Spokeo – Half a Loaf, Maybe More, from the Supreme Court

By Bexis on June 1, 2016

We can’t stand no-injury class actions – brought by plaintiffs who allege only that “I got exactly the product I paid for, and wasn’t hurt, but for X reason I paid ‘too much’ for it.” Such litigation is a waste of time and money, and is inevitably driven by class action lawyers looking for fees, not by any real injury, which is why they’re called ‘no injury” to start with. We see them in our sandbox, mostly in connection with third-party payor actions, although some FCA cases also spout similar damage theories. They’re usually based on some sort of technical violation of the FDCA. But our clients are hardly the only defendants burdened by this kind of senseless litigation for litigation’s sake.

Statutory violations – otherwise not causing harm to anyone – are widely asserted as the basis for classwide relief in many areas of the law. Such violations were at issue in Spokeo, Inc. v. Robins, 136 S. Ct. 1540 (2016), decided last month. Spokeo came to the Court on the question of whether certain alleged violations of the Fair Credit Reporting Act (“FCRA”) could suffice to create the Article III standing needed to proceed in federal court. The Court gave the defense community some relief, at least rhetorical, from no-injury class actions – but ultimately remanded the action without making a definitive ruling on the claims before it.

In a nutshell, sufficient for our purposes here, FCRA imposes penalties for (among other things) false reporting of credit-related information. The defendant, Spokeo, operated an internet search engine that, for a fee, allowed anybody to conduct web searches on anybody else. 136 S. Ct. at 1546. Given that the Internet (present company excepted) often seems to be a giant garbage can, the plaintiff claimed that some of the information about him was false. Since the information on file was (or could be) used for determining credit, he brought a FCRA class action. Id. He sought statutory damages ($100-$1000 per “violation”), without any showing that he had ever actually been denied credit. Id. The district court dismissed for lack of standing, but the court of appeals (the Ninth) reversed. Id.

Continue Reading Spokeo – Half a Loaf, Maybe More, from the Supreme Court

San Francisco vs. The Monster (aka Federal Regulation)

By Stephen McConnell on June 1, 2016

There is a lawyer we worked with at another firm who had a standard move, kind of the way that Jerry Seinfeld had a standard “move” – and, come to think of it, with a similar intention. (“The Move” shows up in “Fusilli Jerry,” the 107^th episode of Seinfeld.) In the face or fear of a hostile action against our client, this lawyer would file a declaratory judgment action in a friendly federal court. The concept, of course, was to seize the initiative and do some forum-shopping. Sometimes the action would be preemptive and sometimes it would be reactive. One would think that the timing would make a difference. But as today’s case, Monster Beverage Corp., v. Herrera, 2016 U.S. App. LEXIS 9012 (9th Cir. May 17, 2016), demonstrates, that ain’t necessarily so. We discussed the Monster case a couple of days after Labor Day in 2013, when Monster survived an attack on its preemptive preemption position. Here it is just a couple of days after Memorial Day in 2016, and the Ninth Circuit has ended the case on grounds of Younger abstention and the Anti-Injunction Act. That’s a long passage of time. The judicial process, especially the appellate phase (doubly so in the Ninth Circuit), can take a while. What happened in the interim?

First, please enjoy this reminder of what the Monster case was about. The San Francisco City Attorney wrote a letter to Monster informing it of an investigation into whether Monster’s marketing of its energy drinks was deceptive and bad in various other ways. Needless to say, the City Attorney’s beef was really with the federal regulatory regime that already governed what Monster could and could not say about its products. But San Francisco has been known to try to conduct its own foreign policy, so why should federal regulations stand in the way of its persistent effort to impose a nanny-state on its benighted citizens? Monster filed a preemptive declaratory judgment action in C.D. Cal. (good idea to drag the San Francisco City Attorney down to SoCal), seeking to shut down the investigation because it was preempted by federal law. Then the San Francisco City Attorney filed a complaint in San Francisco Superior Court, which Monster removed to federal court on grounds of federal question (preemption again), which the federal court remanded after rejecting the preemption argument. For those of you keeping score at home, that means there was a federal case in Dodger-land and a state case in Giant-land.

The San Francisco (honestly, by this point we are tired of writing the city name out in full, but Boranian warned us that we’d be jeered if we abbreviated the city’s name in any way) City Attorney, as is the case with all Bay Area denizens forced to contemplate anything south of Big Sur, must have seen the C.D. Cal. case as a vast annoyance. That was certainly the idea behind Monster’s maneuver. Not surprisingly, then, the City Attorney filed a motion to dismiss the declaratory judgment action in C.D. Cal., arguing that the preemption argument stood no chance. The federal court denied that motion to dismiss. That is the ruling we applauded back in September 2013.

