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Today’s guest post by Reed Smith associate Jennifer Eppensteiner concerns an interesting First Amendment development.  Everybody knows how California’s wildly overwrought Proposition 65 has turned that state’s products, from beer to bacon, into billboards for remote and scientifically suspect cancer warnings.  Well, how about a ruling that requiring scientifically unsound warnings on products is compelled false speech in violation of the First Amendment?  As always our guest posters deserve 100% of the credit (and any blame) for their posts.

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It is probably a safe bet to say that many of the blog’s readers settle in to enjoy these posts with a cup (or, on anticipated longer days after long nights, carafe) of coffee.  Readers in California may soon be drinking coffees with warning labels – no, not of the Jackie Chiles Java World “Caution: Hot!” variety – but a cancer warning, courtesy of Proposition 65 (“Prop 65”).  Coffee consumers are a passionate bunch, so the recent Los Angeles Superior Court proposed ruling to this effect has been widely publicized.  Readers may not be familiar, however, with another recent Prop 65 ruling, one with an arguably better outcome for product manufacturers.  That’s why I’m here today.

The outcomes in drug and medical device litigation often turn on the label. Regardless of how detailed a warning is, in what font and size it’s printed, and whether it comes in a bold, black box, plaintiffs always insist that the warnings were insufficient.  They sometimes base their position on nothing more than attorney argument, and often they cite isolated information that is against the great weight of authority, such as an anecdotal case report or an outlier study with small sample sizes and inconclusive results.

Thankfully, the Eastern District of California recently recognized that requiring a manufacturer to include a cancer warning based on the questionable finding of a single organization, when all other regulatory and governmental bodies had found the opposite, would violate the manufacturer’s First Amendment rights by forcing it to say something that was false, and with which it disagreed. Nat’l Assoc. of Wheat Growers v. Zeise, et al., Civ. No. 2:17-2401, 2018 WL 1071168, at *7 (E.D. Cal. Feb. 26, 2018).  Before the court was a motion for preliminary injunction, requesting the court do two things:  (1) stop the State of California from identifying glyphosate on a list of cancer-causing products; and (2) enjoin the warning requirement of Prop 65 from being enforced against Plaintiffs with regards to glyphosate.  Id. at *1.

Before we get into the court’s reasoning, some background on Prop 65. Officially known as the Safe Drinking Water and Toxic Enforcement Act of 1986, Prop 65 purports to protect California’s drinking water sources from being contaminated with chemicals known to cause cancer, birth defects or other reproductive harm, and requires businesses to inform Californians about exposures to such chemicals.  Under Prop 65, the Governor of California is required to publish a list of chemicals “known to the State” to cause cancer, as determined by certain outside entities.  Id.  Prop 65 also prohibits any person in the course of doing business from knowingly and intentionally exposing anyone to the listed chemicals without a prior “clear and reasonable” warning.  Id.  The prohibition, and corresponding warning requirement, takes effect 12 months after the chemical has been listed.  Id.  Private persons are authorized to file suit to enforce Prop 65, adding to the overwarning problem.

Glyphosate is a widely-used herbicide used to control weeds in various settings.  Id. at *1, n.1.  Glyphosate can even be used on coffee plantations.  But I digress.  Plaintiffs or their members sell glyphosate-based herbicides, use glyphosate in their cultivation of crops that are incorporated into food products sold in California, or process such crops into food products sold in California.  Id.  In 2015, the International Agency for Research on Cancer (“IARC”) of the World Health Organization (“WHO”) classified glyphosate as “probably carcinogenic” to humans based on evidence that it increased cancer rates in animal studies and limited evidence that it could cause cancer in humans.  Id. at *2.  In this case, the IARC is the outlier.  Several other organizations, including the United States Environmental Protection Agency (“EPA”) and other agencies within WHO found no evidence that glyphosate causes cancer.  Id.  Still, relying on the IARC’s “probably carcinogenic” classification, California’s Office of Environmental Health Hazard Assessment (“OEHHA”) issued a Notice of Intent to List Glyphosate in November 2015 and subsequently began listing glyphosate as a chemical known to state of California to cause cancer in July 2017.  Id.  The warning requirement would therefore take effect in July 2018.  Id.

After finding that Plaintiffs’ First Amendment claim was ripe for the court’s consideration, the court turned to the issue of injunctive relief. Injunctive relief, “an extraordinary and drastic remedy,” requires that the moving party establish several familiar elements:  (1) it is likely to succeed on the merits, (2) it is likely to suffer irreparable harm in the absence of preliminary relief, (3) the balance of equities in tips in its favor, and (4) an injunction is in the public interest.  Id.

Regarding the likelihood of success on the merits, the court first distinguished between the State’s listing of glyphosate as a chemical “known to” cause cancer and the subsequent warning requirement.  The former is government speech; the latter is commercial speech.  Id. at *5.  This distinction is significant because the “[t]he Free Speech Clause restricts government regulation of private speech; it does not regulate government speech.”  Id. (citing Pleasant Grove City v. Summum, 555 U.S. 460, 467 (2009).  So, while Plaintiffs could not demonstrate likelihood of success on the merits with regards to the listing of glyphosate, a different analysis was required for the warning requirement itself, which would have the effect of compelling commercial speech – the labeling of a product.  Id.

Commercial speakers receive protection of the First Amendment, subject to some limitations.  The government may require commercial speakers to disclose “purely factual and uncontroversial information” about commercial products or services, as long as the “disclosure requirements are reasonably related” to a substantial government interest and are neither “unjustified [n]or unduly burdensome.”  Id. (citing In Zauderer v. Office of Disciplinary Counsel of Supreme Court of Ohio, 471 U.S. 626, 651 (1985)).  As explained above, only the IARC found that the evidence warranted branding glyphosate as “probably carcinogenic.”  On the other hand, the court noted that

…the EPA has reviewed studies regarding the carcinogenicity of glyphosate multiple times and has determined each time that there was no or insufficient evidence that glyphosate causes cancer, most recently in September 2016. Several international agencies have likewise concluded that there is insufficient evidence that glyphosate causes cancer, including the European Commission’s Health and Consumer Protection Directorate–General, multiple divisions of the World Health Organization besides the IARC, and Germany’s lead consumer health and safety regulator.

Id. at *7.  Based on the great preponderance of scientific opinion, the court reasoned that it was “inherently misleading for a warning to state that a chemical is known to the state of California to cause cancer based on the finding of one organization … when apparently all other regulatory and governmental bodies have found the opposite, including the EPA.”  Id.  Accordingly, the court found that “here, given the heavy weight of evidence in the record that glyphosate is not in fact known to cause cancer, the required warning is factually inaccurate and controversial.”  Id.

After finding that the required warning would be false and misleading, the court found the scales tipped in Plaintiffs’ favor on the issues of irreparable harm, balancing of the equities, and public interest factors.  The court granted Plaintiffs’ request for a preliminary injunction enjoining the warning requirement of Prop 65.  Jackie Chiles would agree that requiring such a warning would be an infringement on Plaintiffs’ constitutional rights.  That’s outrageous, egregious, preposterous!

Remember, as well, that the First Amendment equally applies to tort litigation.  The blog has discussed the product liability implications of New York Times Co. v. Sullivan, 376 U.S. 254, 265 (1964), several times.  This is another such instance.  To the extent that, as in Nat’l Assoc. of Wheat Growers v. Zeise, the First Amendment prevents the government from forcing a product manufacturer to “speak” falsely based on the results of an outlier study, it equally precludes private plaintiffs from seeking damages for a manufacturer’s failure to include the same false information on a product warning.

Where might that come in useful?

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In Looney v. Moore, 2018 WL 1547260 (11th Circuit Mar. 30, 2018), the Eleventh Circuit confirmed Alabama law’s rejection of an “increased risk of harm causation standard and established that lack of informed consent plaintiffs must have a physical injury.

Looney is a clinical trial case. Parents of several infants who were born prematurely claimed that the infants suffered injuries as a result of their participation in a clinical trial aimed at analyzing the effects of differing oxygen saturation levels on premature infants. Plaintiffs made negligence, negligence per se, product liability, breach of fiduciary duty and lack of informed consent claims, and they sued the doctors involved in the study, as well as the independent review board and the company that made the medical equipment for the study. Defendants won at the summary judgment stage, and the Eleventh Circuit affirmed.

