An unexpected bit of good news as we go into November. Bexis will be presenting at the Reed Smith annual client CLE program on big-deal pending cases.  In preparation, he took a look at the SCOTUSBlog page for Merck Sharp & Dohme Corp. v. Albrecht, No 17-290 (that’s the Supreme Court name for In re Fosamax in the Third Circuit).  There’s a new entry from last Friday: “Justice Alito is no longer recused in this case.”  See also, from the Supreme Court’s official docket:

Oct 26 2018 Justice Alito is no longer recused in this case.

That’s good news for our side, because as we mentioned at the time certiorari was accepted:

We do note one unfortunate aspect of the order granting review: “Justice Alito took no part in the consideration or decision of this petition.” Since Justice Alito has historically supported preemption – he wrote the dissent in Wyeth v. Levine, 555 U.S. 555 (2009) – that means we’re short a vote.

Not any more. Our understanding, based on something we heard several years ago, is that Justice Alito at one time held stock in Merck. Evidently not any longer. While we’re not counting our chickens in Albrecht before they’ve hatched, we’re not playing a man short any longer, either. So we like our side’s chances in Albrecht even better now.

For more of our Albrecht/Fosamax coverage see here, here, here, and here.

Nothing emphasizes the impermanence of just about everything as Hawaii – where Bexis is right now on vacation.  On Kauai, Bexis had a boat drop scheduled to Kalalalu Beach, for three days on the Kalalau Trail, all permits obtained.  But several months ago, the heavens opened, and the Na Pali Coast received over an inch of rain an hour for more than a day.  A large number of avalanches, floods, and sinkholes ensued.  The road washed out in numerous places, as (more importantly) did people’s homes – so the best trail in Kauai is closed indefinitely.

That’s not even the worst of it. At least there are plans (on Hawaiian time) to reopen both the road and the trail.  But our favorite resort on the Big Island has been closed for several years.  The Kona Village Resort was damaged by the same 2011 tsunami caused all that horrible destruction in Japan.  For almost a decade, it has been abandoned on the shore at Kaupulehu tied up in layers of debt and litigation.  Although now there’s a rumor that it might reopen in 2019 – we’ve seen those before, so we’ll believe it when we see it.

But even that’s not the worst of it.  Our last trip to the Big Island, we swam in some lovely naturally heated tide pools.  We won’t be able to do that again.  They’re now covered by hundreds of feet of lava from the “Fissure 8” eruption that started on May 2, 2018.  In a geologically active area such as Hawaii, even the land itself is impermanent.

Impermanence is also a legal phenomenon.   Long-time readers of the blog may recall a series of posts from the Mark Herrmann era describing how the two of us fought an ultimately losing battle during the American Law Institute’s Aggregate Litigation Principles Project to keep the ALI from endorsing the practice of “cy pres.”  Not-so-long-time readers might be wondering, “what the heck is that?”  Here’s our description of cy pres from an earlier post:

For those of you new to all this, “cy pres” is the name given to schemes – virtually exclusively in class actions – whereby courts take money supposedly belonging to class members that class counsel can’t or won’t (due to expense) identify and give it to non-class members (mostly charities) who were not damaged in any way by the claimed conduct of the defendants. We know of no legal power invested in the judiciary to take money away from supposedly injured litigants and give it to persons who are essentially bystanders.  There are methods of doing this.  When done privately, it’s called “theft.”  Publicly, it would involve the powers to tax, appropriate, and levy fines, which belong to branches of government other than the judiciary.  We further believe that use of cy pres to facilitate class actions violates the Rules Enabling Act, since procedural rules (such as Rule 23) can’t change the substantive law.  There’s not much more “substantive” than taking money supposedly belonging to injured litigants and giving it to non-parties.

The result was Principles of Aggregate Litigation §3.07 (ALI 2010), entitled “Cy Pres Settlements,” which seemed to enshrine into black-letter law the doctrine that it’s OK to give away purported class members’ money to whatever charity the judge and the lawyers decide to favor.

We kept up a rear-guard battle against cy pres, however, helping draft a proposal for Lawyers for Civil Justice to amend Fed. R. Civ. P. 23 to abolish cy pres. That was a long shot, since the very judges whose power cy pres augmented would have to approve such a change.  Also, were heartened by Chief Justice Roberts’ concurring opinion in Marek v. Lane, 134 S.Ct. 8 (2013), suggesting that the Supreme Court might also have concerns about this peculiar institution.

Then, last May, the Supreme Court granted certiorari in a case we had previously described as a “poster child” for cy pres abuse.  In re Google Referrer Header Privacy Litigation, 869 F.3d 737 (9th Cir. 2017).  This appeal, now called Frank v. Gaos, No. 17-961, 138 S. Ct. 169 (April 30, 2018), features just about everything we don’t like about cy pres:

  • Excessive counsel fees – class counsel stands to walk away with fully 38% of the settlement as fees.  869 F.3d at 747.
  • Lack of classwide recovery – the court declared the entire settlement “non-distributable” because, even without opposition, neither the class members nor their damages could be determined.  Id. at 742.
  • Excessive cy pres – nothing is more excessive than 100% − six uninjured charities took 100% of what class counsel left behind, and the 129 million supposedly injured class members took nothing.  Id. at 743.
  • Rampant conflict of interest − Three of the charities were law schools – and they all had ties to counsel in the case.
  • Litigation industry self-perpetuation – cy pres recipients were expected solicit more lawsuits by “educat[ing]” the public and “publiciz[ing]” privacy issues.  Id. at 746-47.

By now, with briefing completed, we thought we’d take a look at the arguments that are being made to the Supreme Court in opposition to the use of cy pres class action settlements.

First and foremost is the petitioner’s brief, filed by friend-of-the-blog Ted Frank.  As we expected, he pulls no punches about the impropriety of a procedure that we’ve said amounts to judicially sanctioned theft.  The brief starts off by describing cy pres as “one of the most notorious devices used to create the illusion of compensation.”  Id. at 2.  “All the money went to class counsel and to favored nonprofit organizations affiliated with class counsel and the defendant.”  Id.  Petitioner seeks (pp. 15-16) five cy pres-related holdings from the Court:

  1. A settlement that compromises a class’s claims, but seeks to pay class counsel an amount disproportionate with the actual and direct benefit to the class, is not fair or reasonable under Rule 23(e).

Here, the fundamental fact of Due Process is, that “settlement-fund proceeds, having been generated by the value of the class members’ claims, belong solely to the class members.”  Neither courts nor counsel can “divert that property to third parties.”  Id. at 17.

All that courts need to accomplish this result is to apply a simple principle to the Rule 23 fairness hearing: regardless of whether a settlement is “adequate,” it is not fair or reasonable if the settlement pays attorneys’ fees that are disproportionate to the actual and direct benefit realized by the class compromising its claims.

Id. at 21.  Cy pres provisions are a means to “structure the deal to obfuscate the true [a]llocation . . . by larding the [settlement] analysis with hypothetical class recoveries and amorphous ‘benefits’ that ultimately have little value to the class.”  Id. at 23.

First, basing a fee award solely on the “size of the cy pres fund” allows “class attorneys . . . to reap exorbitant fees regardless of whether the absent class members are adequately compensated.”  Id. at 28.  Second, cy pres is “an enticing settlement feature for lawyers interested in promoting their own personal political or charitable preferences.”  Id. at 29.  The brief contains several examples of such conduct.  Id. at 29-30.  Second, with “no resistance from class attorneys,” defendants can even use cy to “benefit themselves” by directing funds to their preferred charities.  Id. at 30.  Again, several concrete examples are discussed.  Id. at 30-33.  Third, cy pres awards to non-parties “fail to redress class members’ alleged injuries for which they are waiving their rights.”  Id. at 33.  Here, another of our primary gripes comes into play.  “Rule 23 cannot operate to ‘abridge, enlarge or modify any substantive right,’” id., but altering who owns what is as “substantive” an application as we can think of.  More examples.  Id. at 33-35.  Fourth, cy pres “permit[s] otherwise unthinkable class certifications” and “induce[s] plaintiffs to pursue doubtful class claims” because they can settle without proving causation or damages. Id. at 35.

[C]y pres incentivizes both the bringing of otherwise unprofitable “strike suits” that would be infeasible to litigate due to unmanageability or questionable merit and their settlement on terms mutually agreeable to class counsel and the defendant.

Id.  A “class action that yields fees for class counsel and nothing for the class − is no better than a racket.” Id. at 36 (quoting In re Walgreen Co. Stockholder Litigation, 832 F.3d 718, 724 (7th Cir. 2016)).  Fifth, cy pres results in subsidizing the “political . . . preferences of class counsel or the defendant without regard to the views of “a substantial proportion, or even a majority, of class members.

Requiring class members to surrender their rights to subsidize speech by a third party that he or she does not wish to support raises serious First Amendment concerns.

Id. at 36.  If a union can’t even collect dues from its own members because of their First Amendment rights, see Janus v. AFSME, Council 31, 138 S. Ct. 2448, 2478 (2018) (“draw[ing] the line at . . .requir[ing] all employees to support the union irrespective of whether they share its views”), how can a court impose a charitable donation on unknown class members?  Sixth, cy pres “often create the appearance or reality of judicial conflicts of interest.”  Id. at 37.  “[A]n open-ended cy pres doctrine is fundamentally incompatible with the judicial role” of “providing relief to claimants . . . who have suffered, or will imminently suffer, actual harm.”  Id. at 38.

Petitioner also argues that all-cy-pres settlements simply cannot be approved under Rule 23:

Any settlement, like this one, that provides no direct benefit to the class, cannot be approved.  “Because the settlement yields fees for class counsel and zero benefits for the class, the class should not have been certified and the settlement should not have been approved.”

Id. at 39 (quoting In re Subway Footlong Sandwich Marketing Litigation, 869 F.3d 551, 557 (7th Cir. 2017)).  We would go further, since we don’t think any cy pres settlements should be approved.  Indeed, the existence of a cy pres component is an admission that, even with no legal opposition, plaintiffs are unable to prove causation or damages.  Such suits should not be brought.  We have criminal prosecutors and other governmental entities to handle such cases.  “[N]early every consumer class-action settlement leaves over 90%, and often over 99%, of the class uncompensated.”  Id. at 45.  We don’t need civil lawyers who are perversely incentivized through cy pres to do as little work as they can possibly get away with.

  1. Cy pres awards are inappropriate in class-action settlements where it is feasible to distribute settlement proceeds to class members.  Whether it is feasible to distribute settlement proceeds is determined by whether such relief can be distributed to some identifiable class members . . .  and not whether the proceeds could be distributed to every potential class member.

