]ourts have consistently drawn a distinction between the qualifications of medical and non-medical doctors, noting that non-medical doctors who are qualified to diagnose a medical condition may be unable to reliably determine its cause.”  Id.  This witness was a “teratologist and toxicologist,” but had no relevant diagnostic expertise.  “[B]y his own testimony he has never evaluated children, has never been called upon to diagnose dysmorphic features or autism in a child, and is not a clinician.”  Id.

Nor did these unqualified “experts” use proper methodology.  They both purported to engage in the last refuge of a Daubert scoundrel – differential diagnosis.  The pediatrician “viewed [minor plaintiff’s] condition as either genetic or the result of prenatal valproate exposure.”  Id. at *5.  Which one didn’t she investigate?

She reached this conclusion before eliminating any genetic causes. . . .  Not only did [she] fail to eliminate alternative causes before reaching her initial conclusion, she lacked the knowledge to independently rule out genetic causes.

Id.  Genetics were a serious alternative  “[A]t least four other treating physicians have recommended further genetic testing to determine the cause of [minor plaintiff’s] injuries.”  Id.  The court could hardly be faulted for wondering what these plaintiffs were hiding in not having this testing done.

The other expert – the one that wasn’t even a doctor – was, if anything worse.  He “did not conduct his own independent investigation,” rather “[h]is opinion is based entirely on reviewing existing reports provided to him by Plaintiffs.”  Id. at *7.  Having to spoon-feed an expert is another indicator of a weak case.  Beyond that, his “attempt to rule out potential alternative causes of [minor plaintiff’s] condition is plagued by the same problems as” the pediatrician’s.  Indeed, “[h]e relied on [her] flawed report in ruling out genetic causes.”  Id.

Finally, plaintiffs failed to slip the pediatrician’s opinions in the back door, as “factual” testimony by a treater.  A treater’s testimony was equally subject to Daubert:

Even if such an opinion could be read into her records, classifying [her] as a fact expert does not relieve this Court of its duty to ensure she utilized reliable methods in reaching her opinion.  Courts in this district have found that when a treating physician seeks to render an opinion on causation, that opinion is subject to the same standards of scientific reliability that govern the expert opinions of physicians hired solely for the purposes of litigation.

Id. at *8 (citations and quotation marks omitted).  To us, this is the most significant legal ruling in N.K.

Summary judgment granted.  One away on a dribbler to the mound.

Next up, Rincon v. Covidien, 2017 WL 2242969 (S.D.N.Y. May 22, 2017). Rincon failed on a motion to dismiss, because of TwIqbal.  Rincon involved hernia mesh, and an alleged injury suffered more than six years after implantation.  Id. at *1.  Plaintiff’s complaint had a rather fundamental – and fatal – flaw.  It failed to allege that a defect caused the alleged injuries:

[Plaintiff] fails to allege any facts that plausibly establish such causation. . . .  Taken together, these facts − even liberally construed (not that there is a basis for liberal construction here) − fall far short of demonstrating that [defendant’s] mesh was a “but for” cause of [her] later injuries. . . .  Nothing in the Amended Complaint even endeavors to explain why the mesh is a more likely, let alone proximate, cause of [plaintiff’s] alleged harms.

Id.  One would have thought that, with an obvious serious timing issue, the plaintiff would have tried harder in Rincon to allege the sort of critical facts supportive of causation.  The absence of these facts is another marker of a weak case.

But not only did the plaintiff in Rincon fail to allege causation; she also failed to allege defect:

Under New York law, Rincon must prove the existence of a defect. . . .  But [plaintiff] fails to allege a defect except in the most conclusory terms:  that [defendant] manufactured the PCO mesh, that the mesh was used during her hernia surgery in 2006, that she needed subsequent medical procedures in 2012 and 2013, and thus [defendant] must not have “properly manufactured, tested, inspected, packaged, labeled, distributed, marketed, examined, sold, supplied, prepared and/or provided [ ] the proper warnings” regarding the mesh.

Id. at *2.  To make matters worse, plaintiff tried to make up her pleading defects in her brief opposing dismissal.  The court was not impressed.  Those assertions “serve only to illustrate the deficiencies in her Amended Complaint − namely, that it does not identify any actual defect in the coating and says nothing about how the coating, even if defective, caused [her] specific injuries.”  Id.

On top of that, plaintiff only “suggest[ed],” but did not actually seek, leave to amend.  Id.  Plaintiff’s notably poor pleading resulted in dismissal with prejudice.   “[E]ven if [she] were to add her new ‘facts’ . . ., her claims would all still fail for the reasons discussed above.”

Called third strike.  Two down, and add one to our TwIqbal cheat sheet.

