Today is the birthday of Gilbert O’Sullivan, who scored a hit back in 1972 with “Alone Again, Naturally,” the saddest song we can think of this side of Albinoni’s Adagio.  That is fitting, given our postscript.

 

December 1 is also the birthday of Sarah Silverman and Bette Midler, two women who consistently bring smiles, so we’ll discuss a good case out of the Eleventh Circuit, though probably not good enough to crack our upcoming top ten list.  In Tsavaris v. Pfizer, Inc., 2017 WL 5593488 (11th Cir. Nov. 21, 2017), the plaintiff claimed that she developed breast cancer after ingesting a generic version of a hormone replacement drug.  She sued both the brand and generic manufacturers.  We don’t know what happened regarding the brand manufacturer (they should certainly have secured a dismissal), but we know that the district court dismissed the claims against the generic manufacturer on preemption grounds well-established in the Mensing and Bartlett SCOTUS decisions and the Guarino Eleventh Circuit decision.  The district court entered final judgment for the defendant.

 

The plaintiff filed an amended complaint against the generic manufacturer, asserting that she would not have been harmed had the manufacturer not “failed in its federally mandated duty” under 21 U.S.C. section 355 to notify the FDA of certain scientific studies relevant to the cancer risk.  The district court denied the amendment on both procedural and substantive grounds, and the Eleventh Circuit affirmed, holding that the district court had not abused its discretion.  The procedural grounds were enough to bar the amendment: the plaintiff identified no newly-discovered evidence or manifest error of law, as required by Federal Rule of Civil Procedure 59(e).  That is all well and good.

 

But it is the substantive decision that is more interesting to us.  The plaintiff was complaining of a violation of a federal reporting duty owed to a federal agency, not to her.  More specifically, she premised her complaint on a provision of the federal Drug Price Competition and Patent Term Restoration Act that requires companies to submit “data relating to clinical experience and other data or information … about the safety, effectiveness, or labeling of its drug” to the FDA.  Because the plaintiff was seeking “to enforce a duty owed to a federal agency and her cause of action would not exist in the absence of that duty, her proposed second amended complaint is preempted.”

 

The Tsavaris decision was not selected by the Eleventh Circuit for publication in the Federal Reporter, perhaps because this was a pro se appeal.  But the proposed amended complaint was drafted “with the assistance of counsel,” and is fairly typical of the way some plaintiff lawyers seek to evade preemption.  Thus, the Eleventh Circuit’s finding that the amendment would have been futile provides some comfort to practitioners on the right side of the v.

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We mourn the passing earlier this week of beloved Reed Smith colleague Chuck Pagliotti.  Chuck was what all of us in the legal profession should aspire to be – a problem solver.  Chuck was a genius when it came to fixing messes we made on our computers, iPhones, or anything else that could occasionally baffle us.  He always did so with patience and a smile.  We shared a love for anything relating to Star Wars.  Chuck was a sweet, gentle soul. Our grief exceeds our poor power of expression.

 

 

When it comes to design defect claims and FDA pre-market approved (“PMA”) medical devices, “preemption” is our reflexive reaction. That’s entirely reasonable, given the many decisions that preempt state-law design-related claims since Riegel v. Medtronic, Inc., 552 U.S. 312 (2008).  We collect then all here.

Nevertheless, there are some judges, particularly (but not all) in state court, who react negatively to the very concept of preemption.  Thus, a word to the wise is not to put all your dismissal eggs in one basket.  One logical alternative argument starts with the same premise as preemption – that “the FDA requires a device that has received premarket approval to be made with almost no deviations from the specifications in its approval application.”  Riegel, 552 U.S. at 323.

The “almost no deviations” limitation, of course applies to device design.  E.g., Walker v. Medtronic, Inc., 670 F.3d 569, 580 (4th Cir. 2012); Blunt v. Medtronic, Inc., 760 N.W.2d 396, 409 (Wis. 2009); McLaughlin v. Bayer Corp., 172 F. Supp. 3d 804, 810 (E.D. Pa. 2016); Kitchen v. Biomet, Inc., 2014 WL 694226, at *3 (E.D. Ky. Feb. 21, 2014); Miller v. DePuy Spine, Inc., 638 F. Supp. 2d 1226, 1229 (D. Nev. 2009).

Which brings us to Restatement (Second) of Torts §402A, comment k (1965), “which insulates from liability manufacturers of unavoidably unsafe products that are properly prepared and accompanied by an adequate warning.”  Rodriguez v. Stryker Corp., 680 F.3d 568, 575 (6th Cir. 2012) (applying Tennessee law).  Putting aside the separate (albeit important) issue whether comment k applies to prescription medical products generally or only on a case-by-case basis, courts on both sides of that question equate “unavoidably unsafe” with the absence of an alternative design:

[N]umerous state and federal courts ha[ve] interpreted comment k to mean that a product is “unavoidably unsafe” when, given proper manufacture and labeling, no feasible alternative design would reduce the safety risks without compromising the product’s cost and utility.

Bruesewitz v. Wyeth LLC, 562 U.S. 223, 256 (2011) (Breyer, J. concurring) (footnote containing string citation omitted) (emphasis added).  In other words, “a defendant seeking to invoke the [comment k] defense must first show that the product is highly useful and that the danger imposed by the product could not have been avoided through a feasible alternative design.”  Mutual Pharmaceutical Co. v. Bartlett, 133 S. Ct. 2466, 2487 (2013) (applying New Hampshire law).  To avoid a claim of “unavoidable risk, there must be, at the time of the subject product’s distribution, no feasible alternative design which on balance accomplishes the subject product’s purpose with a lesser risk.”  Toner v. Lederle Laboratories, 732 P.2d 297, 306 (Idaho 1987).  “The purpose of comment k is to protect from strict liability products that cannot be designed more safely.” Grundberg v. Upjohn Co., 813 P.2d 89, 92 (Utah 1991).  Grundberg and Toner don’t agree on much when it comes to comment k, but they agree on the importance of alternative design.

Thus, that a PMA-approved device must be made with “almost no deviations” from its specified design means (in addition to preemption) that there is no legal alternative design that would allow the plaintiff to avoid a manufacturer’s comment k defense.  To use a non-approved alternative design would be illegal – and illegal designs cannot serve as “feasible” alternative designs.  See Lewis v. American Cyanamid Co., 715 A.2d 967, 981 (N.J. 1998} (“plaintiff may not succeed on an alternative design theory that would have required the defendant manufacturer to violate the law”); White v. Wyeth Laboratories, Inc., 533 N.E.2d 748, 753-54 (Ohio 1988) (alternative design not feasible where “it was not possible for [defendant] to have legally marketed a [product] design using [the alternative design] at the time [plaintiff] was inoculated”); Ackley v. Wyeth Laboratories, Inc., 919 F.2d 397, 401 (6th Cir. 1990) (following White; alternative designs did not “exist[]” where it was “indisputable” that “[w]ithout an FDA license to produce another design, [defendant] was legally prohibited from distributing” those designs) (applying Ohio law); Wolfe v. McNeil-PPC, Inc., 773 F. Supp.2d 561, 572 (E.D. Pa. 2011) (when “[t]here exists no FDA-approved alternative form of [the product],” “there is no available alternative design”); Militrano v. Lederle Laboratories, 769 N.Y.S.2d 839, 847-48 (N.Y. Sup. 2003) (where plaintiff proposed a non-FDA-approved alternative, defendant “could not have marketed a reasonable alternative”), aff’d, 810 N.Y.S.2d 506 (N.Y.A.D. 2006); In re Alloderm Litigation, 2015 WL 5022618, at *12 (N.J. Super. Law Div. Aug. 14, 2015 (no feasible alternative where design plaintiff advocated “was not approved by the Food and Drug Administration until” after plaintiffs’ surgeries); Totterdale v. Lederle Laboratories, 2008 WL 972657 (W.Va. Cir. Mar. 19, 2008) (where FDA approval not until after plaintiff’s injury plaintiff did “not provide[] any new material facts to raise a genuine issue as to whether [the product] was avoidably unsafe”).

Thus, in Gross v. Stryker Corp., 858 F. Supp.2d 466 (W.D. Pa. 2012), comment k applied to “a Class III medical device which received FDA approval pursuant to the PMA process.” Id. at 481 (footnote omitted).