Plaintiffs, who have resolutely opposed any ascertainability prerequisite to class certification, do a backflip when it comes to cy pres and settlement.  “Under the standard set by the Ninth Circuit, it is not considered ‘feasible’ to provide any compensation to class members when it would be infeasible to compensate all of them.”  Petitioner’s br. at 49 (emphasis original).  This is using ascertainability to prevent compensation of class members.  “[I]t is nearly always feasible to distribute settlement funds to some class members.”  Id. at 50 (emphasis original).  “[C]y pres distribution when distribution to some of the class is possible is ‘contrary to the interests’ of the class.”  Id. at 51 (quoting In re BankAmerica Corp. Securities Litigation, 775 F.3d 1060, 1068 (8th Cir. 2015)).  Using cy pres to take money from any class members when some are identifiable thus violates class counsel’s “fiduciary duty to class members.”  Id. at 50-51.

  1. If a class-action settlement cannot provide direct relief to the class, the settlement class cannot be certified.

Again, we agree, even though we might go further.  If “it is somehow impossible to make any distribution to the class, that simply suggests that it was error to certify this settlement class.”  Petitioner’s br. at 52.

In short, the class action is not “superior to other available methods for fairly and efficiently adjudicating the controversy” because every single class member is worse off than if they opted out and reserved their claims to litigate individually.

Id. at 53.  That’s what a zero-dollar settlement like this one means.  Class members are giving up something and not getting anything.

  1. If cy pres is to be permitted at all, there should be strict restrictions against the payment of money to recipients with any significant current or prior relationship with the parties, attorneys, or judge.

In particular, this argument rejects “distribution of cy pres funds to class counsel’s alma mater instead of the class.”  Petitioner’s br. at 54.  This is just another questionable practice enabled by the creation of a “remedy” that is outside of both the law and the rules, and thus essentially ungoverned.

The better rule is to require settling parties to have the burden to demonstrate that neither the court nor any “party has any significant prior affiliation with the intended recipient that would raise substantial questions about whether the selection of the recipient was made on the merits.”

Id. at 55-56 (quoting – ironically – Principles of Aggregate Litigation §3.07, comment b).  Once again, bright line, prophylactic rules are best.  The potential for conflict of interest is simply too great to allow any cy pres award to an entity with ties to the litigants or to the court.

  1. At a minimum, courts should substantially discount cy pres distributions relative to direct payments to class members for purposes of calculating attorneys’ fees based on a percentage of the recovery.

In one paragraph, petitioner’s final argument is that the “indirect and attenuated” – if any – value of a cy pres settlement to any class member requires that such payments “should at least be heavily discounted in the fee calculation to better align incentives.”  Petitioner’s br. at 56-57.

If even a quarter of these arguments succeed, then cy pres distributions of class action settlements will – quite rightly in our view – be cast into the proverbial dustbin of history.  Perhaps Congress, or a state legislature for a state class action, could create such a remedy, but they haven’t.  Our bottom line is that no authority currently exists to allow courts, with or without the connivance of counsel, to take money belonging to certain persons (here, absent class members) and give that money to other persons (here, lawyer-selected charities) without the express approval of the original owners.

As one might expect, the Frank case also produced a bunch of interesting amicus briefs.  Since we spent much longer than we had expected on Ted’s brief, our rundown of the objector-side amici will be significantly briefer – but we’re providing links so anyone interested can read them in their entirety.

Of greatest interest, of course, is the position taken by the government itself – as to which we find a lot to like:

United States of America

The cy pres question need not be reached because Spokeo casts substantial doubt on whether the class representatives suffered sufficiently significant injury to confer Article III standing.  Brief at 11-15.

Cy pres as used in the trust area is irreconcilable with its use in class-action settlements.  Id. at 16-17.

Cy pres raises serious concerns where class members receive no compensation.  Id. at 18.

Cy pres raises serious concerns about collusion against the interests of absent class members.  Id. at 19-20.

Cy pres raises serious concerns about conflicts of interest by counsel and even courts.  Id. at 20.

Cy pres raises serious concerns about the creation of new, extra-statutory remedies.  Id. at 20-21.

Cy pres is improper unless it redresses the specific injuries of the plaintiff class.  Id. at 22-26.

Cy pres is improper when there is any non-arbitrary way of distribution to class members.  Id. at 26-28.

Cy pres distributions should be discounted, ideally entirely, in calculating attorneys’ fees.  Id. at 28-32.

In a nutshell, here are the highlights of other important amicus curiae briefs in Frank v. Gaos:

State Attorneys General – eighteen of them

Cy pres in consumer class actions diverts money away from injured consumers, aggravating the original problems, and should not be recognized.  Brief at 4-8.

Cy pres settlements circumvent statutory and judicial class action standards in violation of the Rules Enabling Act.  Id. at 8-11.

Once again, the Ninth Circuit is out of line.  Id. at 11-13.

Cy pres-only settlements should be per se invalid.  Id. at 13-16.

Cy pres awards should be disregarded in the calculation of attorneys’ fees.  Id. at 16-20.

Chamber of Commerce of the USA

If class actions were better policed at the front end, by denying class certification to no-injury class actions in the first place, the problems with cy pres settlements would never have arisen.  Brief at 5-11.

Cy pres settlements would not be needed if courts properly enforced Rule 23’s commonality and predominance requirements.  Id. at 11-13.

Injury should not be presumed for purposes of class certification.  Id. at 14-15.

Cy pres settlements are symptomatic of meritless, but expensive, class action litigation.  Id. at 16-18.

Conflicts between class counsel and absent class members are inherent in cy pres settlements.  Id. at 18-22.

If allowed at all, cy pres settlements should be strictly regulated.  Id. at 22-26.

Lawyers for Civil Justice

Cy pres awards are inherently inconsistent with Rule 23’s requirement that settlements be “fair, reasonable, and adequate.”  Brief at 9-10.

Cy pres, as it previously existed in non-adversarial trust law, has nothing to do with adversary class actions.  Id. at 11-14.

Cy pres is an improper exercise of judicial power under Article III of the constitution.  Id. at 14-18;

Cy pres violates the Rules Enabling Act by permitting fines against defendants not recognized by substantive law.  Id. at 18-20.

If otherwise permitted, cy would violate the Due Process rights of absent class members.  Id. at 20-21.

Compelling diverse class members to finance speech by either plaintiff-side or defendant-side advocacy groups violates the First Amendment.  Id. at 21-22.

The existence of a cy pres award indicates that the action itself cannot support class certification.  Id. at 23-24.

Cato Institute & Americans for Prosperity

Cy pres violates the Due Process and First Amendment rights of absent class members whose property is being taken and given to charities for the purpose of plaintiff-side advocacy.  Brief at 4-7.

Constitutional rights could be better protected by requiring opt-in class actions.  Id. at 8-10.

Cy pres inevitably leads to self-dealing and violation of professional ethics by class counsel.  Id. at 12-15.

Class counsel use cy pres to increase personal gain at the expense of absent class members.  Id. at 16-18.

Defendants utilize cy pres to lower settlement costs.  Id. at 18-19.

Cy pres erodes judicial neutrality through conflicts of interest in selecting recipients.  Id. at 19-20.

Zero dollar class actions cannot be “superior” to anything.  Id. at 21-22.

There are always better alternatives to cy pres awards.  Id. at 22-24.

Cy pres is a disguise for parties and courts to lobby for special benefits.  Id. at 24-25.

Once again, the Ninth Circuit is out of line.  Id. at 25-29.

Compelling diverse class members to finance speech by either plaintiff-side or defendant-side advocacy groups violates the First Amendment.  Id. at 29-34.

Manhattan Institute for Policy Research

Unlike cy pres in the trust area, which is legislatively recognized, cy pres in the class action context is not based on any recognized grant of power.  Brief at 7-13.

Cy pres violates the Rules Enabling Act by modifying substantive legal remedies.  Id. at 14-15.

Payments to charities are not a remedy recognized by substantive law.  Id. at 16-21.

Cy pres is only allowable where recognized by substantive law.  Id. at 21-23.

Center for Constitutional Jurisprudence & Atlantic Legal Foundation

A class action that cannot deliver any relief to class members does not present an Article III “case or controversy.”  Brief at 4-6.

Compelling diverse class members to finance speech by either plaintiff-side or defendant-side advocacy groups violates the First Amendment.  Id. at 6-8.

Center for Individual Rights

Compelling diverse class members to finance speech by either plaintiff-side or defendant-side advocacy groups violates the First Amendment.  Brief at 3-6.

Opt-out class actions violate the First Amendment.  Id. at 6-10.

New Jersey Civil Justice Institute

Cy pres converts Rule 23 class actions into a substantive remedial scheme.  Brief at 2-8.

An all-cy pres settlement cannot be “superior” under Rule 23 standards.  Id. at 9-16.

There are a couple of other briefs filed by persons with more narrow interests related to copyrights or internet privacy that we don’t think would be of sufficient interest to our members to bother with.

Finally, in accordance with the parties’ agreed-upon schedule, that appears to have been adopted by the Court, the pro-cy pres forces won’t start filing their briefs until the end of August.  With that schedule, it is quite possible that oral argument will occur before the end of the year.

When Justice Gorsuch was first nominated for the Supreme Court, we took a look at his preemption decisions and were favorably impressed.  We’re doing the same thing today with respect to the new nominee, Brett Kavanaugh, currently a judge on the United States Court of Appeals for the District of Columbia.  Our job today won’t be as easy because there isn’t nearly as much state-law-based diversity tort litigation in the DC Circuit.  Heck, there aren’t even any states in the DC Circuit.  So it’s not likely that we’ll find a Caplinger v. Medtronic, Inc., 784 F.3d 1335 (10th Cir. 2015), in Judge Kavanaugh’s judicial resumé.

But we can try.

Our search for Kavanaugh opinions containing some form of the word “preempt!” produced 19 cases.  Over half of them could be eliminated immediately, because “preempt!” appears only in a different opinion, one not written by the possible next Supreme Court justice.

We found only two Kavanaugh opinions concerning preemption that weren’t in the administrative context.  The most significant of those was Doe v. Exxon Mobil Corp., 473 F.3d 345 (D.C. Cir. 2007), where Judge Kavanaugh dissented, in part on preemption grounds, from the court’s decision not to hear an appeal in one of those now (thankfully) eliminated Alien Tort claims involving plaintiffs and conduct that took place entirely overseas.  In dissent, Judge Kavanaugh would have dismissed the Alien Tort claims on non-justiciability grounds due to interference with American foreign policy . Id. at 359-64.  A few remaining state-law tort claims would be preempted  for essentially the same reason:

[T]he possibility that state law (in this case, D.C. tort law) will produce something more than incidental effect in conflict with express foreign policy of the National Government requires preemption of the state law.  Although we need not resolve the issue here, the state-law tort claims are likely preempted as a result of the State Department’s specific statement of harm to foreign policy.

Id. at 365 (dissenting opinion) (citations omitted).  The Doe case rattled around the DC Circuit for quite some time.  Judge Kavanaugh dissented again in Doe v. Exxon Mobil Corp., 654 F.3d 11 (D.C. Cir. 2011), vacated, 527 F. Appx. 7 (D.C. Cir. 2013), but did not reach preemption in that opinion.  Finally, he participated in the ultimate dismissal of the case after Kiobel v. Royal Dutch Petroleum Co., 569 U.S. 108 (2013), again not reaching preemption.  See Doe v. Exxon Mobil Corp., 527 F. Appx. 7 (D.C. Cir. 2013).

