A multidistrict litigation (MDL) can be a sound way of managing a mass tort.  Efficiencies are available (e.g., deposing company witnesses only once) and the U. of Chicago part of us dreams of economies of scale.  Then again, an MDL can be vexing, as plaintiff lawyers park their weak cases in the MDL and find ways to push their relatively few strong cases up front.  Think of the MDL as a vast kennel, with all of the associated dangers and bad smells.  Then again, an MDL can be an out-and-out disaster, as the old If-you-build-it-they-will-come model oft-described by blogger emeritus Mark Herrmann takes hold.  The very existence of the MDL itself makes the mass tort massive.  The MDL becomes a magnet for the meritless.  Plaintiff lawyers resist any discovery of individual cases – there are too many! – and insist on dedicating the MDL to endless discovery of company conduct, as that is common to all cases and, viewed through the MDL lens, is always proportional, no matter how intrusive or expensive.  (At least that is the plaintiff argument.  But now some courts have finally grown weary of MDLs becoming festivals of discovery about discovery, and decided that proportionality applies even when the MDL case inventory has reached four or five digits.  See here, for example.)

We have gone through this evolution of thought in the course of a single MDL, watching good intentions morph into an extortion racket.  We have also seen courts gradually catch on to what has gone wrong with the MDL system.  Is this an instance of phylogeny recapitulating ontogeny? Legislation has been revived in Congress that aims to cabin the insanity of MDLs and class actions. And, mirabile dictu, some MDL judges have started to rein in asymmetrical discovery and have even demanded that plaintiff lawyers furnish evidence of such niceties as usage of the product and medical causation.  We’re not saying let’s make MDLs great again, but can we at least make them less miserable?  Or maybe just make them less.  Perhaps we don’t need an MDL every time there’s an alarming study or an uptick in adverse events.

Continue Reading JPML Refuses MDL for Proton Pump Inhibitor Kidney Injury Cases

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

We suggested in our most recent post on the Pinnacle Hip Implant MDL that, the sooner the Fifth Circuit weighs in on the evidentiary and procedural concerns being raised by the defense, the better. The defense is trying for sooner.

On Thursday, the defense filed in the Fifth Circuit a Petition for a Writ of Mandamus to the MDL court. This isn’t a petition asking the Fifth Circuit to review the evidentiary and procedural rulings that the defense has been raising since the second bellwether trial was scheduled. It couldn’t do that. But the petition does ask the Fifth Circuit to order the MDL court to do the things that are necessary to allow the Fifth Circuit to conduct that review. And it asks that, in the meantime, the Fifth Circuit stop the bellwether process:

Petitioners seek a writ from this Court directing the district court to: (1) vacate its Order on Bellwether Trials, dated June 10, 2016, which scheduled a trial for September 6, 2016 (Exhibit A); (2) rule promptly on petitioners’ pending post-trial motions in the last bellwether trial; and (3) enter judgment in those cases so that an appeal may follow, see Fed. R. Civ. P. 58(b).

Petition at 1.

It seems that a significant amount of paperwork has been piling up on the MDL court’s desk. The MDL court hasn’t entered final judgment on the first bellwether trial, even though that verdict will soon be two years old. The MDL court has also not ruled on the post-trial motions from, or entered judgment on, the second bellwether trial, the one that raised so many procedural and evidentiary concerns and resulted in a half-billion dollar verdict.

Continue Reading Hello Fifth Circuit: The Pinnacle Hip Implant MDL Finally Introduces Itself to the Appellate Court

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

It landed with a concussing thud that surprised no one. The $498 million verdict came last Thursday after weeks of evidence that included suicide, racism, tobacco pseudo-science, cancer, the proliferation of pelvic mesh litigation, Saddam Hussein, and alleged fraudulent practices in foreign countries. You might be wondering what type of case the jury was considering. That evidentiary line-up might make you think it was a wrongful death civil rights trial, or something worse. But it wasn’t. It was a Pinnacle hip implant trial. Really.

Before the verdict came, we were worried that something like this could happen. We wrote about it just as the jury was beginning deliberations. And then it happened, which should have been no surprise given the grouping of five separate plaintiffs for one bellwether trial and the noise that defendants were making about evidentiary rulings.

