This post is from the non-Dechert side of the blog.

After more than a month away at trial, we probably should not have picked a case that hit so close to home, so to speak.  Spear v. Atrium Medical Corp., — F. Supp. 3d –, 2022 WL 3357485 (E.D. Pa. Aug. 12, 2022), is a hernia mesh case brought by a frequent flyer lawyer via a cookie-cutter complaint not tailored to the law or facts of the case.  The decision considers a number of recurring issues, including the meaning of a Pennsylvania Supreme Court decision that reversed in part a case we won on summary judgment.  Even for an order on motion to dismiss, Spear was far too generous for the plaintiffs, at least for us.

We start with what should be a recitation of the basic facts of the case, except that the opinion omitted the basic facts.  The court indicated the hernia device at issue, the month when it was implanted, and the month when plaintiffs sued.  Curiously absent were the name of the implanting physician, where the device was implanted, that the device was available only by prescription, what injuries plaintiffs claimed, how he claimed they occurred, what intervention (if any) happened, and a number of other items we would have expected to be presented.  Are we just being curmudgeonly, like we might be if we pointed out that the decision often did not cite Pennsylvania state court decisions correctly?  Not only that.  As we have noted previously, the presentation of facts can foretell the rigor of the analysis to follow.  It did here.

The procedural history was presented.  Plaintiff sued the US manufacturer, its US parent (at the time of the implant), and its parent’s Swedish parent (at the time of the implant).  (The court did not mention that the manufacturer was sold in 2018.)  The US entities filed a motion to dismiss on 12(b)(6) and the Swedish entity filed a motion to dismiss both on lack of personal jurisdiction and on 12(b)(6).  We will take on the personal jurisdiction issue first, as it should have been very simple given the current Supreme Court precedent.  Since Bauman, it has been clear that there is no general personal jurisdiction over foreign entities simply because they have subsidiaries in the US.  Under Walden, specific personal jurisdiction over a non-resident defendant must be based on contacts with the forum created by the defendant that give rise to the claim.  When the Spear court addressed the Swedish indirect parent’s jurisdictional motion, it cited no Supreme Court or recent authority.  Without analysis, it concluded that:  “Plaintiffs have not established a prima facie case of jurisdiction. They have, however, made enough of a showing to warrant discovery on jurisdiction.”  Id. at *5.  The cite for the latter conclusion was “Toys “R” Us, Inc. v. Step Two, S.A., 318 F.3d 446 (3d Cir. 2003) (“[C]ourts are to assist the plaintiff by allowing jurisdictional discovery unless the plaintiff’s claim is ‘clearly frivolous.’ ”).”  We find this strange, not just because of the citation issues, but because Toys “R” Us predated Bauman and Walden by nine years.  As the Bauman court said, “it is hard to see why much in the way of discovery would be needed to determine where a corporation is at home.”  517 U.S. 117, _ n. 20 (2014).  The Swedish company was surely not at home in Pennsylvania for purposes of general jurisdiction.  In terms of specific jurisdiction according to the standards of Walden, one would expect there to be detailed allegations in the complaint relating to the direct actions of the Swedish company giving rise to liability.  In terms of whether there was a non-frivolous basis for a claim to be asserted against the Swedish company in Pennsylvania, one would expect the court to evaluate the allegations in the complaint.  None of that is presented in Spear, so it reads like a rubberstamp for unnecessary jurisdictional discovery based on a case from well before the tightening of the jurisdictional standards.  That is troubling.

The rest of the opinion had similar analytical and temporal issues.  The first up of the six asserted claims was strict liability design defect.  We will not attempt to do a full recap of all the posts and decisions on the issue of whether Pennsylvania recognizes such a claim for prescription medical products. (See here, here, here, and here)  Suffice it to say that it was long considered established law that it did not.  Over the last few years, there have been a number of decisions out of Pennsylvania federal courts addressing the question of whether such a claim can be maintained against the maker of a prescription medical device.  Just as drawing a line on applying the learned intermediary doctrine to some but not all prescription medical products makes no sense, so would drawing such a line on strict liability.  The strong majority of courts to consider this issue have applied the ruling from Hahn v. Richter, 673 A.2d 888 (Pa. 1996), which rejected strict liability in a prescription drug case, to cases over prescription medical devices.  Last year, the Pennsylvania Supreme Court accepted the Third Circuit’s request to consider this issue again, but that case was resolved before a decision. So, the issue remains open, at least to some.

Strangely, the origin of the new “debate” over this issue seems to have been language in the Pennsylvania Supreme Court’s decision in Lance v. Wyeth, 85 A.3d 434 (Pa. 2014), a prescription drug case.  The defendant won Lance at the trial court level because 1) the prescribing physician testified in deposition (taken by some young hotshot) that no change in the warning as to the risk of primary pulmonary hypertension would have changed his decision to prescribe a weight loss medication to plaintiff’s decedent because her extreme obesity presented significant health risks and 2) plaintiff had no strict liability claims under Pennsylvania law.  On appeal, the plaintiff was allowed to carve out a previously unrecognized claim for what is generously called “negligent design” but is more accurately called “negligent failure to withdraw a legally marketed prescription medical product.”  (We will skip the massive preemption issues with such a claim, but feel free to peruse some posts.)  The appellate courts did not reverse the dismissal of the strict liability counts—knocked out of the master complaint on preliminary objections, the Pennsylvania equivalent of 12(b)(6).  Instead, the line remained firm that Pennsylvania allowed negligence claims for prescription medical products—albeit with an unwarranted expansion—and not strict liability claims.

Fast forward to Spear.  The question of strict liability was framed as “whether Pennsylvania law per se excludes medical devices from strict liability.”  2022 WL 3357485, *1.  Clearly, this is the wrong question for a federal district court sitting in diversity.  Better would have been “does Pennsylvania recognize strict liability claims for prescription medical devices and, if this has not been decided, would it?”  After noting that most Eastern District of Pennsylvania cases to decide the issue have rejected strict liability—but without acknowledging the even stronger majority among other courts addressing the issue—the court looked to a footnote in Lance and general language from Tincher v. Omega Flex, Inc., 104 A.3d 328, 396 (Pa. 2014), a case about steel tubing used as a gas line.  Without analysis, the court stated “Given these decisions, there is little to support a prediction that the Pennsylvania Supreme Court would expand comment k to medical devices as a categorical exception from strict liability.”  2022 WL 3357485, *1.  Even setting aside that the case involves a prescription medical device, huh?