Another Kavanaugh opinion that wasn’t administrative in nature was Mills v. Giant of Maryland, LLC, 508 F.3d 11 (D.C. Cir. 2007).  It was a garbage class action, filed on behalf of DC residents who allegedly were lactose intolerant but didn’t know that yet.  The district court had dismissed the case on FDCA preemption grounds – that the warning plaintiffs demanded was different from the labeling required by the FDA.  Id. at 13.  Judge Kavanaugh, however, didn’t reach preemption.  Instead, he found that DC “tort-law principles foreclose failure-to-warn liability when the risk that some people might have an adverse reaction to the food is ‘widely known.’”  Id. at 13-14.  Having affirmed dismissal on state-law grounds, there was no need to reach preemption.  Id. at 15-16.  At least that ruling suggests that Judge Kavanaugh is a tort conservative.

Interestingly, both Doe and Mills are from 2007 and were Judge Kavanaugh’s first preemption decisions, since he joined the DC Circuit the year before, in 2006.  He does not appear to have encountered preemption in the common-law tort context since.

A lot of the DC Circuit’s docket is administrative in nature, and in that procedural posture it is often the plaintiffs – various regulated businesses of one sort or another – that seek preemption, specifically additional preemption of state regulations beyond that recognized by the relevant federal agency.  That’s not an easy position to win, as it arrays the government on the side against preemption.  One of the administrative cases is Illinois Public Telecommunications Ass’n v. F.C.C., 752 F.3d 1018 (D.C. Cir. 2014), involving telephone refunds.  Preemption was rejected.  First, since the FCC had issued only a voluntary (“may, but are not required”) order covering the subject at issue.  State decisions not to issue refunds thus were not preempted.  Id. at 1024.  Second, given the statutory scheme, the FCC’s decision not to preempt state decisionmaking was not “arbitrary or capricious.”  Id. at 1025-26.  Another such Kavanaugh decision – indeed, the with opinion the most occurrences of “preempt!” − was a total bust, as the preemption argument in American Road & Transportation Builders Ass’n v. E.P.A., 705 F.3d 453 (D.C. Cir. 2013), was both barred by the statute of limitations and previously adjudicated in a different court.

That’s basically it. In no other opinion has Judge Kavanaugh used “preempt!” in the Supremacy Clause context that interests us.

So our conclusion is that, unlike a lot of areas, Judge Kavanaugh has not left a lot of tort preemption footprints during the course of his judicial career.  What little there is, we like.  And that one administrative preemption opinion?  It doesn’t bother us much.  Shockingly, not all preemption arguments are meritorious, and from the discussion in Illinois Public, we might not even have found preemption.

Today, on the last day of the United States Supreme Court’s 2018 Term, the Court issued an order granting review (“certiorari”) in Merck Sharp & Dohme Corp. v. Albrecht, No. 17-290 – which is the Supreme Court docket name for the defendant’s appeal from the horrible preemption decision (our worst case of the year for 2017) in In re Fosamax (Alendronate Sodium) Products Liability Litigation, 852 F.3d 268 (3d Cir. 2017).  The brief Supreme Court order did not alter the question presented in the petition for review, which is:

Is a state-law failure-to-warn claim preempted when the FDA rejected the drug manufacturer’s proposal to warn about the risk after being provided with the relevant scientific data; or must such a case go to a jury for conjecture as to why the FDA rejected the proposed warning?

That’s a nice, broad question that should encompass all of the subsidiary issues – burden of proof, judge vs. jury, and clear evidence, to name three – implicated by the Fosamax decision.

Here at the Blog, we had repeatedly supported Supreme Court review.  We do note one unfortunate aspect of the order granting review:  “Justice Alito took no part in the consideration or decision of this  petition.”  Since Justice Alito has historically supported preemption – he wrote the dissent in Wyeth v. Levine, 555 U.S. 555 (2009) – that means we’re short a vote.  Conversely, the anti-preemption side might lose the vote of Justice Kennedy’s replacement (Justice Kennedy was in the Levine majority).  But even with Justice Thomas (who supports only “impossibility” preemption), a combination of Roberts, Gorsuch, Thomas, and ______ would only get us to a 4-4 tie.  However, we think that the Fosamax decision is bad enough that we should be able to draw a vote from one of the others (most likely Kagan or Breyer), at least on the procedural issues.

We immediately called for the further appeal and reversal of the hideous decision in In re Fosamax (Alendronate Sodium) Products Liability Litigation, 852 F.3d 268 (3d Cir. 2017).  However, we’re just bloggers.  Thus, we were greatly pleased when the United States Supreme Court, on December 8, 2017, requested the views of the Solicitor General on whether to grant certiorari in the Fosamax appeal, now known as Merck, Sharp & Dohme Corp. v. Albrecht, No. 14-1900 (U.S.).

We’re even more pleased, now that we have read the Solicitor General’s responsive brief, which we have just received.  Getting right to the point – the bottom line:

In the view of the United States, the petition for a writ of certiorari should be granted.

United States Amicus br. at 1.  Even though “[n]o circuit conflict yet exists,” the issue in its MDL context is sufficiently “significant” to grant certiorari now.  Id. at 12.

Although the question is close, . . . this Court should grant certiorari.  The underlying issue in this preemption case is a significant one:  whether the meaning and effect of an FDA labeling decision is a question of law for courts to resolve or a question of fact for lay juries to determine.  The petition cleanly presents that issue in an MDL context in which hundreds of separate cases . . . turn on its proper resolution.

Id. at 22-23.

First, the Solicitor General believes that preemption is a legal issue, not one for the jury, as the Third Circuit held in its unprecedented ruling:

The court of appeals erred in holding that a jury must determine whether FDA’s . . . decision − which declined to approve petitioner’s proposal to revise [the drug’s] Warnings and Precautions section . . . − preempted respondents’ state-law failure-to-warn claims arising from that same type of injury.  Where, as here, FDA renders a decision declining to approve a drug-labeling change, the interpretation of that administrative decision and its significance for a failure-to-warn claim are legal questions for a court to resolve, not factual questions for a jury.

Id. at 12.  “The meaning and effect of such agency action is a legal question within the exclusive province of a court.”  Id. at 13.  “Judges, rather than lay juries, are best suited to evaluate the scope of an agency’s legal determination in light of the relevant statutory and regulatory context.”  Id. at 14.

Second, the Solicitor General believes that the FDA’s rejection of the defendant’s request for a label change was “clear evidence” supporting preemption:

[B]ecause FDA’s decision here prevented petitioner from modifying the relevant labeling before late 2010, the court of appeals erred in rejecting petitioner’s impossibility-preemption defense.

Id. at 12.  “Nothing is ‘hypothetical’ about FDA’s actual 2009 decision in this case.”  Id. at 16.

[Levine] did not resolve how to determine the meaning and effect of an actual FDA labeling-supplement decision. . . .  [T]he court of appeals erred in transplanting [Levine’s] discussion about a hypothetical regulatory scenario to support a requirement for “clear evidence” about the scope and effect of the actual agency labeling decision in this case.

Id. at 16-17 (emphasis added).  The FDA was not quibbling about language when it rejected the label change at issue, but instead the “FDA’s decision thus was based on the lack of adequate data to support a warning.”  Id. at 21.  “Indeed, nearly a year later, FDA announced − after reviewing further data − that it had yet to find any ‘clear connection’” between the drug and the alleged risk.  Id. at 22.

Third, “clear evidence” was used in Levine “not in its ‘strict evidentiary sense’ but merely as a ‘useful reminder’ that a general presumption concerning a legal interpretation should control if substantial doubt exists.”  Id. at 18.  Thus, the Third Circuit’s “clear and convincing” evidentiary gloss in Fosamax was also error.  Rather, “to establish impossibility preemption, a name-brand drug manufacturer cannot rely on speculation or merely plausible interpretations of ambiguous features of FDA’s regulatory framework and practices.  Id. at 18-19.

Now we wait. If the Court grants review, Albrecht will likely be the most significant preemption decision since Levine itself.

We bloggers don’t generally consider the Drug and Device Law sandbox to extend to illegal drugs.  We regard that as a completely separate can of worms.  But what of a drug – like marijuana – that’s in between being legal and being illegal?  In an increasing number of states, marijuana’s current situation is a bit like Schroedinger’s famous cat, legal and illegal at the same time depending on who’s enforcing what law.

The same could be said of sports betting – at least until last week, when the United States Supreme Court decided Murphy v. National Collegiate Athletic Assn., ___ S. Ct. ___, 2018 WL 2186168 (U.S. May 14, 2018).  The federal government had banned sports betting (except in Nevada), but a number of states (including New Jersey, the real plaintiff) were champing at the bet to legalize – and reap tax revenues from – gambling on sporting events.

The Supreme Court basically said that the federal government couldn’t force the states to abstain from legalizing sports betting.  The feds could not “commandeer” state law enforcement and require them to keep sports betting illegal:

The [statutory] provision at issue here − prohibiting state authorization of sports gambling − violates the anticommandeering rule. That provision unequivocally dictates what a state legislature may and may not do. . . .  [S]tate legislatures are put under the direct control of Congress.  It is as if federal officers were installed in state legislative chambers and were armed with the authority to stop legislators from voting on any offending proposals. A more direct affront to state sovereignty is not easy to imagine.

Murphy, 2018 WL 2186168, at *13.  See Id. at *17 (“Just as Congress lacks the power to order a state legislature not to enact a law authorizing sports gambling, it may not order a state legislature to refrain from enacting a law licensing sports gambling.”). The federal scheme “would break down if a State broadly decriminalized sports gambling.”  Id. at *19.

The Court viewed both affirmative and negative demands that the states do what the feds want as barred by that principle:

Here is an illustration.  [The statute] includes an exemption for [Nevada], but suppose Congress did not adopt such an exemption.  Suppose Congress ordered States with legalized sports betting to take the affirmative step of criminalizing that activity and ordered the remaining States to retain their laws prohibiting sports betting. There is no good reason why the former would intrude more deeply on state sovereignty than the latter.

Id.  This example certainly seems to resembles certain noises emanating from the current Department of Justice that it might seek to roll back state legalization of marijuana.

Now, let’s be clear, “commandeering” is not something that dissolves federal powers provided for in the constitution.  It would not allow the department to re-institute Jim Crow, let alone slavery.  Federal powers in the constitution (such as power over interstate commerce) remain:

The legislative powers granted to Congress are sizable, but they are not unlimited. The Constitution confers on Congress not plenary legislative power but only certain enumerated powers.  Therefore, all other legislative power is reserved for the States, as the Tenth Amendment confirms.  And conspicuously absent from the list of powers given to Congress is the power to issue direct orders to the governments of the States. The anticommandeering doctrine simply represents the recognition of this limit on congressional authority.

Id. at *10.  But once the state decides to legalize the activity within its borders, the feds can’t force the states to keep that activity illegal under state lawId. at *18 (“If the people of a State support the legalization of sports gambling, federal law would make the activity illegal.”).  A federal law that only operates only to “undermine[] whatever policy is favored by the people of a State” is both “perverse” and “weird.” Id. at *18.