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Eighth Circuit Overturns Class Certification – Common Issues Don’t Predominate

By Michelle Yeary on May 31, 2016

Coming off of Memorial Day weekend we pause to remember all of the American men and women who have died while serving in the military and to thank them for their sacrifice. We also hope everyone had a relaxing and enjoyable holiday weekend. It certainly felt like the start of summer in the Mid-Atlantic area. Pools and beaches were packed, grills were fired up, and cold beverages were flowing. All that fun makes it difficult to get back to work, but here we are and so here is another good defense decision we wanted to share.

We are taking a slight detour away from our traditional drug and device cases to talk about a recent class certification ruling by the Eighth Circuit. While notably diminishing in number over the last two decades, putative class actions are still filed in the drug and device world – usually medical monitoring or economic loss only suits — so we keep our eye out for any decisions that would help to thwart these attempts to abuse (in our opinion) Federal Rule 23.

In Ebert v. General Mills, Inc., No. 15-1735, slip op. (8^th Cir. May 20, 2016), plaintiffs filed a putative class action environmental-contamination lawsuit. Plaintiffs allege that trichloroethylene (“TCE”) was released into the ground and environment at a former General Mills facility in their neighborhood. Id. at 2. Since 1984, General Mills has been participating in clean-up and remediation efforts in the neighborhood. While the details aren’t important for our purposes, it is noteworthy that as part of those efforts, differing levels of TCE were found on different properties and different properties underwent different remediation efforts. Id. at 3.

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New Duty To Supply Decision

By Bexis on May 27, 2016

Ever since we first waded into the issue of “duty to supply” back in 2007 in connection with the litigation that produced Abigail Alliance for Better Access to Developmental Drugs v. von Eschenbach, 495 F.3d 695 (D.C. Cir. 2007), we’ve criticized cases that, either actually or potentially, seek to impose liability – not for defective products – but for failure to supply as much of a non-defective drug as has been prescribed for the plaintiff. Today, we’re updating that discussion with a recent development, the affirmance of the decision that rejected the concept of “duty to supply” in 22 states. We blogged about that decision in the district court here. Plaintiffs thereafter appealed, but dropped their claims asserting a “free-standing duty to supply the market.” What’s left are described as “acceleration” (that progression of the disease allegedly worsened”) and “contaminant” (related to the production difficulties) claims.

This decision is Hochendoner v. Genzyme Corp., Nos. 15-1446, -1447, slip op. (1st Cir. May 23, 2016). The allegations in Hochendoner were that production difficulties led to a shortage of the only FDA-approved treatment for Fabry Disease, a progressive condition that is eventually fatal if untreated. Slip op. at 3-5. The shortage (which lasted several years) led to rationing, and in response to rationing a bunch of Fabre sufferers tried to sue. For more details, see our prior post. Except for one plaintiff, none of them alleged that there was anything wrong with the product they actually received – only that they didn’t receive enough of it, and as a result their pre-existing Fabre Disease symptoms recurred and/or progressed.

The First Circuit affirmed, albeit on different grounds – standing . Although not addressed in the District Court, standing is a “prerequisite” to subject matter jurisdiction, and cannot be waived. Slip op. at 8. An interesting procedural point that the court confirmed is that a “plaintiff bears the burden of establishing sufficient factual matter to plausibly demonstrate his standing to bring the action” under TwIqbal. Id. at 10. In Hochendoner all but one of the plaintiffs alleged no particularized injury (no doubt because the litigation was a putative class action, and anything particularized is likely to preclude class certification). Simply being required to take a reduced dose of a drug didn’t come close to actual, particularized injury:

Utterly absent, however, is any allegation linking the alleged acceleration and contaminant injuries to any specific plaintiff. This gap is most apparent with respect to the contaminant theory. There is simply no assertion at any point in the complaints that any specific plaintiff took or received a dose contaminated with particulate matter. Rather, the allegation is only that [defendant] produced a batch of [the drug] contaminated with particulate matter − not that contaminated doses were ever shipped or administered to any named Fabry patients.