The cited language from Lance suggests little to support this facile conclusion:

Wyeth is quick to point out that many other jurisdictions have not implemented a blanket approach to comment k, as it pertains in the strict-liability arena, and, thus, it takes the position that such cases are irrelevant. We do not share Wyeth’s view, however, that blanket application of the commentary for purposes of strict liability and preclusion of negligence-based liability premises necessarily go hand-in-hand. Indeed, it is our perspective that this Court applied a rather one-dimensional analysis in its adoption of a blanket approach to comment k in the first instance. For example, the terse opinion in Hahn does not so much as mention, let alone evaluate, the reasons why many other jurisdictions had interpreted comment k to require a case-by-case assessment concerning the availability of its protections. Compare, e.g., Hahn, 543 Pa. at 560–63673 A.2d at 889–91,with Toner, 732 P.2d at 304–09.

We emphasize that we are not revisiting Hahn; rather, our point is only that the truncated analysis in the Hahn line offers a poor foundation for extrapolation. See generally infra section IV.

Lance, 85 A.3d at 452 n. 21 (internal citations as in original).  Nor does the language from Tincher that was apparently being cited:

In either case, this jurisdiction’s experience with the repercussions of attempting to articulate specific principles of liability of broad application in implementing the strict liability cause of action make us reticent to go far beyond the necessities of an individual case and embrace a broad new approach premised upon what may prove to be procrustean categorical restrictions.

Our reticence respecting the Third Restatement scheme is not a judgment on our part that, as a matter of policy, articulating categorical exemptions from strict liability is not a viable or desirable alternative. Courts, which address evidence and arguments in individual cases, are neither positioned, nor resourced, to make the kind of policy judgments required to arrive at an a priori decision as to which individual products, or categories and types of products, should be exempt.

Tincher, 104 A.3d at 396.

What followed was a bizarre discourse on how drugs are “intrinsically dangerous” because they “are comprised of biologics meant to interact with and have an effect upon human tissue.”  2022 WL 3357485, *2.  On the purportedly other hand,

Medical devices, at least before implantation, are inert.  They may not remain so, and their insertion may trigger a systemic response from the patient’s body, but their physical characteristics are significantly different from medications.  If, with proper choice of materials and proper methods of fabrication, an implant can be supplied that is not inherently dangerous, then the rationale behind comment k does not readily apply.

Id.  The typical allegations in surgical mesh cases might be instructive.  So might the statutory definition of a medical device, which includes an instrument that is “intended to affect the structure or any function of the body of man or other animals, and which does not achieve its primary intended purposes through chemical action within or on the body of man or other animals.”  21 U.S.C. § 321(h).

Following this bit of shoddy analysis, the Spear court turned to plaintiffs’ failure to warn claim.  After blindly applying its prior reasoning on strict liability design defect to strict liability failure to warn, the court gave a cursory analysis of whether plaintiffs had properly pled their claim.  With a time warp worthy of Riff Raff and Magenta, the court managed to ignore TwIqbal in its analysis.  Instead, it looked to Pennsylvania’s ultimate requirement of proof of expert testimony to prove a prescription drug (!!!) failure to warn claim as a reason why these plaintiffs did not have to plead a viable claim for failure to warn up front.  Id. at *2.  This creative reasoning is quite contrary to TwIqbal.  Many tort claims, and pretty much all product liability claims, will ultimately require expert support, yet those plaintiffs still have to meet Rule 8 pleading standards.  It certainly does not take an expert to write some allegations that “The device’s Instructions for Use did not advise physicians of the true risk of [whatever allegedly happened to this particular plaintiff].  If they had, then Dr. [whatever the name of the implanting surgeon was] would not have implanted the device in plaintiff.”  This plaintiff did not even do this much and the Spear opinion does not provide the information to fill in those brackets.

Next up was the Lance claim for “negligent design.”  The court acknowledged that “Some decisions in this district deem [Lance language describing negligence in broad terms] to be dicta, and interpret Lance as limiting negligent design claims involving medical products solely to the theory that the product was too dangerous to market.”  Id. at *3.  Yet the court followed the other (minority) view that Lance opened the door to “a broader theory of liability to include the claim that sound design requires the product to be accompanied by warnings.”  Id.  It clearly did not.  Summary judgment on negligent failure to warn in Lance, which was not overturned on appeal, is what led to Lance’s creation of a new non-warnings claim in the first place.  As Spear’s remaining discussion of the issue showed, the court did not understand the difference between a warnings claim, a design claim, and the claim that the product should not have been sold at all.  Strangely, in a footnote on whether pleading an alternative design was required, the court noted that language in a Lance footnote was “best understood as related to the Court’s approval of a theory not previously recognized by Pennsylvania law:  that some products are too dangerous to market.”  Id. at *3 n.6.  We could go on, but we will refrain.

After dismissing warranty claims because plaintiff did not oppose that portion of defendants’ motion, the court seems to have discovered Rule 9, specifically (b), in considering plaintiff’s negligent misrepresentation claim.  We do not have a problem with the result—plaintiff had not provided sufficient detail, but got a chance to amend—although the reasoning left something to be desired.  Without deciding whether 9(b)’s heightened pleading standards apply to a negligent misrepresentation claim, the court cited 2001 and 2007 Eastern District of Pennsylvania cases for a “degree of specificity” standard.  If the court decides future motions to dismiss or for summary judgment, then we hope it can be more rigorous and look to recent law, including from relevant courts like the United States Supreme Court.

If we advertised our blog as being non-drowsy, would that be false advertising?  We hope not.  