The final out was made by Merancio v. Smith & Nephew, Inc., 2017 WL 2257124 (E.D. Cal. May 23, 2017), where summary judgment was granted after the plaintiffs failed to retain the allegedly defective implant.  The complaint itself was a mess, which certainly did plaintiffs no favors.  “[N]either factual details concerning plaintiffs’ claimed injuries nor specific legal theories of liability have been alleged in any detail.”  Id. at *1.  Having lost the device that supposedly failed plaintiffs “presented no substantive evidence concerning the merits of their claims.”  Id.  Instead, they pursued another all too common “last refuge of a scoundrel” tactics – attempting to litigate the defendant’s supposed discovery lapses.

That didn’t work this time.  Whatever deficiencies (if any at all) in the defendant’s initial disclosures were irrelevant by the time summary judgment rolled around.  Even if the identity of the affiant who supported the summary judgment motion was disclosed too late, it was disclosed “well prior to the close of discovery,” and the witness “was ultimately deposed by plaintiffs.”  Id. at *4.  Like too much pine tar on a bat, the violation, if it existed at all, was harmless.  Or, to mix sports metaphors, “no harm, no foul.”  “Plaintiffs have made no showing that they were prejudiced by the timing of defendant’s disclosures.  Indeed, plaintiffs have made no allegations of any harm − not even general, vague, and conclusory ones − flowing from defendant’s allegedly belated disclosures.”  Id.

So plaintiffs tried again, arguing that the court should ignore the defendant’s affidavit, which was factually undisputed, because the affiant “failed to include a list of cases in which he has appeared as an expert.”  Id. at *5.  The court was having none of plaintiffs’ trivial pursuit.  If plaintiffs thought this deficiency was so important, they should have done something about it earlier, rather than pursue a nitpicking litigation strategy:

[P]laintiffs’ counsel never asked defense counsel or the expert for this list and never filed a motion to compel with the court seeking the information or the imposition of sanctions. . . .  Again, plaintiffs do not even generally suggest how they have been harmed as a result of these minor deficiencies in [defendant’s] expert report.  Indeed, when asked at the hearing on the pending motion, plaintiffs’ counsel suggested he purposefully did not pursue any further efforts to obtain the list of cases in which [the affiant] had appeared as an expert because, in counsel’s view, it made defendant’s expert “attackable.”

Id. (emphasis added).

With plaintiffs’ discovery smokescreen blown away, summary judgment was inevitable.  “It [was] undisputed on summary judgment that, at the time the parts used in [plaintiff’s] knee replacement left the control of defendant, they had been inspected, passed quality control inspections, and were in compliance with all applicable FDA regulations.”  Id. at *7.  Defect at sale is a “necessary element” of strict liability.  Id.  Further, California simply does not recognize strict liability design defect claims involving prescription medical products.  Id.  Negligence failed because of a “complete failure of proof” that the device failed when it shouldn’t have.  Id. at *8.  Finally, plaintiffs’ warranty claim was dismissed (in addition to the above grounds) on an interesting legal ruling − that the personal injury damages were not available for alleged breach of contract:

Here, plaintiff seeks general damages for pain, suffering, and inconvenience, and special damages for medical expenses, future medical expenses, loss of earnings, [plaintiff] seeks here are generally not cognizable in claims sounding in contract in California.

Id. (citations omitted).  Finally, with no evidence “that the defendant negligently injured” her spouse, that wife-plaintiff’s consortium claim bit the dust. Id. at *9.

Side retired on a (very) foul popup.

Weak claims all in N.K., Rincon, and Merancio. Daubert, TwIqbal, and simple failure to prove the claim defeated these actions, and did so fairly expeditiously.   Which is as it should be.  Weak claims have no business being brought, and where plaintiffs are unable to hide weak claims in MDLs, these cases demonstrate that (at least in the federal courts), the civil justice system still works.

We first mused over arbitration and drug/medical device claims exactly six years ago, when the United States Supreme Court issued its opinion in AT&T Mobility LLC v. Concepcion, 563 U.S. 333 (2011).  In that widely studied opinion, the Supreme Court held that the Federal Arbitration Act preempted state laws limiting the enforceability of class action waivers.  Bexis wondered aloud whether drug and device companies could arbitrate their drug and device-related disputes, perhaps when involved in contractual relationships with third party payers?

And then we largely stopped talking about arbitration. For six years.  Until now.  Because it’s Supreme Court opinion season again, and the Supreme Court has again ruled that the FAA preempts state laws limiting arbitration.  And this time, the Court has done so in a wrongful death case and in a remarkably strong opinion, which got us to thinking again:  Is there a role for arbitration in drug and medical device product liability claims?  (And because Bexis originally posed this question in 2011, we have shamelessly stolen his thoughts and prose for parts of this post, with his permission).