The question now is, what does it mean? Will it promote the ultimate resolution of the mass tort? Well, there’s little to suggest that it will. In fact, it seems more likely to do the opposite.

Continue Reading Trouble in Texas II

Here’s a significant post-rules-amendments discovery decision out of the Xarelto MDL.  In In re Xarelto (Rivaroxaban) Products Liability Litigation, 2016 WL 311762 (E.D. La. Jan. 26, 2016), the court (Fallon, J.) cited both new Rule 26’s heightened proportionality emphasis, as well as privacy issues, in rejecting the plaintiffs’ discovery demand for the personnel files of a large number of the defendant’s employees. This was not a demand for custodial files, call notes or anything peculiarly relevant to the litigation – but for personnel files.

No way, José.  Not after December 1, 2015.

A personnel file, unlike a work-related custodial file, is not the kind of thing that any company wants its litigation opponents rummaging through:

[T]he personnel file is not maintained by the employee.  The personnel file is maintained by the Human Resources department of an employer, and is likely to contain confidential employer evaluations which the employee may have never seen.  The personnel file also may include other sensitive information, such as salary, information concerning physical or mental health issues, alimony and child support garnishment, tax records, and drug test results.

Xarelto, 2016 WL 311762, at *1 (citations and quotation marks omitted).

Continue Reading Disproportionate Discovery, Even in an MDL

What?  You were expecting another of our insensitive blogpost headlines?

Nope, we’re playing this one straight down the middle.  In In re Testosterone Replacement Therapy Products Liability Litigation, 2015 WL 6859286 (N.D. Ill. Nov. 9, 2015) (“TRT”), the court ruled that all claims against all makers of generic testosterone replacement drugs were preempted.  Indeed, except for those generic manufacturers who were also designated by the FDA as “reference listed drugs,” the plaintiffs did not even contest dismissal.  Id. at *1.

Maybe the word is getting through to the other side that the Supreme Court meant what it said in PLIVA v. Mensing, 131 S. Ct. 2567 (2011), and Mutual Pharmaceutical Co. v. Bartlett, 133 S. Ct. 2466 (2013).

The main issue in TRT was whether a generic manufacturer somehow lost the protection of impossibility preemption because the FDA designated that manufacturer’s product as a “reference listed drug” (“RLD”) after the original branded drug left the market.  This issue has been out there for some time, and we discussed in detail in our post on the aberrant Pennsylvania Superior Court metoclopramide-related decisions.  Indeed, we noted that that the FDA had confirmed – on the very day that we wrote that post – that designated generic RLDs remained generic drug manufacturers and were unable to use the preemption-destroying “changes being effected” process to modify their labels.  Id. (citing and quoting “FDA, Guidance for Industry, Safety Labeling Changes − Implementation of Section 505(o)(4) of the FD&C Act, at 7 n.10 (FDA July 30, 2013)).

Continue Reading Generic Preemption Prevails in Testosterone MDL

A couple of weeks ago we discussed the latest entry in the “the saga of Cymbalta plaintiff lawyers who keep pushing the litigation up a hill in an effort to create a class action, mass action, MDL, or whatever will allow them to park as many meritless cases in one place, only to have that litigation roll back down the hill, resulting in crushed toes, directed verdicts, and jury findings of no liability.”  That was the Hill case in Indiana, where the judge granted a motion to sever plaintiffs from various states who had been joined in a transparent effort to create a mini-MDL.  In discussing that decision, we alluded to the persistence of the Cymbalta plaintiffs’ counsel in trying to cobble together some sort of aggregated proceeding to maximize leverage and reduce their own expenses. The only thing more remarkable than plaintiffs’ counsel’s persistence was the way they lost persistently.  As so memorably encapsulated in our deathless prose: “Plaintiffs tried to certify a class in C.D. Cal.  They failed.  Plaintiffs petitioned for creation of a Multi-district Litigation.  They failed.  Plaintiffs’ counsel then filed six Cymbalta lawsuit in S.D. Indiana, all but one involving multiple plaintiffs from different states.  Other plaintiffs’ counsel pursued the same strategy.  Some plaintiffs who had filed their cases in other federal districts moved to transfer those cases to S.D. Indiana, mostly, though not always, without success.  Then plaintiffs’ counsel showed their hand by again seeking creation of an MDL, this time in S.D. Indiana.”