In Amara v. Publix Supermarkets, Inc., 2022 WL 3357575(M. D. Fla. August 15, 2022), the plaintiff claimed that a cough syrup was falsely advertised as non-drowsy.  According to the plaintiff, the cough syrup contained an ingredient called DXM that, contrary to the label, could make people sleepy.  (Call it a doze response.) The plaintiff said he would not have bought the medicine, or would have paid less for it, if he knew the narcoleptic truth.  He filed a putative class action based on various state consumer fraud laws, breach of contract, breach of warranty, etc., as well as the federal Magnuson Moss Warranty Act (MMWA).  He wanted his money back and he wanted an injunction. The defendant moved to dismiss the case because the plaintiff lacked standing , because the claims were preempted by the federal Food Drug and Cosmetic Act (FDCA) and because the claim of non-drowsiness was not deceptive. 

The Amara court held that the plaintiff had alleged an economic injury of overpayment, but had not alleged  “any future harm to himself that is real and immediate and/or certainly impending.”  He offered “only a speculative and conjectural statement that he intends to purchase the Product at some future date.”  Thus, the defendant’s motion on lack of standing was granted with respect to injunctive relief.  

But the plaintiff had alleged an economic injury of overpayment, so he had standing as far as that goes.  Did that mean that such claim could proceed? No, a defense victory rode in on a stallion called preemption.  For the plaintiff, that stallion must have seemed more like a nightmare.  

Congress expressly preempted certain claims with respect to over-the-counter (“OTC”) drugs. With limited exceptions, “no State or political subdivision of a State may establish or continue in effect any requirement…that is different from or in addition to, or that is otherwise not identical with, a requirement” for OTC drugs in the FDCA.  21 U.S.C. § 379r(a).  The FDA issued a final monograph for cough medicines that sets forth the specific disclosures that manufacturers must make on labels for products that contain DXM. That monograph mandates warnings about drowsiness for cough medicines containing  another ingredient, but does not require a disclosure of drowsiness as a side effect for products that contain DXM. 

The plaintiff attempted to sidestep this problem by arguing that because the defendant voluntarily added the affirmative misrepresentation of “non -drowsy” to the cough syrup labeling, requiring it to remove that statement would impose no additional disclosure requirements.  That is, the plaintiff said he was not seeking to add a drowsiness warning to the medicine; rather, he merely sought removal of the term “non-drowsy,” which he claimed was false and misleading. 

That is certainly clever. Most sophistry is.  The plaintiff invited the court to hold the defendant liable for labeling the product as “non-drowsy” when such labeling complied with the FDA’s Monograph.  The court declined that invitation.  According to the court,  “[i]f successful, this litigation would do exactly what Congress, in passing section 379r of the FDCA, sought to forbid:  using state law causes of action to boots trap labeling requirements that are ‘not identical with’ federal regulation.”  Accordingly, the court held that all of the plaintiff’s state-law claims were preempted by the FDCA because they sought to impose a labeling requirement that is “different from or in addition to, or that is otherwise not identical with, a requirement” for OTC drugs in the applicable regulations.

What about the plaintiff’s solitary federal claim under the MMWA?  Federal preemption does not bar federal claims.  But “a breach of warranty claim under the MMWA is dependent upon a viable underlying state breach of warranty claim.”  Because the underlying state-law warranty claims were dismissed, the MMWA claim would be dismissed as well. Additionally – and this is a lesson not to sleep on technicalities — the complaint failed to meet the requirement under the MMWA that the amount in controversy for any individual claim exceeds $25, since the plaintiff claims he purchased the product for approximately $4.99.

Here’s a delicious nightcap: because federal preemption cannot be cured by amendment, the court granted dismissal of the entire case with prejudice.

That’s Amara.  It’s a preemption wake-up call.  

We came across something the other day that we don’t see very often, or really ever. The plaintiff in a medical device case served a request to inspect the two defendants’ manufacturing facilities, claiming that he was entitled to observe the premises where the device was made.  Not so fast, said the defendants.  And with good reason. 

These kinds of requests are probably not unprecedented, but we are unaware of any published order that addresses them.  We personally have seen a request for inspection of a medical device manufacturing facility only once.  That was in or about 2000, when a now non-existent medical device manufacturer voluntarily withdrew certain products from the market.  Eager to demonstrate product quality, a vice president posted a video on the company website inviting people to come visit the factory.  The video did not go viral—this, after all, was the pre-instragram, pre-TikTok early 2000s.  But still, some enterprising plaintiffs’ attorneys wrote polite letters saying, “We accept, when shall we stop by.”  D’oh! 

Those inspections did not happen, and neither did the facility inspections that the plaintiff requested in Thelen v. Somatics, LLC, No. 8:20-cv-1724, 2022 U.S. Dists. LEXIS 146584 (M.D. Fla. Aug. 16, 2022).  The plaintiff in Thelen served his request under FRCP 34, which sure enough allows a request “to permit entry onto designated land or other property possessed or controlled by the responding party.”  Rule 34(a)(2).  There are, however, limits, hinging mainly on the relevance of the inspection and the value of the inspection balanced against the burden: 

[A] court evaluating a request to permit entry under Rule 34 will consider the relevance of the inspection and balance the value of the information sought with the burden of the proposed intrusion.  Further, . . . the court must limit the frequency or extent of discovery otherwise allowed . . . if it determines that: (i) the discovery sought is unreasonably cumulative or duplicative, or can be obtained from some other source that is more convenient, less burdensome, or less expensive.

Thelen, at *4 (internal quotes omitted).  This standard is not unfamiliar, nor is the requirement that a party seeking a protective order bears the burden of showing the necessity of the order and a “particular and specific” showing of facts.  Id. at *4-*5. 

The defendants in Thelen were on solid ground.  The plaintiff argued that the inspection was relevant because (1) he was entitled to observe the “premises and conditions of where the device is made” and (2) the inspection would yield “relevant information regarding Defendant’s liability and their respective roles.”  Id. at *5. 

Let’s pause here.  The first argument obviously proves too much—if this plaintiff is “entitled,” then so is every other plaintiff, which cannot be the case.  The second argument merely mouths discovery buzzwords (“relevant information regarding liability”), which are not compelling and do not explain how the plaintiff could not get the information through other methods. 

