You haven’t heard of Blue Car syndrome?  Remember the last time you went car shopping. You found a particular make and model (a “blue car”) and then, like magic, you see that same “blue car” 10 times in the next week. It’s in the parking lot of your gym. It pulls up next to you in traffic. It’s even parked down the block from your house. The blue cars didn’t just suddenly appear. So what happened? It’s sometimes called the Baader-Meinhof phenomenon or frequency illusion. It occurs when something you’ve just noticed, like a new car, suddenly crops up everywhere. You really are seeing more blue cars, but not because there are more blue cars, but because you are now noticing them more.

That might not strictly speaking be true for us and pre-service removal — we’re pretty sure we’d notice whenever the issue came up – but it certainly feels like out of nowhere pre-service removal became a hot topic last month. No sooner did we update our research on the issue, then the Third Circuit makes a favorable ruling allowing pre-service removal. Just five days after that decision, the Northern District of Illinois does the same thing.

In Cheatham v. Abbott Laboratories Inc., — F. Supp. 3d –, 2018 WL 4095093 (N.D. Ill. Aug. 28, 2018), plaintiff, a citizen of Louisiana sued Abbott, a citizen of Illinois and Delaware, in state court in Illinois. Before the complaint was served on defendant, it removed the case to federal court and plaintiff promptly moved for remand arguing the forum defendant rule. Id. at *1-2. As with any pre-service removal case, the dispute turned on the interpretation of the “properly joined and served” language of 28 U.S.C. §1441(b)(2). If a “properly joined and served” defendant “is a citizen of the State in which [the] action is brought,” removal is not permitted. Id.

Defendant’s argument: Under the plain meaning of the statute, as defendant was not served at the time of removal, the forum defendant rule does not apply. Cheatham, at *3-4.

Plaintiff’s argument: Allowing pre-service removal undermines the purpose of the forum defendant rule to preserve the plaintiff’s choice of forum where there is no prejudice to an out-of-state party. Id. at *2-3.

That’s the debate: purpose v. plain meaning. And that is the split among the courts to have decided the issue. Although, as our recent update points out, plain meaning has been gaining ground in the recent circuit court decisions on the issue. The Cheatham decision does a nice job of setting out both arguments with citations to cases going both ways before ultimately concluding that “the statutory text must control. Courts must give effect to the clear meaning of statutes as written.” Id. at *5 (citations omitted).

Courts that have applied the “purpose” interpretation believe that it is necessary to look beyond the language of the statute to be “faithful to Congressional intent.” Id. at *3. Those courts seem to be particularly concerned by “snap removals” – where a defendant learns of the filing of a lawsuit from monitoring the docket and then immediately removes the case. In the age of online filing, docket monitoring is not new or uncommon. Plaintiff called it both improper and strategic gamesmanship. Id. at *2. But just because something is strategically advantageous to one side doesn’t make it improper. Nor does it make it gamesmanship in the sense that it is a dubious tactic.

When Congress completely re-wrote 28 U.S.C. §1441(b) in 2011 it left the “properly joined and served” language intact. If you want to talk about Congressional intent, the buck stops in 2011. In fact, the Cheatham court, like others applying the plain meaning of the statute, acknowledge that “Congress will rewrite the statute if it feels that removal where an in-forum defendant has not yet been served constitutes an abuse of the judicial system.” Id. at *5. Having left that provision in place, the forum defendant rule does not apply where the forum defendant has not been served at the time of removal.   Defendant learned of the action “before it became a forum defendant that was both properly joined and properly served,” id., and promptly removed it. There was no bending of the rules required. Diligence isn’t gamesmanship.

And, we actually don’t think pre-service removal is not a frequency “illusion” – it’s real and going in defendants’ favor.

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

We haven’t talked about the district court decisions in Dolin v. GlaxoSmithKline LLC, because in our opinion there simply hasn’t been anything good to talk about. Plaintiff sued the manufacturer of the brand drug Paxil arguing that the brand manufacturer should be liable for the death of her husband who took a generic version of the drug manufactured by a different company.  Plaintiff alleged that the brand manufacturer should have amended the warning that accompanied its drug to include the risk of suicidality in adults even though the FDA had expressly rejected such a warning change several times. So, the fact that the defendant’s innovator liability and federal preemption based summary judgment motions were denied left us frankly baffled at how two district courts got it wrong on both counts.

But, now we finally have something good to talk about. The Seventh Circuit just reversed the verdict for the plaintiff in this case overturning the district court’s preemption decision. In Dolin v. GlaxoSmithKline LLC, ___ F.3d ___, 2018 WL 4001208, slip op. (7th Cir. Aug. 22, 2018), the appellate court found overwhelmingly clear evidence that the FDA rejected the very warning proposed by plaintiff, applied Mensing to a brand manufacturer, and also found no evidence of newly acquired information to support a unilateral label change. That’s definitely worth talking about.

Before we get to all those great decisions, we note that the Seventh Circuit opted not to reach the innovator liability question finding that the “evidence of federal preemption is decisive.” Id. at p.25. However, the court did note that the issue had not yet been decided by the Illinois courts, and therefore any ruling would have to be “a prediction of state law under Erie.Id. We point this out as one of problems with the district court decisions was that in the face of an undecided state law question, they over-reached in creating innovator liability where such a claim did not exist.  It was an improper expansion of state law.  Federal Erie predictions are supposed to be conservative, not radical as was the case here.  As discussed in our “Innovator Liability at 100” post, every other court of appeals to consider innovator liability on its merits, has rejected it.  That’s seven courts of appeals (4th, 5th, 6th, 8th, 9th, 10th, & 11th), construing the law of 23 states — including Illinois.  See In re Darvocet, Darvon, & Propoxyphene Products Liability Litigation, 756 F.3d 917, 944-45 (6th Cir. 2014).

Turning to the dispositive preemption question, defendant argued that that the FDA would not have allowed it to include the warning sought by plaintiff and therefore plaintiff’s state law tort claim conflicted with federal law and was preempted. Under the standard announced in Wyeth v. Levine, 555 U.S. 555 (2009), a state law claim based on labeling is not preempted “if the manufacturer could have added the warning unilaterally under the [Changes Being Effected (“CBE”)] regulation.” Dolin, at p.15. Under the CBE regulation, a manufacturer can change its label without advance FDA permission if the manufacturer has “newly acquired information.” Id. at p.4. But Levine also held that “there could be preemption if the manufacturer met the stringent standard of proving that there was clear evidence the FDA would have rejected the proposed change in the drug’s label.” Id. at p.16. So, the issue for the court was whether or not defendant could have changed the drug’s label using the CBE regulation.

Before getting to the substance, we’ll start with another question the court decided not to decide – whether preemption under Wyeth v. Levine, 555 U.S. 555 (2009) is a question of fact or law. The court acknowledged the recently created split in the circuits created by the Third Circuit’s decision in In re Fosamax Products Liab. Litig., 852 F.3d 268 (3rd Cir. 2017) (our worst case of the year for 2017), on which, thankfully, the Supreme Court has granted certiorari to review. But even the Third Circuit decision left a window open. One in which Dolin certainly fit. “[W]hen no reasonable jury applying the clear-evidence standard could conclude that the FDA would have approved a label change, then the manufacturer will be entitled to judgement as a matter of law.” Dolin, slip op. at p. 18 (quoting In re Fosamax).

More specifically, the Seventh Circuit held that “no reasonable jury could find that the FDA would have approved an adult-suicidality warning for Paxil under the CBE regulation between 2007 and [decedent’s] suicide in 2010.” Id. Why was it such an open and shut case? About one-third of the opinion is taken up with setting out the extensive regulatory history demonstrating that both GSK and the FDA thoroughly examined the issue and the FDA completely rejected the addition of an adult-suicidality warning.

  • June 1991 – based on supplemental analysis of data related to suicide the FDA determined there was no signal for additional risk of suicide, id. at p.7;
  • September 1991 – an independent committee convened by the FDA “unanimously agreed that there is no credible evidence of a causal link,” id.;
  • January 2004 – FDA concluded based on review of multiple data sets that there was no increased risk of suicide, id. at p.8;
  • 2004 – the FDA requires a black box warning regarding an association between SSRIs (the class of drugs to which Paxil belongs) and suicide in pediatric patients but not adults, id.;
  • April 2006 – GSK unilaterally changed its label under CBE regulations to include the risk of suicide in adults, id. at p.9;
  • November 2006 – the FDA completed a meta-analysis that led it to conclude “the net effect appears to be neutral on” adult suicidality, id. at p.10;
  • 2007 – the FDA orders class-wide labeling to state that “studies did not show an increase in the risk of suicidality with antidepressants . . . in adults beyond the age of 24,” id. at p.11;
  • On at least 4 separate occasions in 2007, GSK asked the FDA whether it could retain the warning it added via CBE in 2006 and the FDA said no. Id. at p.11-13.

The court found this evidence “undisputed,” id. at p. 18, and held “[i]t is hard to imagine clearer evidence that . . .the FDA would not have approved a change.”  Id. at p.19.  It compared this regulatory history to the one the Supreme Court considered in Levine and found the Paxil evidence filled all the “evidentiary gaps” which led to the Levine non-preemption ruling. The risk of suicidality was given “more than passing attention” by the defendant and the FDA. Defendant provided the FDA with re-analyzed data in 2006. Defendant unilaterally changed the label to add a warning of the risk at issue. And, the FDA, more than once, rejected the warning. Id. at p.19-20.

Plaintiff made two arguments in response. First she argued that the FDA only rejected the defendant’s proposed warning because defendant “proposed adding it to the wrong spot on the label.” To which the court responded:

Plaintiff asks us to believe that the FDA – after deciding against an adult-suicidality warning based on its own analysis – rejected [defendant’s] warning only because GSK proposed putting it in the wrong place. That is unreasonable.

