Maybe we should not be surprised when courts within California reach to find personal jurisdiction over out-of-state corporations even when non-Californians sue. That is what BMS v. Superior Court was all about.  Right?  Well, it happened again last week in Dubose v. Bristol-Myers Squibb Co., No. 17-cv-00244, 2017 WL 2775034 (N.D. Cal. June 27, 2017), and it has us scratching our heads.

This is not an obscure issue. We know from Bauman that a company is subject to general personal jurisdiction only where it is “at home,” which means state of incorporation or principal place of business.  (You can view our post-Bauman personal jurisdiction cheat sheet here.)  And the Supreme Court famously held just two week ago in BMS that California’s courts cannot exercise specific personal jurisdiction over an out-of-state defendant unless there is “an affiliation between the forum and the underlying controversy, principally, [an] activity or an occurrence that takes place in the forum State.” Bristol-Myers Squibb v. Superior Court, 137 S. Ct. 1773, 1781 (2017).  That means there must be a causal link between the defendant’s forum contacts and the alleged injury to the plaintiff.  Contacts with other people—even people taking the same drug—do not count.

That is what makes the order in Dubose so confounding.  In Dubose, a South Carolina plaintiff sued a New York pharmaceutical manufacturer in the Northern District of California alleging product liability claims arising from her use of a prescription drug in South Carolina.  This is Bauman and BMS all over again, right?  Well, the district court saw it differently because the plaintiff alleged that the defendant conducted clinical trials within California, which became “part of an unbroken chain of events leading to Plaintiff’s alleged injury.” Dubose, at *3.  The district court therefore found specific personal jurisdiction based on those clinical trials, and it distinguished BMS v. Superior Court on the basis that there were no California contacts alleged in that case sufficient to support jurisdiction.

Having found jurisdiction, the district court then promptly transferred the case to South Carolina, where it should have been filed in the first place. But even though the case ultimately came to the correct result—sending a litigation tourist packing—we question the court’s order finding jurisdiction for several reasons.  First, we cannot distinguish BMS as easily as the district court did.  The alleged California contacts in Dubose were clinical trials.  But what are clinical trials?  They are physicians prescribing drugs to patients.  Sure, the prescriptions are written under approved protocols and data is collected.  But a patient being treated in a clinical trial does not look all that different from a patient being treated outside a clinical trial.  The Supreme Court held in BMS that “the mere fact that other plaintiffs were prescribed, obtained, and ingested [the drug] in California . . . does not allow the State to assert specific jurisdiction.”  137 S. Ct. at 1871.  The clinical trial participants referenced in Dubose were similarly “prescribed, obtained, and ingested” the drug within California.

Second, the district court in Dubose came to its conclusion because the clinical trials purportedly were in the “but for” causation chain leading to the alleged injury.  But were they?  Pharmaceutical companies typically run clinical trials at centers throughout the world.  Were the data from the California clinical trials really a “but for” cause of a patient ingesting a drug in South Carolina at some later point in time?  Put another way, if the California clinical trials never occurred, would the product really not have come to market?  We don’t know, but our point is that the causal chain leading from a specific, geographically defined subset of clinical trials to an alleged injury seems tenuous at best.

Third, the district court’s order seems to hold that any forum contact is sufficient to support specific personal jurisdiction, so long as it can be related to the plaintiff in any way.  But recall that specific personal jurisdiction is grounded in due process, which asks whether it is fundamentally fair to hold a defendant to answer in a forum where it is not at home.  At some point, the affiliation between the forum contact and the claim can be so attenuated that it can no longer be said that one “arose from” the other.  That is what we think is going on in Dubose.

If specific personal jurisdiction exists in every state where a multi-center clinical trial occurred, then any plaintiff who used the drug conceivably could sue the manufacturer in any of those states—no matter where the manufacturer is based and no matter where the plaintiff resides or used the drug. In the one example the district court cited, that would translate to specific personal jurisdiction in 44 states. Dubose, at *3 (citing M.M. ex rel. Meyers v. GlaxoSmithKline LLC, 61 N.E.3d 1026 (Ill. Ct. App. 2016)).  That is not “specific” personal jurisdiction.  That more resembles the concept of universal jurisdiction that the Supreme Court condemned in Bauman.

It could not be more unlike the disciplined contours of specific jurisdiction set forth in BMS.  The proliferation of jurisdiction to a multiplicity of states allowed the litigation tourism problem to arise in the first place.  It is also what led the Supreme Court to reel in personal jurisdiction.  Moreover, while the district court observed that “it is not clear what the alternative would be,” we would say the alternative is that Plaintiffs can sue a defendant where the defendant is at home or in states where they reside or where they ingested the product and experienced alleged injuries.  The Supreme Court made this clear in BMS too, where it rejected the plaintiffs’ “parade of horribles” and held that its “straightforward application of settled principles of personal jurisdiction” left plaintiffs ample alternatives, whether suing alone or in combination with others.

The case is in South Carolina now, so we doubt this order will undergo appellate review. That’s unfortunate.  Another thing is that the district court in Dubose relied most heavily on the M.M. ex rel. Meyers order to support its finding of jurisdiction.  But M.M. is currently in the U.S. Supreme Court on a petition for certiorari.  In light of BMS, we would not be surprised if the Supreme Court granted cert., vacated the order, and remanded for further proceedings.  That would leave Dubose as even more of an outlier.

 

Finally, some good news out of California – at least when personal jurisdiction isn’t the issue.

Design and warning defects were the questions presented in Trejo v. Johnson & Johnson, ___ Cal. Rptr.3d ___, 2017 WL 2825803 (Cal. App. June 30, 2017), and the result, particularly on the design side, was much more to our liking.

Indeed, there may well not have been post-BMS personal jurisdiction in Trejo either, since the plaintiffs were Hondurans injured in Honduras.  It’s not clear from the opinion where the drug at issue – an over-the-counter (“OTC”) ibuprofen-based pain relief medication – was purchased.  Somewhere in the United States, we gather, and it was then sent as a “care package” to the purchaser’s Honduran relatives.  Trejo, 2017 WL 2825803, at *2.