The simplest issue was causation. The Eleventh Circuit applied Alabama’s strict requirement that a plaintiff making a negligence claim must show that the negligence more than likely caused plaintiff’s injury. An “increase risk of harm” is insufficient:

The Alabama Supreme Court has made clear that, “to present a jury question, the plaintiff in a medical-malpractice action must adduce some evidence indicating that the alleged negligence (the breach of the appropriate standard of care) probably caused the injury. A mere possibility is insufficient. . . . . An alleged “increased risk of harm” is not sufficient to survive summary judgment under Alabama law, which requires proof that the alleged negligence probably caused the injury.

Id. at *3.

Confirming this standard turned out to be the end of plaintiffs’ negligence claims. That’s because no expert, whether it be for plaintiffs or defendants, was willing to say that the defendants’ negligence during the clinical trial probably caused any of the infants’ injuries. At their depositions, defendants’ experts said that the infants’ premature births probably caused their injuries, not participation in the study. Id. Plaintiffs’ own expert could only manage to say that the clinical trial “increased the risk of harm” to the infants, not that it more likely than not injured them. Id. This testimony gave a jury no basis to find for plaintiffs, and the Eleventh Circuit affirmed defendants’ summary judgment victory. Id. at *4.

Plaintiffs’ informed consent claim was a bit trickier. Plaintiffs argued that they did not need a physical injury to make this claim, something that Alabama law had not directly addressed. Id. The Eleventh Circuit sought help on this, certifying a question to the Alabama Supreme Court. But the Alabama Supreme Court declined to answer. Id. This left the Eleventh Circuit in the position of having to predict how Alabama law would decide the issue. Id.

To do this, the Eleventh Circuit first considered the Alabama Medical Liability Act. It required an injury. The Eleventh Circuit also considered Alabama Supreme Court informed consent decisions. In each instance, the court laid out the elements of any informed consent claim, but they did not explicitly include injury. The Eleventh Circuit was not troubled by this because, in each case, the plaintiff not only suffered an injury, but a serious one. Id. at *5.

Left looking for any support for their theory of a claim without physical injury, plaintiffs pointed to battery claims, in particular medical battery claims, which in Alabama do not require physical injury. Id. at *7. The Eleventh Circuit distinguished these claims. Battery claims are not based in negligence, but instead on a lack of any consent at all. Id. On the other hand, plaintiffs in lack of informed consent claims actually give consent to the procedure. They just claim that their consent was ill informed. Id. at *8. In other words, their claims are based on the negligence of the medical providers. And that brings us back to the strict requirement under Alabama law that a plaintiff making a negligence claim must establish that the negligence probably caused an injury. With that, the Eleventh Circuit upheld summary judgment against plaintiffs’ informed consent claims. Id. at *9.

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The personal injury decisions Daimler AG v. Bauman, 571 U.S. 117 (2014), and Bristol-Myers Squibb Co. v. Superior Court, 137 S. Ct. 1773 (2017), are gifts that keep on giving.  The latest development is Wilson v. Nouvag GmbH, 2018 WL 1565602 (N.D. Ill. March 30, 2018), where the plaintiff went to the “home” state of an overseas defendant’s United States distributor and unsuccessfully sought to obtain personal jurisdiction over the parent as well.

Wilson was a wrongful death case filed almost exactly two years after the death at issue.  Id. at *1.  That suggests, although it isn’t stated, that it was filed on eve of the running of the statute of limitations (two years is a common limitations period for personal injury claims, and “death” is often an absolute date for the calculation of limitations periods in death cases).  We’ll come back to that.

The corporate structure of the defendant medical device manufacturer in Wilson is hardly uncommon.  The parent manufacturer is located overseas.  It sells its product, still overseas, to an affiliated distributor that the parent also owns.  The overseas affiliated distributor then sells the products to a similar affiliated distributor in the United States.  That United States distributor then sells the products throughout the country.  Only the United States distributor knows about, and sells to, particular United States customers.  Wilson, 2018 WL 1565602, at *1.

Bauman held that personal jurisdiction rules are intended to “permit out-of-state defendants to structure their primary conduct with some minimum assurance as to where that conduct will and will not render them liable to suit.”  571 U.S. at 762 (citation and quotation marks omitted).  In Wilson that happened.  The corporate structure described above is sufficient to preclude the overseas parent from being sued in product liability anywhere in the United States.

The plaintiff in Wilson, a resident of Virginia, brought suit in Illinois, where the defendant’s United States distributor was undisputedly “at home.”  2018 WL 1565602, at *3.  While that was certainly sufficient to reach the distributor, it did not confer specific “case-linked” jurisdiction (plaintiff conceded no general jurisdiction existed) over the overseas parent or its overseas distributor.

First, although the parent “intentionally directed distribution of its [device] into the United States through an Illinois company,” that didn’t establish specific jurisdiction in Illinois.  Id. at *4.  The product simply passing “through Illinois” into the rest of the country was not enough.  The parent defendant “had no knowledge or influence” over where its products were sold by its American distributor.  Id.  Mere knowledge of its distributor’s location was insufficient.  Id. (FDA filings with Illinois address did not “provide any information about the distribution of the product in the United States”).

Second, the plaintiff “ha[d] not established that [the overseas parent] itself had any contacts with the State of Illinois, as is required to establish specific jurisdiction.”  Id. at *5.  “The Supreme Court has ‘consistently rejected attempts to satisfy the defendant-focused ‘minimum contacts’ inquiry by demonstrating contacts between the plaintiff (or third parties) and the forum State.’” Id. (quoting Walden v. Fiore, 134 S. Ct. 1115, 1122 (2014)).

The fact that [the overseas parent’s] customer distributed its product through a subsidiary based in Illinois is not enough to indicate that [the parent] purposefully availed itself of the privilege of conducting activities within Illinois.

Wilson, 2018 WL 1565602, at *5.

Third, personal jurisdiction could not be based on a stream of commerce theory.  “The ‘stream of commerce’ is a metaphor for the concept of purposeful availment.”  Id.  Stream of commerce without purposeful availment has never commanded a Supreme Court majority.  Id.

[T]his leaves the “stream of commerce” concept of questionable significance in resolving questions of personal jurisdiction. . . .  [A] majority of the Court has never held that jurisdiction premised on the placement of a product into the stream of commerce is, without more, sufficient to establish a constitutionally adequate connection to the forum State.

Id. (citation omitted).  Further, the foreign parent “had no contractual arrangement with” its United States distributor – only its overseas distributor did.  Id.  Thus, there was no basis for stream of commerce jurisdiction “even [under] the more relaxed standard.”  Id.  Finally, the plaintiff produced no evidence that the particular product that caused injury “actually passed through Illinois on [its] way to Virginia.”  Id. at *6.  The mere fact that a distributor was located in Illinois was not proof that any particular unit of the device passed through Illinois in the stream of commerce.  Id.

Fourth, plaintiff couldn’t establish personal jurisdiction through agency, either.  Plaintiff offered only “conclusory allegations.”  Id.

To plead the existence of an agency relationship, a plaintiff must allege some facts that support the inference of agency.  Furthermore, unsupported allegations by a plaintiff are insufficient to support personal jurisdiction.

Wilson, 2018 WL 1565602, at *6 (citation omitted).  “The test for agency is whether the alleged principal has the right to control the agent, and whether the alleged agent can affect the legal relationships of the principal.”  Id. (citation and quotation marks omitted).  The overseas parent’s FDA submissions did not speak at all to the elements of agency.  Id.  As an overseas parent, two steps removed from its United States distributor, the parent “has no knowledge or influence over what happens to the [devices] after they are sold,” in Europe, to its overseas distributor.  Id.

Fifth, even if the plaintiff had proven that the overseas parent had some sort of “contacts” with Illinois, plaintiff failed to establish that the “alleged connection with the State of Illinois has any relation to the claims in this lawsuit” as required by BMS.  Id. at *7.

[Plaintiff] does not allege that any specific conduct related to his claims took place in Illinois.  Specific jurisdiction exists only if there is “an affiliation between the forum and the underlying controversy, principally, an activity or an occurrence that takes place in the forum State.”

Id. (quoting BMS, 137 S. Ct. at 1781).  BMS was “particularly relevant,” as it also involved product liability claims against a prescription medical product.  Wilson, 2018 WL 1565602, at *7.  Under BMS, “a defendant’s contract with a distributor in the forum State is not itself enough to establish personal jurisdiction in the State.”   Id.  The overseas parent “did not design, manufacture, label, or sell its [devices] in Illinois,” therefore product liability allegations about such conduct were not case-related contacts with the state.  Id.