Moreover, the inherently rigorous nature of the premarket approval process and the contraindications, warnings, and precautions described in the [device’s] Summary of Safety and Security Data all suggest that [it] is an “unavoidably unsafe” product to which strict liability does not apply.

Id. at 482.  “As a result, the [device] can be considered a prescription medical device that falls within the scope of comment k to § 402A.”  Id.

Similarly, the court employed the non-preemption path of comment k in Aaron v. Medtronic, Inc., 209 F. Supp.3d 994 (S.D. Ohio 2016).  While Ohio (at the relevant time, this has now changed, Ohio Rev. Code Ann. §2307.75(D)) was a case-by-case comment k state, the PMA approved nature of the device, and the constraints the FDA’s approval placed on alternative designs, meant that comment k had to apply:

Defendant argues . . . that [the device’s] classification by the FDA as a Class III medical device inherently means that it is unavoidably unsafe and that Comment K’s prohibition of strict liability claims therefore applies. Defendant’s argument is well taken.  Class III devices . . . are, as relevant here, defined as devices that are “for a use which is of substantial importance in preventing impairment of human health, or…present[] a potential unreasonable risk of illness or injury.”  21 U.S.C. §360c(a)(1)(C)(ii). . . .

[T]here is no alternative design for [the device] that could lawfully be marketed.  “Once a device has received premarket approval, the MDA forbids the manufacturer to make, without FDA permission, changes in design specifications…that would affect safety or effectiveness.” There is therefore no basis for an in-depth evidentiary inquiry into alternative designs.

Aaron, 209 F. Supp.3d at 1013-14 (quoting Riegel, 552 U.S. at 319) (other citations omitted).

So while preemption should do the trick with design defect claims involving PMA approved medical devices, courts may sometimes have an easier time with alternative, non-constitutional arguments such as the lack of any legal alternative design under Restatement §402A, comment k.  Consider giving judges this other way to the end result that we all want – dismissal of design defect claims.

As our PMA preemption scorecard makes clear, warning claims are preempted under Riegel v. Medtronic, Inc., 552 U.S. 312 (2008), because the preemptive language, “different from or in addition to,” precludes plaintiffs from demanding more or different warnings.  Since warning claims are the bread and butter of prescription medical product liability, plaintiffs will try just about anything to get around that simple fact.

One common plaintiff-side tactic is to relabel failure to warn as “fraud.”  Plaintiffs then argue that “fraud” claims shouldn’t be preempted, either because they are predicated “on a more general obligation[,] the duty not to deceive,” Cipollone v. Liggett Group, Inc., 505 U.S. 504, 528-29 (1992), or because they are a “parallel” claim associated both with that “general” state-law duty and FDA regulations prohibiting “false or misleading” statements.

While sometimes plaintiffs gain some traction with “fraud” claims asserting affirmatively false statements, most failure to warn claims involve omissions.  Thus, plaintiffs are also wont to argue that “fraudulent concealment” or “fraud by omission” claims should also be unpreempted.  Here plaintiffs lose.  Such concealment/omission claims are always at least “in addition to” a PMA device’s FDA-approved labeling.

The key case, Perez v. Nidek Co., 711 F.3d 1109 (9th Cir. 2013), held that not only is a “fraud by omission claim [] expressly preempted” – but “obvious[ly]” so.  Id. at 1118.

The teachings from the Supreme Court cases plus our application of MDA preemption . . . lead to an obvious result:  [plaintiff’s] fraud by omission claim is expressly preempted by § 360k(a).  [T]he [omission] claim here depends on a requirement that is “in addition to” those federal requirements.  [Plaintiff] effectively seeks to write in a new provision to the FDCA: that physicians and medical device companies must affirmatively tell patients when medical devices have not been approved for a certain use. . . .  Just as significant, the alleged missing disclosure . . . “relates to the safety or effectiveness” of the [PMA device].

Id. at 1118-19 (emphasis added).   See Martin v. Medtronic, Inc., 2017 WL 825410, at *7 (E.D. Cal. Feb. 24, 2017) (following Perez; fraudulent concealment claim expressly preempted); Frere v. Medtronic, Inc., 2016 WL 1533524, at *10 (C.D. Cal. April, 6, 2016) (same); Jones v. Medtronic, 89 F. Supp.3d 1035, 1050 (D. Ariz. 2015) (same); Hawkins v. Medtronic, Inc., 2014 WL 346622, at *6 (E.D. Cal. Jan. 30, 2014) (same).

This rationale means that, the “distinction between claims premised on false misrepresentations and those premised on omissions” has been described as “the key dividing line” for preemption purposes.  Schouest v. Medtronic, Inc., 13 F. Supp.3d 692, 701 (S.D. Tex. 2014).

The affirmative misrepresentation/omission distinction is representative of the two types of claims [plaintiff] is asserting: on the one hand, that [defendant] did not do enough, and on the other, that [defendant] did too much.

Id.

In another claim, like Perez and Schouest, alleging failure to warn of risks of off-label use of a PMA device as “fraudulent concealment,” the court held such claims expressly preempted to “to the extent it is based on any alleged omissions or concealments.” Byrnes v. Small, 142 F. Supp.3d 1262, 1269 (M.D. Fla. 2015).

Plaintiffs have not identified any federal requirement to inform the public or to update warning labels regarding the dangers of the off-label use of medical devices.  Therefore, to the extent this claim is premised on [defendant’s] alleged concealment of information . . ., it is expressly preempted, because requiring [defendant] to warn [prescribers] of the dangers of the off-label use of [the device] would clearly be different from, or in addition to, the federal requirements.

Id. (citation, footnote, and quotation marks omitted).

In Sadler v. Advanced Bionics, Inc., 929 F. Supp.2d 670 (W.D. Ky. 2013), state “law for fraudulent omissions . . . requires that the defendant have a duty to disclose information.”  Id. at 683 (citation omitted).

Plaintiffs cite no federal duty to disclose to the public or to patients the omitted information.  Therefore, to the extent Plaintiffs assert that [defendant] was under some state law duty to disclose, this amounts to an additional requirement, which §360k expressly preempts.

Id. at 683-84 (citation and footnote omitted)

In Leonard v. Medtronic, Inc., 2011 WL 3652311 (N.D. Ga. Aug. 9, 2011), the plaintiffs claimed that their concealment allegations were “actually a fraud claim” when faced with a preemption motion.  That dodge went nowhere:

This claim is preempted because it would require [defendant] to give different, additional warnings about the [device’s] safety and effectiveness, which is strictly prohibited without FDA approval. . . .  Plaintiffs’ fraud claim thus necessarily imposes state requirements that are “different from, or in addition to” the federal ones.

Id. at *11 (citation omitted).

Likewise, in Littlebear v. Advanced Bionics, LLC, 896 F. Supp. 2d 1085, 1091 (N.D. Okla. 2012), the plaintiff “d[id] not claim [defendant] made any affirmative misrepresentations” but only that it did not disclose its use of a purportedly non-FDA-approved part.  Id. at 1091.  Since no FDA regulation mandated such a disclosure, the “fraud by nondisclosure [wa]s expressly preempted.”  Similarly, in Purcel v. Advanced Bionics Corp., 2010 WL 2679988 (N.D. Tex. June 30, 2010), plaintiff’s “claims of fraud by nondisclosure . . . impose a requirement in addition to those approved by the FDA — the duty to warn consumers if devices are adulterated − and are therefore preempted.”  Id. at *6. See Burrell v. Bayer Corp., ___ F. Supp.3d ___, 2017 WL 1955333, at *8 (W.D.N.C. May 10, 2017) (fraudulent concealment claims “alleg[ing] misrepresentations [that] are indistinguishable from FDA-approved labeling statements” held preempted); Richardson v. Bayer Healthcare Pharmaceuticals, Inc., 2016 WL 4546369, at *9 (D. Idaho Aug. 30, 2016) (“fraud by concealment claim addresses essentially the same conduct as the failure to warn claim” and is expressly preempted because state “law cannot require stronger duties than the FDA actively requires under the MDA”); Humana Inc. v. Medtronic Sofamor Danek USA, Inc., 133 F. Supp.3d 1068, 1076 n.12 (W.D. Tenn. 2015) (“fraud by omission is expressly preempted under the FDCA”) (quoting Perez, supra); Day v. Howmedica Osteonics Corp., 2015 WL 13469348, at *8 (D. Colo. Dec. 24, 2015) (“because Plaintiffs’ concealment and misrepresentation claims take issue with the labeling and representations made regarding the [device] and the clinical trial of the device, these claims are preempted”); Cline v. Advanced Neuromodulation Systems, Inc., 17 F. Supp.3d 1275, 1288 (N.D. Ga. 2014) (“[t]o the extent Plaintiff’s fraud claim is based on Defendant’s omissions of information regarding known device failures, it is preempted”); Ali v. Allergan USA, Inc., 2012 WL 3692396, at *17 (E.D. Va. Aug. 23, 2012) (“The cause of action for fraud by nondisclosure is also preempted by the MDA because it would impose requirements under [state] law that add to federal requirements on statements [defendant] can make concerning [the device].”); Latimer v. Medtronic, Inc., 2015 WL 5222644, at *8 (Ga. Super. Sept. 4, 2015) (“a fraud by omission claim is expressly preempted . . . because the underlying state-law disclosure requirement would necessarily be different from, or in addition to the requirements applicable” under federal law) (quoting Perez, supra).

