It’s been a long road.  Well after product liability litigation over Accutane and inflammatory bowel disease (“IBD”) had been thoroughly debunked everywhere else in the nation, such litigation lived on in New Jersey – for year after interminable year.  First, a number of trials occurred, but literally every verdict for the plaintiffs was reversed on appeal.  Here are some of our posts on that phase of the litigation.  Then, once the trial court had had enough and began dismissing large numbers of cases, the intermediate appellate court reversed those decisions, too.  Here are some of our posts on that phase of the litigation.

Ultimately, it was up to the New Jersey Supreme Court to step in and figure everything out.  We blogged recently about it reversing the Appellate Division and entering a landmark decision on the admissibility of expert testimony in New Jersey.  See In re Accutane Litigation, ___ A.3d ___, 2018 WL 3636867 (N.J. Aug. 1, 2018).  Well, the defendant went back to the well on the adequacy of the drug’s warnings, and yesterday it rang the bell again.  In In re Accutane Litigation, ___ A.3d ___, 2018 WL 4761403, slip op. (N.J. Oct. 3, 2018), the court unanimously reversed the Appellate Division and affirmed the grant of summary judgment against another 532 cases brought mostly by litigation tourists.  “Of the 532 plaintiffs, 18 are New Jersey residents and 514 are residents of 44 other jurisdictions.”  Id. at *5.

The trial court had told the tourist plaintiffs that they were stuck with the consequences of choosing to descend on New Jersey like a plague of locusts – New Jersey law applied, including the presumption of adequacy that the state’s Product Liability Act (“PLA”) gives to FDA-approved warnings.  The warnings were adequate as a matter of law because “plaintiffs failed to overcome the presumption of adequacy.”  2018 WL 4761403 at *5.  The Appellate Division held that the law of each of the plaintiffs’ home states, 45 states altogether, governed, and reversed summary judgment under the laws of most of those states (all but eight).  Id.

Choice of Law

The New Jersey Supreme Court first said “you’ve got to be kidding” to the Appellate Division’s multifarious choice of law result.  The plaintiffs made their bed and thus had to sleep in it:

[W]e hold that New Jersey has the most significant interests, given the consolidation of the 532 cases for MCL [multi-county litigation] purposes. . . .  The aggregation of hundreds of cases under MCL allows the resolution of common issues of law.   A trial judge cannot be expected to gain a mastery of the law of forty-five different jurisdictions.  Construing New Jersey’s PLA is challenging enough.  New Jersey’s interest in consistent, fair, and reliable outcomes cannot be achieved by applying a diverse quilt of laws to so many cases that share common issues of fact.

Accutane, 2018 WL 4761403 at *6 (summarizing ruling).  See Id. at *15-20 (lengthy discussion of rationale for applying New Jersey law to all cases).

The court “proceed[ed] under the assumption” that true conflicts existed – that “application of New Jersey’s PLA may lead to an outcome different from the application of the laws of those other jurisdictions.”  Id. at *17 (citation and quotation marks omitted).  Even so, the most “significant relationship” for choice of law purposes in all cases was New Jersey.  First, as to alleged failures to warn, the corporation’s principal place of business “is where the alleged conduct causing the injury occurred − the manufacturing and labeling of [the product].”  Id. at *18 (citation and quotation marks omitted).

Second, in mass torts, “ordinary choice-of-law practices should yield in suits consolidating large numbers of claims and that courts should apply a single law in such cases.”  Id. at *17 (citation and quotation marks omitted).

The two most significant Restatement factors in this MCL matter are . . . “certainty, predictability and uniformity of result” and . . . “ease in the determination and application of the law to be applied”.  Applying a single standard to govern the adequacy of the label warnings in the 532 individual cases will ensure predictable and uniform results − rather than disparate outcomes among similarly situated plaintiffs.

Id. at *20 (discussing factors under Restatement (Second) of Conflict of Laws §6 (1971)).  Litigants cannot expect “[a] single judge . . . to gain a mastery of the laws of forty-five jurisdictions.”  Id.  If mass tort plaintiffs don’t want New Jersey law to apply they should “bring suit in the state where they reside.”  Id.  Under this new, mass-tort-specific application of choice of law, the plaintiffs in Accutane were stuck with New Jersey substantive law, which “is not as beneficial to their cause as the laws of other jurisdictions.”  Id.

We recommend that defense counsel study the court’s choice of law rationale.  It is no accident that, in its discussion of choice of law, the court cited Bristol-Myers Squibb Co. v. Superior Court, 137 S. Ct. 1773 (2017).  Accutane, 2018 WL 4761403 at *20.  Save for Delaware, more major pharmaceutical manufacturers are probably “at home” in New Jersey than anywhere else.  Thus, if the other side in the future chooses to congregate in New Jersey, they’ll have to put up with New Jersey substantive law, at least if the defendant makes motions in the aggregate.  Query, however, if the practicality rationale still applies in a single “bellwether” case where the alternative is application of one other state’s law, rather than the multi-state muddle the court faced in Accutane.  We think defendants have another opportunity to exercise some strategic discretion here.

Presumption of Adequacy

On the merits, the Supreme Court agreed with the trial court, that the defendant’s warnings were adequate as a matter of law under the PLA’s presumption of adequacy of FDA-approved labeling.  Initially, we get another shout out for the learned intermediary rule from the court:

[T]he PLA codifies what is commonly referred to as the learned intermediary doctrine – . . . that the physician acts as the intermediary between the manufacturer and the patient.  The prescribing physician − as a learned intermediary − generally is in the best position to advise the patient of the benefits and risks of taking a particular drug to treat a medical condition.  Under the learned intermediary doctrine, a pharmaceutical manufacturer generally discharges its duty to warn the ultimate user of prescription drugs by supplying physicians with information about the drug’s dangerous propensities.

Accutane, 2018 WL 4761403 at *21 (citations and quotation marks omitted).  We’re always on the lookout for high court reaffirmations of the learned intermediary rule.

As to the statutory presumption of the adequacy of FDA warnings, the court reached the right result, but not before a lengthy detour based on a questionable source (a law review article written by plaintiff-side professional expert David Kessler) and the infamous decision in Wyeth v. Levine, 555 U.S. 555 (2009).  2018 WL 4761403 at *21-24.  The upshot is a ruling on how the PLA’s “rebuttable” presumption of adequacy can be rebutted:

[T]he rebuttable presumption of adequacy attaching to an FDA-approved drug label is overcome when a plaintiff presents clear and convincing evidence that a manufacturer knew or should have known, based on newly acquired information, of a causal association between the use of the drug and “a clinically significant hazard” and that the manufacturer failed to update the label accordingly.

Id. at 26.  Notably, the substantive aspects of this rebuttal standard are based on federal regulations, including the notorious Levine “CBE regulation,” 21 C.F.R. §314.70.  This result leaves little daylight between the PLA presumption and implied preemption under Levine, except for the burden of proof.  Preemption is also based on “newly acquired information” – specifically the lack of it.  So any claim that would be preempted in other jurisdictions because plaintiffs can’t point to anything new that the FDA hadn’t already considered is independently barred in New Jersey by the PLA presumption.  However, while defendants bear the burden of proving preemption, in New Jersey the PLA presumption means that plaintiffs bear the burden of proving the presence of the necessary “new” information, and must do with clear and convincing evidence, which Accutane defined as “evidence so clear, direct, weighty in terms of quality, and convincing as to cause one to come to a clear conviction of the truth of the precise facts in issue.”  Id. at *26 (citation and quotation marks omitted).

