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

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

It can be difficult to have a completely consistent position on choice of law issues.  That’s because state law varies and sometimes you’ll find you are better served by the law of the forum state, other times by the law of the plaintiff’s home state, and sometimes by the law of the defendant’s home state. The issue, the facts, and the law all drive the parties’ preferences.

Typically, however, we tend to favor the notion that liability issues should be governed by the law of the plaintiff’s residence.  That is where the alleged treatment and injury occurred, and those factors are important in any choice of law analysis.  Such a rule also imposes some limit on blatant forum-shopping by plaintiffs.  But what law should apply to punitive damages?  This is where things can get a little fuzzy.  On punitive damages, the balance of interest between plaintiff’s residence and defendant’s residence is more even – making the analysis trickier and also affording more opportunity to craft an argument for the law of the state that is more defense-friendly.

Continue Reading Role Reversal – Plaintiff Asks for New Jersey Punitive Damages Law

Multidistrict Litigation – the name says it all.  It is an amalgamation of related cases from multiple federal district courts across the country.  Think about the journey a single case in an MDL may take.  Plaintiff files in state court.  Defendants remove the case to federal court based on diversity.  But as soon as the case is assigned a new docket number, defendants file a notice of tag-along with the Judicial Panel on Multidistrict Litigation and the case moves again – this time to whatever district has been assigned the MDL.  Now the case probably gets a little time to rest while pre-trial discovery and motion practice and maybe even a few bellwether trials take place.  But, if that isn’t the end of the litigation, the case may get remanded back to the district court from whence it came.  Now multiply that by a few hundred or a few thousand cases and it’s a whole lot of paperwork (or probably more accurately,
a whole lot of keystrokes).

So, it has become a more common practice for MDL courts to enter orders allowing plaintiffs to file their cases directly into the MDL – an option that would normally be foreclosed to most plaintiffs because venue would be improper.  It is a case management tool.  Once an MDL is established and it is apparent which cases belong in it, the parties and the court recognize that the tag-along process simply adds another unnecessary layer of red tape and delay.   Plaintiffs, however, usually aren’t willing to give up home court advantage and so issues of proper venue and forum convenience are typically reserved until the time of remand.  At that time the parties usually try to agree to which federal district court a directly filed MDL case should be sent for further proceedings and most often it is the district where the plaintiff resided at the time of filing.

In either the tag-along scenario or the direct filing scenario, MDLs are a breeding ground for choice of law questions.  At a minimum, there are at least two different jurisdictions involved and that is just considering where the case itself was filed or transferred.  That doesn’t account for other things like defendant’s state of residence or whether plaintiff’s current state of residence is different than the state where the injury occurred.  And choice of law can be a big issue – like in two recent MDL cases:  Wahl v. General Electric Co., 2015 U.S. App. LEXIS 8477 (6th Cir. May 22, 2015) and   In re Tylenol (Acetaminophen) Mktg., Sales Prac. and Prods. Liab. Litig., 2015 WL 2417411 (E.D. Pa. May 20, 2015) (Terry v. McNeil-PPC, Inc.).

Wahl, at issue was whether Tennessee’s rather unique statute of repose applied and therefore barred plaintiff’s claims.  In that case, the district court had already concluded that it did and we discussed that decision here.  In the Tylenol case, Terry, the question was whether Alabama’s wrongful death statute (which only provides punitive damages) or New Jersey’s punitive damages and wrongful death statutes applied.  With New Jersey’s preclusion of punitive damages for FDA approved drugs, the choice of law could have a significant impact on plaintiff’s potential recovery. Unfortunately, the court held that Alabama law applied.