The converse is also true. In McLaughlin v. Bayer Corp., 172 F. Supp.3d 804 (E.D. Pa. 2016), the basis for the plaintiffs’ fraudulent concealment claim against the maker of a PMA device was an alleged “duty to disclose” under the FDCA.  Id. at 825.  Because “[t]he Complaint in this case alleges only that federal law and the PMA imposed a duty to speak by requiring [defendant] to disclose certain information,” it was impliedly preempted under Buckman Co. v. Plaintiffs Legal Committee, 531 U.S. 341 (2001).  172 F. Supp.3d at 825 (emphasis original).  Since plaintiffs “do[] not allege that [state] law imposed any duty on [defendant] to disclose the allegedly undisclosed information . . ., the “fraudulent concealment claim, as pled, exists ‘solely by virtue of FDCA requirements,’” and was thus preempted under BuckmanId.  Accord Perez, 711 F.3d at 1119-20 (fraud by omission claim impliedly preempted because premised on defendant’s non-disclosure concerning scope of FDA’s premarket approval); Houston v. Medtronic, Inc., 957 F. Supp. 2d 1166, 1178 (C.D. Cal. 2013) (fraudulent concealment claim impliedly preempted); Bush v. Thoratec Corp., 837 F. Supp.2d 603, 608-09 (E.D. La. 2011) (same).

Since fraudulent concealment/omission claims in PMA device litigation are merely failure to warn claims with a scienter requirement – and scienter is irrelevant to express preemption under §360k – it is only fitting that these claims are preempted for the same fundamental reasons as warning claims.

And it’s the start of another season of too much eating, drinking, shopping, and socializing. Sometimes it feels like a year’s worth cramped into a little over a month. And, for some of us (OK, me), we’re entering this week still a little groggy and foggy. So, we’ll admit to looking for something fairly straightforward and on the shorter side to post about as we clear our heads and shake off the haze. That’s not to say Mitchell v. Boehringer Ingelheim Pharma, Inc., 2017 U.S. Dist. LEXIS 192498 (W.D. Tenn. Nov. 21, 2017) isn’t noteworthy, it’s just not overly complicated. Sometimes that’s what you need to get the ball rolling again.

Plaintiff in Mitchell alleged that she suffered diabetic ketoacidosis (“DKA”) as a result of using the prescription drug Jardiance to treat her type-2 diabetes. Id. at *3. The drug, one of a class of drugs known as SGLT-2 inhibitors, was approved by the FDA in August 2014 and plaintiff began using it in February 2015. In May 2015, the FDA issued a safety alert warning about the risk of DKA with this class of drugs. The alert was based on a review of adverse event reports collected from March 2013 to June 2014 – before Jardiance was approved. Id. at *3-4.

Products liability claims in Tennessee are governed by the Tennessee Products Liability Act. Under the TPLA, drug manufacturers have a duty to minimize the risk or dangers from their products and they can discharge that duty by providing adequate warnings and instructions. Id. at *7. Plaintiff in Mitchell alleged defendant failed to satisfy that duty because it did not warn about DKA at the time the drug was approved and did not amend the warning via the FDA’s Changes Being Effected (“CBE”) process at any time before plaintiff was injured. Id. at *4.

We see CBE and we immediately start looking for a preemption discussion. Sure enough, there is one. As discussed here many times before, the CBE process allows a manufacturer to add or strengthen a warning based on “newly acquired information” without first obtaining FDA approval. Id. at *9-10. Where a CBE label change is an option for a manufacturer, the Supreme Court has held that failure to warn claims are not preempted. See Wyeth v. Levine, 555 U.S. 555 (2009).

But what about when a CBE is not an option? In Mitchell, the court broke the plaintiff’s failure to warn claim into two pieces – a challenge to the original labeling and a challenge to warning as it was at the time plaintiff used the drug. The court found the former preempted because defendant could not have changed the original FDA approved labeling. The data plaintiff relied on to support her allegation on this claim was pre-launch data. In other words, data that was known to the FDA at the time they approved the drug’s warnings – not newly acquired. “[T]he FDA is the exclusive judge of safety and efficacy based on information available at the commencement of marketing.” Id. at *11 (citing  In re Celexa & Lexapro Mktg. & Sales Practices Litig., 779 F.3d 34, 41 (1st Cir. 2015).

Similarly, plaintiff cannot base her failure to warn claim challenging defendant’s failure to amend the warning after the drug was introduced on the market on information that existed pre-FDA approval. Id. at *13. So plaintiff cannot rely on the adverse events collected before June 2014. Plaintiff’s allegations must be based on information that was not known by the FDA at the time of approval. In her complaint, plaintiff alleged that additional DKA adverse events were reported in 2015. Defendant, citing federal regulations, argued that while later in time, the additional reports did not provide any “new” information that would support a CBE. The court determined that was an issue better suited to a motion for summary judgment and that plaintiff had done enough to withstand a motion to dismiss. Id. at *15. Not a win yet, but the door is certainly still open.

The court made a few other rulings as well. Based on the learned intermediary doctrine, plaintiff cannot bring a failure to warn claim premised on failing to warn plaintiff directly. She is limited to a claim for failure to warn her prescriber. Id. at *17-18. And plaintiff must plead warning inadequacies with specificity. The court determined her allegations as to DKA were sufficient. But, plaintiff failed to state a claim to the extent she was looking to recover for “other related health complications.” Id. at *22. Plaintiff’s complaint neither specified the alleged complications nor how the drug’s warnings were inadequate as to those complications. So, as to unspecified complications, the failure to warn claim was dismissed.

In the end, plaintiff is left with a narrow failure to warn claim and the hurdle of proving proximate cause.

We know that our blogposts are carried by legal aggregating services, such as Lexology and JDSupra.  Some of you may even be reading this post via one of these services.  In addition to writing for them, we actually read them, too.  Sometimes we find interesting things on them – like last week.

A bit of background, first.  Other than providing readers with:  (1) a post on how the municipal cost recovery rule is useful against municipal/county attempts to recover the cost of governmental services (actually, so can the economic loss and derivative injury rules, but we haven’t blogged about those − yet); and (2) some other posts on how the in pari delicto doctrine can be employed to defeat suits by individuals harmed by their own criminal activity, we haven’t had all that much to say about the “opioid epidemic.”  It’s a fast moving area, and to some extent it resembles the spate of litigation over firearms marketing (where Bexis became familiar with municipal cost recovery) a couple of decades ago.  In other ways it resembles something much more sinister – how the states ganged up to extort money from various cigarette companies after the companies had consistently prevailed in ordinary product liability litigation.

So while we feel we should have something to say about this “opioid epidemic” litigation threat to our clients, it’s difficult to decide what.  We were very interested to read – on JDSupra – a recent thought-provoking article entitled “De-Bunking the Opioid Litigation Epidemic.”  That blogpost is mostly about how overheated “opioid epidemic” rhetoric (and litigation) has outrun any basis in science.  Briefly, it makes the following points:

We compliment the Kelley Drye folks for this effort, and encourage our readers to read the whole article.

So what can we add?  We point out that, as to the last bullet point, injuries from illegal opioid use are precisely the sort of injuries that the in pari delicto doctrine was designed to preclude from being recovered in litigation.