The drug was eventually taken, in Honduras, by someone other than its intended user, and that person, the eventual plaintiff, subsequently suffered Stevens-Johnson Syndrome (“SJS”), a nasty condition that we’ve encountered frequently on this blog.  This particular exercise in litigation tourism was quite initially successful.  A jury awarded over $50 million (including $15 million in punitive damages), finding for plaintiff on negligent failure to warn, negligent design, and strict liability design defect under the so-called “consumer expectation” test and the risk-benefit test.  The defendant “won” (if you could call it that) on strict liability warning defect and design defect under the “risk/utility” test. Id. at *5.  California not only allows plaintiffs two bites at the warning apple on separate negligence and strict liability theories, but three bites at the design apple under separate negligence, strict liability/consumer expectation design defect, and strict liability/risk/utility design defect theories.  No wonder plaintiffs flock to the state.

On appeal, however, the plaintiff in Trejo lost it all.

The design defect rulings are the most significant for the rest of us.

First, Trejo becomes the fourth appellate court to hold that the impossibility preemption rationale of Mutual Pharmaceutical Co. v. Bartlett, 133 S.Ct. 2466 (2013), and PLIVA, Inc. v. Mensing, 564 U.S. 604 (2011), applies generally, and it not limited to generic drugs – the others being Sikkelee v. Precision Airmotive Corp., 822 F.3d 680, 703-04 (3d Cir. 2016) (airplanes); Yates v. Ortho-McNeil-Janssen Pharmaceuticals, Inc., 808 F.3d 281, 298 (6th Cir., 2015) (branded drugs), and In re Celexa & Lexapro Marketing & Sales Practices Litigation, 779 F.3d 34, 41 (1st Cir. 2015) (branded drugs). Trejo joins Sikkelee and Yates in applying Mensing/Bartlett to design defects.  And Trejo is the first appellate decision to apply Mensing/Bartlett specifically to OTC drugs.

This is a good direction for the law to be moving. No appellate court has held that Mensing/Bartlett is limited to design defects in generic drugs.

Here’s what the unanimous Second District Cal. App. panel in Trejo had to say about preemption:

While the FDCA contains an express preemption provision concerning OTC drugs (21 U.S.C. §379r) – with a great big exception that exempts “product liability” claims from preemption – express and implied preemption operate independently.  Thus the savings clause for “product liability” doesn’t preclude implied preemption where product liability claims are in conflict with federal law.  Trejo, 2017 WL 2825803, at *23 (“[t]he savings clause does not foreclose the possibility that conflict preemption may arise from federal sources other than . . . §379r”).

Plaintiff’s design defect claim was that the defendant shouldn’t have used ibuprofen at all, but rather dexibuprofen, an isomer of the drug in question, “even though the FDA has not approved dexibuprofen for sale in the United States.” Id. at *5.  That’s right – plaintiff articulated a blatant stop-selling claim of the sort Bartlett had held preempted, and the Court of Appeal called “barnyard expletive” on plaintiff’s tortured argument otherwise:

[Plaintiff] asserts that he did not argue that defendants “should have withdrawn [the drug] from the marketplace, or should have never sold it in the first place.”  This argument is merely a matter of semantics. No matter how plaintiff words his argument, the claim that defendants failed to sell dexibuprofen instead of ibuprofen requires the claim that defendants should have withdrawn [the drug] from the market because defendants could not have changed the active ingredient of [the drug] without undergoing an entirely new FDA drug application process.

Trejo, 2017 WL 2825803, at *21 n.20 (emphasis added).

The Bartlettindependence principle” also required preemption.  It was impossible for the defendant to do what plaintiff contended state law required (materially change the drug’s design) immediately because material design changes to OTC (and all) drugs (and medical devices) require the prior review by and approval of the FDA.  “[F]ederal law prohibited the manufacturer from taking the remedial action required to avoid liability under [state] law.”  Trejo, 2017 WL 2825803, at *25 (quoting Bartlett, 133 S. Ct. at 2476).  That ruling applied to all drugs:

Consistent with our conclusion that the savings clause . . . does not prevent the applicability of ordinary preemption principles in the nonprescription drug context, we agree . . . that Bartlett’s holding is not limited to prescription drugs.

Trejo, 2017 WL 2825803, at *25 (emphasis added).  The FDCA did not permit the defendant to substitute freely one active ingredient for another.  “Dexibuprofen therefore would be a new drug, requiring a new drug application.”  Id.

[F]ederal law prohibited defendants from changing the design of [the drug] by selling dexibuprofen without prior FDA approval.  Defendants accordingly could not have avoided design defect liability without violating federal law.  “FDA regulations provide that once a drug, whether generic or brand-name, is approved, the manufacturer is prohibited from making any major changes to the qualitative or quantitative formulation of the drug product.”

Id. (quoting and following Yates, 808 F.3d at 298).

Preemption applied because the defendant could not have acted “unilaterally” to make the design change purportedly required by state product liability law – whether design defect is measured by consumer expectation or risk/utility:

Thus, under federal law [citations omitted] defendants could not unilaterally change the chemical composition of [the drug] from ibuprofen to dexibuprofen in order to satisfy consumer expectations or to increase the benefits or decrease the risks of [the drug].  Nor could they be required to stop selling [the drug] in order to avoid state liability.  Plaintiff’s design defect claim accordingly is preempted.

Id. at *26 (Bartlett citations omitted) (after quoting from a half-dozen cases listed in our post-Levine drug preemption cheat sheet).

Moreover, after trying the case as a straight-forward “you should have designed the product differently” claim, plaintiff could not attempt to convert it to some kind of quasi-warning-based case.  Plaintiff had a real warning claim (which we’ll get to) and couldn’t convert one possible design related factor (presence of warnings) into the whole design ball of wax to avoid preemption after having tried a different case to the jury.  Id.

But there’s more on design first.