Thus, what Murphy calls “the anticommandeering principle” is limited.  While it could well prevent DoJ from – as the “example” above indicates – “order[ing] States with legalized [marijuana] to take the affirmative step of criminalizing that activity,” id. at *13, the feds still retain the power, for example, to ban marijuana from interstate commerce.  Murphy also leaves open the possibility that a federal statute, phrased (unlike the law before the Court) explicitly in terms of federal preemption and not directed at states, might have provided means of avoiding the anticommandeering principle.  Id. at *15-16 (“every form of preemption is based on a federal law that regulates the conduct of private actors, not the States”). So that’s another possible source of federal power to continue prohibition, should Congress choose to act in that fashion.

There’s one other place where would be marijuana entrepreneurs – and states wishing to raise revenue from taxing such enterprises – might be able to put the anticommandeering principle to good use.  One big problem has been federal laws that prevent even legalized marijuana businesses from accessing the banking system.  While the feds can certainly continue that practice, whether it’s a good or bad idea, with respect to federally regulated banks, we think that Murphy casts considerable doubt on whether the federal government can tell state banks that they cannot accept deposits from marijuana businesses that the state regulating those banks has declared to be legal.

We don’t claim to know all the ins and outs of anticommandeering – a word we had never seen before reading Murphy.  But if a state, in its wisdom, chooses to legalize commerce in marijuana, it seems equally “perverse” and “weird” to require those legal businesses to bury the money they legally make in their basements rather than to deposit it in a bank regulated by the same government that legalized their activities.

 

Last September, we criticized a 2-1 decision out of the Ninth Circuit, In re Google Referrer Header Privacy Litigation, 869 F.3d 737 (9th Cir. 2017), calling it a “poster child” for cy pres abuse in class actions.  Read the entire post for all the gory details, but briefly, the class action settlement in Google Referrer:

  • Let counsel have a whopping 38% of the settlement as fees.
  • Declared the entire settlement “non-distributable” because, even without opposition, neither the class members nor their damages could be determined.
  • Gave 100% of the settlement funds as cy pres to six uninjured charities, and 0% to the 129 million estimated supposedly injured class members.
  • All three of the law school cy pres recipients had ties to counsel in the case.
  • The cy pres recipients were to educate and publicize supposed internet privacy issues – in other words, to act as a breeding ground for further litigation of this sort.

We closed that post by recommending, “[w]e think this is a case that should go to the United States Supreme Court.”  We don’t say that often (only about DesianoNeurontinBartlett, Bristol Myers-Squibb, and Fosamax, that we can recall offhand) – six times in eleven years.

Well, we’re pleased to report that yesterday the United States Supreme Court accepted a certiorari petition in the case, rechristened as Frank v. Gaos, No. 17-961, 2018 WL 324121 (U.S. Apr. 30, 2018).  The SCOTUSBlog story is here.  The order granting certiorari is here.  The question presented is:

Whether, or in what circumstances, a cy pres award of class action proceeds that provides no direct relief to class members supports class certification and comports with the requirement that a settlement binding class members must be “fair, reasonable, and adequate.”

See Certiorari petition.  We are cautiously optimistic that the result in Frank will be the disavowal or severe limitation of cy pres distributions in class actions.

Our careers have seen several major pro-defense trends in product liability litigation:

Mainstreaming summary judgment:  This happened when we were still young lawyers.  A trilogy of United States Supreme Court cases established that summary judgment wasn’t an “extraordinary” or “disfavored” procedure, but rather part and parcel of modern litigation.  The lead case in the trilogy was Celotex Corp. v. Catrett, 477 U.S. 317 (1986).

Preemption and product liability:  We remember when our most powerful in product liability litigation was hardly available at all.  That changed beginning with Cipollone v. Liggett Group, Inc., 505 U.S. 504 (1992).

Limiting junk science:  The Supreme Court required the curbing of abusive expert opinions, based mostly on who was paying the supposed “expert,” and imposed a significant degree of scientific rigor on defect and causation opinions.  The lead case was Daubert v. Merrell Dow Pharmaceuticals, 509 U.S. 579 (1993).

Purging bogus class actions:  Class actions for personal injury used to be a real threat in product liability litigation.  They aren’t anymore, not since the door was closed by Amchem Products, Inc. v. Windsor, 521 U.S. 591 (1997), and Ortiz v. Fibreboard Corp., 527 U.S. 815 (1999).

Making pleadings matter:  Not so long ago, complaints were formalities that told us practically nothing about what actually happened, not even what the plaintiff thought happened.  That’s no longer the case (at least in most courts), thanks to Bell Atlantic Corp. v. Twombly, 550 U.S. 544 (2007), and Ashcroft v. Iqbal, 556 U.S. 662 (2009) (or “TwIqbal” – the term popularized by this blog).

With last term’s decision in Bristol-Myers Squibb Co. v. Superior Court, 137 S. Ct. 1773 (2017) (“BMS”), we think it’s now safe to add reducing litigation tourism to our megatrends list.  As we discussed at the time, Justice Alito’s opinion in BMS (joined by the entire Court, except Justice Sotomayor) meant that the crackdown on general personal jurisdiction epitomized by Daimler AG v. Bauman, 134 S. Ct. 746 (2014), could not be evaded by “loose and spurious” importation of extraneous forum contacts into the separate Due Process analysis for specific personal jurisdiction.  As explained in more detail in that post and others, specific personal jurisdiction is just that – specific, or “case-linked” – to the plaintiff, to the defendant, and the forum.  Indeed, the very idea of non-residents attempting to invoke specific jurisdiction is radical – it never happened before Bauman.

BMS reiterated that the purported jurisdictional contacts of other plaintiffs and other defendants don’t count in specific personal jurisdiction.  137 S. Ct. at 1781 (“The mere fact that other plaintiffs were prescribed, obtained, and ingested [the product] 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.”); 1783 (“[A] defendant’s relationship with a … third party, standing alone, is an insufficient basis for jurisdiction”) (quoting Walden v. Fiore, 134 S.Ct. 1115, 1123 (2014)).  But the Court, as is its practice, didn’t just say no.  Rather it held that the minimal record the plaintiffs had established in BMS (they had been content to rely on the penchant of California courts for adopting pro-plaintiff theories) didn’t meet the longstanding test for specific personal jurisdiction – “arising from or relating to” the litigation in question.

In BMS the defendant “did not develop [the product] in California, did not create a marketing strategy for [it] in California, and did not manufacture, label, package, or work on the regulatory approval of the product in California.”  137 S. Ct. at 1778.  “[T]he nonresident [plaintiff]s were not prescribed [the product] in California, did not purchase [it] in California, did not ingest [it] in California, and were not injured by [it] in California.  Id. at 1781.  Nor was there any claim that the defendant was “derivatively liable” for anyone else’s in-state conduct.  Id. at 1783.  “The bare fact that [the defendant] contracted with [an in-state] distributor is not enough to establish personal jurisdiction in the State.”  Id.

So that’s where we are in the ongoing process of restoring sanity to personal jurisdiction that the Supreme Court has undertaken. Except for a few pockets of “jurisdiction by consent” holdouts (see our post here) general personal jurisdiction is off the board except where a corporate defendant is “at home” – where it is incorporated or has its principal place of business.  The new battleground is whether, and to what extent, courts will allow non-residents to assert specific personal jurisdiction under the “arising from or relating to” test.  That’s what we’re looking at today

Thus, we know from BMS that “the suit must arise out of or relate to the defendant’s contacts with the forum.”  137 S. Ct. at 1780 (citation and quotation marks omitted) (emphasis original).  “[T]he primary [Due Process] concern is the burden on the defendant.”  Id. (citation and quotation marks omitted).  The required “affiliation between the forum and the underlying controversy” means that “an activity or an occurrence [must] take[] place in the forum State.”  Id. (citation and quotation marks omitted).  “[S]pecific jurisdiction is confined to adjudication of issues deriving from, or connected with, the very controversy that establishes jurisdiction.”  Id. (citation and quotation marks omitted).  In determining these questions, “the primary concern is “the burden on the defendant.  Id. (citation and quotation marks omitted).

[R]estrictions on personal jurisdiction . . . are a consequence of territorial limitations on the power of the respective States. . . .  The sovereignty of each State implies a limitation on the sovereignty of all its sister States.  And at times, this federalism interest may be decisive. . . .  Even if the defendant would suffer minimal or no inconvenience . . .; even if the forum State has a strong interest in applying its law to the controversy; even if the forum State is the most convenient location for litigation, the Due Process Clause, acting as an instrument of interstate federalism, may sometimes act to divest the State of its power to render a valid judgment.

Id. at 1780-81 (citations and quotation marks omitted)

In sum, existence of specific personal jurisdiction after BMS requires “a connection between the forum and the specific claims at issue.”  Id. at 1781.  Thus, BMS recognized two types of possible mass tort aggregation:  (1) plaintiffs from anywhere may bring “a consolidated action” in a state that has “general jurisdiction” under Bauman.  (2) Plaintiffs who are “residents of a particular state” can “probably sue together in their home states” (assuming that was also where they were injured, and maybe other things in specific cases).  Id. at 1783.  Although it did not draw the bright line our side would have liked, BMS did not recognize any instance where a non-resident could assert specific personal jurisdiction.

Finally, BMS pointed out that personal jurisdictional rules might be different where a federal court is asked to adjudicate a federal claim. Id. at 1784 (citing Omni Capital International, Ltd. v. Rudolf Wolff & Co., 484 U.S. 9 (1987)).  The Court’s page citation to Omni Capital, 484 U.S. at 103 n.5, explains that caveat, since that Omni Capital footnote had preserved a possibility that Congress could permit analysis of nationwide contacts by enacting a statute allowing nationwide service of process.  Id. That’s not something applicable to state-law product liability actions.

From the discussion in BMS we take away, first, the holding that a “defendant’s relationship with a third party, standing alone, is an insufficient basis” for jurisdiction.  A defendant’s contracting with a separate in-state entity, such as the distributor in BMS, is not a relevant specific personal jurisdiction contact.  There would have to be some basis, like alter ego or conspiracy, to impose a separate entity’s contacts on a defendant.

Second, BMS requires that the defendant’s jurisdictional contacts for specific jurisdiction must relate to a plaintiff’s “specific claims” – ruling out more general contacts that would be the same for every plaintiff in the litigation.  Thus, that the defendant has a manufacturing plant in a state that made the drug in question doesn’t matter if no manufacturing defect claim is alleged, nor should it matter unless the plaintiff can establish that the drug s/he ingested was actually made in that facility.  Ditto with testing.  An in-state activity related to overall FDA approval wouldn’t be “specific” to any plaintiff, and thus should not be not a relevant contact under BMS.  However, if a plaintiff were actually enrolled in a clinical trial (say plaintiff X, a Pennsylvania resident, crossed the river and participated in an New Jersey study), and was claiming injury from that participation, that contact would be “specific” to that plaintiff’s claims and thus relevant to a BMS specific personal jurisdiction analysis.