The Accutane court added “one caveat” – regardless of anything else:

A manufacturer that acts in a reasonable and timely way to update its label warnings with the FDA, in accordance with its federal regulatory responsibilities, will receive the protection of the rebuttable presumption.

Id.

The Accutane court acknowledged that this “is a standard protective of responsible drug manufacturers.”  Id.

The PLA’s rebuttable presumption of adequacy that attaches to label warnings gives pharmaceutical companies the protection necessary to research and develop the drugs that will improve and extend the lives of people around the world.  The presumption of adequacy protects manufacturers from unmeritorious lawsuits.

Id.

Plaintiffs’ Failure of Proof

Finally, Accutane applied the law to the facts, and found that none of the 532 plaintiffs came close to overcoming the statutory presumption of adequate warnings.  “[M]ultiple warning tools,” the package insert, the patient package insert, the medication guide and “blister packaging,” all warned about the possibility of IBD.  Id. at *27.  “Association” was the proper description of the drug’s relationship to the plaintiffs’ injuries; “cause” would have been too strong.  Defendant “had reports that some patients, after taking [the drug], developed symptoms of IBD.  That one followed the other does not prove cause and effect.”  Id. (citing Accutane, 2018 WL 3636867, at *8-10).  Plaintiffs offered only “isolated examples” that had been “culled from the voluminous discovery.”  Id. at *27-28.  “To be sure,” that evidence “is not clear and convincing evidence that [defendant] knew or should have known that the use of the word ‘associated’ was inadequate.”  Id. at *28.

Nor is there any evidence that [defendant] avoided necessary label changes for economic reasons.  [Defendant’s] marketing personnel certainly expressed an interest in Accutane’s financial success; it would have been surprising if it were otherwise.  However, there is no evidence that [defendant’s] financial interest in Accutane’s success led it to withhold necessary IBD-related warnings.

Id.

*          *          *          *

This latest Accutane decision is a great result and should finally drive a stake through this vampire of a litigation.  Still, a couple aspects of this ruling give us pause.  As for choice of law, the application of multiple states’ laws was one means of defending against class actions, since doing so defeated both proportionality and manageability.  Many other reasons for rejecting class actions in personal injury litigation remain, but like practically everything else about choice of law, this could be a two-edged sword.  Second, the continued willingness of New Jersey courts to craft extra-statutory “exceptions” to the New Jersey legislature’s presumption of adequacy of FDA warnings bothers us doctrinally.  The statute says what it says, and we think that – as with all other statutory provisions (including preemption clauses) – courts should enforce statutes as written, and not use subsequent developments to change what the legislature did.  Short of a constitutional issue, courts should not encroach on the legislature’s prerogative to draft legislation.

It can sometimes be difficult for us here at the DDL Blog to address “mixed bag” cases. We are quite clear that we are a defense side blog. Love us or hate us – we don’t pull punches. We hoard and covet preemption and learned intermediary wins and treat each one like the gem that it is. We collect and pile up class action denials, no duty cases, and Lone Pine orders. We have scorecards, and cheat sheets and surveys all designed to celebrate defense victories and assist in creating more defense victories. So, when faced with a case that only goes half way, we are left a bit deflated. It’s sort of like seeing a movie where you say the special effects were amazing, but the story – not so much. You can’t trash the movie because there was something decent. But you also aren’t giving it two thumbs up (you know, the standard movie rating before it became based on tomatoes). If a decision is all bad, we trounce it. If a decision is all good, we praise it. If it’s somewhere in the middle, we talk about it.

That about sums up our take on McWilliams v. Novartis AG, 2018 U.S. Dist. LEXIS 113862 (S.D. Fla. Jul. 9, 2018). It is a failure to warn case concerning a drug used to treat leukemia. Id. at *2. Plaintiff suffered a stroke after using the drug to treat his chronic myeloid leukemia for a little over 2 years. Id. at *3. Defendant moved for summary judgment on the grounds of preemption, adequacy of the warning, lack of proximate causation, and no punitive damages under the law of New Jersey. The court denied the first three and granted the motion on punitive damages.

As to preemption, defendant moved that the case should be dismissed based on impossibility preemption arguing that there was clear evidence that the FDA would have rejected a warning on the risk of stroke if defendant had proposed one. In support of its argument, defendant noted multiple occasions on which the issue of arterial and vascular occlusive events was raised with the FDA before the date of plaintiff’s stroke:

  • In 2011, Defendant proposed adding peripheral artery occlusive disease to the Medication Guide and the Adverse Reaction section of the label and the FDA rejected the proposal.
  • Twice in 2013 before plaintiff’s stroke, Defendant told the FDA of labeling revisions required by Canada regarding cerebrovascular events.
  • Later in 2013, the FDA required another drug in the same class to add a boxed warning that included language that “similar rates of serious vascular events have not been observed in several other drugs of this class.”

Id. at *5-6. We view that as a pretty well-documented history of FDA regulatory rejection or inaction related directly to the risk at issue. Perhaps most compelling to us was the fact that when the FDA added a “serious vascular events” warning to another product it specifically said defendant’s product (as one of the others in the class) didn’t have the same risk profile. That feels like clear evidence that the FDA would have rejected that warning if proposed by defendant. The court reasoned that just because the FDA changed one label doesn’t mean that it would not have change another. Id. at *11-12. But that misses the language the FDA used distinguishing the drug that required the warning and the others that did not.

Unfortunately for the defendant in this case, the court compared its regulatory history to the histories set forth in the cases cited where clear evidence was found and concluded that the others had more extensive histories. But is that the correct analysis? Perhaps the evidence of rejection has been stronger in other cases, but that doesn’t make the evidence in the current case any less clear.

Moving on to the actual warning itself, defendant’s first argument was that the risk of stroke was not known or knowable during the time period that plaintiff took the drug. Defendant argued that there were no article or published reports of patients experiencing strokes while taking the drug until 2 adverse events were noted in 2013. Id. at *16. Plaintiffs on the other hand argue that Canadian regulators provided defendant of information regarding an association between the drug and atherosclerotic disease in 2012. That’s not the same thing as strokes, but it was enough for the court to find a disputed issue of fact. Id. at *16-17.

Defendant also challenged proximate cause arguing that plaintiff could not prove that his prescriber would not have prescribed or would have stopped the prescription if he received a different warning. Id. at *17. As evidence of this, defendant relied on the prescriber’s testimony that he continues to prescribe the drug today. Id. Plaintiff countered with the prescriber’s testimony that when he prescribes today he does so “with careful warning.” The court concluded that because the prescriber has now changed his warning to patients, causation remains in dispute. Id. at *19.