Second, as we mentioned, California allows plaintiffs generally to prosecute design defect claims on either a consumer expectation or risk/utility theory of liability.  Not anymore in prescription medical product cases after Trejo.  Trejo also held, quite apart from preemption, that the consumer expectation theory was inapplicable to complicated products such as OTC drugs – and thus, we would argue, a fortiori would be inapplicable to prescription medical products.

The consumer expectation test is only appropriate for products that “everyday experience” allows consumers generally to have safety expectations about:

[T]he consumer expectations test is reserved for cases in which the everyday experience of the product’s users permits a conclusion that the product’s design violated minimum safety assumptions, and is thus defective regardless of expert opinion about the merits of the design.

Trejo, 2017 WL 2825803, at *27 (quoting Soule v. General Motors Corp., 882 P.2d 298, 308 (Cal. 1994)) (emphasis original).  OTC drugs – let alone prescription products – aren’t that.  Plaintiff tried the case with expert witnesses, which is a no-no under the consumer expectation theory.  That plaintiff did so demonstrated the theory’s inapplicability.

The circumstances of [the drug’s] failure involve technical details and expert testimony regarding the effect of the product upon an individual plaintiff’s health, and the ultimate question of whether [the drug] was defectively designed calls for a careful assessment of feasibility, practicality, risk, and benefit.

Id. at *30 (citations and quotation marks omitted).  SJS was an “unusual reaction” to the drug, thus “expert testimony was required to explain plaintiff’s theory.”  Id.  “Accordingly, we conclude that the consumer expectation test should not have been applied.”  Id.

In light of this complexity, plaintiff’s excuse for consumer expectations fell in the same barnyard as his argument against stop selling preemption.  Simply testifying that “I didn’t expect to get hurt” didn’t cut it:

Plaintiff here contends that the consumer expectation test applies because the ordinary consumer does not expect to contract SJS/TEN from taking OTC [ibuprofen].  However, it could be said that any injury from the intended or foreseeable use of a product is not expected by the ordinary consumer.  If this were the end of the inquiry, the consumer expectation test always would apply and every product would be found to have a design defect.

Trejo, 2017 WL 2825803, at *29 (emphasis added).  A consumer cannot, by playing dumb, bootstrap himself into a consumer expectation claim.  “[T]he consumer expectation test does not apply merely because the consumer states that he or she did not expect to be injured by the product.”  Id. Admittedly, we haven’t seen that many California plaintiffs audacious (or desperate) enough to utilize consumer expectation theories against FDA-approved products; nonetheless we’re beyond pleased now to have explicit appellate authority precluding this theory of liability against our clients.

After Trejo, it becomes a lot harder for any plaintiff to pursue a design defect claim against a prescription medical product in California.  If the design considerations that go into OTC drugs are too complex and involved to allow use of the consumer expectation theory of liability, than that theory is even less available to more sophisticated prescription products whose risks and benefits are so esoteric that the FDA has concluded that they should be dispensed only after evaluation by medical doctors.  Likewise, the Mensing/Bartlett preemption rationale against design defects is equally applicable to all FDA regulated products.  Can a branded drug manufacturer change its product’s active ingredient – or any other aspect of the product that materially affects product safety?   No.  And neither can a medical device manufacturer.  Effectively, all design defect claims that could make a difference in a product liability action (that materially affect “safety”) require prior FDA review, and thus should be preempted under Trejo and the Mensing/Bartlett independence principle.

That’s still not all.  We still have Trejo’s disposition of the warning-related aspects of the verdict to discuss.

Third, the Court of Appeal unanimously held that the jury’s verdict for the defendant on strict liability warning defect was fatally inconsistent with its verdict for plaintiff on negligent failure to warn.  Trejo, 2017 WL 2825803, at *8-14.  From a national perspective, this result is less important than the design defect aspects we just finished with, because disposition of the warning claim has to do with the interaction of California’s peculiar warning-based legal doctrines, which still attempt to maintain a difference between negligence and strict liability in the warning context.  Most other states treat them interchangeably.

It’s still important in Trejo, however.  $50 million is $50 million.

Briefly – because the whole thing reeks of hair-splitting to us – “both the strict liability and negligence theories were premised on a single alleged defect.”  Id. at *8.  “[U]nder either a negligence or a strict liability theory of products liability, to recover from a manufacturer, a plaintiff must prove that a defect caused injury.”  Id. at *6.  However, “strict liability, which was developed to ease a claimant’s burden of proof, requires proof of fewer elements than negligence.”  Id.  Thus, negligence requires “an additional element, namely, that the defect in the product was due to negligence of the defendant.”  Id.  Where (as here) the claimed defect under both theories is the same, that means that strict liability simply eliminates an necessary element, so that “a positive verdict on the latter [negligence, is] difficult to explain if strict liability cannot be found.”  Id.

Exactly that happened in Trejo, and it cost plaintiff $50 million.  It wasn’t the first time, either.  A previous decision, Valentine v. Baxter Healthcare Corp., 81 Cal. Rptr. 2d 252, 262-64 (Cal. App. 1999), was directly on point, forthrightly holding that “[a]s a practical matter then, the difference in the two concepts [negligence and strict liability] is so small as to make no difference.”  Id. at 263.  The jury’s finding for the defendant on the “easier” warning defect claim was necessarily inconsistent with its finding for plaintiff on the “harder to prove” negligent warning claim.  Trejo, 2017 WL 2825803, at *14 (“The jury’s special verdict on negligent failure to warn is fatally inconsistent with its verdict on strict liability failure to warn and must be reversed.”).

Who knows what would have happened if this plaintiff had not insisted on more than one bite at the apple?  That’s what we’ll find out on retrial.  We have no idea when that might be however, since further appellate review in Trejo is certainly possible.  In this respect, we are reminded that Bartlett, like Trejo, was also an SJS case.

This post is from the Cozen side of the blog only.