In Kindred Nursing Centers Limited Partnership v. Clark, No. 16-32, 2017 WL 2039160 (U.S.S.C. May 15, 2017), the U.S. Supreme Court upheld application of a nursing home’s arbitration agreement to tort claims for alleged personal injuries suffered by patients under the home’s care.  Those holding the patients’ medical powers of attorney (an unfortunately common situation) “signed an arbitration agreement with [defendant] on behalf of [the] relative.” Id. at *3.  Later, they brought state-court tort actions for wrongful death. Id.  The defendant moved to enforce the arbitration agreement, but lost.  The state supreme court held both agreements invalid, invoking specificity rules involving powers of attorney and singling out arbitration agreements for special scrutiny.  As described by the Court:

The Kentucky Constitution, the court explained, protects the rights of access to the courts and trial by jury; indeed, the jury guarantee is the sole right the Constitution declares “sacred” and “inviolate”. . . . And that clear-statement rule − so said the court − complied with the FAA’s demands.  True enough that the [Federal Arbitration] Act precludes singling out arbitration agreements.  But that was no problem, the court asserted, because its rule would apply not just to those agreements, but also to some other contracts implicating “fundamental constitutional rights” . . . [such as] a contract “bind[ing] the principal to personal servitude.”

Kindred, at *4 (citations and quotation marks to opinion being reviewed omitted).

The Federal Arbitration Act “preempts any state rule discriminating on its face against arbitration,” including “any rule that covertly accomplished the same objective by disfavoring contracts that (oh so coincidentally) have the defining features of arbitration agreements.” Id.  The Court then found the examples of non-arbitration “constitutional rights”− other than jury trial − pretextual.  “[T]he court hypothesized a slim set of both patently objectionable and utterly fanciful contracts that would be subject to its rule,” but only the jury trial was realistically implicated:

In ringing terms, the court affirmed the jury right’s unsurpassed standing in the State Constitution: The framers, the court explained, recognized “that right and that right alone as a divine God-given right” when they made it “the only thing” that must be “ ‘held sacred’ ” and “ ‘inviolate’”. . . .  And so it was that the court did exactly what Concepcion barred: adopt a legal rule hinging on the primary characteristic of an arbitration agreement − namely, a waiver of the right to go to court and receive a jury trial.  Such a rule is too tailor-made to arbitration agreements − subjecting them, by virtue of their defining trait, to uncommon barriers.

Id. at *5 (citations omitted).

Thus, even in personal injury cases, the FAA “requires a State to enforce all arbitration agreements (save on generally applicable grounds) once they have come into being.” Id. at *6.  “The Act’s key provision, once again, states that an arbitration agreement must ordinarily be treated as “valid, irrevocable, and enforceable.” Id. (citing 9 U.S.C. § 2).  “Adopting the [plaintiffs’] view would make it trivially easy for States to undermine the Act − indeed, to wholly defeat it.” Id.  Thus, the Court in Kindred “reach[ed] a conclusion that falls well within the confines of (and goes no further than) present well-established law.” Id. at *7 (quoting DIRECTV, Inc. v. Imburgia, 136 S. Ct. 463, 471 (2015)).  States cannot “flout[ ] the FAA’s command to place those agreements on an equal footing with all other contracts.” Id.

It was already clear that the FAA enforces arbitration clauses in “standard form” contracts. Doctor’s Assocs., Inc. v. Casarotto, 517 U.S. 681, 682 (1996).  The Act validates arbitration provisions in consumer contracts as well, including where the contract allows a company “to make unilateral amendments,” including to the arbitration provision. AT&T Mobility LLC v. Concepcion, 563 U.S. 333, 336 (2011).  DIRECTV pointed out that “parties to an arbitration contract [have] considerable latitude to choose what law governs,” so long as that law is “valid” under the FAA.  136 S. Ct. at 468, 470.

From our perspective, what Kindred adds to the analysis is the elimination of any argument that the FAA somehow exempts state-law personal injury actions – since that is precisely what was preempted by the FAA in that case.  We would even say more broadly that the opinion pumps the brakes on efforts to invalidate arbitration clauses on the basis of public policy.

So let’s circle back to our initial question: Is there a role for arbitration in drug and medical device product liability claims?  Forty years ago, when arbitration was seen as a commercial animal and a process where “businessmen” felt comfortable resolving their business disputes, we would have asked, why?

Today, we ask, why not? Things have changed, both in how we view arbitration on the one hand and product liability litigation on the other.  Of course, the elephant in the room is that in most personal injury lawsuits, the plaintiff and the alleged tortfeasor do not have a preexisting contractual relationship, which is how most parties in arbitration have agreed to arbitrate.  But assuming that could somehow be overcome, there are no clear legal barriers to adopting arbitration in drug and medical device product liability cases.

The FAA certainly does not exempt product liability claims. The relevant provision – the aforementioned 9 U.S.C. §2 – states:

A written provision in any . . . contract evidencing a transaction involving commerce to settle by arbitration a controversy thereafter arising out of such contract or transaction . . . shall be valid, irrevocable, and enforceable, save upon such grounds as exist at law or in equity for the revocation of any contract.