What did the defendants say?  First, no relevance.  One defendant reminded the district court that the plaintiff had not alleged a manufacturing defect, and the other asserted that the plaintiff’s devices were not manufactured there.  Second, they both highlighted the undue burden.  Counsel would have to travel to both facilities.  Id. at *8.  Further, an inspection would unnecessarily interrupt their manufacturing operations, and in the case of one defendant, “the facility is also the residence of its president, where he lives with his family.”  Id. at *6-7.  (Wow, talk about the lack of separation between work and personal life; that is one company person who has taken pandemic-era “work at home” very seriously.) 

The district court probably could have stopped there, but when considering that the plaintiff had not fully tried other, less intrusive means of discovery, the court had little difficulty ruling that “[t]he burden of the requested discovery outweighs its likely benefit.”  Id. at *7.  Both defendants represented that they would respond to interrogatories on the product’s manufacturing if the plaintiff were to propound them.  Id.  Moreover, the plaintiff already had some of the information through interrogatory responses, documents, and a deposition of one defendant’s president.  That witness did not know about the other defendant’s processes, but the remedy there was to take the deposition of someone who knew—which the plaintiff had not done. 

All this added up to good cause for preventing the inspections and an order denying the plaintiff’s motion to compel.  As we observed at the outset, this is not a scenario that we have often seen, but we are sure that if you have, you will let us know. 

Earlier this week, we spoke of the impending birth of our soon-to-be standard poodle puppy.  We are delighted to report that the puppies are being born as we type this!   Eight are expected (e-mail us and we will send you a cool x-ray that shows all eight in utero – count the spines and skulls!), and one has arrived.  Dad is white and Mom is silver, and we are told that the litter will likely be a mix of blue (a dark steel grey) and white puppies.  (The genetics of all of this are way over our head – something to do with black plus a dilution factor and both parents carrying white.)  So far, one white girl has arrived.  We won’t know for a month or so which puppy will be ours, so we are beyond excited to see the array of possibilities.

“Excited” may overstate our reaction to today’s case, but we did read it with pleasure.  Nelson v. Bard, 2022 WL 3223188, ___ F.4th ___  (5th Cir. 2022), is a decision on the appeal of the District of Mississippi’s grant of summary judgment for the defendant in an IVC (inferior vena cava) filter case.   IVC filters are placed to prevent blood clots from traveling to the heart, lungs, and brain.  The plaintiff/appellant received his filter “as a prophylactic measure to prevent deep venous thrombosis and pulmonary embolism” when he temporarily stopped taking anticoagulants in preparation for a liver transplant.  Nelson, 2022 WL 3223188 at *2.  Fourteen years later, imaging revealed that the filter had fractured, with fragments penetrating the wall of the IVC and some migrating to other parts of the plaintiff’s body.   Most of the fragments were removed in the course of three surgeries, but one fragment remained in the pulmonary artery.  The plaintiff filed suit in the IVC filter MDL, asserting claims for design defect and failure to warn under the Mississippi Products Liability Act.  The case was remanded to the Southern District of Mississippi, and both sides moved for summary judgment.

The district court granted summary judgment for the defendant, holding that the filter’s warnings were adequate as a matter of law because the instructions for use (“IFU”) that accompanied the product “expressly warned” the plaintiff’s treating physician of the “very complications” the plaintiff suffered.  Id.  As we discussed then, the district court rejected at some length the plaintiff’s argument that the warnings were inadequate because they did compare the complication rates to those of the defendant’s predecessor filters and other manufacturers’ filters, holding that Mississippi law did not “support the conclusion that a failure to provide comparative-risk information renders a warning inadequate.” Id. at *3.   With respect to the design defect claim, the court held that the plaintiff had not adduced evidence linking the design defect his expert identified to the injuries he suffered, and that he had not identified a feasible alternative design.  The plaintiff appealed, resulting in today’s decision.

The Fifth Circuit affirmed the district court’s finding that the filter’s warnings were adequate as a matter of law, emphasizing that the IFU, “in no uncertain terms,” warned that fracture and migration, the “exact complications that allegedly caused [the plaintiff’s injuries,” were “known complications” associated with the filter.  And the plaintiff did not “persuasively argue” otherwise.  Id. at *5.   As the court explained, the district court’s holding was correct because the plaintiff did not “discuss, in any meaningful way, the warning language itself.”  Id.  He did not explain “why the text of the warnings was inadequate;” instead, he relied on the defendant’s internal documents to argue that the defendant knew of, and concealed, risk data, and thereby did not “warn physicians of high complication rates that it was aware of at the time.”   He argued that “the information that was concealed was so egregious that the IFU [was] per se inadequate.”  Id. at *6 (emphasis in original, internal punctuation omitted).  But, the court emphasized, Mississippi law requires failure-to-warn cases to be based upon “the warning label itself – its text and language – rather than internal documents.”  Id.  Because the plaintiff did not address “the language of the warning itself and how it was inadequate,” and because the warning label “warned in two different locations that filter fracture and migration were known complications,” the court held that the plaintiff failed to raise a genuine issue of material fact as to the failure to warn claim.  Id. 

With respect to the design defect claim, the court explained that the MPLA requires proof that the product was defective when it left the manufacturer’s control and that the defect proximately caused the plaintiff’s injuries.  The plaintiff’s expert testified that the filter was defective because it “tilted,” but the plaintiff failed to submit evidence that tied this supposed design defect to the fracturing and migration of the plaintiff’s filter.  In fact, the court pointed out, the expert’s report did explain how a “tilt” could cause the filter to fracture and perforate the IVC.  Since the plaintiff “failed to direct the district court’s attention” to this portion of the report, the appeals court could not consider it.   As the court stated, “Rule 56 does not impose upon the district court a duty to sift through the record in search of evidence to support a party’s opposition to summary judgment.”   (Because the court affirmed this holding, it did not need to address the “alternative design” holding.)