The Third Circuit gets fraudulent joinder—as if the name of the doctrine isn’t enough to give it away. It refers to, quite simply, joining a defendant in a lawsuit for a purpose other than pursuing liability against that defendant. And so the Third Circuit, getting it, has established a standard for determining fraudulent joinder that considers more than simply whether the plaintiff’s complaint states a colorable basis for a claim against the defendant. It also considers whether the plaintiff has a good faith intent to actually pursue that claim. Earlier this month, we posted on a decision by a district court in the Third Circuit applying this standard to deny a plaintiffs’ remand motion.

Since then, in fact just last week, this standard once again played a pivotal role in a determination by a court in the Third Circuit—this time the Zoloft MDL court—that a plaintiff had fraudulently joined a defendant to defeat diversity jurisdiction. In Re: Zoloft (Sertraline Hydrochloride) Prods. Liab. Litig., 2017 U.S. Dist. LEXIS 94953 (E.D. Pa. June 20, 2017). In that case, California plaintiffs sued Pfizer entities, none of which were California citizens, in a California state court. That complaint would ordinarily have been removable to federal court based on diversity jurisdiction, but plaintiffs also sued a California defendant, the (possible) distributor McKesson. In theory, McKesson’s presence as a defendant would defeat diversity jurisdiction. But the defendants nonetheless removed the case to California federal court, from whence it was swiftly transferred to the Zoloft MDL in the Eastern District of Pennsylvania.

Plaintiffs filed their remand motion in that court, which sits quite snugly inside the Third Circuit. In considering plaintiffs’ motion, the court began by laying out the Third Circuit standard:

In order to establish fraudulent joinder, a defendant must prove that there is no reasonable basis in fact or colorable ground supporting the claim against the joined defendant, or no real intention in good faith to prosecute the action against the defendants or seek a joint judgment.

2017 U.S. Dist. LEXIS 94953, at *5-6 (emphasis added) (citing Boyer v. Snap-On Tools Corp., 913 F.2d 108, 111 (3d Cir. 1990)). The court focused on the second half of the standard: plaintiffs’ real intentions for suing McKesson. Importantly, the court had the history of the Zoloft litigation to consider. A large mass tort, maybe even a not-so-large one, inevitably creates a litigation history that will highlight litigation maneuvers and counsel that have used them.

Here, the litigation history was determinative. The same plaintiffs’ counsel, along with other plaintiffs’ counsel, had sued McKesson in other Zoloft cases and then not seriously pursued discovery from McKesson, at times even dropping it as a defendant:

[T]he Court has been made aware of no instance in which any of the numerous Zoloft plaintiffs have propounded meaningful discovery on McKesson in either state or federal court, even though some cases have gone to trial. This failure to seek discovery includes other cases brought by Plaintiffs’ counsel. The lack of discovery requests directed towards McKesson casts doubt on Plaintiffs’ intent to pursue claims against McKesson.

Even more significantly, the plaintiffs in numerous Zoloft cases have dismissed claims against McKesson both before and after the Court granted summary judgment in favor of Pfizer and another Defendant and the plaintiffs appealed to the Third Circuit. One of these cases had been filed by Plaintiffs’ counsel in this case.

2017 U.S. Dist. LEXIS 94953, at *9.

The court saw a pattern. It rejected plaintiffs’ arguments that the Federal Rules of Civil Procedure establish no discovery standard upon which to determine whether a party was properly joined, holding that, regardless, the court may consider relevant information from the history of the litigation to determine plaintiffs’ intent in suing McKesson. Id. at *10.

The court then coupled the historical failures of plaintiffs and counsel to pursue McKesson after naming it as a defendant with the lack of specific, particularized allegations against McKesson in the complaint to determine that McKesson had been fraudulently joined. With that, the court held that it, in fact, did have diversity jurisdiction over the case:

Plaintiffs here have asserted non-specific claims against McKesson, Plaintiffs’ counsel has in separate Zoloft actions failed to propound discovery on McKesson, and, most notably, Plaintiffs’ counsel has outright dismissed McKesson as a defendant in other state and federal Zoloft cases. The Court thus concludes that Plaintiffs lack good faith intent to prosecute their claims against McKesson. The Court finds McKesson to be fraudulently joined in this action, and therefore does not take McKesson into account during its diversity jurisdiction analysis. Without McKesson, there is complete diversity between Plaintiffs and Defendants, and no dispute that the amount in controversy exceeds $75,000. The Court thus has jurisdiction over this case.

Id. at *10-11.

Obviously, this standard, along with the growing list of decisions applying it to reject remand motions, is a useful tool available to defense lawyers involved in mass torts, particularly in the Third Circuit. Allegations that are sufficient to state a colorable claim against a non-diverse defendant may not be enough to save a case from removal. The litigation history matters. Did plaintiffs actually pursue discovery against the non-diverse defendant? Did plaintiffs dismiss the non-diverse defendant late in the litigation? Did plaintiffs’ counsel ever depose the non-diverse defendant or subject it to the lengthy stream of depositions that they no doubt took of the employees and executives of the defendant that was the real target? Did plaintiffs pursue summary judgment against the non-diverse defendant when they pursued it against the real target? Has plaintiffs’ counsel used this tactic in other mass torts and a court called them out on it? And so on. We like the Third Circuit’s standard because it takes account of reality, and we expect to see more decisions adopting and applying it.

Late last year we happily blogged about Utts v. Bristol-Myers Squibb Co., ___ F. Supp.3d ___, 2016 WL 7429449 (S.D.N.Y. Dec. 23, 2016), chiefly because it held that design defect claims against a branded prescription drug (Eliquis) were preempted under the impossibility preemption reasoning in PLIVA, Inc. v. Mensing, 564 U.S. 604 (2011), and Mutual Pharmaceutical Co. v. Bartlett, 133 S.Ct. 2466 (2013).  However, as we noted in that post, dismissal of the non-design aspects of complaint was with “leave to amend.” See also Utts, 2016 WL 7429449, at *1.

Of course, plaintiffs amended.

Now, they probably wish they hadn’t.