The sale of prescription medical products is certainly a “transaction” or “contract” – the other side routinely alleges warranty, consumer protection, and other contractually-based claims when suing our clients. Likewise such sales “involve commerce,” or else the FDA couldn’t exist.  There is no explicit exemption in the statute for product liability, torts, personal injury, or anything else of that nature.  So, we’d say the FAA by its terms covers sales of prescription medical products. Kindred establishes that tort claims for damages from goods and services “arise out of” the sales transaction for FAA purposes.

The FDA does not prohibit arbitration either. We checked FDA regulations and guidance documents to see if the FDA put any a priori (that means “right at the outset” in legal Latin) limits on arbitration clauses.  We found zilch in the FDA’s regulations, and to the extent arbitration is discussed at all in FDA Guidance Documents, those discussions did not pertain to prescription medical products – at least those used in humans.  Moreover, in 1998, President Clinton issued an executive order that “each Federal agency must take steps to:  1. Promote greater use of . . . arbitration. . . .”  Granted, that this order, by its terms applies only to disputes “involving the United States,” but it would be difficult for the FDA affirmatively to obstruct arbitration elsewhere while itself being under such a presidential directive.

And, because of Kindred, we know that state law cannot discriminate against arbitration clauses.  That was what Kindred was all about.

So it appears to us that the primary obstacles are practical, and assuming those could be worked out, we see many reasons why arbitration is worthy of consideration for product liability cases. To start with, there is no longer any stigma attached to arbitrating tort claims.  It has been well-established since the 1970s that medical malpractice claims can be arbitrated, and it has been clear since at least the 1990s that there is no public policy that would per se exclude personal injury and wrongful death claims from the scope of arbitration.  If there were any doubt on this point, the U.S. Supreme Court laid it to rest in Kindred, where seven justices of an eight-member court ruled that wrongful death claims can and should be arbitrated.

To those who say that arbitration is inadequate or is biased against claimants, we would say there are two sides to every story. Sure, the arbitration process can be (but is not always) less robust than litigation, especially in terms of discovery.  But before decrying that compromise, consider how productive discovery actually is when weighed against the cost—the majority of which is born by the defense.  Does discovery in its current form actually lead to results that are more fair than what parties would receive in arbitration?  We are not so sure.  And considering our view that discovery abuse is all too common, we would argue that a process that brings discovery under control and fully embraces proportionality would be eminently more fair.

As for bias, anyone who has been hit with a substantial arbitration award would disagree that arbitration presents substantial disadvantages to claimants. The structure of the arbitration process can address perceptions of bias as well.  We saw that in Concepcion, where the Supreme Court noted several procedural features that benefited consumers, including adoption of a one-page complaint, shifting of “nonfrivolous” costs to the defendants, designating a location convenient to the claimant, a flexible hearing process (in person, by telephone, or in writing) at the claimant’s option, among other features. Concepcion, 563 U.S. at 336-37.  Anyone who has been on the losing end of an arbitration award person would also disagree that arbitration removes the deterrent value of jury verdicts.  After all, the same statute that makes arbitration clauses enforceable also makes arbitration awards enforceable.

Finally, some defend product liability litigation for its “narrative value,” i.e., the value gained by presenting and resolving controversies in open court.  We see their point, but again consider how things have changed.  In our years of practice, we have come to understand that the American tort system is good at transferring wealth from one party to another, but is limited in delivering much more than that.  As a result, plaintiffs who sue to vindicate interests other than monetary interests tend to be disappointed.  Moreover, in today’s mass tort system, relatively few plaintiffs have any interest in litigation other than monetary gain.  Other than a few hand-picked “bellwether” plaintiffs, none will actually see the inside of a courtroom, and many will not meet their lawyers until the day before their depositions, if ever.  How does preserving this inventory-based system advance any helpful “narrative”?

In the end, we don’t know if arbitration on any appreciable scale could work, but it is worth considering. We do know that the current Supreme Court would be open to approving it.

It is quite unusual for a state trial court to depart from that state’s highest court precedent.  But consider that old Hebrew National frankfurter advertising campaign: “We answer to a higher authority.”  If the United States Supreme Court comes out with a case that renders your state supreme court’s opinion null, void, or wrong, you go with SCOTUS.  That is what happened in Russell v. Johnson & Johnson, Inc., 2017 WL 2261136 (Ky. Circuit Court May 8, 2017).  To see intervening SCOTUS authority dislodge a vexing state ruling is remarkable enough.  When that SCOTUS authority compels application of preemption – well, you just know we’re going to blog about it.

The plaintiff in Russell alleged injuries from a cardiac ablation procedure in which doctors used an “SF catheter.”  The plaintiff’s claims included strict liability, design defect, negligence (including failure to test), failure to warn, breach of warranties, fraud, unjust enrichment, and violation of Kentucky’s consumer protection statute.  The defendant filed a motion for judgment on the pleadings, arguing that the SF catheter was a Class III medical device that had gone through the pre-market application (PMA) process, thereby earning the protection of conflict preemption.  That is, no state jury could, via its verdict, impose obligations on a defendant that were in any way different from the FDA’s federal scheme.