Id. at p.21. The court called that “unreasonable.” We’d probably have found a stronger adjective.

Plaintiff’s second argument is more important because it emphasizes what Levine preemption is at its core. Plaintiff argued that the defendant could have asked for a formal meeting with the FDA and therefore defendant lacks clear evidence that the FDA would have rejected the warning after such a meeting. Id. This argument misses the mark because “[s]tate laws requiring a label change are preempted unless the manufacturer could unilaterally add the new warning under the CBE regulation.” Id. In other words, if you need FDA approval there is conflict preemption.

This is where Pliva, Inc. v. Mensing, 564 U.S. 604 (2011), comes in and we of course laud its use in brand drug cases. Mensing held that claims against generic drug manufacturers were preempted because generic manufacturers are not permitted to unilaterally change a drug’s label. Because generic manufacturers cannot independently comply with their state law duties — changing their label would require “special permission or assistance” from the FDA — claims against them are preempted. Equate that to plaintiff’s argument in Dolin:

The preemption analysis asks only whether [defendant] could have added the adult-suicidality warning through the CBE regulation, not whether [defendant] might have been able to persuade the FDA to change its mind in a formal meeting – and certainly not whether [defendant] could have persuaded the FDA after already asking four times to include the warning and being told no four times.

Id. at p.22.

That takes care of the preemption issue up until 2007, when the FDA repeatedly rejected defendant’s CBE warning language. But plaintiff’s husband did not take the drug until 2010. So the remaining question is whether between 2007 and 2010, defendant acquired any “new” information that would have permitted a CBE label change during that period. Newly acquired information is defined as “data, analyses, or other information not previously submitted to the Agency.” 21 C.F.R. § 314.3. Plaintiff argued that in the data defendant submitted to the FDA, it “improperly attributed suicides that occurred in the wash-out phase of the drug tests as occurring on the placebo.” Dolin, slip op. at p.23. But the evidence showed that the FDA was aware that wash-out events were included and that defendant re-submitted the data to the FDA excluding the wash-out phase. Id. at p.24. Plaintiff also pointed to an article published in 2011 but the article was based on a 2006 analysis. So there was no evidence that the analysis was either new or not previously submitted to the FDA. Id. The court, therefore, concluded that plaintiff had offered no evidence that defendant acquired any new information after 2007 that would have supported a CBE label change.

All this was strong preemption evidence indeed.  We note that Dolin was written by Judge Hamilton, who is no friend of preemption generally.  See Bausch v. Stryker Corp., 630 F.3d 546 (7th Cir. 2010), also authored by Judge Hamilton.

We were always optimistic that the district court’s decisions in Dolin and the verdict would not stand and the Seventh Circuit did not disappoint (well, maybe they could have tossed innovator liability too, but a nod to Erie doesn’t hurt).

 

 

This post comes only from the Cozen O’Connor side of the blog.

 

Plaintiffs’ lawyers wanted to file a class action premised on the recovery of costs spent monitoring and replacing allegedly defective defibrillators manufactured by St. Jude Medical LLC. And they wanted to file it in Illinois. So they recruited a putative class representative, a union health benefits trust, and they filed their complaint, ASEA/AFSCME Local Health 52 Health Benefits Trust v. St. Jude Medical LLC, in Illinois federal court. But they then ran into a problem. St. Jude is not from Illinois. It is a Delaware LLC with Minnesota headquarters. In the post-Bauman personal jurisdiction world, St. Jude is considered to be at “home” only in those two states, not Illinois. So the Illinois court did not have general jurisdiction over St. Jude. Nor did it have specific jurisdiction. The health benefits trust plaintiff, ASEA, didn’t buy the St. Jude defibrillators in Illinois, nor did its beneficiaries have them implanted there. It didn’t matter that St. Jude marketed and sold defibrillators in Illinois. That fact doesn’t create the connection needed for specific jurisdiction. 2018 WL 3022670, at *4 (N.D. Ill. June 18, 2018). So the Illinois court could not exert personal jurisdiction over St. Jude.

But the plaintiffs’ lawyers thought they had a way around that. St. Jude had been recently acquired by Abbott Laboratories. And Abbott is at “home” in Illinois. It is incorporated and headquartered there. So the plaintiffs’ lawyers asked the court to look to St. Jude’s parent, not St. Jude itself, in determining personal jurisdiction. The problem with that approach, however, was that St. Jude is a limited liability company. The very name of that type of business entity—“limited liability company”—tells you how our legal system treats it. Holders of membership interests in a limited liability company are shielded from liability for the company’s debts and judgments. The only way around that general rule is to successfully assert an “alter ego” theory, generally known as piercing the corporate veil. If ASEA could do that, the court could then ignore St. Jude’s independent existence as a company and treat Abbott as the real defendant, thus presumably creating personal jurisdiction. And, while that approach might sound promising for the plaintiffs’ lawyers, the Illinois court very quickly reminded them of how hard—how very, very hard—it is to succeed on an “alter ego” claim.

Since St. Jude Medical LLC was formed in Delaware, Delaware law applied to the “alter ego” analysis. And Delaware law does not lightly lift the corporate veil. It requires an intensive inquiry into whether the company is in fact a sham that is rife with serious financial improprieties and management manipulation intended to defraud the people with which the company does business. It is only found in rare cases:

Under Delaware law, courts disregard the corporate form only in exceptional cases. Determining whether to do so requires an intensive inquiry which takes into consideration (1) whether the company was adequately capitalized for the undertaking; (2) whether the company was solvent; (3) whether corporate formalities were observed; (4) whether the controlling shareholder siphoned company funds; and (5) whether the company functioned as a façade for the controlling shareholder. In addition to these factors, Delaware’s courts have required an element of fraud or similar injustice in order to pierce the corporate veil.

Id. at *3 (citations omitted). And because an alter ego claim is generally based in fraud, courts often apply a heightened pleading standard.

So pleading an “alter ego” claim is extraordinarily difficult. ASEA did not come close. Rather than plead particulars of a sham financial structure and non-existent management, ASEA pointed to surface level actions and statements by St. Jude’s parent, Abbott, all of which are the types of actions ordinarily seen in the workaday world of a corporate holding structure.

For instance, plaintiff alleged that Abbott itself claimed responsibility for the recall of the defibrillators, issued updates on the recall using the Abbot name, communicated with the FDA using the Abbott name, took over the defibrillator manufacturing facility, advertised that “St. Jude Medical is now Abbott,” shared officers, managers and facilities with St. Jude, and even stated that St. Jude’s operations are controlled by Abbott. Id. These allegations are based on the faulty premise that Abbott’s “control” of St. Jude creates an alter ego claim. It does not. Abbott owns St. Jude. It is expected to control it. “Controlling shareholder” is presumed in the very Delaware test quoted above. And so exertion of control does not satisfy the alter ego inquiry. The real test is whether St. Jude was operated, or controlled, as a sham entity with inadequate capitalization and make-believe management for the purpose of defrauding others. And, as the court held, the plaintiff’s allegations addressed none of this:

These allegations do not call into question St. Jude’s capitalization, solvency, or recognition of corporate formalities. Cf. City of Greenville, Ill. v. Syngenta Crop Prot., Inc., 830 F. Supp. 2d 550, 563 (S.D. Ill. 2011) (piercing the corporate veil where evidence showed that the subsidiary company’s board unanimously rubber-stamped the parent company’s recommendations on a regular basis without discussion and where the subsidiaries employees were sometimes directly managed by employees of the parent company). Nor do they suggest that Abbott was siphoning or diverting funds from St. Jude. At most, the allegations in the complaint suggest that Abbott sometimes spoke on behalf of St. Jude or sometimes represented that it had succeeded St. Jude. See LaSalle Nat. Bank v. Vitro, Sociedad Anonima, 85 F. Supp. 2d 857, 865 (N.D. Ill. 2000) (Nordberg, J.) (“Personal jurisdiction is based on actual evidence of control … rather than on a corporation’s general descriptions. Promotional statements made on a public website do not precisely convey the operative corporate structure.”). Absent more, however, the allegations do not suggest that unfairness or injustice has resulted from the relationship between St. Jude and Abbott, as would be necessary to justify piercing the corporate veil under Delaware law. Doberstein v. G-P Indus., Inc., No. CV 9995-VCP, 2015 WL 6606484, at *4 (Del. Ch. 2015).

Id.

With the plaintiff unable to pierce the corporate (really, LLC) veil, the Illinois court was back to where it started, which is with no personal jurisdiction over St. Jude: “Accordingly, this Court does not have general jurisdiction over St. Jude because it is not “at home” in the state of Illinois. Id. It dismissed the action for lack of personal jurisdiction.

We expect this to be the ordinary outcome in attempts by plaintiffs’ lawyers to establish personal jurisdiction through an alter ego theory in drug and device cases. Not only is such a claim extraordinarily hard to plead and harder to prove, but drug and device cases usually involve large pharmaceutical and medical device companies with well-established, well-advised corporate structures. Under those circumstances, it will be rare that plaintiffs’ lawyers will be able to piece together the type of extraordinary facts necessary to successfully plead and prove an alter ego claim.

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

You’re likely all familiar with the phrase, “don’t look a gift horse in the mouth.” Checking out a gift horse’s teeth is like looking for the price tag of the gift to see how much it’s worth. The expression is meant to convey that upon receiving a gift you should accept it gratefully. But what happens when you don’t accept the gift at all. In many instances, politely declining a gift is completely acceptable. When the gift actually comes in the form of help, passing it up may well be to your own detriment. Sure, it looks good to stand on your own two feet. To accomplish something on your own. But sometimes offers of help are extended because they are needed. A parent offers to help a child tie his shoe. A teacher offers to guide a student through a math lesson. A young man offers to cut the grass for an elderly neighbor. Or perhaps a judge offers plaintiff an opportunity to take discovery to save her case. And that plaintiff says: No thanks. I’ll stand “on the allegations contained in [my] original complaint.” That plaintiff shouldn’t be surprised that what wasn’t good enough the first time around, isn’t good enough the second.