In a second opinion, issued earlier this month, the Utts litigation was dismissed a second time, this time with prejudice. Utts v. Bristol-Myers Squibb Co., ___ F. Supp.3d ___, 2017 WL 1906875 (S.D.N.Y. May 8, 2017) (“Utts II”).  Preemption was once again front and center, but this time an excellent preemption result was accompanied by a variety of equally pleasing common-law – California law – rulings.

Impossibility Preemption

First, preemption. Design defect claims had already been preempted under Mensing/Bartlett, as plaintiffs were reminded whenever they crossed the line into design-type claims. Id. at *1, 9, 10 n.10, 13 n.15, 16, 19.  But the major preemption issue this time around involved warnings – and whether any of the information that plaintiffs claimed required some kind of “better” warnings involved “newly acquired information” of the sort that a defendant could unilaterally add given the scope of the FDA’s “changes being effected” exception to preemption recognized in Wyeth v. Levine, 555 U.S. 555 (2009). See 21 C.F.R. §314.3(b) (known as the “CBE” regulation for drugs – note, there are similar CBE regulations for devices and biologics; we’ve discussed the device regulation here).

For a more detailed discussion of the “newly acquired information” aspect of preemption, see our post here about In re Celexa & Lexapro Marketing & Sales Practices Litigation, 779 F.3d 34 (1st Cir. 2015), which was the first appellate decision finding preemption where plaintiffs failed to come forward with any “new” information to support their warning claims. Utts II explained that, in the preemption context, “if the plaintiff can point to the existence of ‘newly acquired information’ to support a labeling change under the CBE regulation, the burden then shifts to the manufacturer to show by ‘clear evidence’ that the FDA would not have approved the labeling change made on the basis of this newly acquired information.”  2017 WL 1906875, at *9.

Plaintiffs threw a lot of mud at the drug and its manufacturer, but nothing they heaved against the wall stuck – everything plaintiffs cited all old information that did not go beyond what the FDA had before it when it approved the drug in the first place.

Why is that?

Basically, Eliquis is a next-generation anticoagulant, very effective at what it does, and not requiring the kind of dietary restrictions and constant blood testing that older blood thinners such as warfarin – originally sold as rat poison – do.  Utts II, 2017 WL 1906875, at *2 & n.4.  Unfortunately, the plaintiffs’ bar has decided that anybody needing anticoagulation therapy should be should only have such older drugs available, and has launched an ongoing litigation assault at practically every next generation anticoagulant (others include Xarelto and Pradaxa) – because of risks of serious and sometimes fatal bleeding inherent in what these drugs are supposed to do.

The FDA was well aware of the risks that Eliquis, like any other anticoagulant, could cause uncontrollable bleeding when it approved it. Indeed, the “label warns about the risk of serious bleeding no less than five times.” Id. at *3.  It “specifically warns about the risk of bleeding” during concomitant therapy “in conjunction with antiplatelet agents, such as aspirin.”  Id. at *4.  The labeling also “twice warns about the fact that there is no specific antidote” should serious bleeding occur.  Id.

That’s why plaintiffs lost in Utts II.

Basically, the well-known fact that anticoagulants carry with them serious bleeding risks is why none of the information that the plaintiffs in Utts II brought forward qualified as “new.”  “New” is defined in the FDA’s CBE regulation as “studies, events, or analyses [that] reveal risks of a different type or greater severity or frequency than previously included in submissions to FDA.  21 C.F.R. §314.3(b) (quoted at 2017 WL 1906875, at *8).  In the preemption context, “

  • “The table and the description from the ISMP report do not suggest − nor do the plaintiffs allege − that the real-world signal data for [the drug] shows a greater severity or frequency of bleeding events or deaths than previously disclosed in [defendant’s] submissions to the FDA. Accordingly, the information contained in this table does not constitute newly acquired information. Utts II, 2017 WL 1906875, at *13.
  • Plaintiffs argue “that the guidance regarding concomitant use of antiplatelet agents is inadequate because the label does not advise how or when to use combination therapy . . . or how commonly bleeding events will occur. This omission . . . was evident to the FDA when it approved the label and the plaintiffs have not identified any newly acquired information.” Id. (quotation marks and footnote omitted).
  • This observation does not constitute newly acquired information, as it simply speculates whether [drug] safety could be further improved. Id. at *14 (as to “improved dosage guidance”).
  • [E]mbolic-thrombotic events are . . . not bleeding events. Nor do the plaintiffs argue that any of this data comparing the incidence of embolic-thrombotic events . . . constitutes newly acquired information. Id. (footnote omitted).
  • [T]he findings directed towards the risk of ischemic stroke for [the drug] users do not constitute newly acquired information. Id. at *15.
  • [P]laintiffs do not allege, however, that this expert guidance contains, or is founded upon, any newly acquired information regarding reversal agents or the treatment of excessive bleeding.” Id.
  • “[P]laintiffs do not allege that this statement contains newly acquired information about what constitutes a safe residual drug level.” Id. at *16.
  • “[T]his article does not refer to any new information that would have permitted the defendants to amend the [drug’s] label. And, in their opposition to this motion, the plaintiffs do not argue that it does.” Id.
  • “[P]laintiffs do not contend that any of the five remaining documents . . . contains newly acquired information regarding an undisclosed risk of bleeding. Several of these articles merely express a desire for further investigation. Id.

Thus, although plaintiffs loaded up their amended complaint with no fewer than “34 warnings that the defendants allegedly failed to provide,” 2017 WL 1906875, at *11, there was no safety in numbers. None of their supposedly missing warnings was based on “newly acquired information” as defined and required by the FDA’s CBE regulation.

Because, plaintiffs could not point to any “newly acquired information” to support their warning-related allegations, those allegations fell outside the scope of the Levine CBE exception and were preempted, because under Mensing/Bartlett such warnings could not be added without prior FDA approval.  2017 WL 1906875, at *9.