If a product went through the PMA process, product liability litigation involving that product is usually a laydown.  No matter what theories are invoked by the plaintiff, preemption applies.   Sure, there is that annoying “parallel violation” exception, which we have written about endlessly, but let’s for the moment put that aside and pretend that the Supreme Court in Riegel had never penned that unfortunate dicta, and that appellate courts around the country had not wrestled with that same dicta in ways various and often incoherent.  This doctrinal confusion really is an instance of “what the SCOTUS giveth, the SCOTUS taketh away,” for it was the Riegel decision that established medical device preemption, and it was the Riegel case that permitted the Russell court to dispense with a bothersome Kentucky precedent.

The complication in the Russell case is that the SF catheter at issue had gone through several modifications since the initial PMA approval.  The SF catheter used in the procedure was part of an FDA-approved clinical trial under the auspices of an FDA investigational device exemption (IDE).  The legal question front and center in Russell was whether the IDE regulations involve the same sort of rigorous, device-specific safety requirements as the PMA process, such that full-blown preemption should apply.  The Russell court held that they did, and that preemption therefore foreclosed all of the plaintiff’s claims.

The plaintiff resisted preemption by contending that the SF catheter at issue did not receive PMA approval until 14 months after the procedure.  On the date of the procedure, all the SF catheter had going for it was an IDE, and a Kentucky Supreme Court decision back in 1997, Niehoff v. Surgidev Corp., 950 S.W.2d 816 (Ky. 1997), had held that certain state law claims were not preempted in a case involving an intraocular lens used during a clinical trial under an IDE.  That non-preemption ruling would seem to be squarely relevant and binding precedent — save for Riegel, which SCOTUS decided 11 years after Niehoff.

The facts in Niehoff were distinguishable from Russell in two significant ways: (1) the product in Niehoff never received PMA approval, whereas the SF Catheter in Russell had, and (2) unlike the plaintiff in Niehoff, the plaintiff in Russell had signed a lengthy, FDA approved consent form acknowledging that the medical procedure in question was investigational. Even aside from those factual distinctions, the Russell court concluded that Riegel and its progeny made clear that the IDE procedure involved the same rigorous safety review process as pertains to a PMA, and that preemption applied. We do not know of a single IDE case after Riegel that has failed to apply extensive PMA preemption. Put another way, an IDE was much more like the PMA process covered by Riegel preemption than like the 510(k) substantial equivalence process that the earlier Lohr decision held did not merit preemption.  Plus there is the additional fact that the device in Riegel had gone through the PMA supplemental process, making it very like the SF catheter in terms of FDA posture.  (It really pays to read the details of a case, not just the headnotes.)

Once the Russell court decided that Riegel preemption applied to the SF catheter, the rest was easy.  Would the causes of action impose requirements different from or additional to the federal requirements?  The answer for every claim in the complaint was Yes.  And now inevitably, we come to the issue of whether there was a parallel violation alleged.  The Russell court reasoned that such a parallel violation must include: (1) a violation of a specific federal regulation (that “specific” is important and right away makes the Russell decision better than most), (2) a violation of an identical state law duty, and (3) a showing that violation of the federal rule caused the injuries. The plaintiff’s claims failed this test.  For one, the plaintiff alleged no deviation from the IDE requirements. Beyond that, the plaintiff’s claims essentially demanded that the defendant do more (secure a more detailed informed consent) or say more (additional warnings) than required by the federal scheme.  That is the stuff of preemption, not any parallel violation, and the court dismissed all of the plaintiff’s claims with prejudice.

 

We pointed out earlier that Bristol-Myers Squibb Co. v. Superior Court, No. 16-466 (“BMS”), was not the only personal jurisdiction matter on the Supreme Court’s docket this term.  Argued the same day as BMS was BNSF Railway Co. v. Tyrell, a Federal Employees Liability Act (“FELA”) personal injury case raising some similar personal jurisdiction questions – but not the unprecedented expansion of “specific” personal jurisdiction presented by BMS.  We opined in our prior post that for all the difficulties that the plaintiffs in BMS encountered at oral argument, the plaintiffs in BNSF (there were two consolidated cases) had it even worse:

[W]e frankly can’t see a path to affirmance for the plaintiff in BNSF.  It could well be a unanimous reversal of the Montana Supreme Court, albeit with at least one concurrence offering a different rationale (similar to Bauman).

For the full post, go here.

BNSF was just decided, here’s the link to the opinion, and that’s pretty much what happened – reversal with only one justice (Sotomayor) concurring in part and dissenting in part – as was the case in Bauman.  Also as in Bauman, Justice Ginsburg authored the opinion of the Court.

Briefly, since we discussed the facts in BNSF before, two plaintiffs sued the defendant for personal injuries under FELA in Montana state court despite:  (1) neither plaintiff being a Montana resident; (2) neither plaintiff being injured in Montana; and (3) the defendant being neither a Montana corporation nor headquartered in Montana.