Terry involved a litigation tourist, a plaintiff-resident of Alabama, who filed suit the “new-fashioned” way in state court in Pennsylvania against Johnson & Johnson, a New Jersey corporation, and McNeil, which plaintiff argued was a Pennsylvania corporation and defendant argued was a New Jersey corporation.  Terry, 2015 WL 2417411 at *2.  Whichever was correct, there was complete diversity and so defendants removed the case to federal court where it was then tagged to the MDL which also happened to be pending in the Eastern District of Pennsylvania.  Id.  While the general rule is that a federal court sitting in diversity must apply the choice of law rules of the state in which the court sits, MDL courts typically “apply the choice of law rules of the court from which the case was transferred.”  Id.  Here those two are one and the same, so it is hardly controversial that the court applied Pennsylvania’s choice of law rules.

However, it is worth noting the very attenuated relationship Pennsylvania has to the underlying case.  Defendants cited numerous decisions in which courts had held that McNeil was a New Jersey resident for purposes of diversity jurisdiction.  While the Terry court did not have to decide that issue because the plaintiff was from neither New Jersey nor Pennsylvania, maybe it should have.  Maybe the bigger question was whether the case was properly venued in Pennsylvania at all.  And that’s important because the Terry court acknowledged that in an almost identical case, Lyles v. McNeil-PPC, 12-CV-7263 (D.N.J.), that court ruled that New Jersey law rather than Alabama law applied.  Instead, the Pennsylvania judge found that because he was “sitting in a federal court in Pennsylvania applying Pennsylvania choice of law principles, New Jersey’s interests in this case hold less weight that they did in Lyles.”  Id. at *7.  So, if the case had reached the MDL by way of transfer from New Jersey, it seems like defendants might have had a slightly better chance of arguing for application of New Jersey law because the MDL court would not have also been the transferor court.  A bit confusing admittedly, but worth a second thought about venue right before removal.

Wahl presents the choice of law question in a direct filing case.  Plaintiff, a resident of Tennessee, opted to file her complaint directly in the gadolinium MDL in the Northern District of Ohio.  When it came time for remand, the parties agreed that this case should be transferred to the Middle District of Tennessee, “the district court of proper venue.”  Wahl, 2015 U.S. App. LEXIS 8477 at *3.   The Tennessee court applied Tennessee’s choice of law rules and as noted above, concluded that Tennessee law required dismissal of plaintiff’s claims.  On appeal, plaintiff argued that the court should have applied Ohio’s choice of law rules which it contends would have barred application of the Tennessee statute of repose.

Plaintiff’s argument was based on the standard rule that “when a diversity case is transferred from one federal district court to another, substantive law governing the jurisdiction of the transferor court controls.”  Id. at *5-6.  In what appears to be the first
appellate decision on this issue, the Sixth Circuit held that:

This ordinary rule appears strict and inflexible. But it
does not apply to cases of direct-filed, later-transferred MDL suits such as
the present case.

Id. at *6.  After a detailed discussion of the case law that led to the development of the standard rule, the court noted that in those cases, “plaintiff’s choice of initial forum was appropriate as to both jurisdiction and venue.”  Id. at *10.  Plaintiff’s choice in a direct-filed MDL case is based on an “accident of bureaucratic convenience.”  Id. Therefore, there must be an exception to the general rule for direct-filed MDL cases that are then transferred to a more convenient forum, otherwise that “accident” would “elevate the law of the MDL forum.”  Id.  at *11.

The court found two bases for its decision that direct-filed MDL cases warranted an exception.  First, the court looked to the order governing direct filing in the MDL which specifically stated that the “fact that a case was file directly in MDL 1909 pursuant to this order will have no impact on the choice of law to be applied.”  Id. at *16-17.  Further, plaintiffs conceded both in their complaint and in agreeing to the transfer, that the Middle District of Tennessee was the proper venue for this case.  Id. at *17.  Given all those things, the court concluded that plaintiff “did not subject herself to the jurisdiction of the district court where she filed.  Instead, she took advantage of the procedural mechanism the MDL made available to increase efficiency of filings.” Id. at *17-18.