Lots of good stuff here.  We especially like the court’s rigorous application of good Mississippi precedent confining the warnings analysis to the text of the warnings themselves and leaving company documents – and conjecture based on them – out of the mix.  We also love the court pointing out the plaintiff’s sloppiness in failing to identify the portion of his expert’s opinion that might have saved the design defect claim.   Nelson is a well-reasoned opinion delivering a well-deserved victory for the defendant/appellee.  

Meanwhile, we are now up to three white girls, one white boy, and one blue boy!  We’ll give you the final tally when we next talk to you.  In the meantime, stay safe out there.

Two weeks ago we reported on a case that refused to apply offensive non-mutual collateral estoppel, the doctrine that prevents a defendant from relitigating an issue that it lost in earlier litigation against a different plaintiff. Although we weren’t impressed by that decision’s analysis, its outcome was one we could endorse. Today we report on another case involving offensive non-mutual collateral estoppel, Freeman v. Ethicon, Inc., 2022 WL 3147194 (C.D. Cal. 2022). This time, we are neither impressed by the decision’s analysis nor happy with its result.

Indeed, Freeman illustrates why offensive non-mutual collateral estoppel is systematically unfair to defendants.

Alleging that they were injured by one of the defendants’ pelvic mesh devices, the Freeman plaintiffs moved for partial summary judgment, arguing that at trial the defendants should not be allowed to dispute certain factual findings entered by a state-court judge after a bench trial in earlier false-advertising and unfair-competition litigation.

In Parklane Hosiery Co. v. Shore, 439 U.S. 322, 330–31 (1979), the Supreme Court identified four non-exhaustive factors that federal courts should consider when determining whether application of offensive non-mutual collateral estoppel would be fair in a particular case:  (1) whether “the plaintiff had the incentive to adopt a ‘wait and see’ attitude in the hope that the first action by another plaintiff would result in a favorable judgment”; (2) whether the defendant had the incentive to defend the first suit; (3) whether one or more judgments entered before the one invoked as preclusive are inconsistent with the latter or each other, suggesting that reliance on a single adverse judgment would be unfair; and (4) whether the defendant might be afforded procedural opportunities in the later action that were unavailable in the first and “could readily cause a different result.”

In Freeman, the defendants argued that applying offensive non-mutual collateral estoppel would be inappropriate under Parklane and would violate their Seventh Amendment right to a jury. The court rejected the defendants’ arguments at every turn.

The court acknowledged that “[t]he existence of inconsistent prior judgments is perhaps the single most easily identified factor that suggests strongly that neither should be given preclusive effect.” 2022 WL 3147194, at *4 (quoting Wright & Miller, 18A Fed. Prac. & Proc. § 4465.2 (3d ed. Apr. 2022 Update)). The court also acknowledged that in the past decade there have been two dozen jury trials involving the defendants’ mesh products, with plaintiffs winning some and the defendants winning others. Nonetheless, despite the conflicting product-liability verdicts, the Freeman court thought it appropriate to give preclusive effect to the adverse findings entered in the false-advertising and unfair-competition litigation because, said the court, the findings of fact entered by the state-court judge at the conclusion of the bench trial in that case “were specific” while the verdicts for the defense in the product-liability trials did not contain “any specific” contrary findings of fact. Id. at *5. But juries often return general verdicts. Indeed, the Freeman court explained that in one of the product-liability trials resulting in a defense verdict the jury had no need to make particularized findings of fact because it concluded that, whatever the product’s characteristics, the defendants were not negligent in designing it. Yet rather than view the general defense verdict as weighing against application of offensive non-mutual collateral estoppel, the court considered its very generality a factor in favor of applying the doctrine to prevent the defendants from contesting certain elements of liability. In effect, the court concluded that the defendants should not be allowed to offer a defense because the earlier verdict in their favor had been too categorical.

The court also rejected the defendants’ argument that the state-court findings should not preclude relitigation of the factual issues because those findings rest on evidence that would not be admissible in federal court. The defendants argued that the state-court findings rest on expert testimony that was admitted under California’s Kelly-Frye standard but has been repeatedly excluded by federal courts applying the Daubert standard (or, as we like to say, Federal Rule of Evidence 702). This reality didn’t impress the Freeman court, which found that “the differences between the Kelly-Frye and Daubert standards do not rise to the level of procedural differences contemplated” by Parklane because, said the court, “the overlap of the two standards generally results in the same evidence being admitted.” 2022 WL 3147194, at *5.

Nor was the court impressed by the existence of new evidence that became available only after the state court that had entered the purportedly preclusive findings. Applying California law (because it was sitting in diversity), the court held that “even if new evidence was not previously available, collateral estoppel will still apply if the new evidence goes only to the weight of the evidence in support of the party who opposes preclusion.” 2022 WL 3147194, at *6 (cleaned up). In other words, in the court’s view, a prior weight-of-the-evidence determination is forever binding even when there is new evidence to be weighed in the balance.

The court also was not deterred by the Seventh Amendment. Citing numerous cases refusing to give preclusive effect to findings made in prior bench trials, the defendants argued that giving preclusive effect to findings made by a judge would deprive them of their right to a jury trial. None of the cases cited by the defendants were apposite, said the court, because the supposedly preclusive findings at issue in them “were made in prior federal court cases[,] whereas in this case, the findings were made in state court.” 2022 WL 3147194, at *6. That distinction was dispositive, the court asserted, because “[t]he Seventh Amendment is not applicable to the states.” Id. (internal quotation marks omitted). But that is irrelevant. The findings would be given preclusive effect in federal court, where the Seventh Amendment unquestionably applies. The question is not whether the defendants had a right to a jury trial in state court, but whether they can be denied that right in federal court. According to the Freeman court, they can be.

Summarizing its analysis, the Freeman court found that “issue preclusion in this case is fair under the Parklane factors.” 2022 WL 3147194, at *7. We have a very different notion of fairness.