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First Circuit: Plaintiffs’ Specific Causation Expert Fails to Pass Muster in Benzene Case

By Andrew Tauber & Rachel B. Weil on May 26, 2016

Last week, we (along with many of you, we assume) attended the DRI Drug and Medical Device conference in Chicago. We re-connected with friends dating to the beginning of our lengthy career (literally – ran into the head of our decades-ago summer associate program), met lots of new people, and attended great parties. (Perhaps we are biased, but we thought the reception Reed Smith co-sponsored was particularly fabulous – stunning venue, fantastic food, great company and ambiance.)

Squeezed in among the parties was a whole seminar program, covering all manner of hot topics in the mass tort space in which we practice. We were (as we always are) awed by the sheer intellectual firepower the speakers brought to bear and by the depth of their knowledge and the thoroughness of their preparation. We also enjoyed observing the diversity of presenters’ styles. Some were earnest and academic, some deceptively casual and colloquial, still others politician-impassioned. As wordsmiths, we always delight in this, and we count it among the reasons we like today’s case, which follows a mostly serious and measured (albeit dismissive) majority opinion with a snarky and stylized dissent. (Guess which one was more fun to read.)

Milward v. Rust-Oleum Corp., 2016 U.S. App. LEXIS 7470 (1st Cir. Apr. 25, 2016), is not a drug or device case. It is the First Circuit’s review of the District of Massachusetts’s exclusion of the plaintiffs’ specific causation expert in a benzene-exposure toxic tort case, but the issues are identical to Daubert issues we face in our cases.

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Stick a Fork in It – FDA Anti-Generic Drug Preemption Proposal Postponed Until After the Presidential Election

By Bexis on May 25, 2016

On May 18, the FDA extended the comment period for its proposed generic drug labeling rule until April 2017 – that is, until after the next presidential election. We believe that, for all practical purposes, this means that the proposed rule is dead. Here’s why we think that.

As we have maintained from the beginning, the statute, which requires generic labeling to be the “same” as innovator labeling, simply does not support the FDA proposal to allow CBE labeling changes that would result in generic labeling that is not the “same.” The FDA can do a lot of things, but it can’t do that – the opposite of what its organic statute specifically requires. The generic drug industry knows this, too, and from day one has vowed an administrative challenge to any rule that violates statutorily-mandated sameness.

As we have also maintained almost from the beginning, the FDA’s proposed rule has been driven by the desire of the political FDA leadership (who broke the rules regarding impartial communication with outside groups) to overturn the generic preemption decisions, PLIVA v. Mensing, 131 S. Ct. 2567 (2011), and Mutual Pharmaceutical Co. v. Bartlett, 133 S. Ct. 2466 (2013). They are doing this as affirmative political payback to satisfy the plaintiffs’ trial bar, for whom they broke the aforesaid rules. The plaintiffs’ trial bar have, of course, been major political supporters of the current administration, and as long as they tell the FDA’s political leadership to jump, during this administration the response will be “how high.”

Continue Reading Stick a Fork in It – FDA Anti-Generic Drug Preemption Proposal Postponed Until After the Presidential Election

Guest Post – The Connecticut Supreme Court Modifies The State’s Consumer Expectation Test By Adopting The Modified Test

By Bexis on May 20, 2016

Today’s guest post is by Adam M. Masin, a partner at Shipman & Goodwin LLP. It’s about the most significant general Connecticut product liability decision in almost 20 years. It’s not a drug/device case, though. Instead it involves tobacco. But make no mistake about it, this case could affect our sandbox – particular design defect cases involving medical devices.

As always our guest posters deserve all the credit, and any blame, for the contents of their posts.

Finally – be sure to read the repeated IMPORTANT ANNOUNCEMENT at the end of this post. DDLaw blog is getting ready to move, and that means you’ll have to resubscribe to continue getting our posts. But don’t worry, it’s easy.

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The Connecticut Supreme Court this month clarified how Connecticut distinguishes between the use of the “ordinary consumer expectation test” and the “modified consumer expectation test” in strict product liability design defect cases. Izzarelli v. R.J. Reynolds Tobacco Co., ___ A.3d ___, 321 Conn. 172 (2016). Not to confuse things from the start, but Court’s key holding was that the “modified consumer expectation test” is now the “primary strict liability test.” In other words, the prior ordinary test in Connecticut is no longer the ordinary test, and the primary test is the modified test. Just so we are clear. Wordplay aside, this is an unfortunate through probably unsurprising development in a state that still has a ways to go to firm up its product liability law (more on that below).