The case is Benyak v. Medtronic, Inc., 2018 Ill. App. Unpub. LEXIS 998 (Ill. App. Jun. 14, 2018) and involves an implanted intrathecal pump that plaintiff alleges became inverted in her body causing her pain. Id. at *2. Plaintiff alleged only negligent design and manufacturing defect and negligent education of medical providers. Id. at *2-3. The medical device underwent pre-market approval by the FDA and so defendant moved to dismiss the claims as preempted. That motion was granted but the court granted plaintiff leave to serve written discovery on the manufacturer and then to file an amended complaint. Plaintiff opted to do neither and so the court dismissed her claims with prejudice. Id. at *2. Plaintiff then appealed that dismissal arguing that her original allegations should have survived defendant’s motion to dismiss.

The Illinois Appellate Court authored a nice accounting of PMA preemption, see id. at *5-15, which we won’t completely recount here because if you are even an infrequent reader of this blog, you’re likely well-versed in PMA preemption. And if not, check out this scorecard to start your PMA preemption education. We will point out the court’s proper conclusion that because of the MDA’s express preemption provision, there is no presumption against preemption. Id. at *10. Also that the court landed where most court’s do, finding that there is only “a small window in which a state-law claim may escape express or implied preemption.” Id. at *13. Finally, before turning to the case-specific details, the court notes that “the manner in which allegations are pled guides the analysis of whether a state-law claim involves requirements different from, or in addition to, the federal requirements.” Id. at *15.

Since it was undisputed that the device at issue was a PMA device, there was also no dispute that the FDA had established requirements applicable to it. Id. So the court moved on to the next part of the PMA-preemption analysis – did plaintiff’s state law claims involve requirements related to safety and effectiveness different from or in addition to federal requirements. Because safety was at the heart of plaintiff’s claims, the only real issue was the “different or in addition to” standard. In other words, did plaintiff’s claim parallel the federal requirements established by the FDA for this device.

As for design and manufacturing defect – plaintiff’s complaint was completely silent as to whether the device was designed or manufactured differently or out of compliance with the FDA’s approval and protocols. Id. at *16-17.

Absent such factual allegations, plaintiff, in essence, posits that the [device] should have been designed and manufactured differently than what the FDA approved during the premarket approval process, which necessarily would impose a requirement for the [device] that is different from, or in addition to, the requirements already imposed by the FDA.

Id. at *17.

On appeal, plaintiff argued that “the ability of the [device] to remain upright” was a premarket requirement that defendant failed to meet. However, the complaint “never specifically identified any specific requirement resulting from the premarket approval process.” Id. at *19. And this brings us back to that gift horse:

Understandably, at the time plaintiff filed her complaint, she might not have had enough facts to support her allegations, which is why the circuit court allowed her leave to serve written discovery on defendants and file an amended complaint. Had she taken the opportunity to conduct the discovery, she could have bolstered the allegations of her complaint and perhaps, her state-law claim would not have been expressly preempted by the MDA. But she chose not to conduct the discovery nor file an amended complaint, resulting in her design and manufacturing defect claim, as pled in her complaint, being expressly preempted.

Id. at *19-20. It jumped right up and bit her.

As for plaintiff’s other claim, negligent instruction, it is not a recognized claim under Illinois law. Id. Even if it were, plaintiff didn’t allege that the instructions defendant provided deviated from those approved by the FDA during the PMA process. Id. at *21. So, that’s two grounds to affirm the dismissal. Plaintiff attempted to turn the claim into a learned intermediary claim arguing it was really a failure to warn the doctor claim. But, that’s not what plaintiff alleged in the complaint. The complaint never mentions learned intermediary and the court was unwilling to construe it as such.

Finally, plaintiff asked for the case to be remanded with leave to amend her complaint. Wow. Once you refuse a gift it’s much less likely you’ll get offered it again. The appellate court found that because plaintiff had “intentionally” chose not to take discovery and amend her complaint when that opportunity was afforded to her, “she has waived any right to a remand with leave to amend.” Id. at *22.

We often talk about giving plaintiffs second bites at trying to plead their claims. But if you’re going to toss the apple away without so much as a nibble, don’t be surprised when the gift horse you decided to ignore gobbles it up and spits it out with nothing left for you to chomp on.

 

The personal injury decisions Daimler AG v. Bauman, 571 U.S. 117 (2014), and Bristol-Myers Squibb Co. v. Superior Court, 137 S. Ct. 1773 (2017), are gifts that keep on giving.  The latest development is Wilson v. Nouvag GmbH, 2018 WL 1565602 (N.D. Ill. March 30, 2018), where the plaintiff went to the “home” state of an overseas defendant’s United States distributor and unsuccessfully sought to obtain personal jurisdiction over the parent as well.

Wilson was a wrongful death case filed almost exactly two years after the death at issue.  Id. at *1.  That suggests, although it isn’t stated, that it was filed on eve of the running of the statute of limitations (two years is a common limitations period for personal injury claims, and “death” is often an absolute date for the calculation of limitations periods in death cases).  We’ll come back to that.

The corporate structure of the defendant medical device manufacturer in Wilson is hardly uncommon.  The parent manufacturer is located overseas.  It sells its product, still overseas, to an affiliated distributor that the parent also owns.  The overseas affiliated distributor then sells the products to a similar affiliated distributor in the United States.  That United States distributor then sells the products throughout the country.  Only the United States distributor knows about, and sells to, particular United States customers.  Wilson, 2018 WL 1565602, at *1.

Bauman held that personal jurisdiction rules are intended to “permit out-of-state defendants to structure their primary conduct with some minimum assurance as to where that conduct will and will not render them liable to suit.”  571 U.S. at 762 (citation and quotation marks omitted).  In Wilson that happened.  The corporate structure described above is sufficient to preclude the overseas parent from being sued in product liability anywhere in the United States.

The plaintiff in Wilson, a resident of Virginia, brought suit in Illinois, where the defendant’s United States distributor was undisputedly “at home.”  2018 WL 1565602, at *3.  While that was certainly sufficient to reach the distributor, it did not confer specific “case-linked” jurisdiction (plaintiff conceded no general jurisdiction existed) over the overseas parent or its overseas distributor.

First, although the parent “intentionally directed distribution of its [device] into the United States through an Illinois company,” that didn’t establish specific jurisdiction in Illinois.  Id. at *4.  The product simply passing “through Illinois” into the rest of the country was not enough.  The parent defendant “had no knowledge or influence” over where its products were sold by its American distributor.  Id.  Mere knowledge of its distributor’s location was insufficient.  Id. (FDA filings with Illinois address did not “provide any information about the distribution of the product in the United States”).

Second, the plaintiff “ha[d] not established that [the overseas parent] itself had any contacts with the State of Illinois, as is required to establish specific jurisdiction.”  Id. at *5.  “The Supreme Court has ‘consistently rejected attempts to satisfy the defendant-focused ‘minimum contacts’ inquiry by demonstrating contacts between the plaintiff (or third parties) and the forum State.’” Id. (quoting Walden v. Fiore, 134 S. Ct. 1115, 1122 (2014)).

The fact that [the overseas parent’s] customer distributed its product through a subsidiary based in Illinois is not enough to indicate that [the parent] purposefully availed itself of the privilege of conducting activities within Illinois.

Wilson, 2018 WL 1565602, at *5.

Third, personal jurisdiction could not be based on a stream of commerce theory.  “The ‘stream of commerce’ is a metaphor for the concept of purposeful availment.”  Id.  Stream of commerce without purposeful availment has never commanded a Supreme Court majority.  Id.

[T]his leaves the “stream of commerce” concept of questionable significance in resolving questions of personal jurisdiction. . . .  [A] majority of the Court has never held that jurisdiction premised on the placement of a product into the stream of commerce is, without more, sufficient to establish a constitutionally adequate connection to the forum State.

Id. (citation omitted).  Further, the foreign parent “had no contractual arrangement with” its United States distributor – only its overseas distributor did.  Id.  Thus, there was no basis for stream of commerce jurisdiction “even [under] the more relaxed standard.”  Id.  Finally, the plaintiff produced no evidence that the particular product that caused injury “actually passed through Illinois on [its] way to Virginia.”  Id. at *6.  The mere fact that a distributor was located in Illinois was not proof that any particular unit of the device passed through Illinois in the stream of commerce.  Id.

Fourth, plaintiff couldn’t establish personal jurisdiction through agency, either.  Plaintiff offered only “conclusory allegations.”  Id.

To plead the existence of an agency relationship, a plaintiff must allege some facts that support the inference of agency.  Furthermore, unsupported allegations by a plaintiff are insufficient to support personal jurisdiction.

Wilson, 2018 WL 1565602, at *6 (citation omitted).  “The test for agency is whether the alleged principal has the right to control the agent, and whether the alleged agent can affect the legal relationships of the principal.”  Id. (citation and quotation marks omitted).  The overseas parent’s FDA submissions did not speak at all to the elements of agency.  Id.  As an overseas parent, two steps removed from its United States distributor, the parent “has no knowledge or influence over what happens to the [devices] after they are sold,” in Europe, to its overseas distributor.  Id.

Fifth, even if the plaintiff had proven that the overseas parent had some sort of “contacts” with Illinois, plaintiff failed to establish that the “alleged connection with the State of Illinois has any relation to the claims in this lawsuit” as required by BMS.  Id. at *7.