Well, what about the states as plaintiffs?  In general we’re big fans of off-label use.  We never tire of pointing out that off-label use is 100% legal under the FDCA, and that the FDA cannot prevent physicians from prescribing FDA-approved drugs (which include opioids) for any therapeutically appropriate treatment, whether or not that indication appears on a drug’s FDA-approved labeling.  As the Supreme Court has held, “‘off-label’ usage . . . is an accepted and necessary corollary of the FDA’s mission to regulate in this area without directly interfering with the practice of medicine.”  Buckman Co. v. Plaintiffs Legal Committee, 531 U.S. 341, 350 (2001) (citing Beck & Azari, FDA, Off-Label Use, & Informed Consent: Debunking Myths and Misconceptions, 53 Food & Drug L.J. 71, 76-77 (1998)) – yes, that Beck, as in Bexis.

So who can restrict the rights of physicians to prescribe drugs for off-label uses?  That would be the states, in their traditional roles of regulators of medical practice.

It is elemental that a state has broad power to establish and enforce standards of conduct within its borders relative to the health of everyone there.  It is a vital part of a state’s police power.  The state’s discretion in that field extends naturally to the regulation of all professions concerned with health.

Barsky v. Bd. of Regents, 347 U.S. 442, 449 (1954).

We recognize that the States have a compelling interest in the practice of professions within their boundaries, and that as part of their power to protect the public health, safety, and other valid interests they have broad power to establish standards for licensing practitioners and regulating the practice of professions.

Goldfarb v. Virginia State Bar, 421 U.S. 773, 792 (1975).

“The State, in the performance of its duty to protect and preserve the public health, has the power, within constitutional limitations, to regulate the practice of medicine by those engaged therein.”  Comm’n on Medical Discipline v. Stillman, 435 A.2d 747, 755 (Md. 1981).  “[P]rofessional licensing and regulation is a traditional area of state power.”  Edinboro College Park Apartments v. Edinboro University Foundation, 850 F.3d 567, 577 n.9 (3d Cir. 2017).  “It is well established that a state can legitimately impose broad regulations on the practice of medicine through its police powers to protect the health, safety, and welfare of its citizens.”  People v. Rogers, 641 N.W.2d 595, 605 (Mich. App. 2001).  “States retain the police power to regulate professions, such as the practice of medicine.”  Betancur v. Florida, 296 F. Appx. 761, 763 (11th Cir. 2008).  The “the valid police power the legislature exercise[s] when it regulate[s] the practice of medicine” is widely recognized. State v. Pacific Health Center, Inc., 143 P.3d 618, 626 (Wash. App. 2006).

These general propositions apply to controlled substances, such as opioids. “[E]nforcement of the Controlled Substances Act to prevent illegal or illegitimate drug trafficking by registered medical professionals does not intrude upon the states’ ability to regulate the practice of medicine in accordance with their police powers.”  United States v. Brickhouse, 2016 WL 2654359, at *7 (Mag. E.D. Tenn. March 30, 2016), adopted, 2016 WL 2350137 (E.D. Tenn. May 4, 2016).  They also apply to off-label use.  “[R]egulation of the practice of medicine generally lies within the States’ police powers.”  United States v. Kaplan, 2014 WL 4402586, at *4 (D. Nev. Sept. 5, 2014) (off-label use case).

However, except for unusual forays such as informed consent relating to diet drugs (Utah), performance enhancing drugs in sports (Ohio, and probably others), and constitutionally questionable attempts to harass those seeking drug-induced abortions by prohibiting an off-label use that’s actually safer than the outmoded FDA-indicated use, see Cordray v. Planned Parenthood Cincinnati Region, 911 N.E.2d 871, 878 (Ohio 2009) (affirming such a provision), the states have generally not regulated medical practice and off-label uses.

In general, that’s a very good thing.

But if the states are now going to sue drug manufacturers, wholesalers, and others in the chain of sale over what are legal, FDA-approved drugs properly prescribed by state-licensed medical doctors, and properly filled by state-licensed pharmacists, then the states should be required to look in the mirror.  And if counties and other municipalities that are creatures of the states are going to sue over off-label uses that their sovereign states have not seen fit to prohibit, they may find themselves preempted from doing so – by state law.

States could ban precisely the off-label uses they are complaining about, but they haven’t.

Off-label use of prescription opioids (assuming the requirements set by FDA REMS and federal controlled substances regulations are complied with) is by and large perfectly legal under state law.  If the states believe that the risks of particular off-label uses outweigh the benefits, then they have the power to act to prohibit such uses outright.  Where the FDA has actually approved an indication, the result would be different – federal preemption would prevent such action.  But off-label use is state rather than federally regulated.  We thus believe that, for states to sue to recover, say, the costs off-label opioid prescriptions, without having exercised their own authority to prevent the underlying conduct, at minimum runs squarely into the defense of failure to mitigate damages.

So the question is, how much is that argument worth?  That depends on how much opioid use is off label.  We’ll take a look at that question.

It appears the argument might be worth quite a bit. A New England Journal of Medicine article from earlier this year asserts that “the risk-benefit profile of opioids used for chronic pain remains unknown” with “no studies lasting longer than 1 year that evaluated pain, function, or quality of life as a primary outcome.”  Assuming the statement is accurate, it suggests to us that long-term opioid use doesn’t have the level of scientific evidence behind it needed to obtain FDA approval, since “[g]enerally, the agency expects that the drug maker will submit results from two well-designed clinical trials” before approval can be granted.”  Another recent article states:

The FDA doesn’t have the statutory ability to limit the amount of pills or the duration of prescriptions.  However, the agency could deem prescriptions off-label if they’re too large.

Likewise, the FDA believes that “[m]ost analgesic use in pediatric patients is off-label.”  So that’s a second category of opioid prescription that could be off-label and thus regulated by states, rather than by the FDA.

Another place to look is for judicial admissions.  Most complaints (to hype plaintiffs’ damages) can be expected also to allege widespread off-label use, and thus conduct that the relevant state could have regulated, but hasn’t.  In the litigation context, it fits in with a possible narrative against state AG or parens patriae suits – that the plaintiff state, which has legal authority, has done nothing to curb off-label opioid prescriptions, while the FDA, which lacks this authority, has at least tried.

The DEA also appears to have stepped up scrutiny of at least some off-label opioid prescribing, according to this recent (11/9/17) alert from the Academy of Integrative Pain Management:

The Drug Enforcement Administration has recently taken criminal and administrative action against physicians who prescribe transmucosal immediate-release fentanyl (TIRF) off-label for the treatment of breakthrough pain.  Historically, prescribing medications off-label has been a decision left to the discretion of the prescriber based on the specific needs of the patient; therefore, physicians prescribing these products off-label for noncancer breakthrough pain should be aware of this increased scrutiny.

An editorial in the National Review addressed part of this equation, stating “opioids are harmful primarily when they are not used as directed, are cleared for sale by the federal government, and come with government-approved warning labels explaining the risks — all factors that will make judges skeptical of suits” by states.  But it’s even worse than that, since the states are suing, at least in significant part, over the consequences of their own governmental sloth.  Perhaps, having utterly failed to hold up their end, either legislatively or by regulation, a state should be estopped from trying to recover from drug companies for legal activities.

Thus, while we strongly support the right of physicians to prescribe off-label, and the right of everyone – including drug manufacturers – to provide truthful information about off-label uses, we recognize that off-label prescribing is ultimately subject to the police power of the states.  If a state has come to the conclusion that a particular off-label use is doing more harm than good, it has the legal authority (within constitutional parameters) to prohibit that use.  Unless and until a state does so, however, it should not engage in the hypocritical practice of suing over a legal medical practice that it could have stopped but has chosen not to.

Thus, to the extent that the “opioid epidemic” is an off-label use issue, in that respect it is a problem created largely by the failure of the states to utilize their existing police powers.

We’ve got food on our mind.  Last Sunday, the CBS Sunday Morning show ran its food episode, with segments about, inter alia, a little restaurant in the north of England being rated the best in the world, the Martha Stewart and Snoop Dog cooking show, and the rolled ice cream fad (focusing on Sweet Charlie’s in Philly).  And tomorrow, of course, is Thanksgiving.  We’re looking forward to great food on the table and loved ones around it. We wish the same for you.