Some background helps to clarify how a “modified” test supplanted an “ordinary” test. As the Court noted, Connecticut was one of the first states to adopt § 402 of the Restatement (Second) of Torts. (Connecticut was also the first state to adopt a speed limit restriction for cars − a blazing 12 MPH). [Editor’s note, both make about the same amount of sense these days.] Connecticut interpreted § 402 to require a plaintiff alleging a strict liability claim to prove, amongst other things, “the product was in a defective condition unreasonably dangerous to the consumer or user.” Giglio v. Connecticut Light & Power Co., 180 Conn. 230, 234 (1980).　 Connecticut interpreted that element to mean, based on comment (i) to § 402, that “the article sold must be dangerous to an extent beyond that which would be contemplated by the ordinary consumer who purchases it, with the ordinary knowledge common to the community as to its characteristics.” That became known as the “ordinary consumer expectation test.”

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Trimming Some Fat From Statin Litigation With Rule 702 and Preemption

By Eric Alexander on May 19, 2016

One of the greatest spectacles on earth is the annual migration of wildebeest, zebras, and antelope in a loop around the Serengeti. The Blog will have its own migration shortly, which we hope will be a one-time event without dangerous river crossings or, well, loads of crap for either us or our readers. Next week, the Drug and Device Law Blog will be moving to an upgraded platform via LexBlog. All the old posts will be available and going to the old site should redirect you to the new site. That’s the easy part. The comparatively difficult part should take you about 30 seconds, less time than it usually takes to google one of McConnell’s obscure movie references. Click HERE to fill out the new e-mail sign-up form. (Personal information will not be used for holiday cards from Bexis or any other nefarious purpose.) After you complete the form, you will receive a confirmation e-mail and you will have to click to confirm your subscription. Then you will get posts by email once we have completed the not-so-great migration. As an added bonus (?) from the migration, we will not be posting on May 23 or May 24. If your DDL addiction is too strong for that much of a break, then feel free to peruse old posts. Checklists and surveys might do the trick. If you need a stronger fix, then try searching for obscure or inflammatory words used in past posts. Hours of fun.

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In the mythical days of product liability yore, a big drug litigation was spurred by a notable event—like a study describing a new risk appearing in a major journal, a significant labeling change because of new or greater risk, or the withdrawal of the drug—and was built on identifiable and otherwise uncommon injuries in patients who took the drug.　 Because there was a notable event and there were identifiable injuries, the manufacturer could generally expect when lawsuits about those injuries would need to be filed and that it could figure out if a plaintiff was suing over an injury that fit the larger liability issues.　 In the purportedly distinct modern era of drug litigation, the only notable events sometimes are the start of plaintiff lawyer conferences and advertising on the drug and the injuries claimed may not be particularly identifiable or otherwise uncommon.　 The cases brought probably include non-product liability claims for economic harm and product liability claims loosely tied to the risk of the injury actually sustained by the individual plaintiffs.　 Even if there is no good science backing up the plaintiffs’ claims, it can take quite a bit of time and effort for the manufacturer to get the rulings needed to show the claims and evidence offered in support of them to be bogus.

This seems to be what is going on in litigation involving the drug Lipitor, which has been one of the most widely prescribed drugs over the last twenty years (although generic entry had an effect a few years ago).　 Along the way, the manufacturer has faced litigation over liver injuries and rhabdomyolysis (like the other statins), antitrust claims, and some other issues.　 Meanwhile, the drug continued to be recommended as first line therapy for an expanding range of indications related to improving lipids and reducing cardiovascular risk.　 From what we can tell, without anything terribly dramatic, the drug was also one of several in the class associated with a possible small increase in the risk of developing Type 2 diabetes.　 If you have been paying attention over the last few decades, then you probably know that the rates of Type 2 diabetes have climbed dramatically, basically hand-in-hand with increases in the rates of obesity, hypertension, unhealthy eating, inactivity, and some other bad habits that call to mind the scooter-bound humans of the future in “WALL-E.”　 You might also know that the risks of heart attacks and strokes go up when you add a bad lipid profile to the mix and go down when the lipid profile improves.　 That is why doctors and patients care about LDL, HDL, and triglycerides in trying to prevent first or second heart attacks, for instance, just as they try to monitor and control obesity, hypertension, diabetes, sleep apnea, etc.　 In this context, it makes sense that doctors might continue to prescribe Lipitor or any of the other statins pretty much as they did before the labels warned of a possible increase in blood sugar levels and the rate of diabetes.　 That might make you think plaintiffs suing over a risk of diabetes might have hard time establishing either medical causation or proximate cause for failure to warn of diabetes.　 But the plaintiff lawyers filed enough cases that an MDL was established, so they must have mustered some good theories and evidence to support their claims, right?