Beyond the BMS discussion of the “arising out of”/”relating to” specific personal jurisdiction test, we’re doing two things – first, we take another look at the aforementioned Walden case, because of the heavy reliance on Walden in BMS.  Second, we ran a search of all previous Supreme Court decision that used the words “arising” and “relating” (in any verb form) in the same sentence, and also mentioned “personal jurisdiction” anywhere in the opinion.  That search produced 13 prior Supreme Court cases, a manageable number.

Walden:  We already examined the Walden v. Fiore, 134 S. Ct. 1115 (2014), specific personal jurisdiction decision quite closely back in 2016, following the California Supreme Court’s now overturned ruling in BMS.  First we note that Walden involved federal constitutional claims (a so-called “Bivens” action), brought in federal court, id. at 1120, so the BMS Fifth/Fourteenth Amendment caveat doesn’t seem to matter in practice (and we won’t mention it further).  Plaintiff was a Nevada resident, asserting the specific jurisdiction of his home state, suing over a currency seizure by a Georgia police officer who acted in Georgia.  Id. at 1119-20.  As an in-state plaintiff, not only did he assert specific personal jurisdiction in the usual way, but a fortiori he had far more forum contacts than the litigation tourists who frequent drug/device mass torts.  However, as emphasized by BMS, the “primary concern” is with the defendant’s situation, so our focus in Walden is on what the Court had to say about the defendant’s contacts/conduct.

Walden held, as to a defendant, “the relationship must arise out of contacts that the defendant himself creates with the forum State,” and “the defendant’s suit-related conduct must create a substantial connection with the forum.”  Id. at 1122 (citations and quotation marks omitted).  Further, “minimum contacts analysis looks to the defendant’s contacts with the forum State itself, not the defendant’s contacts with persons who reside there,” id., which in Walden included the plaintiff himself.  “[R]andom, fortuitous or attenuated contacts [a defendant] makes by interacting with other persons affiliated with the State” are insufficient.  Id. at 1123.  Neither the plaintiffs nor a third-party’s “unilateral activity” count.  Id. at 1222.  Mere knowledge that the future plaintiff was affiliated with the forum state doesn’t count:

Petitioner’s actions in [another state] did not create sufficient contacts with [the forum] simply because he allegedly directed his conduct at plaintiffs whom he knew had [forum] connections. Such reasoning improperly attributes a plaintiff’s forum connections to the defendant.

Id. at 1125.  Thus, “the mere fact that [defendant’s] conduct affected plaintiffs with connections to the forum State does not suffice to authorize jurisdiction.”  Id. at 1126.

In Walden, like BMS, “no part of [defendant’s] course of conduct occurred in” the forum state.  Id. at 1124.  Plaintiff could not compensate for that lack of activity through reliance on “knowledge of [plaintiff’s] strong forum connections.  Id. at 1124-25.  “The proper question is not where the plaintiff experienced a particular injury or effect but whether the defendant’s conduct connects him to the forum in a meaningful way.” Id. at 1125.  The Court also held that, where a plaintiff “would experience this same [injury] . . . wherever else they might have” been, specific personal jurisdiction on the basis of such a contact could not be sustained.  Id.  If “the effects of [defendant’s] conduct” would be the same anywhere, that conduct was “not connected to the forum State in a way that makes those effects a proper basis for jurisdiction.”  Id.

Walden thus yields the following takeaways:  (1) The defendant’s contacts must create a “substantial connection.”  One of several dozen clinical trials shouldn’t cut it.  Nor should a trivial and irrelevant step in the manufacturing process, such as the presence of a packaging or processing facility where packaging/processing is not an issue in litigation.  (2) As held in BMS, jurisdictional contacts must be a defendant’s own, not those of some other in-state entity with which the defendant has some sort of relationship.  (3) Walden’s “same injury wherever else [a plaintiff] might have been” holding reinforces the “specific claims” discussion in BMS.  A general contact, as to which any plaintiff from anywhere could claim the same sort of injury and causation, cannot be a specific jurisdiction forum contact.  Purported contacts relating to, for example, the invention of a medical device, the testing of a prescription medical product, the preparation of FDA submissions – all of these are general contacts that any plaintiff anywhere could equally well assert.  Those are not what specific jurisdiction is about under BMS and Walden.

Other specific personal jurisdiction cases:  First, where did the “arising out of”/”relating to” specific personal jurisdiction test originate?   We tracked that down.  Ironically, the current formulation of this test was first articulated in Helicopteros Nacionales de Colombia, S.A. v. Hall, 466 U.S. 408 (1984), a case that neither involved specific jurisdiction nor applied the test.  See 466 U.S. at 415 (“[a]ll parties . . . concede[d] that [plaintiffs’] claims . . . did not “arise out of,” and are not related to, [defendant’s] activities within” the forum state”).  That being said, the Court in Helicopteros Nacionales stated:

Due process requirements are satisfied when . . . a nonresident corporate defendant . . . has certain minimum contacts with the forum such that the maintenance of the suit does not offend traditional notions of fair play and substantial justice.  When a controversy is related to or “arises out of” a defendant’s contacts with the forum, the Court has said that a “relationship among the defendant, the forum, and the litigation” is the essential foundation of in personam jurisdiction.

Id. at 414 (quoting Shaffer v. Heitner, 433 U.S. 186, 204 (1977)) (other citations and quotation marks omitted) (emphasis added).  Shaffer, however, does not contain “arising out of”/”relating to” language – that phraseology actually comes from a law review article cited in a footnote in Helicopteros Nacionales. See 466 U.S. at 414 n.8 (citing von Mehren & Trautman, “Jurisdiction to Adjudicate:  A Suggested Analysis,” 79 Harv. L. Rev. 1121, 1144-64 (1966)).  The von Mehren & Trautman article stated, “[i]n the case of specific jurisdiction, the assertion of power to adjudicate is limited to matters arising out of − or intimately related to − the affiliating circumstances on which the jurisdictional claim is based.”  79 Harv. L. Rev. at 1144-45.  So that is the origin of the relevant test applied in subsequent specific personal jurisdiction cases, up to and including BMS.

Helicopteros Nacionales contains a second interesting footnote, noting the existence (but did not deciding) of some specific personal jurisdiction issues:

[W]e decline to reach the questions (1) whether the terms “arising out of” and “related to” describe different connections between a cause of action and a defendant’s contacts with a forum, and (2) what sort of tie between a cause of action and a defendant’s contacts with a forum is necessary to a determination that either connection exists.  Nor do we reach the question whether, if the two types of relationship differ, a forum’s exercise of personal jurisdiction in a situation where the cause of action “relates to,” but does not “arise out of,” the defendant’s contacts with the forum should be analyzed as an assertion of specific jurisdiction.

Id. at 415 n.10.  Aside from this mention in Helicopteros Nacionales, these questions have never been addressed by the Supreme Court.  We will not address them either.

Other than BMS and Walden, the most recent specific personal jurisdiction case utilizing the “arising out of”/”relating to” specific personal jurisdiction test is J. McIntyre Machinery, Ltd. v. Nicastro, 564 U.S. 873 (2011), a decision concerning so-called “stream of commerce” jurisdiction that did not produce a majority opinion.  We previously discussed Nicastro here. “When a fragmented Court decides a case and no single rationale explaining the result enjoys the assent of five Justices, the holding of the Court may be viewed as that position taken by those Members who concurred in the judgments on the narrowest grounds.”  Marks v. United States, 430 U.S. 188, 193 (1977).  Thus, we need to pay careful attention to the concurring opinion of Justices Breyer and Alito in Nicastro.

Nicastro was brought  in New Jersey.  Specific personal jurisdiction over an overseas defendant had been asserted on the basis of:  (1) an out-of-state independent national distributor; (2) attendance at conventions elsewhere in the United States, and (3) the injury-causing product ending up in New Jersey.  564 U.S. at 878.  Four justices (in an opinion by Justice Kennedy) held that none of these contacts involved an “act by which the defendant purposefully avail[ed] itself of the privilege of conducting activities within the forum State“ that would allow personal jurisdiction.  Id. at 880 (citation and quotation marks omitted).  None of the facts supported the specific targeting of New Jersey, therefore no specific personal jurisdiction existed.  Id. at 886.

A state’s “strong interest in protecting its citizens from defective products” cannot overcome Due Process, since “the Constitution commands restraint before discarding liberty in the name of expediency.”  Id. at 887.  A defendant:

submits to the judicial power of an otherwise foreign sovereign to the extent that power is exercised in connection with the defendant’s activities touching on the State.  In other words, submission through contact with and activity directed at a sovereign may justify specific jurisdiction in a suit arising out of or related to the defendant’s contacts with the forum.

Id. at 881 (citations and quotation marks omitted) (emphasis added).  Applying federalism over foreseeability, these four justices rejected stream of commerce altogether.  See Id. at 886 (“the stream-of-commerce metaphor cannot supersede either the mandate of the Due Process Clause or the limits on judicial authority”).

“The principal inquiry in cases of this sort is whether the defendant’s activities manifest an intention to submit to the power of a sovereign.”  Id. at 882.  Thus, a “defendant’s transmission of goods permits the exercise of jurisdiction only where the defendant can be said to have targeted the forum; as a general rule, it is not enough that the defendant might have predicted that its goods will reach the forum State.”  Id.  Specific “personal jurisdiction requires a forum-by-forum, or sovereign-by-sovereign, analysis.”  Id. at 884.  After all, where specific jurisdiction is unavailable, “the courts of [a defendant’s] home State are available and can exercise general jurisdiction.”  Id.

The Nicastro concurrence did not reach as broadly.  It held only that “a single sale of a product in a State does not constitute an adequate basis for asserting jurisdiction over an out-of-state defendant, even if that defendant places his goods in the stream of commerce, fully aware (and hoping) that such a sale will take place.”  Id. at 888-89 (citations omitted).  The concurring justices refrained from adopting the plurality’s “strict rules that limit jurisdiction where a defendant does not intend to submit to the power of a sovereign.”  Id. at 890.

[As an aside, with Justice Alito having since written the federalism-based BMS decision, the continued viability of any form of stream of commerce jurisdiction is now open to serious question − but that is not the focus of today’s post.]

Nor could the Nicastro concurrence countenance specific jurisdiction based on foreseeability. Specific jurisdiction “rest[s] upon a particular notion of defendant-focused fairness.” Id. at 891.  They reject any rule that:

would permit every State to assert jurisdiction in a products-liability suit against any domestic manufacturer who sells its products (made anywhere in the United States) to a national distributor, no matter how large or small the manufacturer, no matter how distant the forum, and no matter how few the number of items that end up in the particular forum at issue.

Id. (emphasis added).

Nicastro thus reinforces our takeaways from BMA and Walden with the concurrence’s rejection of jurisdictional theories that would expand specific personal jurisdiction to allow product liability suits against corporate defendants to be brought in “every State” no matter how remote from where the defendant operates.  “Fairness” concerns as to specific jurisdiction are “defendant-focused.”