Today’s case is about food, and about a legal doctrine we like almost as much as turkey and cranberry sauce: primary jurisdiction.  The case is Rosillo v. Annie’s Homegrown Inc., 2017 U.S. Dist. LEXIS 190130 (N.D. Cal. Oct. 17, 2017).  It is yet another case alleging misuse of the term “Natural.”  Does anyone have a clear idea what that word means? Even if you do think you do know what it means, are you confident that your definition is the same as what resides in the head of the person sitting next to you?  Who knows what any given set of jurors will think about this issue?  We need order brought to this chaos.  That order is much more likely to come from the FDA than from random litigation experiments sprinkled around the country.

In Rosillo, the plaintiffs claimed that the defendant’s salad dressings were not natural because they contained xanthan gum, a thickening agent manufactured via fermentation and treated with a byproduct of isopropyl alcohol.  (One plaintiff bought her salad dressing at a Target store, while another bought hers at Whole Foods.  Now that’s varied distribution.). The plaintiffs brought causes of action under California and New York consumer and false advertising laws, as well as for breach of warranty, misrepresentation, and violation of the federal Magnuson-Moss Warranty Act.  The defendants moved to dismiss the actions on the merits and, in the alternative, to stay the action under the primary jurisdiction doctrine in order to permit the FDA to decide the scope of “natural.”  The court issued the stay, so it did not reach the merits.

Primary jurisdiction is a “prudential” doctrine, under which a court determines that an otherwise cognizable legal claim implicates technical policy questions that would benefit by first hearing from the regulatory authority.  The Rosillo defendants premised their stay request on the FDA’s establishment in November 2015 of a docket to consider the use of the term “natural” on food labels.  The FDA invited comments, and extended the period for taking such comments up through mid 2016.  No decision has yet issued.  Meanwhile, lots and lots of cases have been filed against food manufacturers around the country (though especially in California) alleging phony “natural” labels.

The plaintiffs argued against waiting for the FDA because (1) the issue in their cases is whether reasonable consumers were being deceived, which is supposedly separate from whatever the FDA will decide, and (2) it is unclear whether the FDA will ever actually resolve the “natural” issue, especially given the FDA’s “extended silence” since the closing of the comment period.  The Rosillo court disagreed with the plaintiffs.

First, the FDA’s guidance on whether and when companies can call their products “natural” will inevitably be relevant to how reasonable consumers understand the term.  Indeed, the plaintiffs’ complaint cites FDA regulations and pronouncements.  Second, the FDA’s food labeling regulatory framework undeniably is broad and comprehensive.  Third, the Ninth Circuit Astiana case held that the meaning of “natural” is a particularly complicated issue that Congress committed to the FDA.

What about the FDA’s “extended silence”?  The Rosillo court seized upon a recent Congressional appropriations bill report, which commended the FDA for wrestling with the “natural” issue and directing the FDA to report within 60 days “on the actions and timeframe for defining ‘natural’ so that there is a uniform national standard for the labeling claims and consumers and food producers have certainty about the meaning of the term.”  The appropriations bill is pending, so the 60 day clock has not yet commenced.  Nevertheless, the Rosillo court concluded that it is likely that the FDA will address the “natural” issue in a relatively short period of time.

The result is that the Rosillo case is stayed.  The logic of the Rosillo decision should also apply to the vast array of other cases with similar allegations.  Even more important, let’s hope that the FDA will for once and for all resolve the issue and make these disputes and the surrounding cacophony unnecessary.  That outcome would make us thankful.

We wrote a few months ago about what you will see from the plaintiffs’ side as they try to evade the Supreme Court’s opinion in BMS v. Superior Court.  That opinion has combined with Bauman to reset personal jurisdiction and restore fairness to a system that had gotten out of whack, particularly in the mass tort world in which we often dwell.  Plaintiffs have resisted this reset, even though there is no rational reason why they should.  A more disciplined approach to personal jurisdiction imposes absolutely no burden on plaintiffs, who remain free to sue where the defendants are “at home” or (if different) where the operative facts occurred with regard to those defendants.  The resistance comes from their attorneys, who would prefer to concentrate masses of case in fewer jurisdictions of their choosing so they can make more money with less effort.  We are not judging; they are merely exploiting the incentives built into our civil litigation system.

So what is in their personal jurisdiction playbook? We reported before that plaintiffs will try to stretch even the most tenuous forum contacts into specific personal jurisdiction.  Or they will assert that defendants “consented” to jurisdiction in a particular state through such routine activities as registering to do business.  If those do not work, the fallback position will always be to request “jurisdictional discovery,” even when the facts relevant to forum contacts are either undisputed or are already within the plaintiffs’ control.

Plaintiffs recently added to those tactics in a hernia mesh MDL in New Hampshire, In re Atrium Medical Corp. C-Qur Mesh Products Liability Litigation, No. 16-md-2753, 2017 WL 5514193 (D.N.H. Nov. 14, 2017), where the issue was whether the court had personal jurisdiction over a holding company based in Sweden.  The company did not make or sell the products in question, and it was undisputed that the company had no direct contacts with the United States.  Of course, the plaintiffs sued the device manufacturers too, and those companies did not contest jurisdiction in New Hampshire.  But wanting deeper pockets in which to reach, or simply to increase their nuisance value through harassment, the plaintiffs opposed the holding company’s motion to dismiss on multiple grounds.

First, the plaintiffs argued that the Swedish company waived its personal jurisdiction defense by participating in the MDL and complying with the court’s initial case management orders.  That argument was obviously frivolous.  The Swedish company asserted the lack of personal jurisdiction as an affirmative defense in its answer and simultaneously filed a motion to dismiss on that basis.  It is certainly possible for a defendant to waive its personal jurisdiction defense, but the Federal Rules allow a defendant to preserve a personal jurisdiction defense by way of answer (unlike some states).  The Swedish company did that, and it also moved to dismiss as soon as it answered.  That is not a waiver.  Id. at *2.

Second, the plaintiffs argued that the Swedish company was judicially estopped from contesting jurisdiction because the company participated in product liability cases in New Hampshire and California and had itself sued someone in Delaware state court.  This argument borders on frivolous as well.  Judicial estoppel prevents litigants from taking a contested legal position in one case to gain an advantage then taking the opposite position in another case to gain an advantage there, too.  A common example is a plaintiff who discharges his debts in bankruptcy by representing that he has no product liability claims, but then turns around and represents to another court that he actually has a claim by filing a complaint.  You can’t do that.  Another example, which we wrote about here, is when a plaintiff defeats preemption by arguing that a drug manufacturer’s label change was voluntary, but then turns around and argues later that the label change was not a subsequent remedial measure because it was actually mandatory.  That’s wrong, too.  Here, the Swedish company was neither talking out of both sides of its mouth nor trying to gain an unfair advantage.  There are many reasons why a defendant would voluntarily submit to a court’s jurisdiction in one case but not in another, especially when the rules have recently changed.  Moreover, if the plaintiffs were correct, a defendant who voluntarily submitted to personal jurisdiction in any state would be permanently estopped from asserting the defense anywhere and everywhere.  Ridiculous.  The court did not think much of the argument either. Id. at *3.

Third, the plaintiffs argued that the other defendants’ forum contacts could be attributed to the Swedish company because the Swedish company assumed responsibility for the other companies’ liabilities and because the companies were alter egos or agents of each other.  This version of “piercing the corporate veil” is very difficult for plaintiffs to satisfy, and while the plaintiffs gained some traction with this argument, they are hardly out of the woods yet.  The rules as applied in an MDL are a little different, and because we have never seen them set forth quite so clearly, we will repeat them here:

In multi-district litigation cases . . . the [specific personal jurisdiction] inquiry is often more complicated. In multi-district litigation based on diversity jurisdiction, ordinarily personal jurisdiction in the transferee court is based on the jurisdiction of the transferor court.  The transferee court then separately applies the state law pertaining to personal jurisdiction applicable in each of the transferor courts.  The transferee court, however, conducts “this analysis according to the law not of the transferor circuit,” but rather according to the law of the circuit in which it sits.