That leaves plaintiff’s punitive damages claim which turned on choice of law. Plaintiff is a Florida resident, was prescribed the drug in Florida, and suffered his stroke in Florida. Defendant is a New Jersey corporation. Florida allows claims for punitive damages in prescription drug cases. New Jersey does not. See N.J.S.A 2A:58C-5 (no punitive damages for drugs and devices that are approved by the FDA). There’s a clear conflict. Florida uses the significant relationship test to resolve conflicts. McWilliams, at *23. Which means the court has to decide which state has the most significant relationship to the particular issue. Id.

We are all familiar with the assumption in most personal injury cases that the law of the place of injury applies. And that used to be the beginning, middle, and end of the inquiry. Until about a decade ago, the argument that defendant’s domicile should control for punitive damages didn’t have much support.  It is in defendant’s home state that the conduct that allegedly serves as the basis for punitive damages takes place. While the drug was marketed to doctors in Florida, “the alleged sales and marketing strategies originated from [defendant’s] New Jersey headquarters, and plaintiffs have not identified any way in which those strategies were implemented differently in Florida than any other state.” Id. at *26. According to the Restatement (Second) of Conflict of Laws, when the issue under consideration is about deterrence or punishment, the place where the conduct took place may have the dominant interest. Id. at *25. Since punitive damages are “designed to deter and punish” the defendant rather than compensate the plaintiff that means New Jersey has the more significant relationship and its law applies.

In this case that means no punitive damages. But as we’ve mentioned before, one of the reasons we don’t spend much time on choice of law is the rulings are double-edged and can easily be turned to apply the law of states we don’t like. As we said at the outset, this is a mixed bag case so we’ll take from it what we can get. Good news for New Jersey drug and device companies sued in other states.

Once again we find ourselves in the position of creating new defenses to a novel, plaintiff-side cause of action.  This time, we’ve been doing a lot of thinking about innovator liability – the theory that would hold branded manufacturers liable for injuries allegedly caused by the ingestion of (preemption-immune) generic drugs on some kind of attenuated inadequate warning theory – since even before the California Supreme Court’s T.H. v. Novartis, Inc., 407 P.3d 18 (Cal. 2017), decision late last year.  If your company or your clients are concerned about being a target of such theories, here are some ideas we’ve come up with that might help.

Direct Preemption

In T.H., the “major, and ultimately most important, consideration under California law is the foreseeability of physical harm.”  407 P.3d at 29 (citations and quotation marks omitted).  What did T.H. have to say about “foreseeability” in deciding to create a new negligence duty on non-manufacturing branded manufacturers?  The manner in which T.H. construed “foreseeability” was much different than in the normal negligence case:

[A branded drug manufacturer] could reasonably have foreseen that deficiencies in its [product’s] label could mislead physicians about the safety of [the drug’s] generic bioequivalent, which was legally required to bear an identical label.

A brand-name pharmaceutical manufacturer has a duty under federal law to draft, update, and maintain the warning label so that it provides adequate warning of the drug’s potentially dangerous effects. . . .  [T]his category of manufacturers may use the “changes being effected” . . . regulation to “add or strengthen a contraindication, warning, precaution, or adverse reaction” immediately upon filing a supplemental application, without waiting for FDA approval.

The duty for a manufacturer of generic drugs, on the other hand, is to ensure that its warning label is identical to the label of the brand-name drug. . . .

What a brand-name manufacturer thus knows to a legal certainty is that any deficiencies in the label for its drug will be perpetuated in the label for its generic bioequivalent.

Id. (numerous regulatory citations omitted) (emphasis added).

T.H. thus grounded its duty (to be distinguished from breach) analysis, not on the likelihood that the defendant would have violated some common-law obligation, which is the usual way foreseeability is analyzed – but on the likelihood that the defendant would be compliant with its federal obligations under the FDCA.  Indeed, T.H. suggests that, but for this federal overlay, it would not have recognized a new duty at all.  Id. at 31 n.2 (were there “parity between NDA [branded] holders and ANDA [generic] holders with respect to submission of . . . safety-related labeling changes based on newly acquired information,” that could “justify reweighing of the [duty] factors and some reconsideration of the brand-name manufacturer’s duty in this category of cases”).

There is a second element to T.H.’s foreseeability analysis, and that also involves compliance (as opposed to violation) with legal obligations:

A brand-name manufacturer will also be aware that although the warnings communicated in its drug label are designed for physicians . . . it is often the pharmacist who actually decides whether the patient receives the brand-name drug or its generic bioequivalent.  Moreover, many insurance companies require the substitution of a generic drug for the brand-name drug as a matter of course. . . .  Accordingly, it is entirely foreseeable that the warnings included (or not included) on the brand-name drug label would influence the dispensing of the generic drug, either because the generic is substituted by the pharmacist or the insurance company after the physician has prescribed the brand-name drug, or because the warning label on the generic drug is legally required to be identical to the label on the brand-name drug.

Id. at 29-30.

The same unusual reliance on compliance with – rather than violation of – federal and other legal requirements governing the marketing of prescription drugs occurred in Rafferty v. Merck & Co., 92 N.E.3d 1205 (Mass. 2018):

[I]n the vast majority of such cases, the duty to warn would be limited to the manufacturer of the product − even if the plaintiff were to bring a general negligence claim − because the risk of harm arising from an inadequate warning would be foreseeable to a manufacturer only with respect to users of its own product, not the users of another product. . . .  Moreover, apart from any duty arising from the risk of foreseeable injury, only in rare cases could a plaintiff contend that his or her injury was caused by the inadequate warning given for another product.

But this case presents an exception to the usual pattern. Because the Hatch–Waxman amendments to the act require that the warning label of a generic drug be identical to the warning label of its brand-name counterpart . . . duty to warn claims involving generic drugs are potentially viable as general negligence claims, although not as products liability claims.  With generic drugs, it is not merely foreseeable but certain that the warning label provided by the brand-name manufacturer will be identical to the warning label provided by the generic manufacturer, and moreover that it will be relied on, not only by users of its own product, but also by users of the generic product.

92 N.E.3d at 1214-15 (once again omitting a passel of regulatory citations) (emphasis original).  And again the branded defendant’s compliance with the FDCA was the basis for this unique extension of duty to a non-manufacturer:

Federal labeling requirements for generic drugs present precisely the kind of “special circumstance” where a consumer would rely on the warnings created by someone other than the manufacturer of the product causing the injury. . . .  Where a brand-name drug manufacturer provides an inadequate warning for its own product, it knows or should know that it puts at risk not only the users of its own product, but also the users of the generic product.  Consequently, this is the rare (perhaps the only) type of case involving a manufactured product where the requirements of general negligence may be satisfied even where the requirements of products liability are not.

Id. at 1215 (emphasis added).

Plainly, innovator liability amounts to the imposition of a singular and burdensome form of non-manufacturing negligence liability predicated on the branded defendant’s compliance with its obligations under the FDCA – specifically the Hatch-Waxman requirement that it allow generic manufacturers to copy its labeling word-for-word.