Next, in accordance with practically all law, Utts II held that preemption could be decided on a motion to dismiss.  A “determination regarding preemption is a conclusion of law.” Id. at *19 (pointing out that Mensing had been decided on a motion to dismiss).  To the extent that the Third Circuit’s aberrant Fosamax decision was pertinent, it was distinguishable.  Fosamax was limited to “clear evidence” determinations, and in Utts II, because plaintiffs offered no “new” information, clear evidence was never at issue.  Id. at *19-20.  Finally, plaintiffs were “not entitled to discovery on preempted claims.”  Id. at *20 (discussing TwIqbal).

In a way, the new evidence requirement discussed in Utts II resembles the so called “public disclosure” requirement that is a defense to False Claims Act claims (see here for more discussion), except that the “newness” of the information in preemption of state-law warning claims is measured against the evidence presented to the FDA, as opposed to the public.

Buckman Preemption

Utts II also found fraud-on-the-FDA preemption under Buckman Co. v. Plaintiffs Legal Committee, 531 U.S. 341 (2001).  Plaintiffs ran from their blatant fraud-on-the-FDA allegations, asking that they “be read merely as evidentiary background.”  2017 WL 1906875, at *26.  The court read them as they were written (and no doubt intended), and found preemption:

Each of the statements on which the fraud claim is premised depends on statements made to and approved by the FDA. There is no newly acquired information that required or suggested that the allegedly fraudulent statements should be altered to remain truthful and non-fraudulent.  Accordingly, the fraud claims are preempted.

Id.

Other FDCA-Related Issues

On other FDCA-related issues, Utts II ends up on our Adverse Drug/Device Event cheat sheet because of its discussion of how voluntarily reported adverse events aren’t legitimate proof of causation:

Federal regulations advise that a report submitted by a manufacturer “does not necessarily reflect a conclusion by the [manufacturer] or FDA that the report or information constitutes an admission that the drug caused or contributed to an adverse effect.” 21 C.F.R. § 314.80(l).  As the FDA Website explains:

FDA does not require that a causal relationship between a product and event be proven, and reports do not always contain enough detail to properly evaluate an event. Further, FDA does not receive reports for every adverse event or medication error that occurs with a product. Many factors can influence whether or not an event will be reported, such as the time a product has been marketed and publicity about an event.

The Supreme Court has similarly warned that “[t]he fact that a user of a drug has suffered an adverse event, standing alone, does not mean that the drug caused that event.” Matrixx Initiatives, Inc. v. Siracusano, 563 U.S. 27, 44 (2011). I n sum, “the mere existence of reports of adverse events . . . says nothing in and of itself about whether the drug is causing the adverse events.” Id.

Utts II, 2017 WL 1906875, at *12.

In addition, Utts II contains an excellent discussion of the harmful effects of overwarning.  The need to prevent overwarning is the reason that the CBE regulation does not apply to all information, new or old, that could in some way “strengthen” existing warnings:

The FDA has recognized that “[e]xaggeration of risk, or inclusion of speculative or hypothetical risks, could discourage appropriate use of a beneficial drug . . . or decrease the usefulness and accessibility of important information by diluting or obscuring it.” Indeed, “labeling that includes theoretical hazards not well-grounded in scientific evidence can cause meaningful risk information to lose its significance.” For this reason, the CBE regulation requires that there be sufficient evidence of a causal association between the drug and the information sought to be added.

Utts II, 2017 WL 1906875, at *8 (all quotes from “Supplemental Applications Proposing Labeling Changes for Approved Drugs, Biologics, and Medical Devices,” 73 Fed. Reg. 2848 (FDA Jan. 16, 2008).

Another notable FDA-related aspect of Utts II has to do with so-called “comparative claims” – claims that one medication is better than another in some respect.  Plaintiffs often claim (as they did in Utts II) that there is some sort of duty to warn that ones product is less safe than its competition.  However, Utts II points out that the FDA does not permit such claims except when supported by specific types and amounts of scientific evidence.  “[A]ny claim comparing the drug to which the labeling applies with other drugs in terms of frequency, severity, or character of adverse reactions must be based on adequate and well-controlled studies.”  2017 WL 1906875, at *7 (citing 21 C.F.R. §201.57(c)(7)(iii)).  Further, “federal regulations do not require a manufacturer to include information about a competitor’s product or progress.” Id. at *16 (citing 21 C.F.R. §§201.56, 201.57, 201.80).

State-Law Warning Issues

Beyond its preemption and other FDCA-related aspects, Utts II has a load of other helpful holdings, mostly about California law.  The decision contains an excellent discussion of the state of the art defense.  2017 WL 1906875, at *10.  It also points out that, the California Supreme Court’s holding – quite apart from preemption – that as a matter of federal/state comity, warning liability does not exist as a matter of state law where the purported duty flies in the face of FDA regulation:

Even where a risk is “known” or “knowable” at the time of distribution, under California law, a manufacturer “may not be held liable for failing to give a warning it has been expressly precluded by the FDA from giving.” Thus, if the manufacturer disclosed to the FDA “state-of-the-art scientific data concerning the alleged risk” and the FDA determined, after its review, “that the pharmaceutical manufacturer was not permitted to warn − e.g., because the data was inconclusive or the risk was too speculative to justify a warning,” then the manufacturer could not be held strictly liable for failure to warn. “[T]he FDA’s conclusion that there was, in effect, no ‘known risk’ is controlling.”

2017 WL 1906875, at *11 (all quotations from Carlin v. Superior Court, 920 P.2d 1347 (Cal. 1996)).  Thus, the same grounds that support preemption as a matter of federal law – where, as here, the FDA says “no” – also preclude liability as a matter of state law.

In tandem with preemption, Utts II also holds that the defendant’s drug labeling was adequate as a matter of California law on the bleeding issues raised by plaintiffs – just as our prior post thought it should.  In general, the label “clearly discloses that there is a risk of excessive bleeding and that there is no known antidote if that occurs.”  2017 WL 1906875, at *21.  Nor could plaintiffs prevail with any of the usual nitpicking that goes on in this type of litigation.