By 8-1 the Court held no personal jurisdiction. The first part of BNSF was about issues peculiar to the FELA statute.  We’ll skip that – except to point out that the Court once again cautioned – as it did in Bauman – that personal jurisdiction decisions predating International Shoe Co. v. Washington, 326 U.S. 310 (1945), were of doubtful validity:

[A]ll these cases [cited by plaintiffs] were decided before this Court’s transformative decision on personal jurisdiction in International Shoe.  See Daimler, [which we call Bauman] 571 U.S., at ___, n.18 [134 S.Ct. 746, 761] n.18) (cautioning against reliance on cases “decided in the era dominated by” the “territorial thinking” of Pennoyer v. Neff, 95 U.S. 714 (1878)).

BNSF, slip op. at 9 (citations rejiggered).

After disposing of the FELA issues, BNSF turned to the Montana law issues.  The Montana Supreme Court had relied on the Montana “Long Arm” statute, which provided for the exercise of general jurisdiction over all persons “found within” the state.  Id. The terms of the statute didn’t matter much since the correct question was “whether the Montana courts’ exercise of personal jurisdiction under Montana law comports with the Due Process Clause of the Fourteenth Amendment.”  Even though it was undisputed that the defendant was “found within” Montana under the statute, there was no jurisdiction for the rather transparently obvious reason that no state statute could go beyond what constitutional Due Process permitted:

[T]he business [defendant] does in Montana is sufficient to subject the railroad to specific personal jurisdiction in that State on claims related to the business it does in Montana. But instate business, we clarified in [Bauman] and Goodyear, does not suffice to permit the assertion of general jurisdiction over claims like [plaintiffs’] that are unrelated to any activity occurring in Montana.

Id. at 11-12 (footnote omitted).

For DDLaw’s purposes, not specific to railroads, that’s the most significant aspect of BNSF.  Some courts, most notably Bors v. Johnson & Johnson, 208 F. Supp.3d 648 (E.D. Pa. 2016), which we discussed here, seem to have overlooked the point that a peculiarly worded state statute simply cannot override the Due Process constraints enforced in BNSF and Bauman.  Thus, that the unusual language of a state enactment (Pennsylvania’s corporate registration statute) in Bors could be read to allow personal jurisdiction (in Bors “consent” jurisdiction) beyond the Due Process limits of Bauman means nothing.  State statutes cannot extend personal jurisdiction to unconstitutional extremes – as BNSF held with respect to the “found within” language in Montana’s Long Arm statute.

Thus, although BNSF did not reach the issue of jurisdiction by consent, slip op. at 12, its rationale should be fatal to decisions like Bors that purport to hold that a state statute can authorize an otherwise unconstitutional scope of personal jurisdiction.

Put a New Yorker and a Californian in a room together and the debate will begin almost immediately. Hollywood v. Broadway. Atlantic v. Pacific. Dodgers v. Yankees or Giants v. Forty-Niners. Shake Shack v. In-N-Out (or is Five Guys overtaking both?). And more generally speaking that east coast/west coast divide extends beyond those two urban hubs. Laid back v. fast-paced lifestyle. Deserts v. low country. Golden Gate v. Sunshine Skyway. Disneyland v. Disney World. And let’s not forget – the west coast may be synonymous with California sunshine, but the east coast gives you actual seasons.

While failure to report adverse event claims are not limited to the west coast, we think of them as Stengel claims. In case you need reminding, we believe that the Ninth Circuit made a historic error in Stengel v. Medtronic Inc., 704 F.3d 1224 (9th Cir., 2013) (en banc), when it equated routine product liability inadequate warning claims with indirect third-party warning claims where the third party is a governmental agency – that is, the FDA. Since Stengel is a Ninth Circuit case and the Ninth Circuit includes the entire west coast – we’re going to saddle the west coast with that one. And we’re going to praise an east coast court for saying, thanks but no thanks.

We’ve talked about Burrell v. Bayer Corporation before when earlier this year the court ruled that allegations of parallel claims in plaintiff’s complaint conferred federal question jurisdiction. After winning on removal, the defendants next moved to dismiss the entire case on preemption. Round 2 goes to defendants as well.

The product at issue is the Essure birth control medical device. It is a pre-market approved device so preemption shouldn’t be a big surprise. Burrell v. Bayer Corp., 2017 WL 1955333, *1 (W.D.N.C. May 10, 2017). As is true of the vast majority of drug and medical device products cases, failure to warn is at the heart of the case. But as we already know, traditional failure to warn claims are preempted in PMA device cases. So, plaintiffs pushed for a Stengel-claim. Plaintiff’s argument is failure to warn premised on failure to provide adverse event reports to the FDA is a non-preempted parallel claim. Unpersuaded by the reasoning of that west coast court, Burrell found that the requirement to report adverse events exists under the FDCA rather than state law and therefore, plaintiff’s failure to warn claim is “being brought because the [] defendants allegedly failed to meet these reporting requirements.” Burrell, at *5 (emphasis added). And where a claim is being brought solely based on a violation of the FDCA – that’s Buckman implied preemption. Traditional failure to warn is expressly preempted, failure to report to the FDA is impliedly preempted. Score one for the east coast for getting this.