Finally, plaintiff was “not entitled to jurisdictional discovery because he has not made a prima facie showing of personal jurisdiction.”  Id. at *8.  Plaintiff’s attempt to harass the overseas parent with “interrogatories, requesting documents, and conducting depositions on 17 wide-ranging topics” also failed.  Id.  Any discovery along those lines would have to be directed to the United States distributor over which jurisdiction existed.  Id.

In sum, the plaintiff utterly “fail[ed] to establish that any suit-related conduct, by [the overseas distributor] or other defendants, took place in the State of Illinois.”  Wilson, 2018 WL 1565602, at *8 (emphasis added).  That holding means that even the United States distributor was not subject to specific, case-linked jurisdiction (although general jurisdiction existed as to the Illinois-based company) for failure to establish that its purportedly injury-causing product passed through the forum state.

[T]his Court cannot exercise specific jurisdiction over a foreign defendant for claims that have no connection to Illinois.  [Plaintiff] has not shown any affiliation between the forum and the underlying controversy to allow the exercise of specific jurisdiction in Illinois over [the overseas parent].

Id.

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Wilson is thus a successful example of what Bauman held was proper – “out-of-state defendants [being able] to structure their primary conduct” so as to avoid suit in the United States.  If an overseas parent cannot be subject to jurisdiction in the only state where its United States distributor is actually located, it can hardly be subject to jurisdiction anywhere else in the country.  See also Fed. R. Civ. P. 4(k)(2) (providing relief in this situation only for claims “aris[ing] under federal law”).  A corporation’s vertical integration:  (1) overseas parent selling to (2) overseas distributor selling to (3) a viable (we are not addressing alter ego claims not raised in Wilson) United States distributor – is thus a model for other overseas entities selling products into the American market that wish to structure their affairs so as to limit their product liability exposure to the assets of the American entity.  Indeed, Bauman/BMS also provides a degree of insulation from excessive American discovery, at least as a party to litigation.

Furthermore, as we mentioned earlier, the plaintiff in Wilson was apparently up against the statute of limitations when suit was filed.  The Bauman/BMS limits on personal jurisdiction have another beneficial effect.  The statute of limitations is often considered “procedural” for choice of law purposes (in the absence of a forum “borrowing statute”), which has in the past allowed otherwise time-barred plaintiffs to flock to those jurisdictions with longer statutes of limitations or broader tolling exceptions to their statutes.  No longer.  Due process in personal jurisdiction now precludes tardy plaintiffs from filing belated claims in states with no “case-related” contacts simply because those states have more permissive statutes of limitations.

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This morning, our commuter train was packed with overjoyed Villanova students headed for the NCAA Championship Victory Parade.   It was the second time in a few months that our fair city has been lifted by a huge sports triumph.  And, though our heads were ringing by the time we reached our stop (“Indoor Voice” is apparently not a course offered at Villanova), we love the infectious joy of these victories.

We also love a good Daubert victory, like today’s decision.  In Tsao v. Ferring Pharms., Inc., 2018 U.S. Dist. LEXIS 49173 (S.D. Tex. Mar. 26, 2018), the defendant manufactured a drug designed to stimulate women’s ovaries to produce eggs to be used for in vitro fertilization (“IVF”).  The plaintiff, an oncologist, underwent fertility treatments using the defendant’s drug.  Alleging that she purchased “defective, adulterated, and misbranded” vials of the drug, she sued the defendant for economic damages for breaches of express and implied warranties and violations of the Texas Deceptive Trade Practices Act.   The defendant had earlier voluntarily recalled certain lots of the drug because routine stability testing indicated that the lots “did not meet potency specifications and were out of specification . . . at the time of testing (twelve months or more into their shelf life.” Tsao, 2018 U.S. Dist. LEXIS 49173 at *1.   The plaintiff “complain[ed] that [the defendant] failed to inform her that [the drug] lacked the potency described in the drug’s Prescribing Information” and that she would not have purchased and used [the drug] had she known it did not meet those product specifications.” Id. at *3.  Claiming that the reduced potency adversely affected her fertility treatments, she sought recovery of money she spent to purchase the drug, money she spent on other medications used in conjunction with the drug, and the costs of her IVF treatments.

Among her designated experts, the plaintiff designated herself to offer a number of opinions, among them opinions related to the alleged “sub-potency” of the drug she purchased, the likelihood that this “sub-potency” would cause her IVF treatments to fail, and multiple issues related to ovarian stimulation, including the “usual” period of stimulation, the “prolonged” period necessary because the drug was “sub-potent,” and the supposed negative effects of this “prolonged stimulation.”  The plaintiff also designated a regulatory expert to testify about causation as well as the defendant’s “alleged lack of compliance with FDA regulations regarding drug recall and misbranded or adulterated drugs.” Id. at *11.  The defendant moved to exclude the plaintiff’s “expert” testimony and the testimony of her regulatory expert.

Motion to Exclude the Plaintiff’s Expert Testimony

The defendant moved to strike the plaintiff’s expert testimony on the grounds that: 1) she was not qualified as a reproductive endocrinologist; and 2) her opinions lacked the indicia of reliability required for medical expert testimony.  The court resoundingly agreed.  First, the court held that the plaintiff had “failed to demonstrate knowledge, skill, experience, training, or education with respect to reproductive endocrinology and drug recalls . . . .” Id. at  *17.   To wit, the plaintiff testified in deposition that “many of her opinions regarding [the drug] and reproductive endocrinology [were] based on internet research that she conducted using Google  and Wikipedia” as well as “the websites of different fertility clinics and online patient forums to research the average stimulation period” for women undergoing this type of therapy. Id. at *17-18.   In addition, the plaintiff testified that her opinions about issues related to the drug’s recall were “based on her general understanding of ow pharmaceutical companies work. Id. at  *19 (internal punctuation omitted).   And so, the court found, the plaintiff had not met her burden to demonstrate that she was qualified to offer her expert opinions.

Because it had excluded the plaintiff’s opinions based on her lack of qualifications, the court emphasized that it didn’t need to reach issues related to the reliability of her opinions. But it stated for the record that the plaintiff’s own opinion that she would have produced more eggs if the drug were “fully potent” was not reliable because: 1) it “did not “fit” with the scientific literature, the data contained in the medical record, or her treating physicians’ testimony,” id. at *21; 2) was not the product of the same rigor the plaintiff would use in her own practice (the court commented that it “[didn’t]  believe that [the plaintiff ] would base her opinions regarding treatment of an oncology patient on Wikipedia research”); id. at *24-25; and 3) her repeated deference to her treating physicians confirmed her lack of expertise in reproductive endocrinology. Id. at *26.

And so, while the plaintiff was obviously permitted to testify about her own experience, she was not permitted to offer her own “expert” opinions.

Motion to Exclude Regulatory Expert

The defendant challenged the testimony of the plaintiff’s designated regulatory expert on three topics: 1) the potency of the drug purchased and used by the plaintiff; 2) FDA labeling requirements; and 3) the recall of the drug.  After recounting the expert’s qualifications at length, the court held that she was generally qualified to testify as an expert, and, specifically, was qualified to testify about FDA regulations and recalls.  But the court held that the expert’s opinions that the drug was “misbranded” and “adulterated” were impermissible legal conclusions and were contrary to FDA regulations.  Specifically, the FDA had set a potency range within which the drug was required to fall – 80%  to 125% of the labeled potency —  and the drug was not “misbranded”  or “adulterated” or “out of specification,” according to FDA regulations, as long as it fell within this  range.  And there was no evidence that any lots of the drug that the plaintiff used were “out of specification” at the time she used them.  As such, the expert’s opinion that certain vials of the drug “may have” fallen out of specification by the time the plaintiff used them was “speculative, contrary to the evidence, and inadmissible ipse dixit.” Id. at *37.   Finally, the court held that the expert’s opinion that the drug’s potency was a key factor affecting the quality of retrieved eggs was unreliable because it was “contrary to the labeled indications for [the drug], her own deposition testimony, and the testimony of Plaintiff’s treating physicians.” Id. at *43.

Regular readers are familiar with our frustration with the too-frequent admission of expert testimony that should never see the light of day.   While many of the challenges to the Tsao opinions were, dare we say, a slam-dunk, it’s still nice to see an opinion come out the right way.  Let’s hope for more, and, on the day of the Phillies’ 5-0 victory in their home opener, hope springs eternal that they can harness some of the city’s “sports karma” for the long upcoming season.