Continue Reading Trimming Some Fat From Statin Litigation With Rule 702 and Preemption

Mass Appeal of Off Label Use

By Stephen McConnell on May 18, 2016

Hardly a week goes by without our blogging about accusations of off label promotion. This week is no exception. On Monday, we discussed a nice New York opinion rejecting a plaintiff argument that off label promotion saved a case from preemption. And hardly a week goes by without plaintiff lawyers attempting to inject off label issues into our cases, as though mere mention of the possibility conjured up liability, punitive damages, and settlement-grids. As we have discussed many times before, the demonization of off label use is wrongheaded and counterproductive, given how off label use can be the only thing standing between patients and pain. Today’s case, Tangney v. Burwell, Secy of HHS, 2016 U.S. Dist. LEXIS 61724 (D. Mass. May 10, 2016), reminds us of that fact yet again.

The plaintiff in Tangney suffered from severe nausea and abdominal pain emanating from gastrointestinal issues, not cancer – facts that, as you will see, possibly become pertinent. It was undisputed that off label use of Dronabinol alleviated these symptoms. The issue was whether Medicare Part D covered the cost of the medicine. Such coverage is available if the drug’s use is approved by the FDA (not the case here) or is “supported by one or more citations included or approved for inclusion in any of the [listed] compendia.” 42 U.S.C. Section 1396r-8(k)(6). The particular compendium at issue in Tangney was Drugdex, which cited the successful use of Dronabinol to treat nausea resulting … in a case involving cancer.

Medicare rejected coverage because the plaintiff’s nausea was unconnected to cancer. Then a hearing officer reversed that decision and concluded there was coverage, because (1) the title of the Drugdex citation was not limited to cancer, even if the underlying case study was, and (2) the plaintiff’s real-world history showed that without coverage of the off-label use of the medicine, the plaintiff would “either have to remain in the hospital indefinitely or possibly die.” The Appeals Council then reversed the hearing officer”s decision and concluded there was no coverage, because the underlying case study involved a cancer patient, and there was insufficient evidence to show that efficacy would extend to non-cancer patients. The Appeals Council decision is considered a decision by the Secretary of the U.S. Department of Health and Human Services, Sylvia Burwell, and that is why she is listed as the defendant in the case that subsequently went before a federal judge.

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Guest Post − Implied Certification: An Eradicated Pest or Here to Stay?

By Bexis on May 17, 2016

Today’s guest post is courtesy of Reed Smith’s Lindsey Harteis. She’s been following the big-deal UHS v. Escobar False Claims Act that the Supreme Court could decide any day now (or could wait until the end of June), which involves the existence and (perhaps) extent of the so-called “implied certification” theory of FCA liability.

As always our guest posters deserve all the credit, and any blame, for the contents of their posts.

Finally – be sure to read the IMPORTANT ANNOUNCEMENT at the end of this post. DDLaw blog is getting ready to move, and that means you’ll have to resubscribe to continue getting our posts. But don’t worry, it’s easy.

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We spent this past weekend chasing our ten-week old Samoyed puppy around the backyard, where he ventured “down in the weeds” more than a few times. This caused the OCD in us to go over him multiple times with a fine-toothed comb: We reasoned that he was bound to pick up some ticks. Lucky for us, he didn’t. But it got us thinking that when courts go down in the weeds like our dog did, they are bound to pick up a few nasty buggers themselves. In the oral argument for the appeal in United Health Services v. Escobar, 780 F. 3d 504 (1st Cir. 2015), the Court definitely took a run through the weeds. (We blogged briefly on the case here). We’re taking our fine tooth comb through the oral argument to look for ticks, and we fear we’re bound to find in this ruling another “corpus juris festooned with various duties.”

That’s a quote from a Justice we missed dearly while listening to the oral argument in this case. Justice Scalia used it in his concurring opinion in Skilling v. United States, 561 U.S. 358 (2010), which limited a fraud statute in the criminal context due to vagueness and via the 5th Amendment Due Process route.

Skilling reminds us of United Health Services for a couple of reasons: (1) It dealt with defining the contours of a sort of fraud – honest services fraud – for which the lower courts took an expansive view that wasn’t foreseeable based on the plain language in the statute; (2) Scalia was accusing the Courts of Appeals of invention of law rather than interpretation in their rulings on what constituted honest services fraud; and (3) the case involved a fusion of Restatement and black letter law in an unrelated area (Agency and Trusteeship) but was a criminal case.

Continue Reading Guest Post − Implied Certification: An Eradicated Pest or Here to Stay?

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