Basing liability expressly on a branded manufacturer’s compliance with federal law should give rise to impossibility preemption.  This observation goes back to the oldest FDCA preemption case on the books, McDermott v. Wisconsin, 228 U.S. 115 (1913), where a state’s attempt to prohibit a product because its label complied with the FDCA, rather than with state law, was held preempted.  Even in 1913, it was “well settled that the state may not, under the guise of exercising its police power or otherwise, . . . enact legislation in conflict with the statutes of Congress passed for the regulation of the subject, and if it does, to the extent that the state law interferes with or frustrates the operation of the acts of Congress, its provisions must yield to the superior Federal power given to Congress by the Constitution.” Id. at 131-32 (citations omitted) (emphasis added).

The modern way of expressing the proposition recognized in McDermott is that “state and federal law conflict where it is ‘impossible for a private party to comply with both state and federal requirements.’” PLIVA, Inc. v. Mensing, 564 U.S. 604, 618 (2011) (quoting Freightliner Corp. v. Myrick, 514 U.S. 280, 287 (1995)).  “Even in the absence of an express pre-emption provision, the Court has found state law to be impliedly pre-empted where it is ‘impossible for a private party to comply with both state and federal requirements.’” Mutual Pharmaceutical Co. v. Bartlett, 570 U.S. 472 (2013) (quoting English v. General Electric Co., 496 U.S. 72, 79 (1990)).

That’s, frankly, pretty blatant here, since (as just demonstrated) compliance with federal law is the sine qua non of extending a warning-related duty to the non-manufacturing, branded-drug defendant in both T.H. and Rafferty.  Since innovator liability is explicitly based on the fact of the branded manufacturer’s compliance with what Hatch-Waxman requires, it cannot avoid being preempted, because the entire theory flows from the premise that meeting FDCA requirements about allowing generic use of its labels equals foreseeability, indeed “certainty.”

There are undoubtedly numerous other precedents expressing the same concept, but even the most anti-preemption courts recognize that tort law cannot penalize compliance with federal law.  Take the Seventh Circuit in Bausch v. Stryker Corp., 630 F.3d 546 (7th Cir. 2010), one of the most virulently anti-preemption decisions we can think of.  Bausch was adamant that preemption (express, in that case) precludes “claims that the [product] at issue ‘violated state tort law notwithstanding compliance with the relevant federal requirements.”  Id. at 552 (quoting Riegel v. Medtronic, Inc., 552 U.S. 312, 330 (2008)) (emphasis original in Bausch).  Innovator liability, which equates “foreseeability” with the branded defendant’s “compliance with the relevant federal requirements,” is worse than even the claims Bausch recognized would be preempted, because state-law innovator liability exists because of, not merely “notwithstanding,” a defendant’s FDCA compliance.

Lack of Personal Jurisdiction

Next, we invite you to consider personal jurisdiction in innovator liability cases in light of Bristol-Myers Squibb Co. v. Superior Court, 137 S. Ct. 1773 (2017) (“BMS”).  In a prescription drug product liability case, BMS held that there was no specific jurisdiction over a plaintiff’s claim just because the same defendant allegedly sold the same drug to other, in-state residents, causing similar injuries:

The mere fact that other plaintiffs were prescribed, obtained, and ingested [the drug] in California − and allegedly sustained the same injuries as did the nonresidents − does not allow the State to assert specific jurisdiction over the nonresidents’ claims.  As we have explained, “a defendant’s relationship with a . . . third party, standing alone, is an insufficient basis for jurisdiction.”

BMS, 137 S. Ct. at 1781 (quoting Walden v. Fiore, 134 S.Ct. 1115, 1123 (2014)).  Rather, “case-linked” personal jurisdiction requires case-linked conduct by the defendant within the jurisdiction.  “Nor is it sufficient − or even relevant − that [the defendant] conducted [activities] in California on matters unrelated to [its product].  What is needed − and what is missing here − is a connection between the forum and the specific claims at issue.”  Id.  It was dispositive in BMS that “all the conduct giving rise to the [plaintiffs’] claims occurred elsewhere.”  Id.

Now, consider the conduct alleged to give rise to innovator liability.  It is not the sale of any product, let alone sale of the product that allegedly injured the plaintiff in the jurisdiction where the plaintiff brings suit.  Rather:

Plaintiffs further allege that [the branded defendant] knew or should have known that [the drug] was of questionable efficacy . . ., that [the drug] carried serious risks of side effects for [persons such as plaintiff], and that federal law required [defendant] to report this information to the FDA and to update the warning label − something [it] could have done unilaterally.  Instead, [the branded defendant] falsely represented that [the drug] was safe and effective and would not cause serious side effects in newborns, and it intended for pregnant mothers and their physicians to rely on these representations.

T.H., 407 P.3d at 26.  See Rafferty, 92 N.E.3d at 1212 (similar allegations that the branded defendant “not changed its label” to include a relevant risk that it was warning about overseas).

Under BMS, where does the “case-linked” conduct of branded defendant take place in an innovator liability case?  That conduct does not include sale of a product.  The defendant did not sell the allegedly injurious product, but only a different bioequivalent product with the same risks.  Sale of a different product to different people, even if those other people are in-state residents, can’t support specific, “case linked” personal jurisdiction.  That’s what BMS was all about, only BMS involved the same product, not a bioequivalent generic.  Further, since a branded defendant did not sell the injurious product, there’s not even an arguable basis for “stream of commerce” jurisdiction in innovator liability cases.

Rather, the alleged failure to warn, the alleged knowledge of undisclosed risks, and the alleged failure to bring this information to the attention of the FDA (or to consumers) occurred, if at all, at the principal place of business of the defendant.  Unless the branded defendant in an innovator liability case has the misfortune of being “at home” in the state permitting that theory, there is no basis for “case linked” personal jurisdiction under BMS, because no case-linked conduct occurred that also constituted the necessary “purposeful availment” of the jurisdiction where the plaintiff was allegedly injured by ingesting a generic drug resided.  Further, Daimler AG v. Bauman, 571 U.S. 117 (2014), teaches that there can be no general personal jurisdiction under the same facts, unless the branded defendant was either incorporated or had its principal place of business in the state where suit is brought.

No case-linked jurisdiction due to lack of case-related in-state conduct, combined with the defendant not being “at home” for general jurisdiction purposes, means that there can’t be personal jurisdiction over a branded defendant sued for no reason other than the plaintiff being injured in a state recognizing innovator liability.  Branded defendants should raise personal jurisdiction as a defense – remember, personal jurisdiction is waivable.

This jurisdictional insight is the reason we invited the guest post a few weeks ago by Blank Rome’s Terry Henry.  He was the first person (other than Bexis) whom we saw articulate this argument – and he got around to writing about it before we did.

The second act of the personal jurisdiction defense to innovator liability occurs when the plaintiff is forced to bring suit in the state where the defendant is “at home.”  That sets up choice of law as another hoop for plaintiff to jump through. Historically, almost all states have limited product liability (even under fraud-based theories) to the manufacturer of the product that allegedly produced the plaintiff’s harm.  Fewer, but still quite a few, states have product liability statutes that expressly impose this requirement (sometimes referred to as “product identification”).  Think back to how plaintiffs, during the brief period that West Virginia rejected the learned intermediary rule, attempted (with some success) to claim that West Virginia “public policy” overrode any other choice of law principles and precluded reliance on the differing law of a plaintiff’s home state?   We described that situation here.  Well, that same “public policy” exception to choice of law analysis, see Restatement (Second) of Conflict of Laws §187(2)(b) (1971) (discussing this aspect of the law), can be utilized by branded defendants to argue that allowing innovator liability would offend the law of the defendant’s “home” state, thus rendering the theory entirely unavailable.  If there’s a statutory basis for this home state public policy, then so much the better, but even states without such statutes (Pennsylvania is one of those) probably have long-established precedent saying something like this:

The underlying purpose of [strict liability] is to ensure that the costs of injuries resulting from defective products are borne by the manufacturers that put such products on the market rather than by the injured persons who are powerless to protect themselves. . . .  [T]he burden of injuries caused by defects in such products should fall upon those who make and market the products and the consuming public is entitled to the maximum of protection.

