Fraud

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It’s about time we got a Summer movie worthy of adult eyes.  Roger Ebert called the cinema a “machine for generating empathy.”  (The Life Itself biopic of Ebert is out now in theaters and available at home on demand.)  Not much empathy washes over us as we turn our eyes to Transformers or superheroes. All those explosions and flattened cities leave us feeling tired and hopeless, or feeling nothing at all.  Those films are about nothing.  The celluloid – or, more likely, the digital 0’s and 1’s – are full of sound and fury, signifying … well, you know.  It is life itself that offers thrills, mystery, and passion.  Where is that in the midst of the inevitable June-July CGI orgy?

It’s about time we got something to look at that said something about life itself.  And with Richard Linklater’s Boyhood, we’ve got it.  It’s about time.  Literally.  Linklater filmed a kid and his family over a 12 year period.  We see the actors age, which might sound like grim stuff, like watching our friends and, therefore, ourselves, slouch toward mortality.  But there is nothing grim about seeing a six year old emerge into adulthood.  That is life.  Dreams, experience, and memories collide and conspire to produce some luminescent thing that seems simultaneously transient and immortal.  It is more arresting and miraculous than cosmic warfare among the exoskeletons.  It stays with us long after the hobbits and avatars exit stage right.  As with Michael Apted’s Up series, or Linklater’s own Before series, Boyhood reminds us what life is about and what movies can do.  The film theorist Siegfried Kracauer said that the function of film is to do what no other art form can do – show light and movement.  We can see the leaves blowing in the wind, flaunting different shades of green as they flutter in sunlight.  We see things live and change in time.  Perhaps everything takes place under the eyes of eternity, but those are not our eyes.  Ours blink.  Ours close.

Time is the big subject today.   It always is.  The most important philosophical work of the 20th Century is not A Theory of Justice by that very nice Rawls fellow, but Being and Time by that not very nice Heidegger fellow.  Our favorite poem of the 20th Century, Auden’s “As I Walked Out One Evening,” is about time.  “Oh let not time deceive you/you cannot conquer time.”  Our favorite beach-reading book that we could not finish was A Brief History of Time.  Our favorite rock song is “A Day in the Life.”  Our favorite baseball team stinks because the star players all got old at once.  Father Time is undefeated.  Time marks victories and defeats.  Time marks births and deaths.  Time marks us.  Time also marks lawsuits.

We do not too often write about statute of limitations decisions.  They are fact-bound.  The people behind Seinfeld (which premiered 25(!)  years ago) vowed that their show would have no learning and no hugging.  Maybe we here at DDL won’t force a hug on you, but we do hope for some learning.  With statute of limitation decisions, we are usually unsure as to what we can learn from any particular case.   Not so with today’s case, Truitt v. Bayer, No. 13-CV-7811, (SDNY July 2, 2014).  A copy of the opinion can be found here.Continue Reading Knowledge of Injury is Enough to Start the Statute of Limitations

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Today, the United States Supreme Court decided Halliburton Co. v. Erica P. John Fund, Inc., No 13-317 (U.S. June 23, 2014).  Here’s a link to the
opinion.  As we mentioned in our prior post, one of the questions the Supreme Court took the case to decide was whether to abolish altogether the so-called “fraud on the market” presumption of reliance in securities cases that the Court had recognized, 4-3, in Basic, Inc. v. Levinson, 485 U. S. 224 (1988).

The Court didn’t do that.  The vote on that point was six-to-three.  A combination of stare decisis (slip op. at 4, 7-8, 11), that Congress could have abolished the presumption itself but hadn’t (id. at 12-13, 15-16), and the Court’s emphasis on the rebuttable nature of the presumption – its “modest premise” (id.
at 10, see id. at 7, 10, 14-15) preserved it in cases where the evidence supported the existence of an “efficient” securities market.

We’re not securities lawyers here.  We’re interested in Halliburton primarily for its effect in keeping “fraud on the market” presumptions out of our sandbox – the manifestly non-“efficient” market for prescription medical products, where patients cannot even buy these products without a learned intermediary physician first prescribing them.  As we laid out at some length in a prior post (one of our 50-state surveys) back in 2010, the fraud on the market theory has been roundly rejected by courts applying state law, even in securities cases.  Our chief concern at present isn’t state law, but rather the abominable RICO-based liability theories that the First Circuit embraced in its Neurontin trilogy.  We discussed at length here how that court had allowed expert testimony that didn’t just presume reliance in a RICO case claiming off-label promotion, but allowed expert testimony amounting to a conclusive presumption of reliance – a presumption that that court held overcame the testimony of every prescribing physician who testified that they had not relied on the promotion.  What’s more, the First Circuit in Neurontin even allowed that expert to impugn the credibility of the physician witnesses before the jury.