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This is not new. PMA devices should have broad preemption against product liability claims. Not just from the express preemption provisions of the MDA, but from attempts to get around express preemption by basing claims on violations of the FDCA and running smack into implied preemption under Buckman. We have talked about the narrow gap a claim needs to squeeze through to not be subject to either version of preemption. We have, when we were feeling mythological, likened this to traversing the Strait of Messina between Scylla and Charybdis. Without overdoing the analogy, each state law claim must neither 1) impose a requirement that is “different from or in addition to” the PMA approval requirements, nor 2) have federal requirements as a “critical element,” or it will be smashed or swallowed into preemption oblivion. A good analysis of these issues starts with looking at what plaintiffs have alleged and how that fits within the cognizable causes of action under applicable state law.

In In re Smith & Nephew BHR & R3 Hip Implant Prods. Liab. Litig., No. CCB-172775, 2018 U.S. Dist. LEXIS 49021 (D. Md. Mar. 26, 2018), more than two hundred plaintiffs purported to assert fairly standard state law product liability causes of action against the manufacturer of a PMA hip implant. The actual allegations of what the manufacturer did wrong and what was bad about the device were not so standard. They were very heavy on alleged non-compliance with a range of FDA requirements. The defendant moved to dismiss under express and implied preemption and TwIqbal. We will focus on the preemption part and will resist griping about how the TwIqbal analysis should have come before the preemption analysis. We cannot, however, avoid commenting on the decision to address whether state law claims—under the law of forty-two states—are preempted without looking at state law. While the defendant may have liked the court’s willingness to address preemption on a motion to dismiss—something the plaintiffs resisted—the limited analysis helped to predict the result. The court said that “there is little need to analyze the elements of underlying state laws” and that it was “merely deciding which claims, and which arguments within those claims, would run afoul of state requirements that differ from and add to federal regulations,” but states do not impose requirements unless there is some statutory or common law claim that fits what plaintiff is complaining about in the case. Id. at **61-62.

The court started its preemption analysis by citing some cases we like, such as Mensing and the Bexis favorite Puerto Rico v. Franklin California Tax-Free Trust, 136 S. Ct. 1938, 1946 (2016), on no presumption against preemption. It then cited some cases we do not like, such as Mink and Bausch on parallel claims. Id. at *66. When it said this, we knew where things were headed:

So, if a plaintiff may succeed on her state law claim by proving conduct that violates federal requirements, then that claim parallels federal requirements. The state law reliance on a federal regulation need not be explicit. Rather the elements of traditional state laws need only be satisfied by conduct leading to a violation of a federal regulation.

Id. Not only is that bit of bad logic eerily reminiscent of another case following Bausch that we lambasted, but you might want to look at the “elements of traditional state laws” before you declare them parallel to federal requirements. And there is that whole Scylla/Buckman part of the preemption analysis that cannot be defined away. With this background, the court’s analysis actually started out pretty well with strict liability design defect claims getting sucked down into the sea. “[P]remarket approval is FDA recognition of a particular medial device’s fitness for the market. Having received that approval, the BHR system cannot be labeled unreasonably dangerous by state law without imposing requirements on medical devices different from or in addition to federal regulations.” Id. at **67-68 (citing Reigel). Not bad.

The rest was. Claims for undifferentiated negligence, negligence per se—with no separate analysis—failure to warn, negligent misrepresentation, express warranty, and manufacturing defect were all considered parallel claims because they were based on the manufacturer’s “alleged failure to comply with duties already required by the FDA.” Id. at **69-70. Even if were not for Buckman, this is not what makes a state law claim parallel to a federal requirement. There needs to be a state law requirement that exists independent of FDA requirements and then it has to be parallel to the federal requirements. If state law required truthful communications about the risks and benefits of all products sold in the state and FDA required specific formats for communications about an approved device, but generally that communications about its risks and benefits be truthful, then that could be parallel. Those state law requirements probably apply equally to mushrooms as they do to implanted prescription medical devices.

By contrast, the purported state law requirement to train surgeons would be different than and in addition to federal requirements, because there is neither a federal requirement that surgeons be trained—states regulate the practice of medicine—nor a state law requirement that a manufacturer train surgeons before they can use its products. The court is correct that this claim is not impliedly preempted—it is not based on a federal requirement—but there needs to be a cognizable state law duty requiring training in the first place. Id. at *69 n.11. Similarly, the court held that a “failure to warn” claim based on reporting adverse events to FDA would not be expressly preempted, without considering whether state law imposes any duty to report—it does not. Id. at * 71. A claim for failure to warn “the general public or the medical community is, however, expressly preempted because there is no such parallel federal requirement”—but there is similarly no actual state law duty. Id. For negligent misrepresentation and express warranty, there are state law duties independent of any federal obligations and, here, we are not critical of the analysis. False marketing claims that a product is safer than it is or safer than a competing device can give rise to liability regardless of FDA requirements. So, we are fine with the court’s statement that “any state law claim that imposes liability for making false statements regarding the device’s relative safety parallels federal requirements,” even if we do not think the cases cited for that proposition are all good law. Id. at **72-73. We also agree that misrepresentation and warranty claims cannot be based on the alleged falsity of FDA-required statements about the device. Id. at *73. On manufacturing defect, the court reverted to an incomplete analysis, assuming that deviations from “the FDA’s approved design of the BHR device” could give rise to non-preempted state law claims, ignoring state law claims require manufacturing defects to render a product dangerous. Id. at *73.

Having found all these claims based on purported violations of FDA requirements to escape express preemption, without considering whether any state law authorized them, the court gave short shrift to implied preemption

All of the plaintiffs’ claims in the MACC fall within the states’ traditional power to regulate matters of health and safety. Not one cause of action tries to enforce a legal right held by a federal agency or relies on the statutory scheme for its existence—they all long predated modern medical devices.

Id. at **75-76. This is neither an accurate recap of what Buckman means, nor consistent with how the court had characterized plaintiffs’ causes of action as not seeking to impose liability based on violating requirements that were different from or in addition to FDA requirements. Rather than belabor the problems with this court’s analysis, we will end with pretty obvious gaffe. In returning to the purported state law claim for “failure to warn” by failing to report adverse events to FDA, the court concluded that “plaintiff’s failure to warn claims do not attempt to enforce the FDA’s right to be warned of information concerning the safety of approved medical devices” because plaintiffs claimed failing to report adverse events to FDA “violated a legal right owed to them.” Id. at *77. Presumably, that would be a right that the law of a state—or, rather, the law of 42 separate states—bestowed on private citizens based solely on federal law. To put it mildly, this is the kind of mess than can happen when preemption analyses skip steps and make unwarranted assumptions.

 

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We recently read an editorial in The New York Times advocating lawsuits as a means of regulating an industry. Politicians are gripped by paralysis – so the argument goes – thus we must entrust the issue to litigators, smart judges, and good-hearted jurors.  After all, hadn’t years of product liability litigation resulted in safer products?

Well, … no.  Data doesn’t  show that litigation leads to safer products.  Fewer products, probably.  More expensive products, definitely.  But litigation is a perfectly awful way to impose safety regulations on an industry.  Say what you will about politicians, but at least they are somewhat representative of people’s will.  Say what you will about regulators, but at least they possess some expertise.  If there is paralysis in the halls of a legislature or government agency, that paralysis reflects a lack of consensus, a clash of passions, or a genuine conflict in the science.  Litigation is an eccentric means of ruling on general issues – it is off-center.  The peculiarities of one lawyer’s eloquence, or one judge’s bent for social engineering or twelve jurors’ emotions can produce a verdict with profoundly puzzling and profoundly enormous implications.  It is a rotten way to lay out general safety rules.  (Mind you, we are not talking about constitutional issues that may require judicial intervention.)  The various say-sos of jurors or even judges can be unpredictable, unbalanced, and inconsistent.  Lawsuits are not designed to determine safety science or policy.  Instead, they resolve disputes between parties.