Miller v. Preitz, 221 A.2d 320, 334-35 (Pa. 1966).  That’s a pretty solid iteration of state “public policy” that product liability is intended to be borne by manufacturers of injurious products.

So consider raising personal jurisdiction as an issue against plaintiffs making innovator liability claims. There’s more than one way to skin a cat.

Setting up a Prophylactic Preemption Defense

The potential scope of innovator liability is so massive that it may require branded companies to reconsider how they carry out certain aspects of their business.  We’re sure most such companies review their warnings in strict compliance with FDA requirements and guidance concerning analysis of signals from medical literature and adverse events, with full recognition that, first, overwarning is a bad thing and, second, voluntarily reported adverse events, by themselves aren’t proof of causation.

If innovator liability catches on, then potential defendants might want to consider changing those time-honored practices at two critical moments:  (1) when entry of generic products into the market is imminent, and (2) when a decision is made to sell the new drug application of a drug having generic counterparts.  When #1 happens, the commercial considerations that reinforce strict compliance with FDA warning standards weaken, because a significant loss of market share is inevitable.  When #2 happens, the potential defendant is about to lose any control over drug labeling, since only NDA holders can file NDA supplements.  Number 2 would, of course, be in addition to any indemnification or similar provisions in the contract selling the NDA.

In those situations, companies that fear being targeted by innovator liability might want to pull every possible “signal” or statistical anomaly they can find in their data and submit these purported “risks” to the FDA for its independent evaluation − even if, objectively, the company does not believe that the data otherwise justify a “changes being effected” labeling change of the sort mentioned in T.H. or Rafferty.  Let the FDA be the one to say “no.”  If the FDA doesn’t like this, let the agency take regulatory steps to prohibit innovator liability.

Why?

The FDA saying “no” – that the scientific data at the time the supplement was submitted was insufficient to justify a warning change – sets up a “clear evidence” preemption defense.  In Cerveny v. Aventis, Inc., 855 F.3d 1091 (10th Cir. 2017), which we discussed here, the court held:

We conclude that the rejection of a [submission to the FDA] may constitute clear evidence that the FDA would have rejected a manufacturer-initiated change to a drug label. Our case provides a perfect example. . . .  Under the standard that would have applied to a change proposed by [the manufacturer], the FDA concluded that warnings were unjustified for risks [at issue in this case].  That conclusion controls here, and the FDA’s denial constitutes clear evidence that the FDA would not have approved the [plaintiffs’] desired warning.

Id. at 1105.  Indeed, the big preemption fight in Cerveny wasn’t even about whether an FDA rejection was preemptive “clear evidence,” but rather focused on whether an FDA citizen’s petition filed by a non-NDA holder should be given the same effect as an FDA rejection of a manufacturer’s NDA supplement.  The scientific standards for both are the same, and Cerveny said that’s enough for preemption.  Id.

Some states disagree, and only give preemptive effect to FDA rejection of manufacturer-filed submissions.  Notably, Massachusetts is in this category.  See Reckis v. Johnson & Johnson, 28 N.E.3d 445, 459-60 (Mass. 2015) (holding that FDA decision rejecting additional warning language proposed by defendant would preempt claims, but not FDA rejection of a third-party citizen’s petition).  California trial court decisions provide a solid basis for a Cerveny-like preemption argument.  See In re Incretin-Based Therapies Products Liability Litigation, 142 F. Supp.3d 1108, 1122-23 (S.D. Cal. 2015), rev’d on other grounds, ___ F. Appx. ___, 2017 WL 6030735 (9th Cir. Dec. 6, 2017) (as to Buckman preemption); Risperdal & Invega Product Liability Cases, 2017 WL 4100102, at *10-11 (Cal. Super. March 16, 2017), reconsideration denied, 2017 WL 4479317 (Cal. Super. July 24, 2017); In re Byetta Cases, 2015 WL 7184655, at *13-14 (Cal. Super. Nov. 13, 2015).  Since the strategy we’re recommending that branded manufacturers consider involves manufacturer-submitted supplements, the distinction drawn in Reckis would be irrelevant.

Thus, if a branded company is staring down the barrel of extensive innovator liability for injuries caused by products it did not make, and thus received no profit from manufacturing, it may be time to reconsider, at certain critical periods, whether to err on side of extreme caution concerning possible emergent risks, and let the FDA decide.  If the FDA says no warning is justified at those times, then the company can assert a “clear evidence” preemption defense against future plaintiffs (innovator liability or otherwise) claiming the opposite.

*          *          *          *

To our in-house readers:

Do these arguments interest you?  Well, Bexis has put together a detailed presentation on these – and several other − ideas for combatting/ameliorating innovator liability.  The dog and pony show takes about an hour, and if you’d like Bexis to pay you a visit and discuss innovator liability with your in-house legal team (invite your outside counsel, too, if you’d like) send an email and we’ll try to set something up.

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

While the recent Pennsylvania Superior Court Risperdal decision is not a defense victory, it is certainly not as favorable for plaintiffs as they are making it out to be. While several issues were presented for appeal in Stange v. Janssen Pharms., Inc., 2018 Pa. Super. LEXIS 11 (Pa. Super. Jan. 8, 2018), the most important one was whether the trial court was incorrect in applying New Jersey law to plaintiff’s punitive damages claim. While plaintiffs are characterizing the decision as answering that question in the affirmative, what the court really said was maybe.

In the consolidated In re Risperdal litigation pending in the Philadelphia Court of Common Pleas, the coordinating judge granted defendants’ motion for summary judgment on punitive damages finding that the law of New Jersey, defendant’s principal place of business, applied and that under the New Jersey Product Liability Act, punitive damages are precluded in cases involving FDA approved products. Id. at *32-33. In opposition to defendants’ motion, plaintiffs argued the law of the case doctrine or in the alternative that the court should apply Pennsylvania law instead. Id. Their law of the case argument was based on the judge’s decision in three prior Risperdal cases to apply the punitive damages law of plaintiff’s home state. Id. at *35n.6. The trial court ruled that those cases were separate cases and therefore law of the case did not apply or if they were considered the same case as In re Risperdal, the same judge made all four rulings and a judge is entitled to revisit his earlier rulings “without running afoul of the law of the case doctrine.” Id. (citation omitted).