But the court didn’t stop there. Analyzing the claim under state law, it still didn’t hold up because plaintiff’s allegations didn’t support a finding of causation. This is where most Stengel claims. By the time the device was implanted in plaintiff, the FDA had received and analyzed the adverse event reports and the subsequent warning did not contain any new information. Id. at *5 (although a black box warning was required, that was a new “type” of warning, the substance of the warning was unchanged). So there was no causal nexus between the alleged failure to report and plaintiff’s injury.

None of plaintiff’s remaining claims fared any better. On failure to train, the claim only survives preemption if premised on allegations that defendant failed to train in accordance with federal requirements. Plaintiff made no such allegations. Id. at *6. Moreover, plaintiff again failed to allege any facts to support a causal connection between the failure to train and her injury. Id. Plaintiff’s negligent manufacturing claim suffered the same fate – no alleged violation of federal requirements and no facts to support causation. Id. Plaintiff’s design defect claim was dismissed as expressly preempted. As a PMA device, the “FDA made its determination of this products safety and effectiveness for its given use. As the plaintiff cannot allege that [defendant] departed from its FDA-approved design of this product, these design defect claims are preempted.” Id. at *7. Even if not preempted, North Carolina does not recognize strict liability claims for products liability. Id.

            Moving on to warranty claims, plaintiff alleged that defendant expressly warranted the product was safe. To find that defendant breached that warranty, a jury would have to conclude that the product was unsafe – which is contrary to the FDA’s conclusion in its pre-market approval that the device was in fact safe and effective. So, express warranty is expressly preempted. Id. Since plaintiff’s implied warranty claim also turned on whether the product was reasonably safe, it too was expressly preempted. “The FDA, under the FDCA and the MDA, has the express authority to make such determinations as to the safety and effectiveness of Class III medical devices.” Id.

Plaintiff’s final claims against the manufacturer were for fraud and unfair trade practices. The court first noted that most of the allegations on these claims were just a re-packaging of the allegations pleaded with plaintiff’s other claims. Since the allege misrepresentations were largely “indistinguishable from FDA-approved labeling statements” – they too were preempted. Id. at *8.

Nice job North Carolina. In the east coast v. west coast debate, we’ll side with an anti-Stengel jurisdiction every time.

While we are waiting for the Supreme Court to rule in Bristol-Myers Squibb Co. v. Superior Court, No. 16-466 (“BMS”), an interesting thing happened.  Last week in TC Heartland LLC v. Kraft Foods Grp. Brands LLC, ___ S.Ct. ___, 2017 WL 2216934 (U.S. May 22, 2017), the Court interpreted the federal venue statute peculiar to patent litigation, 28 U.S.C. §1400(b), to restrict the ability of patent plaintiffs to bring their cases anywhere in the country.  2017 WL 2216934, at *7.  Reaffirming the viability of a 60-year- old decision, Fourco Glass Co. v. Transmirra Products Corp., 353 U.S. 222 (1957), the Court held that patent infringement actions could only be brought where the defendant “resides,” which in the case of corporations meant only where they were incorporated.  2017 WL 2216934, at *7.

A lot has been written already about how TC Heartland means the demise of the Eastern District of Texas as the equivalent of Madison County, Illinois for patent litigation.  That is not our sandbox, and we’re not here to discuss that.  For our purposes, we’re intrigued by the Court unanimously restricting – albeit under a federal venue statute, not the Due Process Clause of the Constitution – widespread plaintiff-side forum shopping leading to suits piling up in particular magnet jurisdictions.  From a policy standpoint, that’s also what BMS is about.

Indeed, we tangentially encountered patent-based forum-shopping before. In this post, we discussed a decision of the Federal Circuit in a patent case, Acorda Therapeutics Inc. v. Mylan Pharmaceuticals, Inc., 817 F.3d 755 (Fed. Cir. 2016), which involved a related question of personal jurisdiction − that a defendant’s “plans to market its proposed drugs” in a jurisdiction were enough to support jurisdiction under minimum contacts/specific jurisdiction analysis in patent cases. Id. at 762-63.  We weren’t concerned with that patent-specific proposition.  Rather, we were interested in the alternative argument – ultimately avoided in Acorda – that sought to assert general jurisdiction under Delaware law simply because the defendant had registered to do business in the state and thereby supposedly “consented” to be sued there for anything by anyone.  The only reason expansive personal jurisdiction arguments were being made in Acorda was to support the equally expansive notions of venue in patent cases that TC Heartland has just consigned to the dustbin of legal history.