Enter the judicial doctrine of standing. You cannot pursue a lawsuit merely because you are sure you have the right idea of How It’s Got to Be.  Rather, you must be actually injured in fact.  Injured sensibilities are not enough.  Not every Nosy Nellie qualifies as a plaintiff.  The doctrine of standing means that lawsuits pertain to actual disputes.  Courtrooms are not debating societies.  If there are judges anywhere in the land, say, in Brooklyn or Boston or Los Angeles or anywhere else who think they have a great idea about how to regulate consumer products, great; write a letter or comment to a legislator or regulator, but don’t glom onto a lawsuit as a way of playing the role of Philosopher King.  Maybe the judiciary is not always the “least dangerous branch,” but limiting doctrines such as standing are intended to make it so.

Standing is the key issue in today’s case, Debernardis v. IQ Formulations, LLC, 2018 U.S. Dist. LEXIS 52445 (S.D. Fla. March 29, 2018).  Debernardis was a purported class action alleging that certain dietary supplements contained a stimulant that was unlawful and, therefore, rendered the supplements “adulterated” or “misbranded.”  The plaintiffs parsed the FDCA regulations to justify this allegation.  While the FDCA does not provide for a private right of action, there are a number of state consumer protection laws that incorporate FDCA labelling provisions and provide a mechanism for private suits.  Accordingly, the plaintiffs in Debernardis contended that the makers of the supplements had violated Florida, Illinois, and New York deceptive practices acts and other laws.  The plaintiffs alleged that they suffered economic injury because they would not have purchased the supplements had they known that one of its ingredients had not been approved by the FDA. Importantly, the plaintiffs did not allege that they had suffered any physical harm or that the supplements did not work as advertised.

The defendants moved to dismiss the class complaint, arguing, inter alia, that the plaintiffs lacked standing to bring the action.  The Debernardis court began with an overview of the standing requirement, describing the actual injury requirement, as well as the need for plaintiffs to demonstrate “a causal connection between the injury and the conduct complained of.”  As we argued in a recent post, it is remarkable how many cases come down to the issue of causation.  The Debernardis court also mentioned the requirement that plaintiffs must show “a likelihood that a court ruling in [the plaintiff’s] favor would remedy [his] injury.”  These standing requirements are in no way relaxed for class actions.  The named plaintiffs still must still allege that they personally have been injured such as to satisfy the test for standing.
We are pleased to report that the key standing cases cited by the defendants in Debernardis were three cases residing within the Third Circuit.   One in particular, Hubert v. Gen. Nutrition Corp., 2017 WL 3971912 (W.D. Pa. Sept. 8, 2017), was very similar to Debernardis and arrived at a dismissal for want of standing.  In Hubert, the plaintiffs offered only a “threadbare allegation” that they paid more for supplements than they would have if the supplements had been accurately labeled.  Without supporting factual allegations, such conclusory statements did not establish injury in fact.  Moreover, the Hubert court rejected a benefit-of-the-bargain theory because the plaintiffs alleged no adverse health consequences nor that the supplements failed to perform as advertised.  Exactly the same weaknesses bedeviled the Debernardis complaint.  No actual, concrete injury was set forth in the complaint.  (The plaintiffs in Debernardis relied on two cases from the Eleventh Circuit. That circuit was the winner of a big, fat No-Prize from us last year, as it generated the most cases in our Bottom Ten list.  In any event, the Eleventh Circuit cases had some meat to their price differential theories – something wholly lacking in Debernardis.)
The Debernardis court confronted the issue of standing squarely and concluded that the plaintiffs did not have it:  “The broad claim that they would not have purchased the Supplements at all had they known that [the defendant] had failed to follow the FDA’s approval procedure regarding an ingredient is insufficient to confer standing.” Similar reasoning might apply to some of the drug and device cases we encounter.
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We don’t normally comment on verdicts, whether they favor our side or the plaintiffs, because the bare fact of a verdict doesn’t give us much to analyze, and analysis is what this blog is about. But we make an exception for the bizarre verdict handed down last week in the first bellwether trial in the Bard IVC Filter MDL.

We’ve seen the verdict form, and the plaintiffs submitted four theories of liability to the jury:  (1) strict liability design defect; (2) strict liability failure to warn; (3) negligent design; and (4) negligent failure to warn.  According to the 360 story (unfortunately behind a paywall to non-subscribers), the jury found that the defendant’s IVC filter wasn’t defectively or negligently designed, and – more importantly for our purposes – also held that there was no strict liability warning defect (the case was under Georgia law, and Georgia is a Restatement §402A state).

After having rendered defense verdicts on the first three theories, the IVC jury found that, somehow, the defendant had negligently failed to warn about the same risks as to which there was no strict liability warning defect.

That’s inconsistent, if not impossible.

We haven’t looked at Georgia law, but the exact same thing happened not too long ago in California, in Trejo v. Johnson & Johnson, 220 Cal. Rptr.3d 127 (App. 2017), review denied (Cal. Oct. 11, 2017), a case we blogged about here.  In Trejo, we were mostly interested in the fate of the plaintiff’s design-related claims (they were preempted), but the court also held that, where the jury had determined that no warning-related, strict-liability defect existed, it was inherently inconsistent for the jury to turn around and find negligent failure to warn:

Considering that both the strict liability and negligence theories were premised on a single alleged defect – failure to warn of [the same risk] – the jury’s findings meant, in substance, that [defendant] was not strictly liable for failure to warn of those possible reactions because they created no substantial danger, but was liable for negligent failure to warn because those possible reactions were, or were likely to be, dangerous.  As we next explain, we conclude that these verdicts are fatally inconsistent.

Trejo, 220 Cal. Rptr.3d at 142.

Why is that?  We’ll let the California Court of Appeals explain.

“[A] finding of negligent failure to warn is logically and legally inconsistent with the jury’s finding [in favor of defendants] on plaintiffs’ strict products liability failure to warn.”  Id. (quoting Oxford v. Foster Wheeler LLC, 99 Cal. Rptr.3d 418, 435 (App. 2009)).  That’s because “the manufacturer’s strict liability duty to warn is greater than its duty under negligence, and thus negligence requires a greater showing by plaintiffs.”  Id. (Valentine v. Baxter Healthcare Corp., 81 Cal. Rptr.2d 252, 263 (App. 1999)).

Strict liability was invented precisely so it would be easier to prove than negligence.  Thus a “defense verdict . . . on strict liability failure to warn subsume[d] the cause of action for negligent failure to warn so that” the proper result was “to direct a defense judgment on that negligence count.”  Trejo, 220 Cal. Rptr.3d at 142 (quoting Valentine again).  “[T]he defense verdict on strict liability failure to warn mandated a defense verdict on negligent failure to warn as well.”  Id.

A negligence formulation of a warning claim – that a defendant “has a duty to use reasonable care to give a warning” of a risk that makes the product “likely to be dangerous” to users whom “the supplier has reason to believe . . . will not realize [the product’s] danger,” id. – requires greater proof of failure to warn than strict liability, which allows recovery whenever a “substantial” danger requires a better warning than what the plaintiff (or the physician in a learned intermediary case) received:

[A] product is defective if the use of the product in a manner that is reasonably foreseeable by the defendant involves a substantial danger that would not be readily recognized by the ordinary user of the product and the manufacturer knows or should have known of the danger but fails to give adequate warning of such danger.  A manufacturer has a duty to provide an adequate warning to the user on how to use the product if a reasonably foreseeable use of the product involves a substantial danger of which the manufacturer is either aware or should be aware, and that would not be recognized by the ordinary user.

Id. at 142-43 (mostly quoting Valentine again).  “[T]he strict liability definition of defective product, coupled with . . . the strict liability duty to warn physicians of the potential risks or side effects of [a medical device] that were ‘known or knowable,’ more than subsumed the elements of duty to warn set forth in the negligence instructions.”  Id. at 143.

[T]he ‘known or knowable in light of’ language in the strict liability instruction at a minimum encompasses the ‘knows or has reason to know’ language in the negligence instruction.  Under a negligence standard, a reasonable manufacturer would not be charged with knowing more than what would come to light from the prevailing scientific and medical knowledge.”

Id. at 144 (quoting Valentine again).

The Trejo decision goes on, reviewing other cases in which courts have found inherently inconsistent verdicts where the jury found for the defendant on strict liability warning defect but for the plaintiff on negligent failure to warn.  Id. at 143-48 (discussing, both Valentine, supra (a medical device case), and Oxford, supra at great length).  Trejo also rejected the plaintiff’s attempted counter that “negligence and strict products liability are not identical doctrines”:

True enough − the two theories of products liability are not identical. . . . the difference between strict liability failure to warn and negligent failure to warn [is] . . . that, unlike negligent failure to warn, strict liability is not concerned with the standard of due care or the reasonableness of a manufacturer’s conduct. . . .  [A] manufacturer could be held liable under strict liability principles even if its failure to warn conformed to industry-wide practices and thus was not negligent.  [The law does] not, however, indicate that a manufacturer could be held liable for negligent failure to warn despite being found not liable for strict liability failure to warn.  Indeed, as illustrated by Valentine and Oxford, this cannot be so where, as here, only one viable factual basis supports both theories.