With that ruling in place, the Stange case went to trial with no punitive damage claim. Stange is a resident of Wisconsin which is where he was prescribed Risperdal and treated for his alleged injury, gynecomastia. Unlike New Jersey, Wisconsin does not have a bar on punitive damages for FDA approved products. Under Wisconsin law, however, punitives would be capped at twice the amount of any compensatory damages or $200,000, whichever is greater. Id. at *42. So, there is a clear conflict of law.

On appeal, plaintiffs argued that the trial court’s global ruling on punitive damages was improper because Pennsylvania law on choice of law requires an analysis of which state has the greatest relationship and interests in each individual plaintiff’s case and that that analysis supports applying plaintiff’s home state’s punitive damages law. Id. at *33. Plaintiffs did not argue for application of Pennsylvania punitive damages law on appeal. Id. at *43n.8. Defendants argued that plaintiffs’ choice of law argument had been waived because it was first raised in plaintiffs’ motion for reconsideration of the global punitive damages ruling. Id. at *37. The Superior Court, however, found plaintiffs’ arguments preserved. In the context of their law of the case doctrine argument which urged the court to follow its earlier decision to apply plaintiff’s home state law, plaintiffs “argued more generally that the law of the plaintiffs’ various home states should apply to punitive damages.” Id. at *39.

So, what the Superior Court concluded was that the choice of law analysis was not waived and that a choice of law analysis as between New Jersey and Wisconsin needed to be undertaken:

the trial court only considered whether New Jersey or Pennsylvania law should apply, not the law of the individual plaintiff’s home state. We agree with Stange that it is necessary to remand for the trial court to allow Stange to develop an individual record on choice-of-law as it relates to his unique circumstances and to set out the facts and state interests important to his particular case.

Id. at *45. Nowhere in the decision does the court make any finding with regard to what the outcome of the choice of law analysis should be on remand, only that the analysis needs to be done. There is nothing prohibiting the trial court from reaching the conclusion in Stange that it did in In re Risperdal globally – that New Jersey has the more significant relationship and interests on the punitive damages claim. Indeed, having reached that decision once already we struggle to understand how the facts of any particular case will impact the court’s analysis. For the underlying substantive claims, most choice of law analyses will favor plaintiff’s home state – where he was prescribed, where he suffered his injury, where he was treated. But the alleged corporate misconduct giving rise to the claims for punitive damages occurred in New Jersey. It is there that the company developed the Risperdal labeling and its marketing and sales strategy and from there that it had communications with the FDA. Id. at *44.  So, even on a case-by-case basis, there is ample support for a finding that in a failure to warn case, the proper focus for purposes of a choice of law analysis on punitive damages is the place where the alleged corporate misconduct occurred.

So we think plaintiffs are celebrating a bit prematurely. The Stange decision may have removed the foil and even loosened the wire cage, but the cork remains in place.

As we noted at the outset, punitive damages choice of law was not the only issue on appeal and so we make passing mention of two other noteworthy aspects of the case. First, defendants challenged the trial court’s admission of certain expert testimony on the grounds it did not meet Frye standards. Id. at *8-9.  The Stange, court however erroneously applied the novelty limitation from Trach v. Fellin, 817 A.2d 1102 (Pa. Super. 2003) – that Frye only applies to the most “novel” of scientific testimony. That narrow interpretation was rejected by the Pennsylvania Supreme Court in Betz v. Pneumo Abex LLC, 44 A.3d 27 (Pa. 2012), a case not cited in Stange.

Second, it was agreed that Wisconsin law governed the substantive claims in the case. While examining the issue of proximate cause on failure to warn, specifically whether plaintiff had carried his burden of proving a different warning would have changed plaintiff’s prescribing physician’s decision to prescribe, the court applied the learned intermediary rule which has never been adopted by any appellate court (only trial courts, which have split) under Wisconsin law. Id. at *22n.4 (no conflict between Pennsylvania and Wisconsin law on the scope of learned intermediary doctrine). We’ll add it to our learned intermediary “head count.”

Interestingly, it’s a case that is almost a year old that has us thinking about litigation tourism post Bristol-Myers Squibb Co. v. Superior Court, 137 S. Ct. 1773 (2017).   We know that plaintiffs’ forum shopping gamesmanship isn’t over. It’s just gotten a lot more difficult now that the Supreme Court has said non-resident plaintiffs can’t go suing non-resident defendants anywhere they want. The most straight forward way for plaintiffs to stay out of federal court, assuming that is their goal, is to sue in defendant’s home state. Per the forum defendant rule, even where diversity exists, a defendant cannot remove a case to federal court if one of defendants (properly joined and served) is a citizen of the state in which the case was filed. See 28 U.S.C. § 1441(b). Stuck in state court, which isn’t always a bad thing, defendants then need to carefully consider forum non conveniens and choice of law issues.

Those were both key issues defendant decided to move on in Yocum v. Biogen, Inc., 2016 WL 10517110 (Mass. Super. Dec. 14, 2016). The case only recently popped up in our searches but with the likelihood of seeing more litigation filed in defendant’s backyards, we thought it worth a quick mention. Plaintiff brought a wrongful death suit in Massachusetts alleging that his wife died as a result of side effects from defendant’s drug used to treat her multiple sclerosis. Id. at *1. Plaintiff resides in and decedent received treatment and died in Wisconsin. Defendant’s principal place of business is in Massachusetts. Id. Just because defendant couldn’t remove the case to federal court, it still had some decisions to make. Such as, would it prefer the case to be litigated in Wisconsin. And, if it couldn’t move the case west, should Wisconsin law still apply. Yes and yes were the answers for this defendant.

First up was a motion to dismiss on the grounds of forum non conveniens.   Defendant’s argument was that not only was Wisconsin an available alternative forum, but that both public and private interests favored litigating there as opposed to Massachusetts. Generally speaking, all things being equal, courts don’t disrupt a plaintiff’s choice of forum. So, where case-specific witnesses like treaters and prescribers are in plaintiff’s home state and company witnesses are in defendant’s home state – most courts see that as a wash. See id. at *3. One set of witnesses or another are either traveling or being put on video. That’s not to say that this is always equal. For instance, if significant depositions of company witnesses have already occurred and won’t need to be repeated, maybe that helps tip things toward the plaintiff’s home state. Or, if the relevant company witnesses have changed jobs, retired, or otherwise moved, the defendant home state connection becomes more attenuated. Likewise, depending on the issues, a large company’s principal place of business might not be where the key company witnesses are located. These are likely the types of things a defendant is going to have to address to move the scales on the private interests.

Turning from the private interests to the public interests, defendant raised two arguments – the court would need to apply Wisconsin law and Wisconsin has a significant interest in regulating tortious conduct alleged to have occurred within the state. Taking them in reverse, the court found that Massachusetts has an equally significant interest in regulating the conduct of a resident business. Id. Another push. Left then with only choice of law, that alone is not enough to warrant a forum non dismissal. Defendant’s motion was denied.

That brings us to choice of law. If defendant can’t get to Wisconsin, it wanted to bring Wisconsin to it. Here the court agreed with defendant. We don’t usually take a definitive position on choice of law issues because frankly, our choice is likely to change case to case. So, we’ll just say that defendant did a good job of explaining why Wisconsin has the more meaningful contacts with the issues and the parties and that it is not an unusual conclusion for a court to decide to apply the law of the place where the injury occurred. Id. at *4-6.

