Last November we took note of a case where a federal court sought clarification from the Arkansas Supreme Court about the scope of claims for “illegal exaction.”  Now we have the answer, and lo, it is good.

For those of you who do not commit our old posts to memory, here is a refresher on Arkansas v. Takeda Pharmaceuticals North America, Inc.,  2013 U.S. Dist. LEXIS 160593 (W.D. La. Nov. 7, 2013).  The plaintiff (named Bowerman) brought an action against Actos manufacturers/sellers to recover costs borne by Arkansas and its citizens for injuries allegedly caused by Actos.   Bowerman never purchased or used Actos, but claimed standing simply by virtue of being an Arkansas taxpayer. The plaintiff sought a refund of money spent by the state to purchase Actos and to treat the injuries.  The theory relied upon by the plaintiff is called “illegal exaction,” which arises under the Arkansas Constitution and is defined as “any exaction that is not authorized by law or is contrary to law.”  That is broad language, but the theory was typically limited to allegations that public officials misappropriated public funds.  Unfortunately, there was enough muddiness in Arkansas law to prompt the federal court to certify questions to the Arkansas Supreme Court as to whether the “illegal exaction” theory was so vast or elastic as to permit Bowerman’s case to proceed.


Continue Reading Final Answer: Arkansas “Illegal Exaction” Theory Does Not Reach Drug Reimbursement

From our ivory tower in the kingdom of blogdom, we track cases and litigations from afar, peeking in on them from decisions rendered at specific points in time.  Sometimes, from a single decision, we venture on what will happen next, like whether claims that survived dismissal will make it past summary judgment or whether a

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

Plaintiffs seeking sanctions in the Actos litigation is nothing new.  We’ve covered the absurd federal MDL spoliation ruling here and the saner result from the Illinois state court proceeding here.   Apparently, the MDL plaintiffs weren’t satisfied with their win on spoliation or with their equally ridiculous trial verdict, so this time they went after Eli Lilly asking the court to use its inherent power to strike Lilly’s answer to the complaint and to enter default judgment in favor of plaintiffs.  In re Actos Prods. Liab. Litig., 2014 U.S. Dist. LEXIS 81305 at *19 (W.D. La. Jun. 11, 2014).  Fortunately, the court denied the motion in its entirety – in large part because plaintiff overreached on the sanctions it wanted imposed and under-reached on the legal theories it used to support its arguments.  But, at the core of the motion was something no defendant or defense counsel wants to have to face – allegations of perjury by a former employee.

We don’t know exactly how Lilly found itself in the situation we are about to describe.  But, the words of every trial advocacy professor we’ve ever had sprang immediately to mind:  Don’t lose because you failed to thoroughly prepare your witnesses.  You never want to be surprised at trial by what your witness is going to say.  And while that gets trickier with a former employee, if you are identifying them on your witness list as someone who will testify on your behalf, you better have considered things like:  was the witness prepared by counsel, does the witness make a good appearance, has the witness provided testimony elsewhere that is concerning or problematic.  And, if the reality is that this is “the” witness on a central issue regardless of how some of these questions are answered – then you better prepare, prepare, prepare and prepare again.


Continue Reading Actos — Another Motion for Sanctions

The Actos litigation has a way of being topsy-turvy these days.  We discussed not too long ago the epic ediscovery fail in that litigation, whereby a defendant, because of overbroad litigation holds that it allowed to persist even after the litigation that had generated them had long since disappeared, was held to have spoliated evidence at a time when there was no Actos litigation.  Appallingly, plaintiffs were allowed to “presume” prejudice from the loss of the information – when it’s not at all clear that the missing information wasn’t, in the end, discovered either in other employee files or from third-party discovery.  In re Actos (Pioglitazone) Products Liability Litigation, 2014 WL 355995, at *26-28 (W.D. La. Jan. 30, 2014).  The missing Actos files were destroyed when people left the defendant’s employ, rather than in any extraordinary attempt to sanitize files.  Id. at *26.