In any event, that alternative argument in Acorda is now moot because only a month later (to the day), the Delaware Supreme Court rejected jurisdiction by consent under state law in Genuine Parts Co. v. Cepec, 137 A.3d 123, 147 (Del. 2016) (holding that Bauman “indicates that such a grasping assertion of state authority is inconsistent with principles of due process”).  The Acorda situation does demonstrate, however, the relationship between the expansive notions of personal jurisdiction before the Supreme Court in BMS and the expansive notions of venue that bit the dust in TC Heartland.

There is one other interesting point that we learned reading TC Heartland.  We had never had much occasion to consider the general federal venue statute, 28 U.S.C. §1391(c), that was the principal basis for the expansive venue arguments that the Court rejected in TC Heartland.  The Court quoted that statute:  “[f]or purposes of venue under this chapter, a defendant that is a corporation shall be deemed to reside in any judicial district in which it is subject to personal jurisdiction at the time the action is commenced.” TC Heartland, 2017 WL 2216934, at *6 (emphasis added).

Thus, the general federal venue statute – applicable to all federal question actions where (unlike the patent statute) the applicable statute does not contain its own venue provisions – is dependent on where a corporation is “subject to personal jurisdiction.” That’s what is before the Supreme Court in BMS.  Thus an unremarked upon (at least by us) aspect of BMS is that the Court’s decision will also determine the scope of available venues available to federal plaintiffs in any number of situations having nothing to do with product liability.  That may be of interest to corporations, particularly if personal jurisdiction was waived in a particular case, but a motion challenging venue is still appropriate.  It may also be of interest for other reasons peculiar to federal claims that we’re not familiar with.  In any event, we invite our readers, in-house and otherwise, to think about this possible aspect of BMS for a moment.

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

The plaintiff thought she had a strong summary judgment opposition. She included the deposition testimony of her prescribing doctor, who suggested that Boston Scientific’s warnings for the pelvic mesh device were inadequate. And she included her own affidavit, in which she said that she wouldn’t have agreed to let her doctor implant that device in her if she’d known that it could cause the negative life changing conditions that she allegedly later suffered. Plaintiff thought her opposition was enough to save her failure to warn claim. It wasn’t. The MDL court granted partial summary judgment. It turned out that Plaintiff’s opposition papers contained a big gap—no evidence of proximate causation. Plaintiff offered no evidence that her doctor read Boston Scientific’s Directions for Use (“DFU”). And, if her prescribing doctor didn’t read the DFU, changing it to include the allegedly proper warning wouldn’t have changed anything, particularly her doctor’s decision to prescribe.

That wasn’t the end for plaintiff, though. She had other claims that survived and that she could take to trial. That trial, however, would happen before a different court.  After its summary judgment decision and completing other pretrial matters, the MDL court transferred the case back to the original transferor court for trial.

Plaintiff saw this as an opportunity. She moved the new court to reconsider the MDL court’s summary judgment decision. Her basis was that, in fact, her prescribing doctor had read the DFU. The plaintiff had simply failed to present that portion of his deposition testimony to the MDL court. On that basis, she asked the new trial court to change the MDL court’s decision and deny summary judgment against the failure to warn claim.

No luck. She lost her reconsideration motion.

So, with no failure to warn claim, Plaintiff went to trial.

She lost there too.

Undaunted and still fighting to revive her failure to warn claim, plaintiff appealed to the Fourth Circuit. She challenged both the MDL court’s original summary judgment decision and the trial court’s denial of her motion to reconsider that decision.

And she lost again.

All of this is described in the Fourth Circuit’s recent opinion. Carlton v. Boston Scientific Corp., 2017 WL 1854278 (4th Cir. May 9, 2017). The Fourth Circuit saw plaintiff’s problems as both substantive and procedural. Substantively, a failure to warn claim cannot survive without evidence that the doctor would have read the warning. Id. at *3. Procedurally, it’s not the court’s job to find the evidence that supports proximate causation. It’s the parties’ job to present that evidence to the court: “The responsibility to comb through the record in search of facts relevant to summary judgment falls on the parties—not the court. We therefore affirm the MDL court’s partial summary judgment award.” Id.

Her procedural failings were particularly problematic on her challenge to the trial’s court’s denial of reconsideration. This wasn’t new evidence on which she was relying. It was evidence that had indisputably been available at the time the MDL court decided the summary judgment motion:

At oral argument, Appellant’s counsel asserted that in light of this late revelation, the MDL court’s summary judgment award constituted clear error causing manifest injustice. Not so. We have consistently affirmed denials of motions to reconsider summary judgment rulings where the motion is merely a vessel for the very evidence that was initially lacking in opposition to summary judgment. Significantly, the entirety of Dr. Kennelly’s deposition testimony was available well before summary judgment briefing, and the additional portions of testimony Appellant provided to the district court for “reconsideration” thus did not amount to the type of evidence constituting grounds for a valid motion for reconsideration. We therefore affirm the district court’s denial of Appellant’s motion for reconsideration.

Id. at *4.

While not for lack of fighting on plaintiff’s part, we suspect that this one is now finally over.