The specific personal jurisdiction test was also applied in Burnham v. Superior Court, 495 U.S. 604, 616 (1990). Burnham, like Walden, did not involve a corporate defendant.  The issue was whether jurisdiction was still obtainable by personal service on a defendant physically in the jurisdiction, without regard for minimum contacts.  Id. at 608.  Burnham, thus decided an attempt to restrict, rather than expand, traditional jurisdictional principles.  Moreover the decision is a mess.  In Burnham, the Court was even more split than Nicastro, producing four opinions, mostly dealing with the whether the “time honored,” id. at 622, tradition of individual personal service remained valid, in and of itself, or required an additional “minimum contacts” analysis.

Justice Scalia, writing for three justices (and sometimes four) in Burnham, predictably answered “no.”  “The short of the matter is that jurisdiction based on physical presence alone constitutes due process because it is one of the continuing traditions of our legal system that define the due process standard.”  495 U.S. at 619.  Principles protecting “absent nonresident[]” defendants were not applicable.  Id. at 620.  These justices also rejected jurisdictional rules based on “fairness” as the guiding principle.  Id. at 625-26.  Justice White’s partial concurrence in the opinion and concurrence in the result, also relied on tradition but not as rigidly.  Id. at 629 (“I cannot agree that . . . all traditional rules of jurisdiction are, ipso facto, forever constitutional”).

Justice Brennan, writing for three justices in Burnham, went the other way:  “[E]very assertion of state-court jurisdiction, even one pursuant to a ‘traditional’ rule such as transient jurisdiction, must comport with contemporary notions of due process.”  Id. at 632.  Justice Stevens agreed with everybody and nobody, found an “easy case,” and offered practically no reasoning.  Id. at 640.  Only Justice Brennan undertook to apply the “arising out of”/”relating to” specific personal jurisdiction test:

[J]urisdiction is often a function of geography.  The transient rule is consistent with reasonable expectations and is entitled to a strong presumption that it comports with due process. . . .  [A] state has power to exercise judicial jurisdiction over an individual who is present within its territory unless the individual’s relationship to the state is so attenuated as to make the exercise of such jurisdiction unreasonable.

Id. at 637 (citations and quotation marks omitted).  Justice Brennan’s concurrence, however, also advanced a proposition that was definitively rejected by BMS – “an out-of-state plaintiff may use state courts in all circumstances in which those courts would be available to state citizens.”  Id. at 638.  As already discussed, BMS rejected this analogy, when it held that the non-resident plaintiffs could not assert specific jurisdiction to the same extent as resident plaintiffs.  137 S. Ct. at 1781.

The many peculiarities of Burnham – the number of opinions, most of the opinions’ reliance on “tradition,” the attempt to restrict (rather than expand) traditional jurisdiction, non-corporate parties – make it impossible to garner any significant takeaways from the decision.  If Burnham stands for anything, it would be the inapplicability of Due Process tests involving “absent nonresident[]” defendants to cases involving individuals who were physically in the jurisdiction.

The “arising out of”/”relating to” specific personal jurisdiction test was also applied in Burger King Corp. v. Rudzewicz, 471 U.S. 462 (1985).

Where a forum seeks to assert specific jurisdiction over an out-of-state defendant who has not consented to suit there, [personal jurisdiction] is satisfied if the defendant has “purposefully directed” his activities at residents of the forum, and the litigation results from alleged injuries that “arise out of or relate to” those activities.

Id. at 472 (citation and quotation marks omitted) (emphasis added).  Michigan franchisees claimed they were not subject to suit in Florida (as provided by contract) because the litigation did not “arise” from Florida.  Id. at 469.  They had “never even visited there.”  Id. at 479.  Burger King held that specific personal jurisdiction nonetheless existed, primarily because of the nature of the parties’ contract.  “[P]arties who reach out beyond one state and create continuing relationships and obligations with citizens of another state are subject to regulation and sanctions in the other State for the consequences of their activities.”  Id. at 473.  “[T]he Due Process Clause may not readily be wielded as a territorial shield to avoid interstate obligations that have been voluntarily assumed.”  Id. at 474.

Mere “foreseeability of causing injury in another State . . . is not a sufficient benchmark for exercising personal jurisdiction.”  Id. (citation and quotation marks omitted).  While a contract, without more does not confer personal jurisdiction, id. at 748, a contract that “established a substantial and continuing relationship with” an out-of-state entity does.  Id. at 487.  Where a party “reached out” and entered into a contract that “voluntar[ily] accept[ed] the long-term and exacting regulation of his business from” out of state, then the relationship is not “random, fortuitous, or attenuated,” so that a claim of breach does not “arise from” those out-of-state obligations.  Id. at 479-80 (citations and quotation marks omitted).

The takeaway from Burger King is that defendants (including corporate defendants) that “reach out” and affirmatively “establish a substantial and continuing relationship” with someone in a jurisdiction are amenable to suit there, even if they have never had a physical presence there.  If not, then they don’t – or, at least, should not be subject to specific personal jurisdiction.

The rest of the cases turned up by our search were less relevant to the test for specific personal jurisdiction.  As in Helicopteros Nacionales, the Court recited the specific personal jurisdiction test in Bauman, although that case turned on general, rather than specific, jurisdiction.  Daimler AG v. Bauman, 134 S.Ct. 746 (2014).  “Adjudicatory authority of this order, in which the suit ‘aris[es] out of or relate[s] to the defendant’s contacts with the forum,’ is today called ‘specific jurisdiction.’” Id. at 755 (quoting Helicopteros Nacionales).  A similar statement – prescient, because the test itself was not formulated until decades later −  is found in Perkins v. Benguet Consolidated Mining Co., 342 U.S. 437 (1952), observing that because the “cause of action sued upon did not arise in [the forum] and does not relate to the corporation’s activities there,” the issue was general, not specific, jurisdiction.  Id. at 439.  Neither case contains any analysis if the specific jurisdiction test.

In Hanson v. Denckla, 357 U.S. 235 (1958), the terms appear in a dissent, and not as a test for jurisdiction.  Id. at 258-59.  The same is true (except for the dissent part) in the older (pre-International Shoe Co. v. Washington, 326 U.S. 310 (1945)) decision Milliken v. Meyer, 311 U.S. 457, 464 (1940).  The remaining cases were not really personal jurisdiction cases at all.  Several involve “arising out of”/”relating to” in arbitration agreements and dealt with arbitration-related issues.  See CompuCredit Corp. v. Greenwood, 565 U.S. 95, 104 (2012); Cortez Byrd Chips, Inc. v. Bill Harbert Construction Co., 529 U.S. 193, 195 (2000); Southland Corp. v. Keating, 465 U.S. 1, 4 (1984).  Finally, the language also appears in a dissent in a sovereign immunity case.  Saudi Arabia v. Nelson, 507 U.S. 349, 379 (1993).

Thus, based on review of every United States Supreme Court case ever expressly employing the “arising out of”/”relating to” test for specific personal jurisdiction we conclude, first, that to allow a non-resident plaintiff to maintain specific personal jurisdiction on any basis would be unprecedented.  Every United States Supreme Court specific jurisdiction decision that we’ve read has involved a plaintiff who was a resident of the jurisdiction in which the suit was brought.  Beyond that, the cases provide the following takeaways:

  • For forum contacts to support specific personal jurisdiction, they must relate to a “specific” plaintiff.  They cannot be such that “wherever else” plaintiffs might reside, they could all assert the same supposed contact.
  • Specific jurisdiction contacts cannot support jurisdiction in multiple states.
  • Contractual arrangements with in-state entities do not create specific jurisdiction.  Unless a basis exists to create vicarious liability, the only relevant contacts are those of the defendant itself.
  • Forum contacts related to the product (e.g., pertaining to FDA approval), but not specific to a particular plaintiff’s claim, do not create specific jurisdiction.
  • Forum contacts that are unrelated to the particular claims of a particular plaintiff (e.g. packaging in a design defect case) cannot support specific jurisdiction.
  • Forum contacts must be “substantial” (or “substantial and continuing,” depending on which decision one quotes), so the presence in the forum state of one of numerous similar activities conducted by the defendant nationwide (e.g., a sales representative, or a clinical trial) cannot create personal jurisdiction unless relevant to the plaintiff’s particular circumstances.

This guest post is by Kevin Hara, an associate at Reed Smith and relatively frequent contributor to the Blog.  Here, he discusses two recent favorable procedural developments in further appeals from two really awful decisions by intermediate courts of appeals.  As always, our guest posters are 100% responsible for what they write – due 100% of the credit, as well as any blame.  Take it away Kevin.

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SCOTUS Calls For Solicitor General’s Views In Third Circuit Fosamax Case

Friday December 8 was a day with two items that are particularly noteworthy because of their potentially momentous implications. Remember the Blog’s previous lambasting of the Third Circuit’s unprecedented Fosamax preemption decision and the haymaker that court unleashed on the drug and device industry, in In re Fosamax (Alendronate Sodium) Products Liability Litigation, 852 F.3d 268 (3d Cir. 2017)?  Now, there is positive news to report. The Supreme Court has invited the Solicitor General “to file a brief in this case expressing the views of the United States.” Merck, Sharp & Dohme Corp. v. Albrecht, et al., No. 14-1900 (Order, Dec. 8, 2017).

What is that? Here is SCOTUSBlog’s description:

“CVSG” stands for “call for the views of the Solicitor General.”  In most cases in which someone is seeking review of the lower courts’ decision, the Court will issue a straightforward grant or denial.  But sometimes the Court will want the government’s views on what it should do in a case in which the government isn’t a party but may still have an interest — for example, because the interpretation of a federal statute is involved.  So the Court will issue an order in which it “invites the Solicitor General to file a brief expressing the views of the United States.”  It isn’t an “invitation” in the sense that the federal government gets to decide whether it wants to file a brief at all, because the Court expects the government to file.  There is no deadline by which the government is required to file the brief, however.  And the government’s recommendation, although not dispositive, will carry significant weight with the Court.

In Fosamax, this development is important because it signals that the case stands out from the general certiorari pool, meaning that review is more likely to be granted.  Statistics are surprisingly hard to come by, but a law review article, Thompson & Wachtell, “An Empirical Analysis of Supreme Court Certiorari Petition Procedures:  The Call for Response and the Call for the Views of the Solicitor General,” 16:2 G. Mason L.R. 237 (2009), analyzed ten years of Supreme Court cases (1994-2004) and concluded:

The overall grant rate increases from 0.9% to 34% following a CVSG from the Court; in other words, the Court is 37 times more likely to grant a petition following a CVSG.  For petitions on the paid docket, the grant rate increases even more, to 42%; a paid petition is 47 times more likely to be granted following a CVSG.

Id. at 245 (emphasis added).  If those somewhat dated statistics are even close to currently accurate, the Fosamax CVSG is a big deal.