Then we get to the substantive issues. Applying Wisconsin law, the court dismissed plaintiff’s breach of warranty and punitive damages claims. Wisconsin does not recognize breach of warranty for products liability suits. Id. at *6. Nor does Wisconsin recognize claims for punitive damages in wrongful death actions. Id. Both categories of claims, however, were dismissed without prejudice. Plaintiff was given an opportunity to try to re-plead the breach of warranty allegations as cognizable Wisconsin claims. And, since Wisconsin does recognize punitive damages for survival actions, plaintiff was getting another shot at that one too.

Finally, defendant also sought dismissal of the failure to warn claims as preempted. Defendant argued that the risks of the drug were considered by the FDA at the time of approval and that there was no newly acquired information that would have allowed defendant to change its label under the CBE regulations. Id. at *7. Therefore, it was impossible for defendant to comply with both federal and state requirements. But, this case is still at the pleadings stage and the court found that plaintiff had alleged enough to survive preemption. Specifically, plaintiff alleged that there were factual developments post-approval regarding the risks that would not have been considered at the time the FDA reviewed the drug and its labeling. Id. Further, the court found that defendant had not presented “clear evidence” that the FDA would not have approved a labeling change. Id. at *8.

It is worth noting, however, that the court did say that if plaintiff was pursuing a fraud-on-the-FDA type claim (failure to disclose risks to the FDA), that claim was preempted. Id. at *8n.12. Given that the court’s preemption decision was based on a very sparse record, we wouldn’t be surprised to see a round 2 on this issue after some discovery.

If defendants are going to see more home state litigation, even if forum non conveniens is a bit of an uphill battle – establishing choice of law early on may have several benefits. Dismissing claims is certainly one of them, but knowing what law is going to apply on issues such as learned intermediary and causation before discovery gets underway can be invaluable.

 

We remember how, shortly after the atrocious decision in Johnson & Johnson v. Karl, 647 S.E.2d 899 (W. Va. 2007), rejecting altogether the learned intermediary rule, litigation tourists visiting West Virginia argued that Karl represented that state’s “public policy” and therefore the learned intermediary rule could not apply even to their out-of-state cases under the “public policy” exception to the ordinary rules for sorting out choice of law issues.  This was also back in the halcyon days (for the other side) of essentially unlimited plaintiff forum shopping pre-Bauman, so the specter existed that, if this argument succeeded, plaintiffs from all over the country, or even the world, would flock to West Virginia, and by the mere fact of their litigation tourism, thereby rid themselves of one of our side’s most significant arguments.

A couple of West Virginia federal courts were sufficiently pro-plaintiff to buy that “public policy” choice-of-law analysis.  Woodcock v. Mylan, Inc., 661 F. Supp.2d 602, 609 (S.D.W. Va. 2009) (“[b]ecause West Virginia has rejected the learned-intermediary doctrine on public-policy grounds and applying Alabama law to the marketing defect claim would violate that public policy, West Virginia law applies to that claim”); Vitatoe v. Mylan Pharmaceuticals, Inc., 696 F. Supp.2d 599, 610 (N.D.W. Va. 2010) (“it is impossible to apply the substantive law of Louisiana to [plaintiff’s] inadequate warning claim without violating West Virginia public policy”; following “Woodcock’s helpful public policy analysis”).  For doing this, we trolled Woodcock with eighth place on our 2009 bottom ten decisions list:

This decision invoked “forum public policy” to apply West Virginia’s rejection of the learned intermediary rule to a forum shopping plaintiff from Alabama – a staunch learned intermediary state.  That can’t be right.  Practically all major tort law doctrines are grounded in a court’s sense of “public policy.”  Thus the “forum public policy” exception (previously limited to legislatively set policy) becomes another constitutionally suspect means of applying forum law to cases with no significant ties to the state in question.  Any other forum shopper can presumably make the same argument. We’re sure we haven’t seen the last of this.  We blogged about Woodcock here.

Fortunately, the West Virginia legislature stepped in and did the right thing, making its own declaration of West Virginia public policy in 2011:

Choice of Law in Pharmaceutical Product Liability Actions.

It is public policy of this state that, in determining the law applicable to a product liability claim brought by a nonresident of this state against the manufacturer or distributor of a prescription drug for failure to warn, the duty to warn shall be governed solely by the product liability law of the place of injury (“lex loci delicti”).

W. Va. Code §55-8-16(a).  We cheered that development here.

Of course, the entire Karl learned intermediary brouhaha became moot (or so we thought) several years later when the legislature did themselves one better and directly overruled Karl on the merits.  See W. Va. Code 55-7-30 (restoring the learned intermediary rule).  Even more vigorously, we cheered on that development – after the fact, of course, since we made sure not to breathe a word about this before it was a done deal (we know the other side reads our blog, so there are some things we do keep quiet about).

Given this background, it is with no small degree of schadenfreude that we bring to you M.M. v. Pfizer, Inc., ___ S.E.2d ___, 2017 WL 5077106 (W. Va. Nov. 1, 2017).  M.M. involved the West Virginia sojourn of other litigation tourists, this time from Michigan.  Id. at *2.  Michigan, as anyone involved in the defense of prescription medical product liability litigation knows, has a statute that provides the strongest FDA compliance defense in the country (although Texas is close):

In a product liability action against a manufacturer or seller, a product that is a drug is not defective or unreasonably dangerous, and the manufacturer or seller is not liable, if the drug was approved . . . by the [FDA], and the drug and its labeling were in compliance with the [FDA’s] approval at the time the drug left the control of the manufacturer or seller. . . .

Mich. Comp. Laws Ann. §600.2946(5).  As we’ve mentioned before, that statute has produced a “diaspora” of Michigan plaintiffs all running away from the policy judgment made by the legislature of their chosen state of residence.  Those prior plaintiffs didn’t have much luck, and as it turns out, neither did this one.

This time, even if West Virginia courts might have been inclined to cut the Michigan plaintiffs a break, they ran headlong into the West Virginia choice-of-law statute mentioned above.  Even though it was passed to overturn half-baked Karl-based “public policy” determinations, the statute’s literal terms establish West Virginia choice of law “public policy” as to all prescription drug warning cases.  Thus, the M.M. plaintiff – despite having nothing to do with Karl – was entirely out of luck.  “Here, there is no dispute that the injuries alleged by [plaintiffs] all occurred in the State of Michigan.  Thus, [the] failure to warn claim is governed by Michigan law, which forecloses such a claim if the drug was approved by the FDA and the manufacturer complied with the FDA’s labeling requirements.”  2017 WL 5077106, at *3 (also discussing why fraud-on-the-FDA exception to statute doesn’t apply).  Thus, “Michigan law forecloses [plaintiffs’] failure to warn claim.” Id. Interestingly, the court added:

To recognize such a claim under West Virginia law where the same already is foreclosed in the same case by the law of another jurisdiction, however, would contradict the full faith and credit due our sister jurisdictions.

Id. (citations omitted).  “Full faith and credit”?   We confess we haven’t seen that much, indeed ever, before in prescription medical product liability litigation, but anything that keeps a plaintiff from relitigating something they’ve already lost finds favor here.