[Plaintiff] does not allege that any specific conduct related to his claims took place in Illinois.  Specific jurisdiction exists only if there is “an affiliation between the forum and the underlying controversy, principally, an activity or an occurrence that takes place in the forum State.”

Id. (quoting BMS, 137 S. Ct. at 1781).  BMS was “particularly relevant,” as it also involved product liability claims against a prescription medical product.  Wilson, 2018 WL 1565602, at *7.  Under BMS, “a defendant’s contract with a distributor in the forum State is not itself enough to establish personal jurisdiction in the State.”   Id.  The overseas parent “did not design, manufacture, label, or sell its [devices] in Illinois,” therefore product liability allegations about such conduct were not case-related contacts with the state.  Id.

Finally, plaintiff was “not entitled to jurisdictional discovery because he has not made a prima facie showing of personal jurisdiction.”  Id. at *8.  Plaintiff’s attempt to harass the overseas parent with “interrogatories, requesting documents, and conducting depositions on 17 wide-ranging topics” also failed.  Id.  Any discovery along those lines would have to be directed to the United States distributor over which jurisdiction existed.  Id.

In sum, the plaintiff utterly “fail[ed] to establish that any suit-related conduct, by [the overseas distributor] or other defendants, took place in the State of Illinois.”  Wilson, 2018 WL 1565602, at *8 (emphasis added).  That holding means that even the United States distributor was not subject to specific, case-linked jurisdiction (although general jurisdiction existed as to the Illinois-based company) for failure to establish that its purportedly injury-causing product passed through the forum state.

[T]his Court cannot exercise specific jurisdiction over a foreign defendant for claims that have no connection to Illinois.  [Plaintiff] has not shown any affiliation between the forum and the underlying controversy to allow the exercise of specific jurisdiction in Illinois over [the overseas parent].

Id.

*          *          *          *

Wilson is thus a successful example of what Bauman held was proper – “out-of-state defendants [being able] to structure their primary conduct” so as to avoid suit in the United States.  If an overseas parent cannot be subject to jurisdiction in the only state where its United States distributor is actually located, it can hardly be subject to jurisdiction anywhere else in the country.  See also Fed. R. Civ. P. 4(k)(2) (providing relief in this situation only for claims “aris[ing] under federal law”).  A corporation’s vertical integration:  (1) overseas parent selling to (2) overseas distributor selling to (3) a viable (we are not addressing alter ego claims not raised in Wilson) United States distributor – is thus a model for other overseas entities selling products into the American market that wish to structure their affairs so as to limit their product liability exposure to the assets of the American entity.  Indeed, Bauman/BMS also provides a degree of insulation from excessive American discovery, at least as a party to litigation.

Furthermore, as we mentioned earlier, the plaintiff in Wilson was apparently up against the statute of limitations when suit was filed.  The Bauman/BMS limits on personal jurisdiction have another beneficial effect.  The statute of limitations is often considered “procedural” for choice of law purposes (in the absence of a forum “borrowing statute”), which has in the past allowed otherwise time-barred plaintiffs to flock to those jurisdictions with longer statutes of limitations or broader tolling exceptions to their statutes.  No longer.  Due process in personal jurisdiction now precludes tardy plaintiffs from filing belated claims in states with no “case-related” contacts simply because those states have more permissive statutes of limitations.

We recently read a news story about a man who was imprisoned for 39 years for a crime he did not commit. The crime was grisly and resulted in the violent deaths of a 24-year-old woman and a small child, leaving a community outraged and law enforcement officials determined to hold someone responsible.  So, burdens of proof be damned, the defendant was convicted despite the fact that relevant DNA recovered from the victims was not his.  Eventually, a crusading retired policeman succeeded in winning exoneration and freedom for the prisoner.   Now, we went to law school.  We know all about the differences between criminal law and civil law.  And we know we should be circumspect about fragile visceral analogies when we are well aware of the relevant distinctions.  Nevertheless, when we read a bad “innovator liability” decision – a decision holding an innovator drug manufacturer liable for injuries caused by a generic version of the drug – a drug manufactured by someone else – there is a simplistic part of us that fails to see how this is so different from imprisoning someone for a crime he did not commit

Today’s case, Garner v. Johnson & Johnson, et al., 2017 WL 6945335 (C.D. Ill. Sept. 06, 2017) (just surfacing though several months old), is just such a bad decision.  In Garner, the plaintiff alleged that a generic fluoroquinolone antibiotic caused her to suffer serious injuries.  She sued the generic drug manufacturer that actually made her drug along with the innovator drug company that manufactured the name-brand version of the drug.  The defendants moved to dismiss for failure to state a claim.

The court first considered the plaintiff’s claims against the generic drug manufacturer, and correctly concluded that, under Mensing, the claims, all rooted in alleged inadequacies of the generic drug’s warning label, were preempted.  But the court wanted to hold someone responsible.  So, noting that the Seventh Circuit had not yet addressed innovator liability, it undertook to circumvent Illinois law.

As we discussed in our “Innovator Liability at 100” post, Illinois has long required product identification for all product liability matters, as evinced by the Illinois Supreme Court’s rejection of industry-wide liability under both market share liability and public nuisance rubrics. See Young v. Bryco Arms, 821 N.E.2d 1078, 1087-91 (2004) (public nuisance); Smith v. Eli Lilly & Co., 560 N.E.2d 324, 337-39, 344-45 (Ill. 1990) (market share liability); City of Chicago v. American Cyanamid Co., 823 N.E.2d 126, 134-35 (Ill. App. 2005) (market share liability in public nuisance); Lewis v. Lead Industries Ass’n. Inc., 793 N.E.2d 869, 874-76 (2003) (same) (all four cases finding no causation as a matter of law without product identification). See also Leng v. Celotex Corp., 554 N.E.2d 468, 470-471 (Ill. App. 1990) (rejecting market share liability pre-Smith in asbestos case); York v. Lunkes, 545 N.E.2d 478, 480 (Ill. App. 1989) (rejecting market share liability pre-Smith in battery case); Poole v. Alpha Therapeutic Corp., 696 F. Supp. 351, 353 (N.D. Ill. 1988) (rejecting market share liability pre-Smith in blood products case); Coerper v. Dayton-Walther, 1986 WL 4111, at *1 (N.D. Ill. March 27, 1986) (rejecting market share liability pre-Smith in tire rim case).

Moreover, Illinois does not recognize a duty to warn about the risks of a competing product:

[Defendant] is under no duty to provide information on other products in the marketplace. Such a duty would require drug manufacturers to rely upon the representations made by competitor drug companies.  This arrangement would only lead to greater liability on behalf of drug manufacturers that were required to vouch for the efficacy of a competitor’s product.

Pluto v. Searle Laboratories, 690 N.E.2d 619, 621 (Ill. App. 1997).  Recently, an Illinois appellate court recognized in dictum that an “overwhelming majority of courts have held that generic consumers may not sue the brand-name manufacturer.” Guvenoz v. Target Corp., 30 N.E.3d 404, 409 n.1 (Ill. App. 2015). See id. at 416 (plaintiffs “cannot obtain relief from brand-name drug manufacturers whose products they did not ingest”).

But the Garner court disregarded all of this. The court acknowledged that, to state a claim for negligence, the plaintiff was required to establish that the defendants owed her a duty of care, and that the existence of such a duty turned on the reasonable foreseeability of the injury.  But it  held, “In the well-regulated pharmaceutical industry, . . . a brand-name manufacturer . . . is surely not blindsided to find out that the equivalent of its . . . [label] as imposed on generic versions of [its drug],” and that doctors and patients would rely on that label when prescribing and using the generic drug.   Garner, 2017 WL 6945335 at *7.  Further, the court held, it was “a common practice, and therefore foreseeable, for a doctor to prescribe a name brand drug and the pharmacy to fill it with the generic version.” Id. And so, though “other courts have expressed trepidation about the consequences of holding brand-name manufacturers liable for injury caused by generics,” id. (citations omitted), the court concluded that finding that the brand-name manufacturer had a duty of care to a plaintiff taking someone else’s drug “simply allows [the plaintiff] to attempt to recover from the one entity, under federal law, that has the unilateral ability to strengthen the label.” Id.  Even though that entity did not manufacture the product that allegedly injured her.

The court next addressed the issue of causation, acknowledging that “liability for negligence may not be imposed based merely on a breach of duty, without causation being established. Id. (citation omitted).  The plaintiff alleged that she would not have taken the generic drug if its label contained adequate warnings.  (Although the generic drug was a prescription drug, the court failed to analyze warnings causation from the perspective of the prescribing physician.) And the court held that “an extra link in the causal chain (here, the transfer of the identical label from the branded drug to the generic drug) does not break it.  It is possible for a plaintiff to show that injuries caused by mislabeling on a generic medication can be directly traced back to the brand name manufacturer’s creation of the label.” Id. (citations omitted).  As such, the court found that the plaintiff had “adequately alleged causation,” id., and, in derogation of its Erie duty to apply Illinois law, denied the innovator company’s motion to dismiss the plaintiff’s negligence claims.  Similar analysis allowed the plaintiff’s related claims to proceed.

We get the issue. We understand that the United States Supreme Court has limited the remedies of plaintiffs injured by generic drugs, even assuming they can prove a product defect, an injury, and causation in between.  But “someone’s gotta pay” cannot justify a decision that starts from a desired result and works backward, hurdling any doctrine or jurisprudence that gets in the way.  We defend innovator drug companies for a living, and we will continue to speak out against decisions like Garner. And we’ll keep you posted on what comes next.