Id. at 148 (citations and quotation marks omitted).

A similar result to Trejo and Valentine was reached decades earlier in Werner v. Upjohn Co., 628 F.2d 848 (4th Cir. 1980):

The effect of the jury verdict on negligence was to find that [defendant] failed to use due care to give an adequate warning of the propensities of the drug marketed, and, in the same breath, the verdict on strict liability found that the drug marketed with such an inadequate warning was not unreasonably dangerous.  The verdicts in the context of this failure to warn case involving prescription drugs are obviously inconsistent and cannot stand.

Id. at 860.  See Witt v. Norfe, Inc., 725 F.2d 1277, 1280 (11th Cir. 1984) (defense verdicts on strict liability and warranty were “irreconcilably contradictory” with plaintiff’s verdict on negligence) (applying Florida law); In re Baycol Products Litigation, 2008 WL 6155700, at *13 (D. Minn. Sept. 22, 2008) (“failure of a plaintiff’s strict liability failure to warn claim, results in the same fate for a plaintiff’s negligent failure to warn claim”), aff’d, 596 F.3d 884 (8th Cir. 2010) (applying California law).

Finally, the irreconcilability of the verdict in IVC Filter may well be a fortiori from the Trejo/Oxford/Valentine cases out of California.   The California law at issue in those cases was crystal clear that, in both negligence and strict liability warning claims, liability is limited by the state of the art defense.  Georgia law, on the other hand, lacks definitive precedent imposing state of the art as a limitation on strict liability.  The closest precedent we have found is McCombs v. Synthes (U.S.A.), 587 S.E.2d 594, 596 (Ga. 2003), a medical device decision recognizing that warning claims generally are held to a “reasonableness” standard.  Thus, strict liability warning claims may be even easier for plaintiffs to prove, compared to negligence, under Georgia law.  That would make the irreconcilability of the IVC Filter verdict for plaintiff on negligence even greater than is the case under Trejo/Oxford/Valentine.

Exactly why the jury in IVC Filter returned such blatantly irreconcilable verdicts is, of course, something we will never know.  From the 360 article, however, we spotted a couple of things that couldn’t have contributed to the mix-up.  First, punitive damages were also at issue in the case.  Our views on the prejudicial nature of evidence relating to that kind of claim are already set forth at some length in our post advocating that MDL defendants limit any so-called “Lexecon waivers” to compensatory damages.  It may well be that prejudicial intent evidence, relating solely to punitive damages, inflamed the jury on the liability question so that even though they could not find that the product was defective, the jury was dead set on finding for the plaintiff anyway.  Don’t know, but certainly plausible.

Second, and possibly related, the 360 article also quotes plaintiffs’ counsel as arguing that the “simple fix” was “[d]on’t put it [the device] on the market.”  To us, that kind of rhetoric is unacceptable because it encourages the jury to disregard the FDA’s decision that initially allowed the product to be marketed.  A claim that a defendant manufacturer should not have sold a product that the FDA has determined should be sold in the United States inherently conflicts with the power that Congress has vested in the FDA specifically to make those decisions.  See Mutual Pharmaceutical Co. v. Bartlett, 570 U.S. 472, 489-90 (2013) (claims “that a regulated actor could avoid liability under both state and federal law by simply leaving the market” held impliedly preempted).  Plaintiffs should never have been allowed to make that sort of appeal to the jury to nullify what the FDA decided.

It seems quite evident that the jury got confused and went astray in the first Bard IVC Filters bellwether trial.  The result was a verdict that can’t logically be a bellwether of anything.  The jury found for the defendant on a warning claim for which the plaintiff had a lesser standard of proof, and then found for the plaintiff on identical warning-related facts where the law required stronger evidence for liability.  That’s what precedent means by “irreconcilable.”

 

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We’ve always been against the concept of class action tolling:  that merely by filing a class action – the class action does not have to have any merit – a class action lawyer magically stops the running of the statute of limitations for everybody in the class.  To us, this gives Fed. R. Civ. P. 23 a substantive effect, which violates the Rules Enabling Act (you can read more about that, here, and here, in other contexts).  It also confers an automatic one-way benefit on putative class members, although in other circumstances the class action lawyers perpetrating this sleight of hand will cheerfully tell courts that “no class exists before certification.”

The Supreme Court first allowed class action tolling in American Pipe & Construction Co. v. Utah, 414 U.S. 538 (1974), an antitrust case, ostensibly to “further[] the purposes of litigative efficiency and economy,” so that no “protective litigation” (by plaintiffs fearing their own claims would be time barred) would clog up the federal courts.  Id. at 553-54.  The impact on defendants would be minimal, suggested the majority, because “[d]uring the pendency of the [certification] determination . . ., which is to be made ‘as soon as practicable after the commencement of an action,’ potential class members are mere passive beneficiaries.”  Id. at 552 (quoting former Rule 23(c)(1)).

We had hopes that this rule, being “specifically grounded in policies of judicial administration,” Smith v. Bayer Corp., 564 U.S. 299, 314 n.10 (2011), would be abolished after its encouragement of inequitable gamesmanship became clear, and once other, less prejudicial methods of judicial administration to address protective filings – such as the inactive dockets widely used in asbestos litigation – were invented.  However, the Court dodged abolition in California Public Employees’ Retirement System v. ANZ Securities, Inc., 137 S. Ct. 2042 (2017), holding only that American Pipe did not apply to statutes of repose . Id. at 2052-53.  The Court did, however, point out that concern about protective filings was much “overstated.”  Id. at 2054 (“courts, furthermore, have ample means and methods to administer their dockets and to ensure that any additional filings proceed in an orderly fashion”).

In any event, all of the Supreme Court’s class action tolling cases, American Pipe, supra, Crown, Cork & Seal Co. v. Parker, 462 U.S. 345 (1983), and Chardon v. Soto, 462 U.S. 650 (1983), involved successive suits in the same jurisdiction – federal-question cases brought in federal court.  So-called “cross-jurisdictional” class action tolling, is much worse, and has intruded at times directly into our sandbox (although thankfully, class action have largely gone extinct in personal injury cases).  As we said in an earlier post:

“Cross-jurisdictional” tolling, on the other hand, refers to allowing a failed class action filed in jurisdiction “A” to toll the statute of limitations on an individual action later filed by a putative class member in jurisdiction “B.”  In a lot of cases that means a state court action filed after a failed federal court class action.  In other cases it means filing an individual action in one state after class certification is denied in a different state.  In either case, the policy of avoidance of protective filings doesn’t work.  In fact, the opposite is true.  A liberal tolling rule only invites more suits to be filed in the jurisdiction that has it.  Thus, even on its own terms, cross-jurisdictional tolling based upon meritless class actions doesn’t make sense.

Thus, going back to the Bone Screw litigation, we have vehemently criticized cross-jurisdictional class action tolling.  Back then plaintiffs asserted that statutes of limitations all over the country were tolled by a baseless class action, In re Orthopedic Bone Screw Products Liability Litigation, 1995 WL 273597 (E.D. Pa. Feb. 22, 1995), in which certification was denied and no appeal even attempted.  Even this relatively quick adjudication took almost 14 months (from 12/30/93, when the class action was filed until denial of certification on 2/22/95).  We litigated cross-jurisdictional tolling to favorable results in Maestas v. Sofamor Danek Group, 33 S.W.3d 805, 808-09 (Tenn. 2000), and Wade v. Danek Medical, Inc., 182 F.3d 281, 287-88 (4th Cir. 1999), while also appearing as amicus curiae in Portwood v. Ford Motor Co., 701 N.E.2d 1102, 1104 (Ill. 1998).  Given that cross-jurisdictional class action tolling inherently involves litigation in one state attempting to toll the statute of limitations in another state, this issue can also be framed as one implicating states-rights, and where one of the courts is federal, federalism.