Second, the court found that transfer of a direct-filed MDL case to the district with proper venue was more like a transfer under 28 U.S.C. §1406(a) rather than a §1404(a) transfer.  A §1404(a) transfer is one that is granted for convenience following plaintiff’s choice of an appropriate forum.  It is because plaintiff’s choice was appropriate that the standard rule applying the law of the transferor court was adopted.  A §1406(a) transfer however, applies when plaintiff files suit in an improper venue, and rather
than dismiss the case, the court transfers it to a district in which it could have been brought.  Under Sixth Circuit precedent,

if the law of the transferor forum were applied following
a § 1406(a) transfer, the plaintiff could benefit from having brought the action in an impermissible forum. Reasoning that [s]uch forum-shopping was what the Supreme Court sought to eliminate . . . we concluded that, following a transfer under §1406(a), the transferee district court should apply its own state law rather than the state law of the transferor district court.

Id. at *14.  Plaintiff Wahl’s case was transferred from the Northern District of Ohio “because that district was not a proper venue.”  Id. at *18.   It would be equally improper to apply Ohio law where Ohio’s only connection to the case was its administrative designation as the home for the MDL.  While we find ourselves straddling the fence on choice of law issues on a case by case basis, we do think the Sixth Circuit got this one right.

We should also note that plaintiff’s choice of law arguments were all for naught anyway  because the court also held that even if Ohio choice of law rules were applied, Tennessee substantive law would also still apply.

If anyone gave out prizes for the most incomprehensibly named multi-district litigation, the one currently proceeding as “In re Fresenius Granuflo/Naturalyte Dialysate Products Liability Litigation” would be right up there.  Rarely have we encountered a case name with four words in a row that, without a dictionary, we didn’t know what they meant.  Basically, this is product liability litigation about two dialysis solutions (Granuflo and Naturalyte) over alleged serious adverse reactions related to effects on blood chemistry.

This MDL is currently pending in the District of Massachusetts.  Just after the new year the Fresenius MDL (that’s all the designation really needed) made some news with a quartet of decisions.  We’ll describe them for you briefly.

First Decision

In In re Fresenius Granuflo/Naturalyte Dialysate Products Liability Litigation, ___ F. Supp.3d ___, 2015 WL 44589, at *1 (D. Mass. Jan. 2, 2015), the court denied remand to a batch of California plaintiffs.  As is so often the case in removal/remand, there was a lot of gamesmanship going on.  The defendant proved, to the court’s satisfaction, that the principal place of business of the target defendant, Fresenius, USA, had been its Massachusetts for almost a decade, since a merger.  Id. at *2.  It satisfied the relevant “nerve center” test (see here for more on that) for personal jurisdiction.

Continue Reading Fresenius Potpourri

It is the time of year for reflection and resolutions. We look back on the ups and downs of the year that is about to end and look forward to the New Year with hope, promises and predictions.  As for 2015 here at the DDL Blog – we hope we will continue to be helpful and informative to our readers, we promise that Bexis will find at least one decision a quarter worthy of a full-blown tirade, and we predict that McConnell will keep us up-to-date on both legal trends and what’s hot on TV and at the movies.

As for 2014, Bexis is posting his annual Best Of and Worst Of lists.  Keeping with that theme, we decided to post about a case that has some of both, the good and the bad.  The case is Brown v. Johnson & Johnson, 2014 U.S. Dist. LEXIS 173800 (E.D. Pa. Dec. 9, 2014) and it involves the over-the-counter drug Children’s Motrin.  Wanting to end on a high note, we’ll dispense with the low points of the decision first.

First up, the preemption rulings.  The court held that plaintiff’s failure to warn claim was not preempted because the defendant had not shown that it could not have used the CBE process to change the warning label.  Establishing warning preemption in a drug case is an “exacting burden” for defendants requiring clear and convincing evidence that the FDA would have rejected the warning proposed by plaintiff.  Id. at *2-3.  The court applied the same “exacting burden” to defendant’s design-related preemption defense, finding a lack of evidence that the FDA would have rejected a proposed design change as well.  Id. at *6.

Continue Reading Celebrating the Highs and Lows