2017 WL 5514193, at *4 (citations omitted).  In other words, an MDL court applies the long-arm statute of the state in which the case was initially filed, but ultimately determines personal jurisdiction under the precedent of the circuit in which it sits.  There are also issues around personal jurisdiction over out-of-state defendants when MDL judges permit “direct filing” into multidistrict litigation, which we discussed at some length here.  This is one reason why the venue of an MDL, as selected by the J.P.M.L., matters.

The court also set forth the various procedural approaches to deciding a personal jurisdiction challenge: The court can determine whether the plaintiff has made a mere prima facie showing that personal jurisdiction exists, or it can conduct a full-blown evidentiary hearing and decide personal jurisdiction on a preponderance-of-the-evidence standard.  A third option falls in between these two ends of the spectrum.  Under the “intermediate standard,” also known as the “likelihood standard,” the court can weigh evidence and find “whether the plaintiff has shown a likelihood of the existence of each fact necessary to support personal jurisdiction.” Id. at **4-5.

The district court decided it would apply the “intermediate standard,” but would do so only after allowing additional discovery. That’s right—jurisdictional discovery.  We have expressed our opinion on jurisdictional discovery—we don’t think that it will make any difference except in the most exceptional cases and should not be allowed.  We also think that jurisdictional discovery is an area appropriate for cost-shifting under Rule 26(c)(1)(B).  This court, however, is allowing it.  But not the oppressively overreaching discovery that, of course, the plaintiffs proposed, which the court rejected as “broader than necessary to address the jurisdictional issues that have arisen.” Id. at *9.  Instead, the court directed the plaintiffs to serve discovery “focused on the issues,” which presumably includes the agency and alter ego theories that the plaintiffs advanced. Id. The discovery many or may not make any difference.  Only time will tell, but either way, the DDL Blog will be monitoring.

We have not been shy in predicting that Bristol-Myers Squibb Co. v. Superior Court, 137 S.Ct. 1773 (2017) (“BMS”), and Daimler AG v. Bauman, 134 S. Ct. 746 (2014) (“Bauman”), should restrain certain abusive class action practices – specifically those involving attempts to bring multi-state class actions in any location other than where the defendant is “at home” and therefore subject to general personal jurisdiction under Bauman.  Note use of “the.”  A nationwide class purporting to sue multiple defendants “at home” in different states shouldn’t be possible at all, as BMS makes crystal clear that each defendant’s personal jurisdiction must be determined separately.

For this reason, we have been careful to note the class action nature of any case that appears on our original post-Bauman and our current post-BMS cheat sheets.  The first of these cases is Demaria v. Nissan N.A., Inc., 2016 WL 374145 (N.D. Ill. Feb. 1, 2016), an automotive consumer fraud case with eighteen class representatives from sixteen states.  Id. at *1.  Following Bauman, the court found no general jurisdiction, also rejecting a claim of consent to general jurisdiction by registering to do business in the forum state.  Id. at *6.  Specific jurisdiction failed as to every would-be class representative except the one resident of the forum state. Id. at *7.  Plaintiffs also raised a “pendent personal jurisdiction” claim similar to that later rejected in BMS:

Under the circumstances of this case, where each plaintiff’s claim is predicated on the law of the particular state where he or she purchased a car and the claims of the other plaintiffs as alleged remain unrelated to anything that transpired in [the forum state], imposing personal jurisdiction for all of the claims because specific jurisdiction may lie as to this one plaintiff’s claims would run afoul of the traditional notions of fair play and substantial justice.

Id. at *8.  The multi-state class action was no more.  “The consumer protection claims for violation of the laws of states other than [the forum state] . . . are dismissed for lack of personal jurisdiction.”  Id. at *14.

Then came Matus v. Premium Nutraceuticals, LLC, 2016 WL 3078745 (C.D. Cal. May 31, 2016), which involved a California consumer fraud class action brought by an in-state resident.  After finding no general jurisdiction under Bauman, id. at *2, the court also found no specific jurisdiction.  The defendant’s website was not oriented towards any particular state, nor did plaintiff claim to have used it to purchase anything from the defendant.  Id. at *3.  Simply “purchas[ing the product] through an unnamed reseller” – that is to say, stream of commerce − was insufficient, notwithstanding other product sales to other in-state residents.  Id. at *4.

Back in Illinois, Bauman also did in a multi-state junk fax class action in Kincaid v. Synchrony Financial, 2016 WL 4245533 (N.D. Ill. Aug. 11, 2016).  Anticipating BMS, the court refused to find specific jurisdiction based on forum contacts with the “putative class members” in the forum state counting as “suit-related contacts.”  Id. at *2.  Plaintiffs’ general jurisdiction claims fell far short of the “outsized proportion” of forum contacts required to establish an exceptional case under Bauman.  Id. at *3.  Nor did the defendant’s initiation (as a plaintiff) of unrelated litigation in the forum state create general jurisdiction.  Id.

Next, in Bauer v. Nortek Global HVAC LLC, 2016 WL 5724232 (M.D. Tenn. Sept. 30, 2016), “five Plaintiffs from four different states” brought a panoply of product liability-related claims against a non-resident defendant, purportedly as a class action.  Id. at *1. Bauman killed the out-of-state class representative’s claims, since there was nothing approaching exceptional case facts.  Id. at *6.  Specific jurisdiction failed because “units [that] were purchased and installed in [the class representatives’] respective . . . Home States” could not possibly “arise out of or relate to” any actions by the defendant in the forum state.  Id. at *6.  “[T]he Amended Complaint does not offer any factual allegations that the out-of-state Plaintiffs had any dealings with the Defendants in the” forum state.  Id. Therefore, “those Plaintiffs and the classes they represent will be dismissed.”  Id.

A third Illinois multi-state class action likewise failed in Demedicis v. CVS Health Corp., 2017 WL 569157 (N.D. Ill. Feb. 13, 2017).  This time, a forum plaintiff sought to assert “purely class-based claim[s] on behalf of others for violations of similar state consumer fraud statutes in other states.”  Id. at *3.  While that claim could have been decided on the basis of non-extraterritoriality (see our post here), Demedicis disposed of them on personal jurisdiction grounds:

Because specific personal jurisdiction is based on claims arising out of a defendant’s conduct within the forum state, this Court has no jurisdiction over claims based on out-of-state consumer fraud laws. . . .  As Defendants argue, “[p]ersonal jurisdiction over the defendant must be established as to each claim asserted.”  Here, Plaintiff has not established personal jurisdiction over the out-of-state claims as he is the sole connection between Defendants and Illinois.

Id. at 4-5 (citations omitted).

In Famular v. Whirlpool Corp., 2017 WL 2470844 (S.D.N.Y. June 7, 2017), nine would-be class representatives from nine states brought consumer protection claims against non-resident defendants.  Decided less than two weeks before BMS, Famular threw out all of the claims by non-resident class representatives against the non-resident defendants for lack of personal jurisdiction.  Anticipating BMS, Famular held that “the Court must determine whether there is general personal jurisdiction over each defendant” individually.  Id. at *3.  By then plaintiffs had given up arguing “exceptional case” general jurisdiction, and the court rejected their consent by virtue of registration to do business argument.  “[T]he Court agrees with defendants that . . . a foreign defendant is not subject to the general personal jurisdiction of the forum state merely by registering to do business with the state, whether that be through a theory of consent by registration or otherwise.”  Id. at *4.  Famular also rejected specific jurisdiction under a “pendent personal jurisdiction” rationale.  Relying in part on Demaria, Famular recognized that “neither specific personal jurisdiction nor pendent personal jurisdiction allow[s a court] to hear plaintiffs’ claims against the foreign defendant based on defendant’s actions occurring solely outside the forum state.  Id. at *7.  Good by non-forum-state class action allegations.

BMS, of course expressly held that specific personal jurisdiction must be decided as to each plaintiff and each defendant separately, so that neither the presence of other, in-state plaintiffs making similar claims, nor the presence of an in-state defendant against which personal jurisdiction could properly be asserted permitted the assertion of personal jurisdiction by non-resident plaintiffs against non-resident defendants.  137 S. Ct. at 1781 (lack of specific jurisdiction “remains true even when third parties (here, the plaintiffs who reside in California) can bring claims similar to those brought by the nonresidents”), 1783 (personal jurisdiction requirements “must be met as to each defendant over whom a state court exercises jurisdiction”; the “bare fact” of a “contract[] with” an in-state resident “is not enough”).  We discussed BMS at length here.