Over time most states have recoiled from cross-jurisdictional class action tolling.  Largely because of our Bone Screw experience, we maintain a scorecard on the issue.  According to our list, 35 jurisdictions (Alabama, Alaska, Arizona, Arkansas, California, Colorado, DC, Florida, Idaho, Illinois, Iowa, Kansas, Kentucky, Louisiana, Maryland, Massachusetts, Minnesota, Mississippi, Missouri, Montana, Nebraska, New Mexico, New York, North Carolina, Oklahoma, Oregon, Pennsylvania, Puerto Rico, South Dakota, Tennessee, Texas, Utah, Virginia, Washington, Wyoming) reject cross-jurisdictional class action tolling; one state (Michigan) allows it where the original class was certified; and six or seven states (Delaware, Hawaii, Montana, New Jersey, Ohio, West Virginia, and maybe Connecticut) allow tolling even for meritless, out-of-state class actions.  We do not credit a couple of LIBOR decisions in which that court blatantly ignored state law.

One of the states that does recognize cross-jurisdictional class action tolling is Delaware.  See Blanco v. AMVAC Chemical Corp., 67 A.3d 392, 398-398 (Del. 2013).  A recent Delaware Supreme Court decision throws into sharp relief why such tolling is a bad idea, and offensive not only to the statute of limitations, but also to the very judicial efficiency considerations that such tolling purports to further.  See Marquinez v. Dow Chemical Co., ___ A.3d ___, 2018 WL 1324178 (Del. March 15, 2018).  Marquinez is a poster child for delay – the very sort of stale and desultory litigation that is why statutes of limitations exist in the first place.  “The plaintiff-appellants (“the plaintiffs”) worked on banana plantations in Costa Rica, Ecuador and Panama at various times in the 1970s and 1980s.”  The first purported class action wasn’t filed until 1993, in Texas.  Marquinez, 2018 WL 1324178, at *2.  Then the following things happened:

  • Removal to federal court on the basis of the Foreign Sovereign Immunities Act (one defendant was owned by a foreign government).
  • MDL consolidation in federal court.
  • Dismissal on forum non conveniens in 1995, with a “return jurisdiction” caveat – if any foreign country ruled no jurisdiction, then plaintiffs could come back to Texas.
  • The forum non conveniens ruling denied as moot all pending motions, including class certification.

Id. at *1-2.  That’s two years of post-litigation delay – between 1993 and 1995 class certification was never ruled upon.  Don’t forget that the “1970s and 1980s” claims were already at least 13 years old before the initial suit was filed.

Plaintiffs really didn’t want to be in federal court – a sure sign of substantively weak litigation.  They appealed the exercise of Foreign Sovereign Immunities jurisdiction all the way to the United States Supreme Court.  Id. at *2.  that appeal took until 2001.  Id.   Then the plaintiffs, accompanied by their lawyers, reluctantly went home.  “[T]hey were unable to prosecute their claims in other countries” so they returned to Texas, where they sought to resurrect their claims under the “return jurisdiction” caveat.  Id.  While that was going on, the Supreme Court rejected Foreign Sovereign Immunities jurisdiction in another case involving identical litigation in another state.  See Dole Food Co. v. Patrickson, 538 U.S. 468 (2003).

So in 2003 – ten years after the original class action was filed, and between 23 and 33 years after the actual events claimed in the suit, the case was remanded to Texas state court.  Then the following things happened:

  • Defendants sought to have the case thrown out due to plaintiffs’ failure to comply with prerequisites to their exercise of “return jurisdiction” rights.
  • The “return jurisdiction” provision, along with the entire forum non conveniens ruling, was declared void for want of subject matter jurisdiction.
  • Plaintiffs again moved for class certification, this time under Texas state law.
  • Defendants removed to federal court a second time, under CAFA.
  • CAFA removal failed because the litigation pre-dated CAFA.

Marquinez, 2018 WL 1324178, at *2-3.  Finally, “[o]n June 3, 2010, class certification was denied in Texas state court.” Id. at *3.

At this point plaintiffs had had enough of Texas.  They started creating satellite litigation.  In mid 2011 one plaintiff filed an individual action in Delaware state court and others filed a class action in federal court in Louisiana.  Id.

Finally, less than a week before two years elapsed after the Texas denial of class certification – on May 31, and June 2, 2012 – two new class actions were filed in Delaware federal court.  Id.

But….

Plaintiffs had screwed up, or so it appeared.  The identical suit being already pending for a year in Louisiana, the Delaware federal court dismissed the Delaware action under the “first filed rule.”  Id.  That was appealed, and eventually reversed by the Third Circuit sitting en banc.  See Chavez v. Dole Food Co., 836 F.3d 205 (3d Cir. 2016) (en banc).

While that was going on, the remaining plaintiffs (those not already litigating in Louisiana (after fleeing Texas)) were dismissed on the statute of limitations.  The District Court in Delaware “h[e]ld[] that class action tolling stopped in July 1995 when [the original court] dismissed the case for forum non conveniens.”  Id. That was in 2014.  Those plaintiffs appealed.  The Third Circuit punted the matter, on certification, to the Delaware Supreme Court.

As in Blanco, the Delaware Supreme Court seemed unduly frightened by the prospect of “placeholder” suits:

If members of a putative class cannot rely on the class action tolling exception to toll the statute of limitations, they will be forced to file “placeholder” lawsuits to preserve their claims. This would result in wasteful and duplicative litigation.

Marquinez, 2018 WL 1324178, at *4 (quoting Blanco, 67 A.3d at 395).

Did the court not look at its own description of this litigation’s ridiculously long procedural history?  Between 1993 when the action was first filed, and denial of class certification in mid-2010 not a single “placeholder” suit was filed in Delaware state or federal court.  That was despite plaintiffs’ extended lack of success in advancing the litigation.

Although nowhere mentioned in Marquinez, the Delaware statute of limitations for tort cases is two years.  10 Del. C. §8119.  Making a mockery of that legislative judgment, Marquinez held that the pendency of a meritless class action can toll the statute of limitations for many multiples of that two-year period – here 17 years, or 8½ times the statutory period – because a “clear and unambiguous” rule is necessary:

[A] clear and unambiguous rule avoids uncertainty over the starting and ending dates for statutes of limitation in cross-jurisdictional class action tolling cases.  Thus, we adopt a rule that furthers the certainty interest − cross-jurisdictional class action tolling ends only when a sister trial court has clearly, unambiguously, and finally denied class action status.

Marquinez, 2018 WL 1324178, at *5.

The mind boggles.  Seventeen years hardly corresponds to the assumption in American Pipe that class certification will be decided “as soon as practicable after the commencement of an action,” and indeed those words don’t even appear in Rule 23 any longer.  Justice Stewart, who wrote American Pipe, would no doubt be appalled.  Seventeen years is more than half the time of Justice Stewart’s tenure on the Supreme Court.

The Delaware statute itself imposed a “clear and unambiguous” rule – two years.  Is the Delaware Supreme Court going to abolish the discovery rule, fraudulent concealment and all the other factbound doctrines that toll the statute of limitations in certain situations, and thus have created uncertainty?  Defendants argue for “clear and unambiguous” rules all the time (e.g., product identification, affirmative prescriber warning causation testimony, relative risk of two).  Why here, in a situation that is certain to make Delaware the dumping ground for Latin American toxic tort litigation.

And is this rule even “clear and unambiguous”?  The Texas plaintiffs never appealed the 2010 class certification denial.  What if they had?  Does “sister trial court” then morph into an further need for certainty, tolling the statute of limitations until the first state’s denial has been “clearly, unambiguously, and finally” been affirmed on appeal?

Marquinez demonstrates why courts should never start down the slippery slope of cross-jurisdictional class action tolling.  Right after proclaiming its “clear and unambiguous” rule, the decision plunges into the minutiae of the Texas litigation, spending seven paragraphs parsing through what the Texas court’s “return jurisdiction” language – in an order void for lack of subject matter jurisdiction – must have meant.  Marquinez, 2018 WL 1324178, at *6-7.  In so doing Marquinez ended up disagreeing with two other courts also forced into that exercise by plaintiffs’ satellite litigation.  Id. at *8-9 (“respectfully disagree[ing] with the Fifth Circuit’s and the Hawai’i Supreme Court’s application of class action tolling”).  If Delaware had rejected cross-jurisdictional class action tolling in the first place, none of that Talmudic exercise would have been necessary.