Two weeks ago we blogged about the Georgia Supreme Court’s not-quite embrace of the apex doctrine limiting depositions of organization big-shots.  In National Collegiate Athletic Association v. Finnerty, 2022 WL 2815848 (Indiana July 19, 2022), the Indiana Supreme Court did something similar.   The Finnerty case was brought on behalf of college athletes against the NCAA  for allegedly failing to implement “proper policies for preventing, diagnosing, or managing football head injuries.”  There are many such lawsuits and in many of them the plaintiffs sought to depose high-ranking NCAA executives.  

Those executives could have ended up doing nothing but depositions. Accordingly, those executives sought protective orders preventing such depositions because the executives possessed no unique knowledge and there were less intrusive means for discovering the information sought.  The trial court denied the protective order, the Indiana Court of Appeals held that the appeal from denial of the protective order was untimely, and the issue ended up in front of the Indiana Supreme Court.

The Indiana Supreme Court held that the appeal from the interlocutory order was timely, and proceeded to consider the NCAA’s request that Indiana adopt the apex doctrine, which limits depositions of executives who sit at the “apex” of a corporation’s hierarchy and who are consequently vulnerable to repetitive or harassing depositions.  In considering this issue, the Indiana Supreme Court had the benefit of excellent amicus briefing, including from the Product Liability Advisory Council and the U.S. Chamber of Commerce. (Full disclosure: we know the lawyers who authored these amicus briefs and we like and admire them.  We also like and admire what they wrote.  The briefs go through the need for and benefit of the apex doctrine, and also make the point that Florida had recently adopted it.)

As in the Georgia Supreme Court opinion we covered earlier, the Indiana Supreme Court in Finnerty declined to adopt the apex doctrine, but articulated a framework based on state discovery rules that captured most of the apex doctrine’s factors and operation.  The Indiana Supreme Court began its analysis by characterizing depositions as a “factual battleground where the vast majority of litigation actually takes place.”  (The Indiana Supreme Court actually borrowed that formulation from an E.D. Pa. case called Hall v. Clifton Precision.  Those of us who litigate frequently in E.D. Pa. are quite familiar with the Hall case, which sets out some terrifying rules about discoverability of conversations between deponents and their lawyers during deposition breaks.  Seriously, if you are defending a deposition in an E.D. Pa. case, read Hall.  And then be afraid.  Very afraid.)  

The Indiana Supreme Court had never before encountered the apex doctrine, and faced the issue of whether that doctrine could be squared with Indiana’s (sigh) “liberal” discovery regime.  On their face, Indiana trial rules do not “include heightened protections for any class of individuals.”  At the same time, Indiana courts are receptive to requests for protective orders that will prevent “annoyance, embarrassment, oppression, or undue burden or expense.”  But for the Indiana Supreme Court, explicit adoption of the apex doctrine was a step too far.  The Court saw federal application of it as “inconsistent” and its prevalence in state courts as “sparse.”  What the Indiana Supreme Court especially disliked about the apex doctrine was its “presumption – in conflict with [state court] discovery rules – that a high ranking official should not be deposed unless the requesting party first establishes a necessity for the deposition.”

What rule did the Indiana Supreme Court embrace, if not the full-blown apex doctrine?  First, the deponent must prove him or herself to be a true apex official.  The issue is anterior to the question of whether good cause exists for a protective order.  Because corporate organizational structures differ, it is impossible to lay out a bright line test based on, say, title.  Instead, it is a fact-sensitive inquiry focusing on the official’s “authority to exercise judgment and discretion when making executive decisions,” as well as the nature and scope of the executive’s duties and responsibilities.  The party seeking protection also bears the burden of demonstrating that the executive lacks personal knowledge of relevant information, that the information is available through less intrusive avenues, that the deposition would be unreasonably cumulative or duplicative, and that the hardship of the deposition would outweigh the benefit.  If that showing is made, the burden shifts to the requesting party to rebut either the deponent’s apex status or the good cause showing.  Such a rebuttal of apex status or good cause for protection requires “particularized factual support.”  Maybe the requesting party has evidence that the deponent really does have personal knowledge.  Or maybe the requesting party can show that any alternative means of discovery are “unavailable, inadequate, or already exhausted.”  If there is a genuine clash between the parties on these factors, the trial court “must use its discretionary authority to balance the parties’ needs and impose a protective order that (1) restricts the topical scope of the deposition or (2) requires the exhaustion of less intrusive discovery methods.”

Because the trial court in Finnerty summarily denied the NCAA’s motion for a protective order, there is no way to know whether it applied anything like this analytical framework.  Therefore, the Indiana Supreme Court remanded the case to the trial court to do the requisite balancing and decide whether the depositions were appropriate.  

This framework might not be precisely the same thing as the apex doctrine, but it seems at least apex adjacent.  The showing you’d put together if you were seeking to prevent or limit a deposition is pretty much the same as if you were in a jurisdiction that employed the apex doctrine.  Sure, it becomes a matter of discretion for the court, which means appellate review will be circumscribed, but at least it is clear in Indiana that a court must actually go through specified steps in exercising its discretion.  We predict that most depositions that would be blocked by the apex doctrine will also be blocked by Indiana’s new framework.  

We have long believed that the Indiana appellate courts are generally not a bad place to be for corporate defendants.  The Finnerty decision does not alter that belief.

Today is sort of a twofer Tuesday.  We have two cases, but only one issue.  So, maybe it’s more of a two-for-one deal.  There is also one general takeaway – it pays to look at state-specific defenses to state-specific claims.  For example, the privity requirements in North Carolina make it extremely difficult to bring a breach of warranty claim in a prescription drug or medical device case.  As plaintiffs in Johnson v. Smith & Nephew, Inc., 2022 U.S. Dist. LEXIS 143203 (W.D.N.C. Aug. 11, 2022) and Cruise v. Smith & Nephew, Inc., 2022 U.S. Dist. LEXIS 143190 (W.D.N.C. Aug. 11, 2022) recently found out.