What happened in Neurontin was unprecedented, and we hope that, after what we gleaned from today’s Supreme Court decision, it remains that way.  There’s a chance of that because the Supreme Court today had a lot to say about rebuttable presumptions of reliance, even in the sometimes “efficient” securities market.Continue Reading Supreme Court Dents, But Keeps, “Fraud on the Market” in Securities Cases

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We noted briefly on Tuesday afternoon that the dyspeptic verdict for more than $330 million in the Louisiana AG action over J&J’s marketing of Risperdal had been reversed by the Louisiana Supreme Court and judgment entered for the defendants.  After a little time to digest the decision, we can say that it is thoroughly satisfying…

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You may already know this, but we had to comment on the Supreme Court’s November 15 grant of certiorari in Halliburton Co. v. Erica P. John Fund, Inc., No. 13-317 on the question of:  “(1) Whether this Court should overrule or substantially modify the holding of Basic, Inc. v. Levinson, 485 U.S. 224…

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The following post is exclusively the work of the Reed Smith side of the blog.

Sometimes the smallest, least significant type of lawsuit can illustrate cracks in the edifice of the largest, most consequential litigation.  So, in our opinion, it is with Neurontin.  In this version of the story, the role of “Mack” is played by Herricks v. Pickaway Correctional Institute, 2013 WL 4804983 (S.D. Ohio Sept. 9, 2013).  That’s prisoner litigation − mostly convicts with nothing better to do with their time than try to sue their jailers.  The great majority of these cases get the back of the judicial hand.  There aren’t many litigation genres of less significance than that.

Playing the role of “Yertle” is the First Circuit’s circuit-splitting trilogy, Kaiser Foundation Health Plan, Inc. v. Pfizer, Inc., 712 F.3d 21 (1st Cir. 2013), Aetna, Inc. v. Pfizer, Inc., 712 F.3d 51 (1st Cir. 2013), and Harden Manufacturing Corp. v. Pfizer, Inc., 712 F.3d 60 (1st Cir. 2013) – all of which also travel under the heading, In re Neurontin Marketing and Sales Practices Litigation.  Not so coincidentally, the defendants filed a petition for certiorari in the Neurontin trilogy the other day.  Big cases – high courts.

The Neurontin cert. petition didn’t cite Herricks, of course, but we think that what went on in Herricks is as good an illustration as any why the First Circuit got it spectacularly and loudly wrong when it allowed the plaintiffs in the Neurontin trilogy to proceed with what amounts to an aggregate trial by formula that deprives the defendants of contesting the individual merits of any of the thousands – heck, millions – of individual claims at issue.  Can you say “due process violation”?

First, Herricks.  Prisoner plaintiffs can’t sue prison doctors for ordinary malpractice, at least not in federal court, where most of these cases seem to end up.  Instead, they must meet a higher constitutional (Eighth Amendment) standard of “deliberate indifference.”  Needless to say, most prisoner cases can’t meet that standard.  But the inmate-plaintiff in Herricks did.  What did the court (actually, a magistrate) find could meet that standard?

The prison doctor’s refusal to treat the plaintiff-prisoner off-label with Neurontin.Continue Reading On Litigation, Great and Small

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We have all heard that bad facts make bad law.  We have also heard that discretion is the better part of valor.  Sometimes, faced with bad alleged facts, a bad decision may be the predictable result of a motion to dismiss.  We are all for knocking out non-existent claims and making plaintiffs plead properly, but it is important when deciding to file 12(b)(6) to keep an eye on the relief being sought and how that relief would affect the case.  Although we do not have any knowledge of the considerations that went into the filing of this motion to dismiss, sitting here with our retrospectoscope, we see Williamson v. Stryker Corp., No. 12 Civ. 7083 (CM), 2013 U.S. Dist. LEXIS 104445 (S.D.N.Y. July 23, 2013), as a predictably bad decision.  We also feel a little like the venerable plaintiffs’ expert from whom we first heard the term “retrospectoscope,” smug, in our office, blathering on about something with which we were not involved.  Unlike him, however, we will resist the temptation to ascribe motive to why the court ruled as it did, as we believe motive is a subject for juries/readers to decide not for experts/blawgers to opine.