  • Monitoring – “The label provides, in unambiguous terms, all of the scientifically reliable information that physicians may need to determine how to monitor their patients.” Id.
  • Bleeding Reversal – A “recommendation is to discontinue [the drug] and apply ‘standard supportive treatment and other local measures’ . . . does not supply a basis for a plausible claim that the label needed to add further guidance.” Id. at *22 (quoting medical article).
  • Dosage – Plaintiffs do “not identify any research or data that undermines or contradicts the dosing guidance” and “speculation about information that the defendants may possess is insufficient to plausibly plead a claim.” Id. (citing TwIqbal).

Similarly, plaintiffs other warning-based claims failed due to the adequacy of the warning.  Id. at *24 (implied warranty), *26-27 (fraud); *29 (consumer fraud)

Finally, here are some other California warning-related nuggets we can use:  (1) Under the learned intermediary rule, “a manufacturer discharges its duty to warn if it provides adequate warnings to the physician about any known or reasonably knowable dangerous side effects, regardless of whether the warning reaches the patient.”  2017 WL 1906875, at *11. (2) “[P]harmaceutical manufacturer[s] may not be required to provide warning of a risk known to the medical community.” Id. (quoting Carlin).  (3) “[W]arnings relevant to any breach of warranty claim are those directed to the physician rather than the patient.” Id. at *22 (quoting Carlin) (emphasis original).  (4) The opinion notes that the learned intermediary rule applies to California consumer fraud claims.  Id. at *28 n.32.

Looking Forward

Utts II contains by far the most detailed discussion to date of the interplay between preemption and the “newly acquired evidence” requirement of the FDA’s CBE regulation.  It would be notable for that reason alone.  However, it also finds the labeling adequate as a matter of law, which is second highly significant ruling in any prescription medical product litigation.  What’s more, since the entire Utts amended complaint is now dismissed with prejudice, not only Utts II, but also the original Utts design defect preemption ruling, is now appealable.

Any appeal would be interesting.  Every ruling in Utts II is double-breasted, in that preemption is bolstered by independent state law grounds.  That is not the case with design defect preemption in the original Utts decision, where preemption is the sole basis for dismissal.  Utts, 2016 WL 7429449, at *12.  So, if plaintiffs were to appeal, their only clean shot at preemption would involve their design claim.  In any event, the preemption rulings in both Utts (Yates v. Ortho-McNeil-Janssen Pharmaceuticals, Inc., 808 F.3d 281 (6th Cir. 2015)), and Utts II (Celexa, 779 F.3d 34) are supported by court of appeals decisions, as our preemption cheat sheet demonstrates.  At best, in a hypothetical appeal, we would get an affirmance and reinforcing appellate precedent supporting preemption in innovator drug cases.  At worst, there would be a circuit split, which would offer the further (double-hypothetical) possibility of additional Supreme Court review of what Utts II called the Levine “trilogy.”  2017 WL 1906875, at *9.  While we always prefer to win, whenever, however, and as quickly and as thoroughly as possible, we certainly would find another shot at innovator drug preemption in the Supreme Court an interesting proposition.

Today’s case is a partially published decision about a partial reversal of a plaintiff verdict in California. So, we are only going to discuss select parts of the decision. It’s a long one and there are large sections about plaintiff’s counsel’s misconduct during trial and excessive damage awards. It is also a joint medical malpractice and product liability case. So, when you strip away the rest, we get down to a handful of legal rulings that we are truly interested in.

The case is Bigler-Engler v. Breg, Inc., 2016 Ca. App. LEXIS 921 (Cal. App. Oct. 28, 2016) and involves the use of a cold therapy medical device, available only upon prescription. Plaintiff underwent arthroscopic knee surgery, following which her surgeon prescribed use of the device to aid in recovery. Id. at *5-6. Plaintiff rented the device from her surgeon’s medical practice. Id. at *7. Upon discharge after surgery, plaintiff was advised to use the device at a certain temperature “as much as possible.” Id. at *8. Plaintiff’s use of the device and the instructions she received from her surgeon are explained in more detail in the opinion, but ultimately, plaintiff developed severe skin damage that required multiple plastic surgeries and scar reduction surgeries. Id. at *9-13.

Plaintiff file suit against her surgeon, the medical practice, and the device manufacturer. The jury found against the manufacturer on plaintiff’s claims for design defect, failure to warn, and intentional concealment. Id. at *19. The jury also awarded punitive damages against the manufacturer on the intentional concealment claim. Id. On appeal, the court overturned the intentional concealment verdict, which also meant reversing the punitive damages verdict. But, the court upheld the trial court’s decision not to instruct the jury on the learned intermediary doctrine finding it did not apply to a medical device intended to be operated directly by the patient.

Continue Reading A Fraudulent Concealment Win Coupled with an Unfavorable Learned Intermediary Ruling

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

Choice of law doesn’t get too much attention here at the DDL blog. That is due in some part to the fact that there really isn’t a defense-oriented position to take on it. Which state’s law should apply is a very case-specific analysis and in any given case, you might come out differently. It really depends on which state’s law is more favorable to your legal arguments in a particular scenario. The second reason it probably doesn’t get much attention from us is that in most personal injury, products liability cases, plaintiff’s home state’s law governs – the law where the injury occurred.

But what about when a plaintiff lives in one state but seeks medical treatment in another. Not to be considered disparaging of the many excellent healthcare facilities in southern New Jersey (where this blogger resides), but when you live a stone’s throw from some of the leading specialists in the country who happen to be across the state line in Philadelphia, you take that ride across the Ben Franklin Bridge. That’s not an unusual situation, making the choice of law question of interest.