These are not related cases and they were not brought by the same plaintiff’s firm.  But both involve medical devices and breach of warranty claims, and both were pending before the same judge.  So, not surprisingly, they both had the same result.  There is really only one difference between the cases, an immaterial one at that.  In Johnson, plaintiff underwent hip replacement surgery and later suffered complications when the implanted device allegedly failed.  Johnson, at *1-2.  The plaintiff in Cruise likewise had hip surgery, but unbeknownst to her surgeon, part of a drill bit that was used in the surgery broke off and implanted in plaintiff’s hip.  Cruise, at *2. 

We’ll cite to Johnson for a discussion of breach of warranty law in North Carolina, but you can find the same discussion in Cruise.  First and foremost, to bring a breach of warranty claim under North Carolina law, you must have contractual privity with the defendant.  Id. at *6.  However, keeping with our two-for-one theme, North Carolina’s version of the Uniform Commercial Code (UCC) has two exceptions to the privity rule, and one common law exception.  The first exception provides that if the buyer of the product is in privity with the defendant, “any express or implied warranties made to the buyer inure to the benefit of the buyer’s family or household guests.”  Id.  So, your husband buys electric hedge clippers but you’re the one who is using them when they malfunction causing you injury – you have privity to bring a warranty claim. 

Exception number two under the North Carolina UCC provides that the privity requirement is removed when a “buyer” of the product involved brings a product liability action directly against the manufacturer for breach of implied warranty.  Id.  So, if you bought the clippers but through a distributor, you could bring your implied warranty claim directly against the manufacturer despite the lack of privity. 

The courts, likely stemming from exception two, have recognized “an exception for buyers who are not in privity wit the manufacturer when the manufacturer intends its warranties to be conveyed to a buyer through the retailer.” Id. at *7.  This time you bought the clippers at your local hardware store and they came with a manual that made representations about the product or Jimmy, your friendly hardware salesman made representations about the clippers based on what the manufacturer told him.  In this scenario you also could overcome the privity requirement and bring a warranty claim. 

But electric hedge clippers are not prescription medical devices and that changes everything.  Neither plaintiff was in privity with the manufacturer, so to bring their warranty claims they had to fit within one of the exceptions.  The first exception does not apply because even assuming the doctor or the hospital was the “buyer” of the hip implant or the drill bit, neither plaintiff is a family member or household guest of the hospital or doctor.  Id. at *11.  The second exception is only available to buyers, which neither plaintiff is.  Mr. Johnson did not purchase his hip implant from his surgeon.  As appellate courts in North Carolina have held, “medical professionals do not engage in the sale of ‘goods’ when they either issue a prescription for a drug, or [implant a medical device].”  Id.    Plaintiff Johnson argued that his insurance company paid for the hip implant and because he paid his insurance premiums, he should be considered they buyer.  But for plaintiff to be a buyer there must be a sale which involves the passing of title which did not occur.  And even if there was a sale of the hip implant, at best the insurance company would be the buyer not plaintiff.  Id. at *14.  If Mr. Johnson did not fit under the second exception, certainly neither did Ms. Cruise.  She did not buy the drill bit from her doctor or contract to buy the drill bit, so she was not a buyer under the UCC.  Cruise at *17.

As for the common law exception, it too fails. It is premised on the passing of representations made by the manufacturer through a retailer to the purchaser.  But in both cases plaintiffs do not allege that the manufacturer made any representations “aimed at” plaintiffs or relied upon by plaintiffs in deciding to undergo surgery.  Johnson, at *10.  The court here recognized that some other North Carolina district courts have found that a manufacturer’s representations to a doctor can inure to the benefit of the patient through an agency relationship.  The court deciding Johnson and Cruise, however, found such a conclusion “stretches the narrow privity exception and does not address the ‘buyer’ issue.”  Id. at *15.  See Cruise at *18 (the agency analysis “is outside the current legal framework, and the Court declines to stretch the narrow privity exceptions”).   

Without a privity exception, plaintiffs breach of warranty claims were dismissed.  That means both plaintiffs are left with only negligence claims because North Carolina does not recognize strict liability.  Two plaintiffs, two medical devices, but now only one claim. 

We report, before we discuss today’s case, that we write in a state of high anticipation.  Regular readers of this blog may recall that we are huge dog show fans (we have had the same seats to the annual Westminster Kennel Club show – the one that is on TV – for 25 years).  We haven’t owned a purebred dog since 2011 when our last standard poodle died.  We have a house full of rescues, canine and feline, and are huge supporters of animal rescue – our tax accountant appreciates the “charitable donations” deduction this facilitates each year.  But we have always wanted one more standard poodle.  It has been a rough year, on both the “macro” and “micro” levels.  So, when our dear friend – and the breeder of our departed standards – offered us a chance to co-own a show puppy, we sent a bunch more money to rescues to assuage our conscience and gave ourselves permission to say “yes.”  Our puppy, and its siblings, are due to be born this Thursday.  When they are five or six weeks old, our friend will decide which is the most promising show dog (both parents are spectacular).  The puppy will come live with us a few weeks later, and it will begin its show career at six months old.  With us cheering from the sidelines.  By next time we post, we should have a birth announcement.

Now on to today’s case.  The decision – In re Taxotere Docetaxel Prods. Liab. Litig., 2022 U.S. Dist. LEXIS 132195 (E.D. La. July 26, 2002) – is short, and the discussion will be short, but we think the problem is big – the tip of a much-larger plaintiff-side MDL “iceberg.” The Taxotere MDL follows the typical model:  there is a master “long form” complaint on file, and each new plaintiff files a “short form” complaint that ticks off the claims (from the long form complaint) that plaintiff is incorporating.   The Taxotere long form complaint was filed in 2016, and the three plaintiffs in today’s decision filed their short form complaints in May 2017.   Under Fed. R. Civ. P. 4(m), the plaintiffs were required to serve their short form complaints within 90 days of filing.  Nearly five years after filing, none of the three plaintiffs had served the defendant with their short form complaints.  In January 2022, all three plaintiffs finally effected service, whereupon the defendant moved to dismiss all of the complaints. 

Fed. R. Civ. P. 4(m) provides;

If a defendant is not served within 90 days after the complaint is filed, the court . . . must dismiss the action without prejudice against that defendant or order that service be made within a specified time. But if the plaintiff shows good cause for the failure, the court must extend the time for service.