When testing the adequacy of a complaint, the “facts” at issue are those plaintiff chooses to include in the complaint, how she chooses to include them.  As such, it is not surprising that the facts analyzed in Williamson seem incomplete to anyone who knows medical device product liability cases.  It seems likely that a knee replacement plaintiff with at least four prior failed replacement surgeries, who was told her only treatment options were amputation or surgery with defendants’ product, had something else going on besides her basic allegation that:  1) the product broke not long after an uneventful implant, 2) then she was assured by defendants’ representative that there had been no prior reports of such breaks, 3) then she proceeded to have the broken product explanted and replaced with another of the same product, and 4) then the second implant also broke.  The court cannot assume additional facts to help direct its analysis to a different result, though.  (Hint, hint.)  So, the court analyzed a motion to dismiss every count other than failure to warn and loss of consortium.  The central allegations were of “manufacturing defect and/or design defect”:

(1) it relies exclusively on “the fixation in place of the femur and tibia bones”; (2) the knee revision system “is not properly designed or constructed to constrain motion between the femur and tibia bones so as to promote fusion by compression of the bones”; and (3) motion by the bones causes excess force on the device, leading to breakage and injury.

Id. at **6-7.  Plus, plaintiff’s review of defendants’ website before the first surgery and discussions with their representatives before the second allegedly created liability under theories of fraud, warranty, negligent misrepresentation, and deceptive business practice.  As you might expect from this lead in, defendants’ motion was denied across the board, although the court directed plaintiff to flesh out her fraud and negligent misrepresentation counts.Continue Reading Pleading Defect

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DUI cases do not show up on this blog often. Or ever. We did a quick search and came up dry. That fact is hardly surprising. After all, what does DUI have to do with drug and device law, or product liability for that matter?   Nor do we deal with DUI law in our everyday practice. Occasionally we might get a broadcast email asking for the name of a good DUI defense attorney, inevitably making us feel sorry for some anonymous, unfortunate, and/or tipsy soul. But early in our career we were loaned out to the Los Angeles City Attorney’s office, where DUI cases were on the bill of fare, along with shoplifting, solicitation of prostitution, wienie waggers (don’t ask), and assaults. DUI cases were among the most interesting assignments because they involved a little bit of science and a lot of creative tale-spinning and lawyering. We learned about Breathalyzers/Intoximeters, nystagmus, and Field Sobriety Tests (FSTs) (walk a straight line heel to toe, say the alphabet backwards — which we cannot do when we are stone-cold sober — and touch your nose whilst closing one’s eyes, etc).

Police officers in California (and throughout much of the West Coast) call a DUI a “deuce.” The provenance of that appellation is unclear. Some think it comes from the various California criminal code DUI sections, which ended in a 2. Some half-jokingly think it refers to the inevitable claim of DUI defendants that they had consumed only “two beers.” A blood alcohol concentration (BAC) measurement in excess of the legal maximum makes you presumptively guilty of a DUI. But it is possible to be found guilty even without that evidence if there is good ocular evidence of bad driving, an aroma of alcohol, and failure of FSTs. That being said, a high BAC is usually such damning evidence that it virtually compels a guilty plea.

That is what happened to a couple of guys from New Jersey named Johnson and Aguaiza. But here’s the twist, and the reason why you are reading about this case on the DDL blog: after pleading guilty in their criminal cases, those guys subsequently brought a product liability action against the company that made the breath-testing device used to establish their BACs as being in excess of .08%. The case is called Johnson and Aguaiza v. Draeger Safety Diagnostics, Inc., Civil Action No. 13-2439 (JLL) (D. N.J. July 19, 2013). The slip opinion is here.  The plaintiffs claimed that “the Alcotest 7110 contains latent design defects in that it is a piece of respiratory equipment that is not standardized at frequent intervals and there is no provision for calibration of its pulmonary reporting apparatus.” Slip op. at 2. It is standard operating procedure for the defendant in a DUI criminal case to attack the calibration of the machine measuring the BAC, but this is the first time we have heard of that issue spilling over into a product liability case.  Further, this was not just a run of the mill product liability case. The plaintiffs styled their complaint as a class action, with the class consisting of all persons arrested for a deuce in New Jersey who blew into the Alcotest 7110 and were subsequently convicted.Continue Reading Three Dumb Legal Theories Walk into a Bar …

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Some time ago we were highly critical of a potentially dangerous expansion of liability for failure to warn to publishers of medical literature.

That’s right, publishers.