After BMS, a consumer protection class action alleging “violations of the consumer protection laws of forty-eight additional [to the forum] states and two territories” was trimmed to just the forum state.  Plumbers’ Local Union No. 690 Health Plan v. Apotex Corp., 2017 WL 3129147, at *1 (E.D. Pa. July 24, 2017).  There was no general jurisdiction against defendants not “at home” in the forum.  Id. at *4.  Nor could defendants that did not sell in the forum be subject to specific jurisdiction.  Id. at *7-8 (even if stream of commerce jurisdiction is viable, it cannot lie without in-state sales).  All of the claims asserted under the laws of the 50 non-forum jurisdictions likewise bit the dust.

Only [plaintiffs’] Pennsylvania Claims arise out of or relate to Selling Defendants’ sales of generic drugs in Pennsylvania. . . .  [T]he Non-Pennsylvania Claims do not arise out of or relate to any of Selling Defendants’ conduct within the forum state.  Accordingly, the Court cannot exercise specific jurisdiction over the Non-Pennsylvania Claims brought against Jurisdiction Defendants.

Id. at *9 (following Demaria and Demedicis).

Another multi-state (four non-forum jurisdictions) consumer class action was trimmed in Spratley v. FCA US LLC, 2017 WL 4023348, at *1 (N.D.N.Y. Sept. 12, 2017).  General jurisdiction by consent based the non-forum defendant’s registration to do business was rejected.  Id. at *3-4.  BMS precluded adjudication of claims asserted by the non-resident classes.  “[T]he out-of-state Plaintiffs have shown no connection between their claims and [defendant’s] contacts with the forum state.  Therefore, the Court lacks specific jurisdiction over the out-of-state Plaintiffs’ claims.”  Id. at *7.  For similar reasons, plaintiffs’ “different” assertion of “pendent jurisdiction” was also rejected.  Id. (following Famular and Demaria).

In an anti-trust case, In re Dental Supplies Antitrust Litigation, 2017 WL 4217115 (S.D.N.Y. Sept. 20, 2017), non-forum class action allegations based on sales made by a defendant’s independent intermediate sellers were dismissed under Bauman and BMS.  General jurisdiction, by this time was not even argued.  Id. at *3.  The would-be class representatives did not buy any of the defendant’s products in the forum state.  Id. at *6.  BMS precluded assertion of personal jurisdiction based merely on the defendant’s contract with an independent distributor, which in turn sold into the forum state.  Id. at *9. Most significantly, Dental Supplies firmly rejected plaintiffs’ argument that personal jurisdiction requirements should be loosened in the class action context.  “A putative class representative seeking to hale a defendant into court to answer to the class must have personal jurisdiction over that defendant just like any individual litigant must.”  Id. at *6 (quoting Newberg on Class Actions §6:25 (5th ed. 2011)).

Plaintiffs attempt to side-step the due process holdings in [BMS] by arguing that the case has no effect on the law in class actions because the case before the Supreme Court was not a class action.  This argument is flawed.  The constitutional requirements of due process does not wax and wane when the complaint is individual or on behalf of a class.  Personal jurisdiction in class actions must comport with due process just the same as any other case.

Id. at *9 (citation omitted).

Most recently, in McDonnell v. Nature’s Way Products, LLC, 2017 WL 4864910 (N.D. Ill. Oct. 26, 2017), the plaintiffs brought class action claims under “seven states’ consumer fraud laws” in addition to the forum state, against a non-resident defendant.  Id. at *1. Bauman and BMS killed the non-forum claims:

[A]ny injury [that non-resident plaintiffs] suffered occurred in the state where they purchased the products. Because the only connection to [the forum] is that provided by [resident plaintiff’s] purchase . . ., which cannot provide a basis for the Court to exercise personal jurisdiction over the claims of nonresidents where [defendant] has no other connection to this forum, the Court dismisses all claims . . . brought on behalf of non-[forum]residents or for violations of [other states’ consumer protection] law without prejudice.

Id. at *4.

Thus, we are now running out of fingers for the cases that have refused, on post-Bauman personal jurisdictional grounds to allow class actions where the effect would be to allow non-resident class members to sue a non-resident corporate defendant.  There is good reason for this.  The Federal Rules of Civil Procedure, and in particular Rule 23, being “rules” are prohibited by the Rules Enabling Act from “abridg[ing], enlarg[ing] or modify[ing] any substantive right.”  28 U.S.C. §2072(b).  See, e.g., Wal-Mart Stores, Inc. v. Dukes, 564 U.S. 338, 367 (2011) (“[b]ecause the Rules Enabling Act forbids interpreting Rule 23 to ‘abridge, enlarge or modify any substantive right,’ a class cannot be certified on the premise that [a defendant] will not be entitled to litigate its statutory defenses to individual claims”) (citations omitted).  Jurisdiction is, if anything, even more “substantive” than the defenses in Dukes.  Without jurisdiction, a plaintiff cannot litigate anything at all.  Nothing could be more “substantive” than to create jurisdiction where none would otherwise exist.

Fundamentally, this is why we disagree with the one decision, Fitzhenry-Russell v. Dr. Pepper Snapple Group, Inc., 2017 WL 4224723 (N.D. Cal. Sept. 22, 2017) that goes the other way.  Plaintiffs in Fitzhenry-Russell purported to bring a “nationwide” class action, even though all of them were California residents and all the causes of action were under California law . Id. at *1, 5.  The court held that because “citizenship of the unnamed plaintiffs is not taken into account for personal jurisdiction purposes,” it was perfectly all right for the action to adjudicate claims by non-resident class members – who made up a “lopsided” 88% of the class – against a non-resident corporation.  Id. at *5.  Fitzhenry-Russell refused an “extension of [BMS] to class actions” by supposing that “this may be one of the those contexts” in which “[n]onnamed class members . . . may be parties for some purposes and not for others” to jurisdiction.  Id.  That’s all there is – a “may be.”  Moreover, the case quoted for that proposition, Devlin v. Scardelletti, 536 U.S. 1, 9-10 (2002), dealt with intervention, not any form of jurisdiction.

Fitzhenry-Russell cited no class action case – let alone one since Bauman (cf. In re Chinese Manufactured Drywall Products Liability Litigation, 894 F. Supp. 2d 819, 858 (E.D. La. 2012) (severing non-resident class member claims in identical situation pre-Bauman), aff’d, 742 F.3d 576 & 753 F.3d 521 (5th Cir. 2014)) – that had permitted personal jurisdiction in a litigation tourist situation, where non-resident absent class members were suing a non-resident corporation.  It found Plumbers’ Local. 690 “unpersuasive” because it supposedly contained “no analysis” of BMS.  2017 WL 4224723, at *5 n.4.  That is a misleading characterization because Plumbers’ Local. 690 devotes four full paragraphs to the issue, although discussing Demaria and Demedicis rather than BMS.  2017 WL 3129147, at *9.  Moreover, other than the footnote reference to Plumbers’ Local. 690, Fitzhenry-Russell addresses neither the other class action personal jurisdiction cases we have discussed in this post (although it must have been aware of at least Demaria and Demedicis) nor the Rules Enabling Act.  We think that the adjective “unpersuasive” more properly applies to Fitzhenry-Russell itself.

Thus, based on what our research has found, we think that our prediction, made shortly after Bauman, that personal jurisdiction would become a major obstacle to nationwide class actions based on state laws is accurate and has even more force after BMS.  Whenever faced with a state-law class action that is structured so that a non-resident (that is, not “at home” under Bauman) corporate defendant would be facing claims brought by non-resident class members (whether named or unnamed), the defendant should strongly consider moving to dismiss that non-resident claims for lack of personal jurisdiction.

The federal Advisory Committee on Rules of Civil Procedure released its latest Civil Rules Agenda Book on November 7, 2017. A copy of it is available here.  A couple of items on the agenda should be of interest to blog readers.

The first topic has to do with proposed changes Fed. R. Civ. P. 30(b)(6), dealing with corporate witness designations (see tab 5 beginning on page 171). The following changes are under consideration:

  • Inclusion of specific reference to Rule 30(b)(6) among the topics for discussion at the Rule 26(f) conference, and in the report to the court under Rule 16.
  • Amending Rule 30(b)(6) to clarify that testimony at a Rule 30(b)(6) deposition is not a judicial admission.
  • Requiring and/or permitting supplementation of Rule 30(b)(6) testimony.
  • Forbidding contention questions in Rule 30(b)(6) depositions.
  • Adding a provision for objections at Rule 30(b)(6) depositions.
  • Amending Rule 30(b)(6) to address the application of limits on the duration and number of depositions.