Recall that the Third Circuit grossly misinterpreted the “clear evidence” preemption test from Wyeth v. Levine, which held that without clear evidence that the FDA would not have approved the label change, a court cannot rule a manufacturer’s compliance with federal and state law is impossible, and thereby preempted, already an exacting defense.  As the Blog explained in praising the petition for certiorari, the Third Circuit distorted Levine, applied an unprecedented standard, and ruled that a manufacturer could not invoke preemption without “clear and convincing” evidence that the FDA would have rejected a proposed warning.  Thus, not only did the Third Circuit reverse summary judgment for the manufacturer in more than 1000 cases, it rendered impossibility preemption even more difficult than the anti-preemption justices in Levine intended.  The Blog also discussed the Product Liability Advisory Council’s amicus brief in support of the petition here, which explained that the Third Circuit’s decision invites further lower court confusion, obliterates the district court’s ruling that was supported by undisputed evidence, encourages pharmaceutical manufacturers to flood the FDA with proposed label changes, and threatens to stifle the innovation necessary to develop new, potentially life-saving drugs.

This latest development raises defense hopes that SCOTUS will grant the petition, and finally reverse one of the worst decisions of 2017, which would be a huge win for the manufacturer in particular, and of greater significance for the big picture for pharmaceutical companies and consumers in general. Stay tuned.

New Jersey Supreme Court Grants Review of Accutane Cases

Also on December 8, the New Jersey Supreme Court granted the appeals in all of the Accutane cases that the appellate court revived back in July. The Blog has monitored the Accutane litigation through many of the twists and turns of its tortuous existence for more than a decade, first with the Accutane MDL, and then with the New Jersey cases.  As a resident of the San Francisco Bay Area, when I think of the Accutane litigation, I automatically picture Lombard Street, often touted “The Crookedest Street In The World,” with its eight hairpin turns and switchbacks that span the 600 feet of the street’s natural 27° grade.  In fact, Lombard Street is not even the most crooked street in San Francisco, because Vermont Street, has a greater sinuosity at 1.56 versus 1.2 for Lombard, though Vermont at seven turns, has one fewer than its more famous cousin.   Lombard Street and its adornment of brick red and beautiful flowers attracts thousands of tourists per year.  This meandering avenue is difficult to traverse, requires careful navigation, has been around a long time, and produced extreme frustration for those who occupy it: if it sounds familiar, bear in mind that the Accutane litigation likewise has a lengthy history, ongoing since 2003, has zigged and zagged, and neither side is particularly thrilled with the results.  The Blog has discussed many of the good aspects here, (vacating plaintiff verdicts) here, (dismissals based on learned intermediary doctrine) here, (MSJ granted) and here (warnings adequate as a matter of law), as well as the very bad Appellate Division decisions earlier this summer, when the court reinstated more than 2000 causation based dismissals.

With that in mind, here is a very brief summary of the mind-bending history of the Accutane saga and the battle over the proper expert testimony that has hopefully neared its dénouement.  As already discussed at length, the Appellate Division reversed the trial court’s decision that excluded plaintiffs’ expert causation testimony, reviving more than 2000 lawsuits.  Not surprisingly, the manufacturer appealed, supported by amicus briefs from 21 of New Jersey’s largest employers, including many Roche competitors, the HealthCare Institute of New Jersey, the New Jersey Chamber of Commerce, the American Medical Association, and eight scholars and professors of law.  When it comes to expert testimony, New Jersey unfortunately travels The Road Not Taken, applying a “relaxed” standard of expert testimony in toxic tort cases, as set forth in Rubanick v. Witco Chemical Corp., 125 N.J. 421 (1991), rather than the more rigorous federal Daubert standard.  Under Rubanick, expert testimony may be admitted “even though it is controversial and its acceptance is not widespread,” only if “it is based on a sound methodology that draws on scientific studies reasonably relied on in the scientific community and has actually been used and applied by responsible experts or practitioners in the particular field.”  Id. at 447.  In Kemp v. State, 174 N.J. 412, 425-426 (2002), the court ruled that the inquiry was not based on reasonableness, but instead examines “whether comparable experts in the field [would] actually rely on that information.  Kemp, 174 N.J. at 426 (citations and quotations omitted).  Since Rubanick and Kemp, New Jersey courts have continued the state’s unique application of scientific expert testimony with an approach distinct from the more exacting federal standard, resulting in inconsistency, confusion, and the morass of the Accutane litigation.

As the Blog discussed, and the amici explained, the Accutane trial judge applied a standard similar to Daubert, but the Appellate Division reversed the decision based on Rubanick. In so doing, the appellate court essentially ignored the gold standard of scientific evidence, epidemiological studies all but one which failed to “demonstrate[] a statistically significant increased risk of developing Crohn’s disease.”  In re Accutane Litigation, 451 N.J. Super. 153, 168  (App. Div. July 28, 2017).  Nonetheless, the Appellate Division allowed the plaintiffs’ experts to rely on evidence that should have been excluded as unreliable, such as animal studies, anecdotal case reports, and analogous medicines – in other words, scientifically unsound data.  Id. at 165-166.  Similarly to the Fosamax decision, this represents not only bad law and bad precedent, but also has far-reaching implications.  Pharmaceutical manufacturers and health professionals resoundingly decried the Accutane decision as one that will stifle research and development, and the practice of medicine out of the uncertainty of scientific evidence, and fear of legal reprisals.  The amici implored the New Jersey Supreme Court to adopt Daubert’s methodology to reaffirm the trial court’s role as a gatekeeper to ensure that only reliable scientific evidence informs the jury’s decision.  Again, the industry can take heart in the court’s order granting review of the Appellate Division’s abysmal decision, and hope that the New Jersey Supreme Court will allow modern scientific principles, rather than the unreliable and questionable methods, to govern expert testimony.  If that occurs, no doubt will the New Jersey high court reinstate the trial court’s ruling, and order dismissal of the more than 2000 cases for lack of  causation evidence.

For over fifty years, the BBC has been chronicling the exploits of that ultimate learned intermediary, Dr. Who.  Over the decades, successive Doctors have crossed swords (or sonic screwdrivers) with a wide variety of enemies, from the Master, through Daleks, Cybermen, Zygons, and Mara.  But for us, there is no more terrifying foe than the Vashta Nerada.  In the episodes “Silence in the Library” and “Forest of the Dead,” these microscopic piranha of the air lurk in the shadows until swarming around their next victim, whom they reduce to skeletal leftovers in seconds.  Shortly before the end, those selected for consumption by the Vashta Nerada take on an unusual characteristic – they have two shadows.

Which is similar to how we see Medtronic, Inc. v. Lohr, 518 U.S. 470 (1996) (“Lohr”).  We think that decision is close to the end – in Gallifreyan terms, it has two shadows.

Bexis still remembers when Lohr came down, like it was yesterday.  Just a few months before, in the Bone Screw litigation (involving Class II devices), the defendants had won an order holding that probably 85% of the plaintiffs’ allegations were preempted.  See In re Orthopedic Bone Screw Products Liability Litigation, 1996 WL 221784 (E.D. Pa. April 8, 1996) (interestingly, this decision doesn’t have a red flag, although it should).  Bexis had also written an amicus curiae brief in Lohr that articulated the defense position on negligence per se issues (available at 1996 WL 109632).  Lohr said good-bye to all that.  The section of Lohr concerning what has become the so-called “parallel claims” exception to preemption was 9-0 (in other words, Bexis got skunked).  The rest of Lohr, concerning preemption of design and warning claims, was ostensibly 5-4, although Justice Breyer’s concurrence (necessary to make a majority) wasn’t exactly on all fours as to the reasoning.

It’s been over 20 years since Lohr, and that decision hasn’t aged well.  We discuss why in this post.

The key to Lohr’s reasoning – particularly in light of the subsequent decision in Riegel v. Medtronic, Inc., 552 U.S. 312 (2008) – is its distinguishing of the FDA pre-market approval (“PMA”) process from the “expedited” §510(k) clearance that the device before the Court had undergone in 1982.  518 U.S. at 480.  Pre-market approval was “rigorous” safety review:

Before a new Class III device may be introduced to the market, the manufacturer must provide the FDA with a “reasonable assurance” that the device is both safe and effective.  See 21 U.S.C. § 360e(d)(2).  Despite its relatively innocuous phrasing, the process of establishing this “reasonable assurance,” which is known as the “premarket approval,” or “PMA” process, is a rigorous one.  Manufacturers must submit detailed information regarding the safety and efficacy of their devices, which the FDA then reviews.

Id. at 477 (emphasis added).

By contrast, “substantial equivalence” clearance for marketing and labeling did not (according to the lead Lohr opinion) impose the same standard as PMA.  Section 510(k) – codified as 21 U.S.C. §360(k) and following the FDA procedure detailed in §360c(i) – was viewed as a “grandfathering provision which allows pre-1976 devices to remain on the market without FDA approval.”  Lohr, 518 U.S. at 478.  It “permits devices that are ‘substantially equivalent’ to pre-existing devices to avoid the PMA process.”  Id.  A majority in Lohr held that “[t]he § 510(k) notification process is by no means comparable to the PMA process.”  Id. at 475-79.

In Lohr, the Court held that preemption under 21 U.S.C. §360k “does not occur in a contextual vacuum.  Rather, that interpretation is informed by two presumptions about the nature of pre-emption.”  Id. at 485.  The “first” and most important of these presumptions in Lohr was:

In all pre-emption cases, and particularly in those in which Congress has legislated in a field which the States have traditionally occupied, . . . we use[] a “presumption against the pre-emption of state police power regulations” to support a narrow interpretation of such an express command.

Id. (citations and quotation marks omitted) (emphasis added).  The second presumption was even more extra-textual – that the Court looks “not only in the [statutory] text,” but also to “the structure and purpose of the statute as a whole” in evaluating congressional “purpose.”  Id. at 485-86.

By then, it was clear where Lohr was going.  The majority construed the language of §360k(a) “narrowly,” and when that was not enough, it looked to its gestalt conception of the overall purpose of the FDCA, again in preference to the language Congress actually drafted in §360k(a).