In our prior post we went after Slater v. Hoffman-La Roche, Inc., 771 F. Supp.2d 524 (E.D. Pa. 2011), for giving credence to a claim that a publisher of medical reference products could somehow be liable under Pennsylvania law for alleged errors and omissions in the content of materials written by others. Slater did not say that there was such a claim, mind you.  It only speculated (in the absence of any contrary precedent) that there could conceivably be such a claim.  Slater was an fraudulent joinder case.  The publisher defendant, Wolters Kluwer, had the misfortune of being headquartered in Pennsylvania.  That meant it was non-diverse, so if the plaintiffs could merely hang a “colorable” claim on it, the case would have to be remanded to the Philadelphia Court of Common Pleas – at the time the #1 ranked Judicial You-Know-What according to ATRA.

Philadelphia isn’t ranked #1 anymore.

The Philadelphia Court of Common Pleas Complex Litigation Center (home to Philly’s notorious mass tort programs) is under New management.

As in Judge Arnold New.

Judge New recently issued an opinion, A.B. vs. Ortho-McNeil-Janssen Pharmaceuticals, 2013 Phila. Com. Pl. Lexis 84 (Pa. C.P. Phila. Co. April 5, 2013), sticking a much deserved fork in the concept of publisher liability.  A.B. involved alleged injuries from certain atypical antipsychotic drugs.  In addition to the manufacturer of the drug, the plaintiffs sued two publishers of medical information, Excerpta Medica and Elsevier.  The publishers recently took the
bull***t by the horns and moved for summary judgment, on the ground that their role in “publishing scholarly books and journals” (Elsevier)  and “developing medical literature . . . including articles published in peer-reviewed journals and posters and abstracts presented at medical conferences” (EM), id.,  at *4-5, couldn’t possibly give rise to liability to the plaintiff.Continue Reading Publisher Liability Rejected By Philadelphia C.P. Court

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On the MLB (that’s baseball) website the other day was a story about the threat of various elected members of the Baseball Hall of Fame to boycott Cooperstown (the very location is a phony story cooked up about a century ago) if any of the so-called “dirty” players − those who allegedly used steroids off-label − were also elected.  So far Mark McGwire (of his almost 600 home runs) and Rafael Palmeiro (of his 3000+ hit and 500+ home runs) haven’t made it, but next year’s crop includes Barry Bonds (probably the best (and maybe the most) offensive player ever); and Roger Clemens (probably the best pitcher since the advent of the lively ball) are up.  Neither of them ever tested positive for the stuff − and steroids weren’t even against baseball rules when they (mostly) played (why they weren’t tested at all).
But off-label use of steroids for the purposes of performance enhancement was against federal law, and both of them were unsuccessfully prosecuted for their alleged use.
Why all the furor over violations of federal law?  How many times did Babe Ruth violate federal law (the Volstead Act − otherwise known as Prohibition), or Jimmie Foxx, or Grover Cleveland Alexander, or others from baseball’s Jim Crow years (a major argument why Bonds was better, in the context of better opposition, than Ruth or Ted Williams)? Nor did Paul Molitor’s admitted cocaine use keep him out of the Hall.
Of course, none of them used banned substances for performance enhancement − although nobody can be sure what they would have done if they had the chance.
Wait a minute.
Why is it worse to use a substance, one that’s illegal under federal law, but not (then) banned by baseball, for performance enhancement rather than performance degradation?  Wasn’t there a “best efforts” clause in the standard baseball contract?  There’s a legitimate argument that it’s worse to engage in illegal conduct that makes you play poorly than illegal conduct that makes you play better.  As fans, we know which way we’d go on that.  The players we boo (at least us Philly fans) are those who dog it, not those who give their all to win.
After all, using a substance banned by baseball − but not illegal − for performance enhancement isn’t considered a disqualification for the Hall of Fame.  Just ask Gaylord Perry (spit) … or George Brett (pine tar) … or Whitey Ford (mud − can a belt buckle be considered a substance?).
But breaking the law − especially federal law − to better one’s performance is somehow considered beyond the pale by a significant portion of both the Hall of Fame electorate and membership.  They should look in the mirror, or better yet in the Hall.  What is Adrian Constantine Anson doing in the Hall?  Nobody damaged baseball more than old Cap, who more than any other person was responsible for banning black players from National Agreement baseball in the 1880s.Continue Reading Off-Label Use And The Hall Of Fame

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FDA-regulated products now account for an estimated one-fifth of overall economic activity in the U.S. They have also been the focus of a litigation explosion. This timely guide covers all aspects of litigation involving drugs, medical devices, vaccines and other FDA-regulated prescription products.
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