Unfortunately for these plaintiffs, they were also entirely unable to come up with any defect claim that wasn’t really a statutorily covered warning claim.  “[B]oth the strict liability and negligence claims allege that [defendant] improperly failed to include . . . warnings on its labeling, which, again, constitute allegations that [defendant] failed to warn.”  Id. at *4.  Even if West Virginia law could apply, the choice-of-law statute meant that West Virginia law kicked things back to Michigan, and was “foreclosed thereby.”  Id.  Both their strict liability and negligence claims, although making boilerplate allegations, were “merely a restatement of [plaintiffs’] failure to warn claim,” id. (strict liability), or “merely a reiteration of [plaintiffs’] failure to warn claim.”  Id. at *5 (negligence).  Any way one looked at the case, plaintiffs alleged only a failure to warn, and failure to warn claims had to be determined by Michigan law, where plaintiffs lost.

[B]ecause [plaintiffs’] failure to warn claim is governed by Michigan law, and the governing Michigan statutes provide that a manufacturer cannot be held liable where it has complied with the FDA reporting, disclosure, and labeling requirements, there exists no duty that could have been breached so as to establish a claim for negligence.

Id. at *5.

Now that BMS has pulled the welcome mat away from litigation tourists, we don’t expect much more of a Michigan diaspora, but even if there were, the West Virginia choice-of-law statute, enacted for an entirely different purpose, will preclude any of them from relying on more favorable West Virginia law.  See Id. at *3 n.2 (noting that §55-8-16(a) has since been expanded so that it applies to “all liability claims at issue,” not just warnings).

We thought we understood statutes of limitations and choice-of-law rules in New Jersey.  Until yesterday.  That was when we read the New Jersey Supreme Court’s opinion in McCarrell v. Hoffmann-La Roche, Inc., No. 076524, 2017 WL 344449 (N.J. Jan. 24, 2017), which unhinged that state’s statute of limitations and choice-of-law jurisprudence from its own precedent and placed statutes of limitations in a special class without much explanation.  And the court did all of this for the stated purpose of preserving plaintiffs’ claims and not “discriminating” against an out-of-state plaintiff’s ability to sue a New Jersey company in New Jersey, after the suit would be barred in the plaintiff’s home state.

How did we get here? Well, this is a New Jersey Accutane case, which tells you that it was contentious, as most things seem to be in that multi-county proceeding.  Other than that, the facts in McCarrell are fairly typical—an out-of-state plaintiff (in this case a fellow from Alabama) who was prescribed a drug in his home state, used the drug in his home state, experienced alleged complications in his home state, and received medical treatment in his home state sued the drug’s manufacturer where the company is incorporated—in this case, New Jersey. McCarrell, at *3.

The rub in McCarrell was that the plaintiff’s claim was time barred under Alabama’s statute of limitations, but not under New Jersey’s statute of limitations, which includes a discovery rule.  The choice of law therefore determined the outcome, which led the parties to contest the issue hotly in the trial court, the intermediate appellate court, and eventually the New Jersey Supreme Court.

Each court applied different rules, which is why this case is so interesting and why the Supreme Court’s opinion is so odd. We have long understood that the choice of forum does not determine the applicable substantive law.  Sure, the forum’s procedural law applies, but the substantive law is determined by applying the forum state’s choice-of-law rules.

Continue Reading New Jersey Supreme Court Turns Back The Clock on Statute of Limitations

Last week, along with many of you, we attended the ACI Drug and Medical Device Conference in New York City. The quality of the presentations was uniformly high, and the collegiality and camaraderie were welcome, refreshing, and a lot of fun.  There was plenty to drink.  There was lots of food.  Oh, and we got to see Hamilton!  We should preface our comments by pointing out that we were skeptics – we knew how pricey (really, really pricey) tickets are, and we weren’t even positive we would enjoy this immensely innovative rap musical.  To wit, one of our best beloved musicals of recent years was the wonderful, if short-lived, revival of Finian’s Rainbow that played the Great White Way a couple of years ago.  We go for the traditional stuff, and had neither resources nor plans to spring for Hamilton.

But we got very lucky. A generous friend had bought four tickets a full year earlier in anticipation of the annual conference.  And there was a last-minute cancellation.  And we got to go.  And it was worth all of the hype (and all of the money, if you have it).   We enjoyed it so much that we came home and researched ticket availability to return with the Drug and Device Law Long-Suffering Companion.  Tickets are on sale for next year, and we thought that we could avoid the crazy street prices by planning way ahead.   Not so – even this far in advance, tickets (from official ticket sources, not ticket agencies) are way out of the reach of normal consumers.  Sometimes, the early bird does not get the worm (or the greatest financial benefit).

And, with just a bit of creativity, we can glean the same message (among others) from today’s case. Dobbs v. DePuy Orthopedics, — F.3d —, 2016 WL 7015648 (Seventh Cir. Dec. 1, 2016), is an appeal of an attorney’s fee decision from the United States District Court for the Northern District of Illinois.  (We’ll explain how it got there in a minute.)  The plaintiff/appellant had direct-filed a product liability claim in the Hip Implant MDL in the Northern District of Ohio.  Believing that the promised compensation was too low, he opted out of the global settlement and fired his lawyers, who had advised him to accept the global settlement, which included a 35% attorneys’ fee.   (The global settlement provided one level of payment for unrepresented plaintiffs, and a second level, 35% higher, for represented plaintiffs.)

Less than two months after his lawyers withdrew their appearance, the plaintiff accepted the global settlement. Because he was considered “represented” for purposes of the settlement, he was paid the larger amount.  (Not clear why he was considered “represented” when his lawyers had been fired.)  His former lawyers asserted a lien on the award and sought to recover attorney’s fees.  The MDL judge tried unsuccessfully to mediate the fee dispute in the Northern District of Ohio then transferred the case to the Northern District of Illinois, where the case would have been filed if the MDL had not been pending.

Continue Reading Court of Appeals Applies Law of Would-Be Filing Court in Fee Dispute in Hip Implant Case Filed Directly Into MDL

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

Today’s case is also about statute of limitations, but we thought adding that to the title would guarantee nobody read any further. None of these are what we’d call “page-turning” – or maybe in the blog world it should be “scroll-worthy” — topics. But, any one of them can be a game changer.   When they combine to lead to a dismissal in circumstances that our readers may find themselves in, we think they are worth a mention.  But we’ll make it quick.

As is so often the case, plaintiffs’ counsel gathered their clients and filed a single mass action lumping together plaintiffs from all over the country.  Jaeger v. Howmedica Osteonics Corp., 2016 U.S. Dist. LEXIS 16493 at *7 (N.D. Cal. Feb. 10, 2016).  The defendant, again in a fairly common response, moved to sever the individual misjoined cases and to transfer them to plaintiffs’ home districts. Id. at *8.  Defendant’s motion was granted.  The original misjoined complaint was filed in the Southern District of Illinois. Defendant is a New Jersey corporation. Plaintiff Jaeger resides in California, where she also received the medical treatment at issue in the case.  Id. at *17.  Plaintiff Jaeger’s case was therefore transferred to California.

Continue Reading Personal Jurisdiction and Choice of Law