The effects of this unusual ruling evidently continued at the first Actos trial.  According to a post last week on the E-Discovery Law Alert  (a blog specializing in ediscovery):

[The judge instructed the jury after closing arguments Monday that they could take [defendant’s] evidence spoliation into account.  Additionally, throughout the trial, the jurors were exposed to voluminous evidence detailing [defendant’s] conduct in destroying the relevant evidence.

As a result we ended up with a $9 billion punitive damages verdict where the plaintiff received all of $1.5 million in compensatory damages.  That’s a ratio of six thousand to one.  The Supreme Court and most state courts consider any ratio above 10:1 presumptively unconstitutional.  A ratio this large, we think, is not only unconstitutional, but is presumptively the product of what lawyers call “passion and prejudice” on the part of the jury.  A verdict based on passion and prejudice is typically thrown out in its entirety.  This one certainly should be.


Continue Reading Actos – Finally Some Sanctions-Related Sanity

In our post on the worst decisions of 2013, we highlighted two trilogies of dreck, the First Circuit’s Neurontin decisions and the Pennsylvania Superior Court’s Reglan decisions.  Today, we discuss a rare pentalogy of drecky decisions from the same court in the same litigation issued over nine days.  See In re Actos (Pioglitazone) Prods. Liab. Litig., MDL No. 6:11-md-2299, 2014 U.S. Dist. LEXIS 4808 (W.D. La. Jan. 10, 2014); In re Actos (Pioglitazone) Prods. Liab. Litig., MDL No. 6:11-md-2299, 2014 U.S. Dist. LEXIS 5289 (W.D. La. Jan. 14, 2014); and three slip ops. concerning experts Panigrahy, Southgate and Grossman.

Like the Lance decision in yesterday’s post, the five Actos MDL Daubert decisions make a strong early case to be included with the worst of whatever else comes down the pike in 2014.  Last week, we posted on the same court’s overly narrow construction of conflict preemption.  Before that, we noted some better—from our perspective—decisions from the same court involving  smacking around a plaintiff lawyer for discovery nonsense, referring a state law question to the Arkansas Supreme Court, and even knocking out speculative medical monitoring opinions under Daubert.  We infer from this progression, and from the repeated and vehement chastising of the Defendants in the five Daubert decisions, that there has been shift in how the court views the parties that is coming through in its decisions.  We have been known to do some chastising of our own, but we never claimed to be neutral.  We also have not seen so many “cautions” to parties—there is but one to plaintiff’s counsel (about framing questions at trial) amid dozen or more to Defendants—or so many characterizations that arguments in motions were false, disingenuous, anemic, borderline specious, or hyperbolic.  You really have to read these decisions to get the full flavor, but it is hard to separate the substance from the delivery.  It is also hard to discern a single explanation for all the strange rulings in the five decisions on five experts in different areas.

We start with the disclaimer that we did not read the briefs of the respective parties or review the studies and liability evidence.  Like many with televisions or at least passing interest in the regulation of drugs, we have some understanding about how the evidence on the association of Actos and bladder cancer and the warnings about that issue have changed over time.  We would not begin to say whether the Court’s characterizations of the evidence and argument from the Daubert briefs are correct, any more than we would say whether an opinion that Actos causes bladder cancer or that the drug’s sponsor should have taken some additional action is correct.  As the Actos court and others before it got wrong, the admissibility of expert opinion testimony under Rule 702 and Daubert is a matter of procedure.  Daubert is applied in all federal court cases, because it is about procedure, not substance.  (Some requirements for expert testimony really are substantive state law, but that is a different issue.)  Without knowing the substance of the litigation, let alone whether a particular proffered expert opinion is correct, we can tell that the decisions misapply the proper standards, including the ones they correctly outline in the matching “Applicable Law” section of each decision.


Continue Reading At First Face, the Actos Rule 702 Decisions Make No Sense

“Tell your Mama, tell your Pa/I’m gonna send you back to Arkansas.”  The way Ray Charles sings those lyrics from “What’d I Say,” it sounds like a threat. What’s so terrible about ending up in the Razorback, excuse us, the “Natural” State?  How can we not adore a place that gave us Johnny Cash, Douglas MacArthur, and Maya Angelou?  Bear Bryant is justifiably famous for coaching Alabama (and, before that, Texas A&M),  but he was born in Arkansas. Because of Arkansas, we can buy really cheap poultry at Walmart.  Plus, we applaud a state legislature that officially endorsed the possessive form “Arkansas’s.”