Today’s post is another guest post from Kevin Hara, of Reed Smith, who is on his way to becoming a semi-regular blog contributor.  This post is about forum non conveniens, which is more discretionary, and less enforceable than personal jurisdiction as a limitation on plaintiff-side (or even defense-side) forum shopping, but which, as Kevin’s post demonstrates, is still better than nothing.  As always with our guest posts, the author deserves 100% of the credit, and any blame, for what follows.

**********

As a child of the 80s (slight pause for the chuckling and/or groaning here), there are so many images that flash through one’s mind as we reflect, fondly, for the most part, on that decade in discussing an Illinois appellate court’s decision in McIver, et al., v. American Medical Systems, Inc., et al., 2017 IL App (5th) 170011-U, 2017 WL 6327143 (Ill. App. Dec. 8, 2017), sending litigation tourists on an about-face based on the doctrine of forum non conveniens.  Though spelled differently, this McIver case makes us recall another MacGyver, the hit 80s television show (which, incidentally, my wife and I enjoy watching together in reruns.)  However, before delving into MacGyver/McIver, it is impossible to not to discuss some pop culture references from that era, even though we could not explore even the tip of the 80s iceberg: but there was the music – from pop, Michael Jackson, Madonna, Prince, to rock bands known for ballads, a la Journey, Bon Jovi, Van Halen, Duran Duran and too many others to name, including the hair bands, the rise of rap music, heavy metal, and a bevy of one-hit wonders.  There was the fashion – perhaps stretching that word a bit – legwarmers, parachute pants, camouflage, perms, bangles, hairspray, and shoulder pads!  Who can forget the movies? Back to the Future, the Indiana Jones trilogy (not including Crystal Skull which came much later, apologies Shia Labeouf), ET, The Shining, Empire Strikes Back, Return of the Jedi, Wall Street, The Color Purple, Beverly Hills Cop, Karate Kid, Sly, Arnie, Bruce Willis, all things explosions and action! and far more.  The events.  Lakers v. Celtics.  Air Jordan. The tragic Challenger explosion.  Chernobyl.  Mount Saint Helens (not all the explosions were in the movies, unfortunately).  Macintosh Computers.  Windows.  The fall of the Berlin Wall.  Perestroika.  Prozac.  CDs.  The Oprah Winfrey Show.  Rubik’s Cube.  All of the above, and so much more.

Before we disappear down a virtual “Who Framed Roger Rabbit?” hole, let’s revisit the classic 80s television series, “MacGyver,” starring Richard Dean Anderson that is apropos to our discussion today.  MacGyver was iconic for numerous reasons, with Anderson as the title character, a secret agent for the fictional Department of External Services, physicist, special forces veteran, and problem solver extraordinaire.  Although MacGyver undoubtedly qualifies as campy, far-fetched, and perhaps melodramatic, it was also imaginative, witty, clever, fun, and at times, touching.  MacGyver famously extricated himself –  and the world – from the brink of doom on countless occasions using ordinary objects, often including his ever-trusty Swiss Army knife (rather than, say, a sonic screwdriver), to perform extraordinary feats.  For instance, MacGyver is now officially defined in the Oxford English Dictionary, as a verb meaning “Make or repair (an object) in an improvised or inventive way, making use of whatever items are at hand.”  See, perhaps the most notable real-world example, here.  Some of MacGyver’s most amazing inventions or accomplishments included using candlesticks, a rubber mat, and an electrical cord to improvise a defibrillator; smashing a pair of binoculars, removing a prism, and deflecting a laser beam back to the emitter, destroying it; plugging a sulfuric acid leak with chocolate, containing sugars which react with acid to form elemental carbon, and a gummy residue (tested successfully by mythbusters); and using jumper cables with coins in the teeth, wiring them to a generator, an creating an arc welder (which, incidentally also proved to be functional.)

But not even MacGyver, despite his quick thinking and unparalleled toolbox, could “MacGyver” jurisdiction over the defendant in the McIver case for the Maryland resident plaintiffs.  McIver was yet another multi-plaintiff complaint filed in 2012 in Illinois state court, involving 75 plaintiffs from 23 states, (only one from Illinois), joined in a single action, alleging product liability claims in connection with prescription pelvic mesh products manufactured by AMS.  Id. at *1.  As with most other multi-plaintiff complaints, the only connection among plaintiffs is that they all received pelvic mesh implants.  The defendant filed a motion to sever the claims of the non-resident plaintiffs, arguing misjoinder, and concurrently filed a motion to dismiss for wrongful venue.  Id.  The parties agreed that the defendant would answer or respond to the complaint after resolution of the motions, as ordered by the court.  In March 2013, the trial court denied defendant’s motion to sever, apparently reasoning that venue was proper based solely on the presence of one Illinois plaintiff, with the order stating “that AMS would have to defend a case in St. Clair County regardless of whether the motion to sever were granted.”  Id.  Shades of the reversed California Supreme Court BMS decision.  The plaintiffs prepared the order, which significantly failed to provide a deadline for the defendant to answer or respond to the complaint, nor did the court order such an answer.  As an aside, given what we know of St. Clair County, it comes as no surprise that the trial court denied the motions to sever or dismiss.  As indicated, had plaintiffs filed McIver this year, the defendant very well could have moved to dismiss for lack of jurisdiction under BMS.

Time passed, and 73 of the 75 plaintiffs settled with the defendant, leaving only Paula and Earl Conway of Essex, Maryland.  Id. at *2.  After the court set the case for trial, the defendant, now faced with only nonresident plaintiffs, filed a motion to dismiss based on forum non conveniens (this was still pre-BMS), arguing that “’the public and private interest factors relevant to the consideration of its motion strongly favored dismissing [plaintiffs’ action]’” such that it could be refiled in Maryland.  Id.  The overwhelming majority of relevant events, including plaintiff’s mesh implant, her treating physicians, and medical records were located in Baltimore, and fact witnesses including friends, family, and coworkers “would be expected to live in or around Baltimore County.”  Id.  After receiving answers to interrogatories confirming that plaintiffs’ fact witnesses all resided outside the state of Illinois, the defendant supplemented its motion, asserting that plaintiffs’ case had “absolutely no connection” to Illinois.  Id. at *3.

It being St. Clair County, the defense lost again, as the trial court denied the motion without explanation.  Id.

On appeal, the defendant argued that the trial court abused its discretion in denying the forum non motion (with which we wholeheartedly agree), and plaintiffs claimed that the motion was untimely under Illinois Supreme Court Rule 187(a).  That rule mandates that any forum non conveniens (“FNC”) motion must be filed not later than 90 days after the last day that a party may file its answer.  Id.  The appellate court noted that the trial court ordered the parties to meet and confer, but did not order the defendant to file an answer and, since no answer was filed, the FNC motion was timely under Rule 187(a)’s “unambiguous” deadline. Id.

Strike one.

Plaintiffs claimed defense-side “gamesmanship” despite their own drafting the scheduling order at issue, claiming that the defendants should have filed the FNC motion at the “earliest opportunity.”  Id. at *4.  Again, the appellate court disagreed, finding that the defendant brought the motion with “reasonable and appropriate promptness,” noting that the parties had tentatively agreed to the filing deadline for AMS’s answer, but “[a]t no point did the plaintiffs seek an order requiring” the defendant to answer by a specific date.  Id.

Strike two.

Ultimately, the court went further, and stated that “even assuming that [the defendant] had filed an answer in 2013,” it would still conclude that the 2016 forum non conveniens motion was timely.  Id.  The court’s reasoning was simple – the case started with 75 plaintiffs from 23 states, and only after all but the two Maryland plaintiffs were dismissed, could the defendant have “had a clear and valid basis for seeking” transfer to that forum.  Id. at *5.

Strike three.

Additionally, the appellate court found no prejudice to the plaintiffs, despite their case being pending more than four years when the defendant filed motion.  Plaintiffs provided no discovery during all that time, and only later – more than four years after filing – did plaintiffs’ initial discovery responses confirm that plaintiffs’ witnesses resided predominantly in Maryland.  Id.

Nor was the court sympathetic to plaintiffs’ claim that transfer would cause delay.  Plaintiffs’ own fault, the court found, because any plaintiff filing in a foreign jurisdiction (litigation tourists) and combining his/her claims with other claimants in one action takes a “calculated risk” that those choices might result in dismissal or delay.  Id.  The court put it bluntly: “[t]o the extent that the present case languished in the circuit court, it did so without objection and with the plaintiffs’ implicit consent.”  Id. (emphasis added)

Finally, reaching the merits of the FNC issue, the court considered both the private and public interest factors, along with plaintiffs’ choice of forum, which was “much less reasonable,” because the vast majority of relevant events occurred outside of St. Clair County.  Id. at *7.  Neither the defendant nor the plaintiffs were Illinois residents, and the convenience of the parties was neutral.  Id.  However, access to evidence “strongly favor[ed] a transfer” to Maryland, given the location of most of the witnesses in that state.  Id.  Likewise, compulsory process would be impossible in Illinois, and the costs of securing witnesses overwhelmingly supported transfer.  Id.  Finding that the practical applications of the trial were a nonfactor, the court turned to the public interest factors, concentrating on which state, Illinois or Maryland, had a greater interest in the litigation.  Id. at *8.  The fact that the plaintiff’s mesh implant surgery occurred in Maryland, combined with the unfairness of imposing jury duty on Illinois residents, favored transfer to avoid burdening its taxpayers with a matter “otherwise unrelated to their state.”  Id. In sum, the appellate court ruled that the trial court erred in denying the forum non conveniens motion because Illinois had “no relevant or significant factual connections to the case.”  Id. at *9.