Judicial efficiency is hardly furthered by forcing the courts of one state to comb through the proceedings of litigation filed elsewhere in an effort to figure out when exactly plaintiffs should not be required to rely on an arguably meritless class action filing for fear that it won’t be certified.  As Marquinez demonstrates, that exercise itself can lead to disparate results.  And now what happens?  The litigants get to engage in the costly, and probably impossible, task of piecing together what happened in the forests and fields of Latin America 40-some years ago when Nixon was president and we though Watergate was as bad as things could get.  There are some cases where no litigation is the correct answer.  If the courts of these plaintiffs’ home countries weren’t willing to entertain this litigation, there is no good reason for Delaware, or any other state, to become the dumping ground for the Third World’s unwanted lawsuits.  Like Justice Stewart, we know a bad result when we see it.

Maybe it doesn’t matter.  Maybe, between Bauman and BMS, would-be non-resident class-action plaintiffs won’t be able obtain personal jurisdiction to file the same lawsuit over and over again in different jurisdictions (here, at least Texas, Louisiana, and Hawai’i before Delaware).  Maybe courts will resort to forum non conveniens to throw these Latin American cases out for good.  See Aranda v. Philip Morris, USA, Inc., ___ A.3d ___, 2018 WL 1415215 (Del. March 22, 2018) (similar overseas chemical exposure case pitched for inconvenience, even though another forum not available).  Maybe the Supreme Court will again re-examine American Pipe, and at least do away with piling meritless class actions on top of other meritless class actions.

But conversely, Bauman and BMS also mean that Delaware, as the “home” of many large corporations, will be assuming outsized importance in the litigation landscape.  Delaware courts are going to have enough to do without being required to sift through the detritus of other jurisdictions’ failed class action litigation.

Finally, there’s a message here for any other jurisdiction considering cross-jurisdictional class action tolling – don’t go there.  Don’t go anywhere near there.

 

 

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We write this as key elements of the Drug and Device Law Passover Feast languish in the oven. Tomorrow, the Drug and Device Law Bubbie will force four generations of our family – the devout and the not and everyone in between – to read (aloud) the lengthy prayer service that precedes the meal.  The ritual includes much laughter, enthusiastic (if discordant) singing, and predicable misbehavior from those of us at the “kids’ table” (the 50- and 60-year-olds, as distinguished from our parents) that provokes sharp rebukes from the elders.  And, these days, the gathering is a little bit bittersweet (cue “Sunrise, Sunset”), as time’s toll on the eldest members of the clan is softened by the presence, each year, of more of our babies’ babies.  We complain about the cooking.  We grouse about the most troublesome relatives.  But we wouldn’t miss it for the world, though we should mention that “feast” is something of a misnomer, as many Passover staples are notorious for barely crossing the line into “palatable.”

Speaking of misnomers, earlier this week, one of our co-bloggers termed causation the “MVP” of mass tort practice. While we heartily agree in principle, we have read (and participated in) too many scenarios in which a passive judge “benched” this “player” to allow meritless cases to queue up in settlement inventories. On the flip side, we are heartened by the increase in Lone Pine orders demanding early causation evidence and by judges who refuse to allow plaintiffs lacking proof of causation to escape summary judgment.

Such was the result of today’s case, a Risperdal case out of the Northern District of Alabama. In Drake v. Ortho-McNeil-Janssen Pharms., 2018 U.S. Dist. LEXIS 47164 (N.D. Ala. Mar. 22, 2018), the plaintiff was an obese 36-year-old man who was diagnosed as schizophrenic at age 17.  He was initially prescribed Risperdal but was switched to other drugs several months later.   He was switched back to Risperdal about two years after that and then remained on the drug for about thirteen years before different drugs were again substituted.

Shortly after the plaintiff stopped taking Risperdal, a social worker noticed that he had large breasts and told his mother that he should be tested for gynecomastia, benign enlargement of glandular breast tissue in males. Antipsychotic medications have been associated with gynecomastia, which “is distinct from pseudo-gynecomastia, which is breast enlargement due to fat deposits in overweight males.  The two conditions may be differentiated only with a physical exam.” Drake, 2018 U.S. Dist. LEXIS 47164 at *4.  No exam took place.  The plaintiff was never diagnosed with gynecomastia, though his levels of prolactin were elevated.  Prolactin is a hormone that induces lactation, but it “does not have a direct grown-stimulating effect on the breast glandular tissue.” Id. at *6 (citation omitted).  Many of the drugs prescribed to the plaintiff were known to cause prolactin elevation.

The plaintiff’s complaint, asserting all of the usual causes of action, alleged that Risperdal caused him to develop gynecomastia. The defendant moved for summary judgement, arguing that the plaintiff could not meet his burden of establishing causation.  The judge emphasized that the plaintiff was required to prove both general and specific causation and that expert testimony was required for both.  The plaintiff’s expert was a certain former FDA commissioner who has testified that the risk of gynecomastia in children and adolescents was higher than Risperdal’s labeling represented.  But, as the court pointed out, while the expert’s “report and deposition testimony from other  cases might be sufficient to raise a question of fact regarding general causation, . . . his report and testimony contain[ed] no evidence regarding the cause of [the plaintiff’s] alleged injuries. Id. at *13.  And the plaintiff had no other causation expert.

As such, as the court put it, “the plaintiff’s evidence concerning specific causation [was] threadbare.” Id.  There was no evidence that the plaintiff had even been diagnosed with gynecomastia.  And while the plaintiff argued that, if his elevated prolactin level had caused “testosterone level drops leading to estrogen expression,” then Risperdal could “theoretically [have caused] gynecomastia,” there was “no evidence in the record regarding [the plaintiff’s] testosterone or estrogen levels, and evidence that Risperdal could theoretically cause gynecomastia [was] not sufficient to raise a disputed issue of material fact concerning specific causation.” Id. The court concluded, “In the absence of medical or expert evidence, a fact finder must speculate about the cause of [the plaintiff’s] enlarged breasts, and a verdict may not rest on speculation.” Id.  

In other words, maybes on top of maybes do not proof of causation make. If the plaintiff cannot be bothered to get a diagnosis or an expert, that plaintiff should not be in court.  Unassailable, although we’ve all seen too many such “easy” decisions go wrong.  We like this case.  We will continue to keep you posted on the good and the bad, and we wish happy gatherings to all celebrating any holiday this week.

Photo of John Sullivan

This post does not come from the Reed Smith side of the blog.

 

Favorable New Jersey appellate court decisions in product liability cases are almost always worthy of mention here. So we bring you Goodson v. C.R. Bard, 2018 WL 1370652 (N.J. App. Div. Mar. 19, 2018). To be truthful, we’re bringing it back to you. Bexis discussed the trial court’s decision to grant summary judgment to defendants last year.

As we discussed then, this is a case involving mesh used in hernia procedures. The particular mesh product involved in this case is not involved in the pelvic mesh MDL proceedings. And that may be reflected in the strength of the plaintiff’s expert reports, which is to say that they are not strong at all.  While the plaintiff used experts who have been involved in the pelvic mesh MDL, not one of them seemed to give the right opinions.

In particular, even though plaintiff brought a design defect claim, none of his experts gave an opinion that the design of this particular product was actually defective or that such a defect caused the plaintiff’s injuries. Id. at *4-5. Rather, his experts simply described various alleged risks of the product. This is not even close to sufficient to support a design defect claim. Id. Nor did any of the experts opine that there was a safer, feasible alternative design. Id. Similarly, even though plaintiff also brought a negligent failure to wan claim, none of the experts gave an opinion on the standard of care for issuing a warning or whether defendants met that standard. Id. at *5-6. In other words, plaintiff didn’t have a warnings expert to opine on whether the warning was adequate.

In short, plaintiff’s experts struck out looking.

To make matters worse, the treating doctor testified that he was aware of the potential risks of this mesh product and informed plaintiff of them. Id. at *6. There goes proximate causation under the learned intermediary doctrine.

Accordingly the New Jersey appellate division upheld the trial court’s grant of summary judgment to defendants. Unfortunately, it designated its opinion “not for publication.” That’s too bad. But rest assured: it happened. Westlaw already has it on-line. And the trial court’s decision, which Bexis’s post from last year lays out in considerable detail, has an excellent analysis of all the weaknesses in plaintiff’s case, an analysis that was essentially adopted by the Appellate Division. And, of course, we’ve written on it twice now. With all of that, we’re confident that you’ll find some way to make use of this appellate decision in your cases.

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