What’s not to like?

Well, maybe you haven’t noticed, but we are defense lawyers. Arkansas courts ‘enjoy’ a reputation of serving up nasty home cooking to out-of-state corporate defendants. Certain counties in Arkansas are as friendly as parts of Southern Illinois are to class actions, mass actions, and just-plain-horrible actions.  We were delighted earlier this year when the U.S. Supreme Court held that plaintiffs cannot escape CAFA federal jurisdiction by submitting a bogus stipulation that the amount at issue was less than the $5 million jurisdictional minimum.  Standard Fire Ins. v. Knowles, 113 S. Ct. 1345 (2013).  That case came out of Arkansas, and the record was replete with recitals regarding Texarkana jurisprudence.  It made us think of Sling Blade – a movie whose star was that well-known Arkansas auteur, Billy Bob Thornton.  Put plainly, Arkansas seems to afford way too many opportunities to plaintiffs to create high-volume, high-stakes litigation that steers a case toward settlement via extortion.
Continue Reading Actos Court Asks Arkansas Supremes to Clarify Scope of “Illegal Exaction” Claims

We saw this morning that the boxcar California verdict that was being ballyhooed the last couple of days was reversed by the trial judge granting a nonsuit (the California equivalent to judgment n.o.v.).  But we don’t usually discuss verdicts, good or bad.  Now we’ve received the opinion supporting that decision.  It’s Cooper v. Takeda Pharmaceuticals America, Inc., LASC No. JCCP4696, slip op. (Cal Super. L.A. Co. May 1, 2013).  Opinions, we discuss.

Basically, the plaintiff’s case fell apart because the causation opinions of the only plaintiff expert witness were so unsupported as to border on farcical.  The court deferred ruling on the defendant’s Kelly/Frye (should we now add Sargon to the name?) exclusion motion and let the case go to the jury – no doubt hoping that the jury would do the right thing.  Unfortunately, the jury fell for the snow job, so the court stepped in.

Cooper is the latest example of the routine abuse of “differential diagnosis/etiology” by plaintiff causation expert.  Here the disease was bladder cancer, which has a number of other known and idiopathic causes.  Unfortunately for plaintiff Sargon Enterprises, Inc. v. University of Southern California, 288 P.3d 1237 (Cal. 2012) (discussed here), recently reiterated that, yes, the rules governing admissibility of expert testimony actually have teeth.  Cooper, slip op. 5-6 (quoting extensively from Sargon).

This particular diagnosis failed because (no surprise) the expert didn’t have all of the relevant medical records and thus didn’t know all of the necessary information about the other causes (“[p]articularly smoking, environmental exposures, occupational exposure,” slip op. at 7) for bladder cancer as they related to this individual.  While the expert told the jury that he had “reviewed the medical history, id. at 10, he actually hadn’t:

Q.   And yet, Dr. Smith, sir, despite reading those records, you were totally unaware that they were records reporting that [plaintiff] had stopped smoking in the 1990’s. Isn’t that true, sir?

A.   There’s discrepancies within the chart which we talked about before. There are places in the chart that say never smoker. There are also places that say 1990’s.

Q.   Doctor, I’m going to ask you a specific question. Isn’t it true that as of the time we took your deposition, you were unaware of any record reporting that he had stopped in the 1990’s?

A.   My impression was that he had stopped in the 1970’s, correct

          *          *          *

Q ….[Y]ou can then agree that for purposes of forming your opinion, you did not weigh whether and to what extent if he smoked for 20 years or 40 years would factor into your opinion because you didn’t know then. Isn’t that true?

A.   I was under the impression,·once again, that he had quit in 1974. I was not aware of any documentation at that time of 1990 something.


Continue Reading Breaking News – Opinion Reversing $6.5 Million Actos Verdict