Thankfully, the appellate court considered the facts – in conjunction with some common sense – and the applicable law, and reversed and remanded with instructions to dismiss the case.  Even though this decision is non-precedential, it puts some handwriting on the wall.  Litigation Tourists Go Home, even from St. Clair County.  And if not FNC, personal jurisdiction under BMS is waiting in the wings.  Not even MacGyver, with his remarkable ingenuity, endless amounts of duct tape, Swiss Army knives, and any assortment of household items, could craft a way back into Illinois state court for these litigation tourist plaintiffs.

Literally for decades plaintiffs in mass torts have employed the business model of flooding jurisdictions seen as friendly to them with more solicited plaintiffs than any court system can possibly handle.  They have employed every forum-shopping trick in the book to trap defendants in these jurisdictions, which usually have no relationship to any party.  After swamping the courts, they finish the job by advocating procedural shortcuts, such as abbreviated discovery and consolidated trials, that make it virtually impossible for defendants to undertake anything approaching an effective defense.

The result is tens, if not hundreds, of thousands of non-resident plaintiffs filing suit in favored(?) fora having nothing to do with either the parties or the supposed disputes.

Having thus sown the jurisdictional wind, however, the other side is now on the verge of reaping the jurisdictional whirlwind.  Their jurisdictional gamesmanship is circling the drain, following the United States Supreme Court’s decisions in Bristol-Myers Squibb Co. v. Superior Court, 137 S. Ct. 1773 (2017) (“BMS”), and before that in Daimler AG v. Bauman, 134 S. Ct. 746 (2014) (“Bauman“).  Without personal jurisdiction over the defendants, plaintiffs can’t get to first base.  Let them explain to all these clients, who probably wondered about having their suits pending in far-off places to begin with, why all is for naught and they have to start over again (assuming they can at all – not every state tolls the statute of limitations) in a more logical forum they could have been in all along.

Two recent cases illustrate the yawning precipice into which so many litigation tourists find themselves staring.

The first is the Illinois Supreme Court’s decision a few weeks ago in Aspen American Insurance Co. v. Interstate Warehousing, Inc., ___ N.E.3d ___, 2017 WL 4173349 (Ill. Sept. 21, 2017), which we mentioned briefly in our recent post on Judge Herndon’s blowing up of a bunch of misjoined complaints dragged out of St. Claire County.  Aspen American wasn’t a product liability case at all – but it just as well could have been.  A litigation tourist insurance company sued on a subrogated claim in Chicago (Cook County).  The insured was a New Jersey company that claimed damages when a warehouse owned by the defendant allegedly collapsed, with the end result being that perishable goods owned by the Jersey entity … well, perished.  2017 WL 4173349, at *1.

The only trouble was that the warehouse wasn’t in Illinois either – it was in Michigan.  Id. at *1.  The defendant owned another warehouse in Illinois, as it did in many other states, but the plaintiff had never stored anything there.  Id.

After losing below, the non-resident defendant successfully argued that the non-resident plaintiff couldn’t obtain personal jurisdiction over it for litigation concerning an accident that also occurred out of state.

The Illinois Supreme Court’s decision was unanimous.

After Bauman and BMS, that the defendant conducted unrelated business – operating a different warehouse – in Illinois did not come close to a basis for personal jurisdiction.  The defendant had operated the Illinois warehouse for decades, but mere “continuous and substantial” business in a state isn’t enough anymore for general jurisdiction.  Aspen American, 2017 WL 4173349, at *3.  A warehouse wasn’t enough:

[T]o comport with the federal due process standards laid out in [Bauman] . . ., plaintiff must make a prima facie showing that defendant is essentially at home in Illinois.   This means that plaintiff must show that defendant is incorporated or has its principal place of business in Illinois or that defendant’s contacts with Illinois are so substantial as to render this an exceptional case.  Plaintiff has failed to make this showing.

Id. at *4.  If operating one warehouse was enough for jurisdiction, “then defendant would also be at home in all the other states where its warehouses are located.  The Supreme Court has expressly rejected this reasoning.”  Id.

Further, the defendant’s registration to do business in Illinois, as it had to do to operate that other warehouse, likewise was insufficient to support jurisdiction over a non-resident’s suit for out-of-state injuries.  “[T]he fact that a foreign corporation has registered to do business under the Act does not mean that the corporation has thereby consented to general jurisdiction over all causes of action, including those that are completely unrelated to the corporation’s activities in Illinois.”  Id. at *5,

So, why did Aspen American attract the attention of amici Illinois Trial Lawyers Association and the American Association for Justice, as well as several major asbestos defendants?  Id. at *2.  It all goes back to that gathering jurisdictional whirlwind.  Cook, Madison, and St. Clair counties are three of plaintiffs’ favorite litigation dumping grounds.  Indeed, as we mentioned in our other post, the same intermediate Illinois appellate court that got spanked in Aspen American decided M.M. v. GlaxoSmithKline LLC, 61 N.E.3d 1026 (Ill. App. 2016), less than two months later (Aspen on June 30, 2016, and M.M. on August 26 of the same year).  M.M. decided that a single clinical trial site was enough for jurisdiction, which means that it could be sued in “all the other states where” it recruited for such trials.  Aspen American unanimously rejected such broad jurisdictional arguments in the context of warehouses – we don’t see much difference.

Good luck with that now. The jurisdictional whirlwind is coming for the litigation tourist Rivieras of Illinois.

It’s already sweeping away the talc swamp in Missouri.

That’s the other decision we want to discuss, Fox v. Johnson & Johnson, ___ S.W.3d ___, 2017 WL 4629383 (Mo. App. Oct. 17, 2017).  Fox was an appeal from one of those gigantic talc verdicts we’ve all read about.  The plaintiff was a non-resident (we don’t know where from, and that doesn’t matter), who found her way into St. Louis by virtue of all that jurisdictional gamesmanship we mentioned earlier.  She was one of 65 plaintiffs from all over the country joined in the same complaint with one St. Louis resident.  Id. at *1.  However, after BMS, that jurisdictional subterfuge – and the boxcar verdict it produced – is for naught.

[A] non-resident plaintiff must establish an independent basis for specific personal jurisdiction over the defendant in the state. . . .  [S]pecific personal jurisdiction requires a connection between the forum state and the specific claims at issue.  “When there is no such connection, specific jurisdiction is lacking regardless of the extent of a defendant’s unconnected activities in the state.”  The fact that resident plaintiffs sustained similar injuries does not support specific jurisdiction as to non-resident claims.  The parties agree that BMS is controlling here, but they disagree on the resulting outcome.

Id. at *2 (BMS citations omitted).  Another unanimous decision.

Plaintiff in Fox wanted to scurry about to see if she could find talc-related contacts between the defendant and an in-state company with which the defendant allegedly did business.  Id.  The court in Fox refused to allow such ex post facto discovery and argument.  Id. at *3 (“we find no authority supporting [plaintiff’s] request to rewind the case so as to supplement the pre-trial record to establish jurisdiction under the new standard”).  Poof.  A half billion dollars or so in talc verdicts just went up in smoke.

Further, that kind of discovery doesn’t advance the ball under BMS.  The contacts that matter are the defendant’s own relationship with the forum – not that the defendant had a relationship with somebody else that was in turn a resident of the forum.  This point was litigated in BMS.  The BMS plaintiffs themselves (like the 63 non-resident plaintiffs in the complaint in Fox) had no contacts with California.

[T]he nonresidents were not prescribed [the drug] in California, did not purchase [the drug] in California, did not ingest [the drug] in California, and were not injured by [the drug] in California.  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.

BMS, 137 S. Ct. at 1781.  Nor did the defendant’s allegedly contracting with a drug wholesaler that was, in turn, located in California:

[Plaintiffs] contend that [defendant’s] “decision to contract with a California company to distribute [the drug] nationally” provides a sufficient basis for personal jurisdiction. . . .  [T]he requirements of [personal jurisdiction] must be met as to each defendant over whom a state court exercises jurisdiction.  In this case, it is not alleged that [defendant] engaged in relevant acts together with [the resident defendant] in California. . . .  The bare fact that [defendant] contracted with a California distributor is not enough to establish personal jurisdiction in the State.

Id. at 1783 (citations and quotation marks omitted).  “[C]ontracting with” an in-state entity doesn’t move the jurisdictional needle.

That a separately owned/incorporated in-state subcontractor was involved in some of the steps by which a product was prepared to enter the stream of commerce doesn’t cut it.  Whether it’s a frantic search for a Missouri talc subcontractor, or for some similar Pennsylvania subcontractor to try to prevent the coming whirlwind from decimating the Philadelphia litigation business, such efforts are highly unlikely to succeed.  What kind of facts are needed to circumvent the usual limits on personal jurisdiction?  Bauman told us.  Doing so requires an “exceptional case.”  134 S. Ct. at 761 n.18 (emphasis added).  Ordinary business relationships with third parties who themselves reside in the state aren’t going to be enough to support litigation tourism.  “Exceptional” cases that would expand specific jurisdiction under BMS should be about as frequent as “exceptional” cases that expand general jurisdiction under Bauman.  It takes something exceptional to make an exception to the constitutional Due Process limits to personal jurisdiction.

This is why we saw asbestos amici descend on Aspen American.  Non-resident asbestos plaintiffs aren’t going to be able, any more, to obtain personal jurisdiction over the great majority of the scores of defendants that they sue – only those few unfortunate enough to be “at home” in the forum.  The same would be true in a multi-defendant suit involving prescription medical products.  And what happens when those unfortunate few viable defendants find themselves unable to pursue cross-claims or otherwise obtain relief against absent parties, simply because the plaintiff didn’t sue in state where s/he was injured?  “For the convenience of parties and witnesses, in the interest of justice, a district court may transfer any civil action to any other district or division where it might have been brought.”  28 U.S.C. §1404(a); see, e.g., Schmidt v. Leader Dogs for the Blind, Inc., 544 F. Supp. 42, 47 (E.D. Pa. 1982) (“[d]efendant’s inability to implead or cross-claim herein against the medical defendants dismissed from this lawsuit is a determinative factor”; §1404(a) transfer of venue granted).  It took us all of two minutes to find a cross-claim-based venue transfer decision; there are undoubtedly more.