Well, guess what?  Now plaintiffs’ counsel lost their latest effort to MDL the Cymbalta litigation.  In re Cymbalta Prods Liability Litigation, 2015 WL 5936936 (Oct. 9, 2015).  For the Judicial Panel on Multidistrict Litigation, it was an exercise in deja vu.  An MDL had been rejected back in December 2014 in Cymbalta I because, even though the different cases involved similar claims that Cymbalta withdrawal could lead to “brain zaps” and other alleged maladies, coordination would have been pointless because the procedural posture of the cases varied significantly, because most of the common discovery had already occurred, and because only a limited number of plaintiffs’ counsel were involved.  All of those same factors still existed in October 2015, only more so.  Common discovery has advanced even further, with production of millions of pages of documents and with multiple 30(b)(6) depositions, all available to all plaintiffs’ counsel.   And let’s not forget that four cases have gone to trial – though it would be understandable if plaintiffs’ counsel tried hard to forget that.  Finally, “the record does not show a significant increase in the number of unique counsel.”  

Hmmmmmm.   Care to hazard a guess as to why that would be?

Centralization denied.  Again.  One gets the distinct sense that the Judicial Panel is getting tired of this.

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

Today’s case is a simple and straightforward message to plaintiffs – you can’t use §1404 transfers to create an MDL after the Judicial Panel on Multidistrict Litigation (“JPML”) has said no.  That is precisely what plaintiffs were asking the court to do in Krupp v. Eli Lilly and Co., 2015 U.S. Dist. LEXIS 83762 (M.D. Fla. Apr. 6, 2015).  Apparently two plaintiffs’ firms had filed 47 Cymbalta cases in 29 different federal courts around the country (presumably plaintiffs’ home jurisdictions) and then petitioned the JPML for the creation of an MDL, alleging an additional 2700 claims in the pipeline.  The JPML declined finding that the cases were in different procedural postures, the bulk of the common discovery had already taken place and with only 2 plaintiffs’ firms, coordination should not prove burdensome.  Id. at *3.

Not happy with that result, plaintiffs appear now to be asking the 29 federal courts with pending Cymbalta cases to transfer them to the Southern District of Indiana – defendant’s home jurisdiction.  Plaintiffs allege that they will then also file the rest of their cases there to create “a de facto MDL.”  Id. at *4.  Plaintiffs argue that transfer of all cases (i) will allow plaintiffs to share costs, (ii) will be more convenient to defendant, and (iii) will promote judicial efficiency.  Id.  Even assuming these are true assertions – they don’t justify a plaintiff’s request for a §1404 transfer.

Continue Reading MDL Shenanigans Disallowed

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Appealability issues in multi-district litigation can  present knotty problems.  While we (that is, Bexis) came up with the preemption argument that killed off fraud on the FDA claims, the realities of MDL practice meant that, even after winning, there was no appeal.  Only when a peripheral defendant – an FDA consultant facing no other claims – filed a “me too” motion was an appealable order created. The consultant’s name was Buckman.

Thus we read with interest the resolution of the MDL appealability issue in Gelboim v. Bank of America Corp., 135 S. Ct. 897 (2015).  Gelboim has nothing to do with drugs and devices; it was an anti-trust case.  The substantive issue was “anti-trust injury,” which doesn’t matter here except to the extent that the district court held that the plaintiffs didn’t have any cognizable injury.  Since the plaintiffs in question didn’t have any other claims, that meant their action was kaput.  Time to appeal, right?  The district court thought so.  135 S. Ct. at 903-04 (discussing procedural history).  In addition, the MDL court issued an order under Fed. R. Civ. P. 54(b), allowing certain other plaintiffs to appeal, even though they had other claims remaining.  (A use of Rule 54(b) also produced the Buckman appeal.)

Not so fast!  The court of appeals said no. Based on a “strong presumption” that appeals in “consolidated cases” were not final, the Second Circuit (the appeal was from the S.D.N.Y.) dismissed the appeal.

Continue Reading Supreme Court Clarifies MDL Appealability Issues

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

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

First Decision

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

Continue Reading Fresenius Potpourri