As the Taxotere court explained, “[t]he burden is on the plaintiff to show good cause as to why service was not effected timely, and the plaintiff must demonstrate least as much as would be required to show excusable neglect.”  In re Taxotere, 2022 U.S. Dist. LEXIS 132195 at  *3 (internal punctuation and citations omitted).  But, the court emphasized, Rule 4(m) afforded the court discretion “to extend the time for service even in the absence of good cause.”  Id. (citation omitted).  Moreover, the court explained, if claims dismissed for failure to effect service would be time-barred on re-filing, “the dismissal should be treated as a dismissal with prejudice under [Fed. R. Civ. P.] 41(b),” which requires a “clear record of delay or contumacious conduct by the plaintiff and a finding that lesser sanctions would not serve the best interest of justice.”  Id. (internal punctuation and citations omitted.

The three Taxotere plaintiffs made no attempt to establish good cause for their nearly-five-year failure to serve their complaints. Instead, they asserted that, under the “dismissal with prejudice” standard, the court should deny the Motions to Dismiss because the record “demonstrate[d] inadvertence, not clear delay or contumacious conduct.”  Id. at *4. 

And the court found that this more-stringent standard was not satisfied.  It held:

Although the delay in effecting service was indeed lengthy, it has not threatened the integrity of the judicial process. Each Plaintiffs’ case is in the same or substantially similar stasis as the thousands of other non-bellwether plaintiffs in this MDL.  Likewise, the record does not establish that Plaintiffs’ failure to effect service was the result of contumacious conduct. . . . [I]t is a party’s willful disobedience of a court order [that satisfies this standard]. There is no record of such conduct here. Rather, the evidence reveals that Plaintiffs discovered the deficiency on their own and cured it without the Court’s involvement.

Id. at *5-6 (internal punctuation and citations omitted).  The court concluded, “Because there is no clear record of delay or contumacious conduct, the circumstances of these cases do not justify dismissal with prejudice. This Court will, therefore, exercise its discretion under Rule 4(m) and extend the time for service nunc pro tunc to January 31, 2022.”  Id. at *6.

But here’s the problem:  this decision buys into the plaintiff-favoring herd mentality that, in our humble opinion, corrupts the MDL process. Because these cases were just getting dumped into a docket containing thousands of other cases, the plaintiffs were excused from complying with the service rules.  This is the same mentality that allows cases to languish for years, without any threshold showing of merit, in the hope of inclusion in a mass “settlement inventory” down the road.  Whether cases are consolidated or not, each plaintiff is an individual, with individual claims.  Each plaintiff should be required to comply with the applicable Rules and with the court’s orders or suffer dismissal.  And each plaintiff should be required to demonstrate, early in the pendency of a case, that he or she used the defendant’s product and suffered a requisite injury (we favor widespread implementation of Lone Pine orders). Sure, excusing these three plaintiffs from the service deadline may not seem like a big deal within the larger picture.  But rules are rules, and consolidation of large groups of cases should not operate to obfuscate individual plaintiffs’ rule violations. Moreover, overlooking plaintiffs’ intermittent service failures permits them to manipulate the docket, advancing cases they like and holding back cases they don’t.

We are scheduled to post again late in the week, and we hope to have puppy news (and maybe pictures!) by then.  In the meantime, stay safe out there.

The world order has been restored.  The clouds have parted, and all today is in perfect resonant harmony.  Ok, we are exaggerating.  A lot.  But we are pleased to report that at least one federal district court has correctly interpreted and applied the PREP Act.  We are sure you are as relieved as we are. 

We reported two weeks ago on a federal district court that got the PREP Act completely wrong.  The law is remarkably straightforward.  Congress enacted the Public Readiness & Emergency Preparedness Act (“PREP Act”) in 2005 to ensure the availability of effective countermeasures in the event of public health emergencies, such as COVID-19.  The Act creates an administrative remedy for allegedly injured individuals, and it grants covered persons immunity from civil liability in connection with countermeasures, like vaccines.  There is only one exception:  The PREP Act provides “an exclusive Federal cause of action against a covered person for death or serious physical injury proximately caused by willful misconduct.”  42 U.S.C. § 247d-6d(d)(1) (emphasis added). 

The misguided case on which we reported two weeks ago ruled that “exclusive” really means “non-exclusive,” and it allowed the plaintiff to pursue a state-law negligence claim based on a COVID vaccine reaction. 

Just days later, a federal court in New Mexico got it exactly right on very similar facts.  In Storment v. Walgreen, Co., No. 1:21-cv-00898, 2022 WL 2966607 (D.N.M. July 27, 2022), the plaintiff alleged that she got dizzy and fell after the defendant pharmacy administered a COVID vaccine.  Id. at *1.  These allegations fell directly within the Act’s preemptive scope, which includes “any claim for loss that has a causal relationship with the administration to or use by an individual of a covered countermeasure.”  Id. at *2 (emphasis in original, quoting 42 U.S.C. § 247d-6d(a)(2)(B)). 

It is difficult to imagine how the PREP Act would not apply to the plaintiff’s negligence-based claims, but the plaintiff tried anyway.  She argued that her injury (fainting at the pharmacy) could have occurred with or without a COVID vaccine and thus was not causally related.  Id. at *2.  She could not, however, get around her own allegations that the vaccine was the cause:

Plaintiff appears to argue that because her injuries could have resulted from any vaccination or other medical procedure . . . , the Court should find the PREP Act not applicable.  While it is true that other vaccinations or procedures might also leave customers dizzy, this does not change the fact that Plaintiff’s injuries actually resulted from administration of the COVID-19 vaccine.  The PREP Act therefore applies

Id. at *3.  The court included this additional pithy remark:  “Plaintiff provided no caselaw to support the it-could-have-been-a-different-vaccine argument . . . .”  This judge would make a good blogger.

This order is a true application of the “plain and unambiguous meaning” of a federal statute, and it provides a quintessential example of the PREP Act in action.  The court dismissed the case with prejudice.