The jurisdictional whirlwind is upon us. Toto, we’re not going to be in Madison County anymore.

Once the Supreme Court’s decision in Bristol-Myers Squibb Co. v. Superior Court, 137 S. Ct. 1773 (2017), definitively determined that non-resident plaintiffs can’t go suing non-resident defendants anywhere they want, attention turned to one of the primary types of forum-shopping gamesmanship that plaintiffs used to trap defendants in their preferred venues.

St. Louis – and thus the Eastern District of Missouri – were one of the first battle grounds, and as we celebrated here, here, and here, a jurisdiction that had previously been almost impervious to attempts to combat fraudulent misjoinder seems to be coming around.  See Jinright v. Johnson & Johnson, Inc., 2017 WL 3731317, at *4-5 (E.D. Mo. Aug. 30, 2017); Covington v. Janssen Pharmaceuticals, Inc., 2017 WL 3433611, at *4-5 (E.D. Mo. Aug. 10, 2017); Turner v. Boehringer Ingelheim Pharma, Inc., 2017 WL 3310696, at *3 (E.D. Mo. Aug. 3, 2017); Jordan v. Bayer Corp., 2017 WL 3006993, at *4 (E.D. Mo. July 14, 2017); Siegfried v. Boehringer Ingelheim Pharmaceuticals, Inc., 2017 WL 2778107, at *4-5 (E.D. Mo. June 27, 2017).  So far every post-BMS removal of a misjoined, multi-plaintiff action in Missouri has followed the rationale discussed in our prior posts (and below), except for those with timing issues.

So that’s one “magnet jurisdiction” seemingly on the way towards at least some degree of redemption.

Another one is the Southern District of Illinois, home to Madison and St. Clair Counties. That one started out looking a lot more doubtful.  The first court to decide a post-BMS removal case had the attitude that nothing had changed.  The court elected to ignore BMS – not even deigning to discuss it, beyond mentioning the defendant’s reliance.  Rios v. Bayer Corp., 2017 WL 3600374, at *1 (S.D. Ill. Aug. 22, 2017).  Otherwise, it appeared that the Southern District was going to continue a status quo that had allowed it to keep its docket largely free of escapees from Madison and St. Clair, no matter what:

Plaintiff’s Complaint alleges that Defendants are citizens of [numerous states and foreign countries], and that some of the plaintiffs are also citizens of [the same states].  Thus, complete diversity does not exist on the face of the Complaint.  In their Notice of Removal, Defendants state that this Court nonetheless has diversity jurisdiction because the out-of-state Plaintiffs’ claims were either fraudulently joined or procedurally misjoined, and thus the non-diverse Plaintiffs’ citizenship should be ignored for purposes of determining jurisdiction.  But because it is clear from the face of the Complaint that diversity jurisdiction is lacking, the Court need not first determine the existence of personal jurisdiction, and once again opts not to do so in this case.

Id. at *2.

And so things stood until just recently, until another jurist in the district (one who wasn’t a former member of ATLA’s board of governors), former Chief Judge Herndon, decided that he couldn’t in good conscience say that BMS changed nothing.  In a series of seven Xarelto cases, Judge Herndon recognized that there could be no more jurisdictional business as usual in the Southern District after BMS.  See Berousee v. Janssen Research & Development, LLC, 2017 WL 4255075 (S.D. Ill. Sept. 26, 2017); Douthit v. Janssen Research & Development, LLC, 2017 WL 4224031 (S.D. Ill. Sept. 22, 2017); Braun v. Janssen Research & Development, LLC, 2017 WL 4224034 (S.D. Ill. Sept. 22, 2017); Bandy v. Janssen Research & Development, LLC, 2017 WL 4224035 (S.D. Ill. Sept. 22, 2017); Pirtle v. Janssen Research & Development, LLC, 2017 WL 4224036 (S.D. Ill. Sept. 22, 2017); Roland v. Janssen Research & Development, LLC, 2017 WL 4224037 (S.D. Ill. Sept. 22, 2017); and Woodall v. Janssen Research & Development, LLC, 2017 WL 4237924 (S.D. Ill. Sept. 22, 2017).

Since they are all by the same judge on the same subject, these seven opinions not surprisingly track the same rationale.  We’ll reference the most recent decision, Berousee, in our discussion. Berousee is a typical (actually somewhat on the small side, in our experience) misjoined mishmash of “32 non-Illinois plaintiffs from 18 different states who were embedded in the lawsuit explicitly to destroy diversity jurisdiction” by making sure that at least one plaintiff was not diverse from the non-resident defendant being sued.  Id., 2017 WL 4255075, at *1.  This motley crew of plaintiffs were blatantly misjoined, having nothing to do with one another, except allegedly taking the same product and suffering similar types of injuries

Notwithstanding the facial non-diversity of the complaint, the defendant removed (from St. Clair county), citing (“draw[ing] attention to”) BMS for the proposition that “state courts lack specific jurisdiction to entertain non-resident plaintiff claims.”  Id.  The court agreed that BMS “established the Fourteenth Amendment’s due process clause did not permit the exercise of specific personal jurisdiction in state court over nonresident consumer’s claims.”  Id. at *1 n.2.

The key point in all these cases is the federal district court’s “discretion in jurisdiction.”  That is, under Ruhrgas AG v. Marathon Oil Co., 526 U.S. 574 (1999), such courts, in determining their jurisdiction, are free to invert the usual process and consider personal jurisdiction before diving into subject matter jurisdiction where the personal jurisdiction question is “straightforward” and “present[s] no complex question of state law,” and conversely “subject-matter jurisdiction is problematic.”  Berousee, 2017 WL 4255075, at *2 (discussing Ruhrgas).

[D]istrict courts do not overstep Article III limits when declining jurisdiction of state-law claims on discretionary grounds without determining whether those claims fall within their pendent jurisdiction without deciding whether the parties present a case or controversy.  Where a straightforward personal jurisdiction issue presenting no complex question of state law is pending before the Court − and the dispute over subject-matter jurisdiction is problematic − the court does not abuse its discretion by turning directly to personal jurisdiction.

Id. at *2 (Ruhrgas quotations omitted).

Now – that is to say, after BMS – personal jurisdiction is much more “straightforward” than the subject matter jurisdictional thicket of fraudulent misjoinder and CAFA jurisdiction:

[S]everal courts [have] utilized the BMS holding [and] conclusively held personal jurisdiction − instead of subject-matter jurisdiction − is the more straightforward inquiry.  Based on the above recent legal decisions combined with lack of “unyielding jurisdictional hierarchy,” interests of judicial economy, and weight of the precautionary effect on ruling on an issue that could regress and bind the state court, the Court finds that in this matter personal jurisdiction is the more straightforward inquiry − and will analyze same before addressing challenges to subject-matter jurisdiction.

Id. at *3 (citations to E.D. Mo. decisions already cited in this post omitted).

That was the hard part, because once the court gets to the personal jurisdiction inquiry, application of BMS really is pretty cut and dried in the context of mass torts and multi-plaintiff misjoined complaints.  General personal jurisdiction was out under our old friend Daimler AG v. Bauman, 134 S. Ct. 746 (2014), as the defendant was neither incorporated nor headquartered in Illinois. Berousee, 2017 WL 4255075, at *3.

As for specific jurisdiction, “[i]n exercising specific personal jurisdiction, defendants’ contacts with Illinois must be directly related to the challenged conduct.”  Id. (citations omitted).  There must be “purposeful availment” related to litigation.  Id. at *3 n.3.  Plaintiffs claimed that “defendants purposefully targeted Illinois as the location for multiple clinical trials which formed the foundation for defendants’ [FDA new drug] application.”  Id. at *4.  That was insufficient under BMS:

It is undisputed that the non-Illinois plaintiffs do not claim injuries from ingesting [the drug] in Illinois, and all conduct giving rise to the non-Illinois plaintiffs’ claims occurred elsewhere. The instant matter is analogous to BMS where the United States Supreme Court held that California state courts do not retain specific personal jurisdiction over non-resident defendant pharmaceutical companies, for non-resident plaintiff claims not arising out of or relating to defendant’s contacts with California. . . .  [T]his Court lacks specific personal jurisdiction over defendants regarding the non-Illinois plaintiffs’ claims.

Id. (emphasis original).

The plaintiff-side jurisdictional argument that Berousee rejected was the same one allowed by an Illinois intermediate appellate court last year in M.M. v. GlaxoSmithKline LLC, 61 N.E.3d 1026 (Ill. App. 2016), which is why M.M. became our #8 worst case of the year.  While the Supreme Court recently denied certiorari, see 2017 WL 1153625 (U.S. Oct. 2, 2017), that means next to nothing.  Consider, for example, the number of denied certiorari petitions in PMA preemption cases before the Court took, and affirmed, the pro-preemption decision in Riegel.  Off the top of our heads (and it’s been a while) we can name at least four − Martin v. Medtronic; Brooks v. Howmedica; Kemp v. Medtronic (one of Bexis’); and Mitchell v. Collagen.  There are probably more.