In Finnerty v. Howmedica Osteonics Corp., 2016 U.S. Dist. LEXIS 123071, *2 (D. Nev. Sep. 12, 2016), plaintiff, a resident of Nevada, sought medical treatment from an orthopedic oncologist located in California. Plaintiff had cancer in his left leg that required either amputation of the leg or a total knee replacement. Plaintiff opted for the replacement and defendant’s modular replacement device was implanted. Id. At the time of surgery, plaintiff was “clinically obese.” Id. The surgery took place in March 2005 and plaintiff had no complications until 2011 – over 6 years later. Id. at *2-3. In August 2011, plaintiff started working as a shuttle driver for a car rental company. The job required him to lift luggage, weighing up to 80 pounds, on a repetitive basis. Id. at *3. In December 2011, while lifting luggage, plaintiff heard a “pop” in his left knee. During revision surgery, it was discovered that the implanted device had fractured. Id. Plaintiff continued to suffer complications and eventually his left leg was amputated.

Plaintiff sued the device manufacturer alleging failure to warn, negligence, strict liability design defect, manufacturing defect, and breach of express and implied warranty. Id. Defendant moved for summary judgment on all counts.

Continue Reading An Interesting Choice of Law Question

It’s been two years since the First District California Court of Appeals issued its ill-founded decision in Bristol-Myers Squibb Co. v. Superior Court, 175 Cal. Rptr. 3d 412 (Cal. App. 2014), which used specific personal jurisdiction to accomplish what the United States Supreme Court had, only six months earlier, condemned as “grasping” and “exorbitant” when attempted through general personal jurisdiction in Daimler AG v. Bauman, 134 S. Ct. 746 (2014).  We immediately blogged about that decision in our “Hotel California” post – describing the California court’s rationale in considerable detail.

Fortunately, the California Supreme Court promptly granted an appeal, which we duly noted here, of the following two questions: “(1) whether after Daimler AG v. Bauman, 571 U.S. ––––, 134 S.Ct. 746, 187 L.Ed.2d 624 (2014), general jurisdiction exists; and (2) whether specific jurisdiction exists.” Bristol-Myers Squibb Co. v. S.C., 337 P.3d 1158 (Cal. 2014).

Thereafter “prompt” dropped out of the lexicon.

But today the wait is over.  The California high court has answered the two questions “no” and “yes.”  This latter ruling – a 4-3 decision − is almost certain to be appealed to the United States Supreme Court, as it creates a form of “specific” jurisdiction in mass tort cases that is every bit as “grasping” and “exorbitant” as that rejected as a Due Process violation in Bauman.  See Bristol-Myers Squibb Co. v. Superior Court (Anderson), S221038, slip op. (Cal. Aug. 29, 2016) (hereafter Anderson). Anderson involved mass tort litigation in California against a defendant that was neither headquartered nor incorporated in California, nor had any peculiar ties to the state.  The plaintiffs in question were also nonresidents of California, so the jurisdictional questions boiled down to whether California can constitutionally provide a forum for non-resident plaintiffs to sue a non-resident defendants.

This is quite apart from the practical question of why, given the severe funding crisis everyone recognizes as facing the California judiciary, California taxpayers should be burdened by thousands (or more) of suits by non-residents against non-residents.

Continue Reading Breaking News – California High Court Expands “Specific” Personal Jurisdiction To Recreate “Exorbitant” Personal Jurisdiction Rejected by Daimler v. Bauman

We’ve always hated Conte v. Wyeth, 85 Cal. Rptr.3d 299 (Cal. App. 2008), and the whole concept of innovator liability (imposing liability on the original innovator drug manufacturer for injuries allegedly caused by a generic drug equivalent).  As amicus for PLAC, Bexis tried to strangle Conte in its cradle, as discussed here, but failed, as the California Supreme Court denied review.

Good news. Others have succeeded where Bexis failed.  The California Supreme Court has just granted an appeal in T.H. v. Novartis Pharmaceuticals Corp., 199 Cal. Rptr.3d 768 (Cal. App. 2016), an even more extreme Conte follow-up that imposed innovator liability in perpetuity − for injuries occurring even after an innovator manufacturer had sold all rights and left the relevant market altogether.  For full discussion of T.H., see our post here.  The order, entered yesterday, states:

The applications to appear as counsel pro hac vice are granted. The petition for review is granted.  The issue to be briefed and argued is limited to the following:  May the brand name manufacturer of a pharmaceutical drug that divested all ownership interest in the drug be held liable for injuries caused years later by another manufacturer’s generic version of that drug?

It appears online here.  Fingers crossed folks, but this is the necessary first step towards eliminating Conte.

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 107th 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.

Continue Reading San Francisco vs. The Monster (aka Federal Regulation)

The plaintiff in Frere v. Medtronic, Inc., 2016 WL 1533524 (C.D. Cal. April 6, 2014), was an 80 year-old woman who had an infusion pump implanted to treat her chronic low-back pain. According to the plaintiff, the device never delivered the pain relief she had experienced during her pre-implantation pump trial, and she ultimately suffered complications. The device is a Class III medical device, requiring FDA premarket approval. Product liability litigation involving Class III devices does not get very far without bumping into federal preemption issues. Frere is no exception.

The problem with the plaintiff’s complaint was that it was either unclear or clearly preempted. The strict liability claims failed because they consisted of conclusory allegations that the purported defects or failure to warn caused her injuries. For example, in the manufacturing defect claim, the plaintiff alleged: (1) that “the catheters at issue were occluded, fractured, obstructed, and/or malfunctioning, which caused Plaintiff to suffer severe injuries and which required multiple surgeries and medical procedures to correct these defects”; and, (2) “as a direct result of the defects, Plaintiff suffered crippling injuries which left Plaintiff with permanent and significant disabilities compensable under the law.” There is no there there. Similarly, in connection with her failure to warn claim, the plaintiff alleged that “[a] foreseeable, direct and proximate result of [Defendants’] failure to warn Plaintiff, Plaintiff’s medical providers, and the FDA . . . about the defective condition of the [Device], Plaintiff suffered crippling injuries that left Plaintiff with permanent and significant disabilities.” The court refused to accept those mere “labels and conclusions.” The complaint was bereft of any facts as to how the alleged manufacturing defect and failure to warn caused her injuries. All we get is the conclusion of causation itself.

Continue Reading C.D. Cal. Dismisses Infusion Pump Complaint