The second topic has to do with requiring disclosure of third-party litigation funding arrangements (see tab 7B beginning on page 345). The proposed rules change would amend Fed. R. Civ. P. 26(a)(1)(A) to add a new subsection (v) to the items subject to mandatory initial disclosure:

(v) for inspection and copying as under Rule 34, any agreement under which any 5 person, other than an attorney permitted to charge a contingent fee representing a party, has a right to receive compensation that is contingent on, and sourced from, any proceeds of the civil action, by settlement, judgment or otherwise.

The committee notes several areas of “disagreement” that would have to be resolved before a rules change could be adopted. These are:

  • Definition of what types of third-party litigation funding agreements are covered.
  • Whether a new disclosure rule for third-party litigation funding should be parallel to the existing requirement for disclosure of a defendant’s insurance policies.
  • Extent to which third-party litigation funders control or impact the conduct of the litigation at issue.
  • Extent to which third-party litigation funders control or impact settlement of the litigation at issue.
  • Possible impact of disclosure of third-party litigation funding on the parties’ strategic behavior.
  • Potential for conflicts of interests created by third-party litigation funding.
  • Whether disclosure of third-party litigation funding is important to judicial recusal.
  • Whether disclosure of third-party litigation funding would be a threat to attorney/client privilege or work product protection.
  • How proportionality affects disclosure of third-party litigation funding.
  • Whether third-party litigation funding increases frivolous litigation.
  • Possible conflict between disclosure of third-party litigation funding and state regulation of professional responsibility.

It appears uncertain whether the committee will seriously consider this proposal or continue to defer action as it did in 2014.  A possible motivating factor, not present in 2014, is the threat of congressional action to amend the rules.

Readers who are interested in either of these two issues can comment on them here.

It is not as if we are delighted to see efforts to resuscitate breast implant litigation, but we won’t groan when the rulings are as good as they are in Laux v. Mentor Worldwide, LLC, No. 2:16-cv-01026-ODW(AGR) (C.D. Cal. Nov. 8, 2017).  Here, we are talking about Daubert rulings.  (The court also issued good preemption rulings that might be the subject of a separate post.)  The Laux court’s Daubert order is not up on Westlaw or Lexis yet, but it will be, and that is good news for defendants and bad news for plaintiffs.

The plaintiff in Laux alleged that she suffered pain and other injuries as a result of moldy silicone breast implants.  Her allegations depended upon opinions by a three experts:  Kolb, Blais, and Brawer.  At least two of these experts are repeat players. The other might be as well, but we confess to being a little out of touch with this litigation. One plaintiff expert (Kolb) explanted the implants and concluded that they were leaking bilaterally.  Another (Blais) examined the implants and concluded that they had defective valves, causing them to leak bilaterally. The moldy saline implant theory has persisted since the turn of the century, largely propped up by a book, The Naked Truth About Breast Implants, written by – ta da! – one of these experts.  Another one of the experts testified long ago at the FDA panel hearings and raised the theory back then that breast implants contained a manufacturing defect that either (1) allowed bi-directional flow of saline and bodily fluid in and out of the valves such that the saline became contaminated by “toxic mold” that then colonized and leached “biotoxins” into plaintiff’s body; or (2) allowed the silicone shell or toxins/metals to flake off in plaintiff’s tissue.  To our moldy eyes, this theory seems driven more by litigation than science.  Is our cynicism based at all on the fact that these selfsame experts seem to be actively working with plaintiffs’ counsel to resurrect breast implant litigation, claiming breast implants cause systemic autoimmune disease despite dozens of epidemiological studies to the contrary?  Yes.  Yes, it is.

In any event, these experts’ sparkling resumes did not dazzle the Laux court. Their methodologies were even weaker than their qualifications, which, as you will see, is really saying something.

By the way, this is hardly our favorite trio.  Here are just a few we prefer:

  • Harry, Hermione, and Ron
  • Kirk, Spock, and Bones
  • The Three Musketeers (literary or candy version)
  • The Three Fates
  • Three Dog Night
  • Three’s Company
  • The Three Amigos
  • Tinkers to Evers to Chance
  • The Good, the Bad, and the Ugly
  • The Dude, Walter, and Donny
  • Willie, Mickey, and The Duke
  • ZZ Top
  • Cream
  • Emerson, Lake, and Palmer
  • The Police
  • Destiny’s Child
  • The Three Tenors
  • Workaholics
  • Moe, Larry, and Curly.  (Heck, we also prefer Moe, Larry, and Shemp to any assortment of litigation/expert stooges.).

Anyway, here, in brief, is how the Laux court concluded that the three plaintiff expert (three blind mice?) opinions could not survive a Daubert challenge:

Kolb

The court deemed Kolb to be insufficiently qualified to provide the proposed testimony. Big surprise: a plastic surgeon is not competent to testify about immunology, mycology (the study of fungi), or infectious disease. Moreover, Kolb’s methodology, such as it was, was unreliable.  Yes, the “differential diagnosis” incantation was muttered by this expert, but to no effect. Kolb’s expert report stated that the plaintiff had developed biotoxin disease from defective implants, and that “Plaintiff had no other environmental mold exposure to account for these symptoms.”  Oops. That premise was directly contradicted by the plaintiff’s earlier statement that she was exposed to mold found in her bedroom closet and mother’s home. Further, Kolb’s failure to test for TGF beta 1 also prevented her from ruling out environmental exposure from an objective perspective.  The court decried Kolb’s “[u]nexplained selective use of the facts” which failed “to satisfy the scientific method.” None of Kolb’s theories had been tested, peer reviewed, or generally accepted by the scientific community.  Her “inferential leap” from the plaintiff’s symptoms to the conclusion that the plaintiff suffered from biotoxin disease was unsupported by any peer-reviewed scientific literature or research.  Adios, litigation expert amigo #1.

 

Blais

 

Blais is a chemist, not a microbiologist, pathologist, medical doctor, or engineer.  Blais has not published any of his theories on bacterial or fungal colonization of saline implants in peer-reviewed literature.  So much for qualifications.  Reliable methodology was also lacking.  Blais supplied a “Failure Analysis Report,” but the real failure was in the expert’s purported analysis, not the product. In developing his opinions for this case, Blais did not test the plaintiff’s breast implants, tissues, or blood, and did not establish a scientific basis for his conclusion that the plaintiff’s injuries were caused by the defendant’s breast implants.  The defendant argued that Blais’s “‘methodology’ essentially consists of looking at explanted breast implants, sometimes with the aid of a microscope, making a few notes and drawing pictures of what he claims to see.”  Not so impressive.  Blais took no measurements of the valves to support his opinion they contained manufacturing defects.  Rather, Blais stated that he “eyeball[ ed]” the valves to determine they were faulty.  Still not impressive. In addition (or subtraction?), Blais did not possess the defendant’s valve design specifications when he concluded that the valves on the plaintiff’s implants were defective. Instead, Blais utilized old documents and his own memory.  The Laux court concluded, as had other courts in earlier decisions, that Blais’s proffered testimony should never reach a juror’s ears. As Harry Potter might say, expulsus expertous hackus nonsensicus.

 

Brawer

 

There were some technical problems with Brawer’s expert report.  It recited “a toxicology opinion with no data in support of that opinion whatsoever.” (emphasis in original)  Brawer opines that there was “breast implant toxicity,” but neglects to state what toxic substance was at issue.  That would seem to be a problematic gap in the analysis.  The Laux court could find no support for Brawer’s “because I said so” – in lawyerese, we sometimes call it ipse dixit — conclusion regarding breast implant toxicityThus, the court held that Brawer’s report “fails to satisfy several requirements of Rule 26, and his report is so lacking of scientific principles and methods that the Court cannot find his opinions reliable or helpful in this case.”

 

Three up, three down.  It reminds us of a typical inning thrown by the late Roy Halladay.

 

Meanwhile, three cheers to Dustin Rawlin and Monee Hanna of Tucker Ellis, who brought this ruling to our attention.