So we wouldn’t read anything into the denial in M.M.  It’s reasoning didn’t impress us – at minimum it is another “grasping” and “exorbitant” theory of personal jurisdiction that, like those in Bauman and BMS, cannot pass Due Process muster.  More importantly, M.M. is questionable in light of the Illinois Supreme Court’s recent decision in Aspen American Insurance Co. v. Interstate Warehousing, Inc., 2017 WL 4173349 (Ill. Sept. 21, 2017), which not only decisively rejected jurisdiction by consent, id. at *4-5,  but also had this to say about a similar theory, involving warehouses rather than clinical trials:

[P]laintiff has established that defendant does business in Illinois through the warehouse. . . .  But this fact falls far short of showing that Illinois is a surrogate home for defendant.  Indeed, if the operation of the warehouse was sufficient, in itself, to establish general jurisdiction, then defendant would also be at home in all the other states where its warehouses are located. The Supreme Court has expressly rejected this reasoning.

Id. at *4.  Granted, Aspen Insurance was addressing general jurisdiction, but since we’re discussing non-resident plaintiffs and Due Process, the “grasping”/”exorbitant” principle is the same.  Substitute “clinical trials” for “warehouses” and you can see where this is going….

Nor, getting back to the focus of this post, did the clinical trials argument impress Judge Herndon.  He was so unimpressed, he didn’t even cite M.M. while rejecting its rationale.  In Berousee,“the non-Illinois plaintiffs failed to allege ingestion of [the drug] in Illinois, or suffered from injuries caused by [the drug] in Illinois.”  2017 WL 4255075, at *4.  Without such allegations, “there is no connection between Illinois and the underlying [drug] controversy, which in itself is unconnected to Illinois.”  Id.  Allegations like the plaintiffs, about clinical trials generally, merely involved “general connections with forum [that] are not enough; a corporation’s continuous activity of some sort within a state is not enough to support demand that corporation be amenable to lawsuits unrelated to specified activity.”  Id.  The same sort of conduct “took place throughout the United States.”  Id. at *4 n.4.  But the non-resident plaintiffs “were not prescribed [the drug] here, nor did they purchase the drug, suffer any injury, or receive treatment in [this state].”  Id.

There being no personal injury over non-resident plaintiffs’ claims against non-resident defendants, those plaintiffs had to be dismissed, without prejudice.  Id. at *4-5.  Dismissal of those plaintiffs’ claims meant that complete diversity existed between the lone Illinois plaintiff and the defendants, so remand of that claim to state court was denied.  Id. at *5.

The other six decisions by Judge Herndon apply the same core jurisdictional reasoning as Berousee almost verbatim.  See Douthit, 2017 WL 4224031, at *3-6; Braun, 2017 WL 4224034, at *3-6; Bandy, 2017 WL 4224035, at *3-6; Pirtle, 2017 WL 4224036, at *3-6; Roland, 2017 WL 4224037, at *2-5; Woodall, 2017 WL 4237924, at *3-6.

That is not to say that they are identical in all respects, however.  In Douthit, the plaintiffs’ back-up argument, that the removal was untimely, was rejected almost out of hand.  The Supreme Court’s decision in BMS constituted an “order or other paper” under 28 U.S.C. § 1446(b)(3) opening up a new 30-day removal period.  2017 WL 4224031, at *6.  Plaintiffs made only “a feeble attempt to persuade the Court that pleadings and orders filed in other suits, not related to the removed case” weren’t “orders or other papers” under this statute . Id.  The court decisively rejected this “erroneous[] conten[tion]”:

Correctly, defendants attest BMS conclusively established the Due Process Clause prohibits non-Illinois plaintiffs from filing claims against defendants in Illinois state courts.  The Court agrees with defendants and finds plaintiffs’ argument unfounded.  When a “different case resolve[s] a legal uncertainty concerning the existence of original federal jurisdiction[,]” removal is allowed on that basis.

Id. (quoting Wisconsin v. Amgen, Inc., 516 F.3d 530, 534 (7th Cir. 2008)). Accord Braun, 2017 WL 4224034, at *6; Bandy, 2017 WL 4224035, at *6; Pirtle, 2017 WL 4224036, at *6; Roland, 2017 WL 4224037, at *5; Woodall, 2017 WL 4237924, at *6.

We hope that Judge Herndon’s septilogy (while not as entertaining as J.K. Rowling’s) nails down post-BMS jurisdictional issues in Southern District of Illinois, just as firmly as those issues appear to be resolved in the Eastern District of Missouri.  On to California and Pennsylvania.

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

In our post earlier this week “No Causation, No ‘Parallel Claim’” we examined the enormous causation hurdle plaintiffs face in trying to prove a Stengel or Hughes type failure to warn claim in those jurisdictions where such a claim has been found not to be preempted. In that post, we commented that we “would have preferred an order finding the failure-to-warn claims preempted.” Well today, we bring you two that do just that. The first a complete preemption win, the other only a partial, but we’ll start with the good news.

Both Golden v. Brown, Case # 17CV30568, slip op. (Colo. Dist. Ct. Sep. 24, 2017) and Norabuena v. Medtronic, Inc., 2017 Ill. App. LEXIS 593 (Ill. App. Sep. 20, 2017) refused to recognize a failure to warn claim premised on a failure to report adverse events to the FDA – a Stengel claim if you’re in the Ninth Circuit and a Hughes claim if you’re in the Fifth. Now neither Colorado nor Illinois is in those circuits, but we’d like to think that regardless these state courts would have reached the same conclusion they did – neither Colorado nor Illinois law recognizes a claim for failure to warn the FDA. So, plaintiff can allege defendant violated a federal regulation by failing provide information to the FDA – but it isn’t “parallel” to any state law claim because there is no such state law claim. The Illinois appellate court summed it up nicely:

[A]lthough plaintiffs have identified a federal requirement that their complaint alleges Medtronic violated, there is no Illinois requirement that parallels it. Plaintiffs asserted claims for failure to warn. Although Illinois recognizes that a manufacturer may satisfy its duty to warn by conveying information to third-party learned intermediaries, this is not synonymous with an affirmative duty to warn a federal regulatory body. The learned intermediary doctrine states that a manufacturer has a duty to warn prescribing physicians of a drug’s known dangerous propensities” under the understanding that those physicians will use their expert knowledge in adequately warning the patient. We cannot find that this duty is parallel to the federal requirement.

Norabuena, 2017 Ill. App. LEXIS 593 at **14. The Colorado court not only found that allegations of failure to report adverse events to the FDA don’t state a parallel claim, but also concluded that Stengel and Hughes “cannot be reconciled with 21 U.S.C. §360k(a) as interpreted in Riegel or 21 U.S.C. §337(a) as interpreted in Buckman.” Golden, slip op. at 3. In other words, failure to warn a learned intermediary is different from and in addition to federal requirements regarding reporting of adverse events and a claim for failure to provide information to the FDA is an improper attempt at private enforcement of the FDCA. Just what we’ve been saying since these two awful decisions came down.

Both decisions have a little more to discuss.

In Golden, plaintiff also attempted to base a parallel claim on alleged violations of Current Good Manufacturing Processes (“CGMPs”). Noting that it was joining the majority of courts to have considered the issue, the court ruled that the CGMPs are too “vague” and “open-ended” to serve as a basis for a parallel claim. Id. at 2. The court also found plaintiff’s breach of implied warranty of merchantability claim preempted as essentially an allegation that the device was not safe and effective which would directly contradict the FDA’s PMA decision that “there is a reasonable assurance of . . . safety and effectiveness” and therefore expressly preempted. Id. at 3. And finally, the court found plaintiff’s claims impliedly preempted because plaintiff failed to explain “how Defendant’s conduct violated state law duties absent the FDCA.” Id. Simply stating that her claims were premised on Colorado common law was insufficient – “true merely in title, not substance.” Id. Instead, plaintiff’s claim exist solely under the FDCA which is not allowed.

The Golden case also suffered from some pleadings defects, such as failure to allege facts to support either a defect or causation. Id. at 2. But even if those pleading deficiencies could be cured, none of plaintiff’s claims survived preemption, so the case was dismissed in its entirety.

Switching gears to Illinois – unfortunately the court ruled that one of the bases for plaintiff’s failure to warn claim was not preempted. The FDCA contains regulations against device misbranding, which includes advertising that is false and misleading. Norabuena, 2017 Ill. App. LEXIS 593 at **15. Plaintiff alleged that defendant’s advertising was false and misleading in that it concealed known risks of using the device in an off-label manner. Id. at **16. In reaching its conclusion, the court distinguished plaintiff’s claim as not an attack on the device’s label which would be preempted as having been specifically approved by the FDA during the PMA process. But rather, plaintiff was challenging allegedly deceptive marketing practices post pre-market approval. Id. at **17. But that is a distinction without a difference where plaintiff’s allegation is that in its advertising defendant should have included a warning different from or in addition to the warning the FDA approved. The FDA-approved warning is what must accompany product advertising. Think about what the court is saying – if the warning is in the product label it must adhere to the FDA-approved language. If the warning accompanies an advertisement for the product it does not. We do not believe that is something the FDA would allow. While we can understand how a court can find that a false statement made in product promotion may be both a violation of state law and FDCA misbranding regulations, where that falsity is alleged to be a failure to include a warning not approved by the FDA, we respectfully disagree.

But, all is not lost in Norabuena. The appellate court found that plaintiff’s claims were properly dismissed on another ground – failure to plead causation. The complaint apparently was replete with allegations of “omitted” risks, “[h]owever, there are no specific factual allegations in the complaint asserting that [plaintiff’s] surgeon encountered or relied on any of the asserted promotional marketing.” Id. at **21. If a tree falls in the woods. . . . It’s not enough to plead the act or omission, the complaint was also allege facts supporting proximate cause. This pleading deficiency wasn’t enough for a dismissal with prejudice, so the case is heading back to the trial court and plaintiff will have to re-plead her remaining failure to warn claim.