Looking at the entire statute, the Lohr lead opinion found no private FDCA cause of action.  518 U.S. at 487.  It declared the argument “implausible” that “Congress would have barred most, if not all, relief for persons injured by defective medical devices,” even though that result was what a literal reading of “different from or in addition to” would produce. Id. To avoid that result, it decided:

  • “[R]equirement,” as used in §360k(a) should not be given “its widest reasonable meaning” because of the potentially “broad” “scope of the preclusion that would occur.”  Id. at 488-89.  Instead, the lead Lohr opinion held that preemption “was primarily concerned with the problem of specific, conflicting state statutes and regulations rather than the general duties enforced by common-law actions.”  Id. at 489. This result could be inferred from silence in the legislative history.  Id. at 491.
  • Nothing in the “the statutory scheme or the legislative history” – in other words, still more silence – suggested that §510(k) “was intended to do anything other than maintain the status quo,” which included “common-law tort suits,” so the express preemption language could not be taken “literal[ly].”  Id. at 494-95.
  • A parallel violation claim can “be ‘different from’ the [FDA] rules in a literal sense,” but still escape preemption because it is “narrower” than an FDA requirement, “not broader,” by adding a requirement of negligence.  Id. at 495.
  • “The presence of a damages remedy does not amount to the additional or different ‘requirement’ that is necessary under the statute; rather, it merely provides another reason for manufacturers to comply” with FDA requirements.  Id.
  • An FDA regulation, 21 C.F.R. §808.1(d), “interpret[ed] the scope of § 360k’s pre-emptive effect,” and disclaimed preemption of “general” state-law requirements, requiring instead “specific counterpart regulations.  Id. at 496-97.  Lohr gave that regulation “substantial weight” in its preemption analysis.  Id. at 496.
  • “[P]re-emption [can] occur only where a particular state requirement threatens to interfere with a specific federal interest.  State requirements must be ‘with respect to’ medical devices and ‘different from, or in addition to,’ federal requirements.”  Id. at 500.
  • FDA “regulations provide that state requirements of ‘general applicability’ are not pre-empted except where they have ‘the effect of establishing a substantive requirement for a specific device.’  Moreover, federal requirements must be ‘applicable to the device’ in question, and, according to the regulations, pre-empt state law only if they are ‘specific counterpart regulations’ or ‘specific’ to a “particular device.’”  Id.

As to the particular tort claims brought by the plaintiffs in Lohr, the lead opinion further discounted the scope of the substantial equivalence in §510(k), holding that “[t]he 510(k) process is focused on equivalence, not safety,” and “provide[s] little protection to the public.”  Id. at 493 (citation and quotation marks omitted) (emphasis original).  Lohr took the position that this process “did nothing more than compare one device to another, already marketed device, requiring only compliance with ‘general standards,’ the lowest level of protection.”  Id.

Further, substantial equivalence review “did not ‘require’” the design of the product “to take any particular form for any particular reason.”  Id. at 493.  Nor were any “labeling and manufacturing requirements” of §510(k) “‘applicable to the device’ in question” because they were “entirely generic” and were “applicable to a host of different devices.”  Id. at 498-99 (once again relying on 21 C.F.R. §808.1(d)).  “General” state-law product liability claims “are no more a threat to federal requirements than” “fire prevention requirements” or “zoning codes.”  Id. at 501.

Therefore, “few, if any, common-law duties have been pre-empted by this statute.”  Id. at 502.  Even then, to find preemption would “require a careful comparison between the allegedly pre-empting federal requirement and the allegedly pre-empted state requirement.”  Id. at 500.

From the outset uncertainty reigned as to Lohr.  Four justices dissented from the entire rationale that departed from the text of §360k(a), and from the ensuing result, except as to design and violation claims.  Lohr, 518 U.S. at 509, 513 (dissenting opinion).  Justice Breyer’s concurring opinion, necessary to make a majority as to most parts of the opinion, expressly disagreed “that future incidents of MDA pre-emption of common-law claims will be ‘few’ or ‘rare.’”  Id. at 508.  Justice Breyer based his result largely on the FDA’s regulation restricting the scope of the statute’s preemptive effect.  Id. at 505-06.

What happened “next” had actually happened before Lohr, but had not been relevant to Lohr’s 1982-cleared device.  In response to precisely the sort of lack-of-safety-review criticism of the original §510(k) process, as had been leveled by the lead Lohr opinion, Congress rewrote that part of the FDCA in 1990 in what is called the “Safe Medical Devices Act” (“SMDA”).  Lohr mentioned the SMDA in a footnote that addressed none of its implications.  See 518 U.S. at 480 n.4.  Here’s the SMDA’s statutory gobbledygook:  PL 101-629, November 28, 1990, 104 Stat 4511.  After 1990, the new version of §360c(f) read, in pertinent part:

(f) Initial classification and reclassification of certain devices

(1) Any device intended for human use . . . is classified in class III unless–

(A) the device . . . (ii) is substantially equivalent to another device within such type. . . .

(2)(A)(i) Any person who submits a report under section 360(k) [that’s §510k] for a type of device. . . .

(v) . . . may recommend . . . classification in class II, include in the request an initial draft proposal for applicable special controls . . . that are necessary, in conjunction with general controls, to provide reasonable assurance of safety and effectiveness and a description of how the special controls provide such assurance.  Any such request shall describe the device and provide detailed information and reasons for the recommended classification.

(Emphasis original). Thus, the SMDA extended to §510(k) substantial equivalence the same “reasonable assurance of safety and effectiveness” standard that Lohr described as “rigorous” in connection with premarket approval.  518 U.S. at 477.

In the SMDA, all “Class II” devices – the classification for the vast majority of §510(k) devices − were expressly made subject to this “reasonable assurance” standard.  To meet this standard, the SMDA also authorized the FDA to impose a wide variety of device specific “special controls”:

(B) Class II, special controls–

A device which cannot be classified as a class I device because the general controls by themselves are insufficient to provide reasonable assurance of the safety and effectiveness of the device, and for which there is sufficient information to establish special controls to provide such assurance, including the promulgation of performance standards, postmarket surveillance, patient registries, development and dissemination of guidelines . . ., recommendations, and other appropriate actions as the Secretary deems necessary to provide such assurance.  For a device that is purported or represented to be for a use in supporting or sustaining human life, the Secretary shall examine and identify the special controls, if any, that are necessary to provide adequate assurance of safety and effectiveness and describe how such controls provide such assurance.

21 U.S.C. §360c(a)(1)(B) (emphasis added).

The SMDA also revamped the substantial equivalence process itself, expanding 21 U.S.C. §360c(i), defining “substantial equivalence,” so that “safety and equivalence” became an express part of this process.  This statutory section is really long and complex, so here are the most relevant excerpts:

  • Any “different technological characteristics” in a device “demonstrate[ed]” to be “as safe and effective as a legally marketed device,” by “appropriate clinical or scientific data if deemed necessary by the Secretary” “do[] not raise different questions of safety and effectiveness than the predicate device.”  §360c(i)(1)(A)(ii).
  • “[A] submission under section 360(k) of this title . . . shall provide an adequate summary of any information respecting safety and effectiveness.”  §360c(i)(3)(A).

See generally Hall & Mercer, Rethinking Lohr:  Does “SE” Mean Safe and Effective, Substantially Equivalent, or Both?, 13 MINN. J.L. SCI. & TECH. 737, 747-50 (2012) (discussing SMDA).

Thus, at the time Lohr was decided, the SMDA had already rectified most of the lead opinion’s criticism of the earlier §510(k) process – (1) upgrading the regulatory review standard to the “reasonable assurance of safety and equivalence” level that Lohr praised as “rigorous,” (2) imposing on the FDA the duty to evaluate “safety and effectiveness” in its §510(k) evaluations, and (3) providing the Agency with discretionary authority to issue various types of device-specific “special controls.”

The Supreme Court began receding from Lohr in Buckman Co. v. Plaintiffs Legal Committee, 531 U.S. 341 (2001), albeit under an implied preemption rationale.  Buckman also involved §510(k)-cleared devices, as to which the FDA is “empowered to require additional necessary information” to facilitate the agency’s substantial equivalence determinations.  Id. at 348 (citing 21 C.F.R. §870.87(l)).  In Buckman a unanimous Court limited Lohr on two fronts.  First, the Lohr presumption against preemption was avoided because the “dealings with the FDA,” that were central to the plaintiffs’ fraud and violation claims were “inherently federal in character,” so that “no presumption against pre-emption obtains.”  Id. at 348.  Second, Buckman used implied preemption to prune the Lohr’s parallel violation claim rationale considerably.  Another provision of the FDCA, that Lohr’s gestalt analysis of FDCA purpose had somehow overlooked, established the express intent of Congress to preclude private enforcement of the FDCA by plaintiffs alleging violation claims.  “[W]e have clear evidence that Congress intended that the MDA be enforced exclusively by the Federal Government.  21 U.S.C. § 337(a).”  Id. at 352.

[T]he [Lohr] claims arose from the manufacturer’s alleged failure to use reasonable care in the production of the product, not solely from the violation of FDCA requirements.  In the present case, however, the fraud claims exist solely by virtue of the FDCA disclosure requirements.  Thus, although [Lohr] can be read to allow certain state-law causes of actions that parallel federal safety requirements, it does not and cannot stand for the proposition that any violation of the FDCA will support a state-law claim. . . .  “[F]raud-on-the-agency claims . . . would not be relying on traditional state tort law [but] . . . [o]n the contrary, the existence of these federal enactments is a critical element in their case.

Id. at 352-53 (emphasis added).  Thus, violation claims can’t be “solely” based on FDCA infractions, but must “parallel” existing state tort law.  Preemption precludes purported state-law claims that depend on a “federal enactment” as a “critical element” of a private plaintiff’s case.

The Court returned to express preemption in Riegel v. Medtronic, Inc., 552 U.S. 312 (2008).  Further undercutting Lohr, a 7-2 majority dispensed with any presumption against preemption (only the dissent mentioned it, id. at 334).  Riegel viewed Lohr as “disclaim[ing] a conclusion that general federal requirements could never pre-empt” and holding only “that no pre-emption occurred in the case at hand based on a careful comparison between the state and federal duties at issue.”  Id. at 322.  The majority in Riegel thus converted what Lohr had observed about the “rigor” of FDA premarket review into a preemptive holding.  The FDA “grants premarket approval only if it finds there is a ‘reasonable assurance’ of the device’s ‘safety and effectiveness.’”  Id. at 318.

[P]remarket approval is specific to individual devices.  And it is in no sense an exemption from federal safety review − it is federal safety review.  Thus, the attributes that Lohr found lacking in §510(k) review are present here. . . .  [P]remarket approval is focused on safety, not equivalence.  While devices that enter the market through §510(k) have “never been formally reviewed under the MDA for safety or efficacy,” the FDA may grant premarket approval only after it determines that a device offers a reasonable assurance of safety and effectiveness, §360e(d).  And while the FDA does not “‘require’” that a device allowed to enter the market as a substantial equivalent “take any particular form for any particular reason,” the FDA requires a device that has received premarket approval to be made with almost no deviations from the specifications in its approval application, for the reason that the FDA has determined that the approved form provides a reasonable assurance of safety and effectiveness.

Id. at 323 (Lohr citations omitted) (most emphasis added).

Unrestricted by artificial presumptions, Riegel further rejected Lohr’s crabbed view of “requirements” in §360k(a) – “adher[ing] to the dissent in Lohr, and observing that “[i]n interpreting two other statutes we have likewise held that a provision pre-empting state ‘requirements’ pre-empted common-law duties.”  552 U.S. at 324 (citations omitted).  From then on, a statutory “reference to a State’s ‘requirements’ includes its common-law duties.”  Id.  When plaintiffs raised 21 C.F.R. §808.1(d), to which Lohr’s lead opinion and Justice Breyer’s concurrence had deferred, the Riegel majority gave that regulation the back of their collective hands.  It “neither accept[ed] nor reject[ed] the proposition” that a “regulation can properly be consulted to determine the [FDCA’s] meaning,” id. at 329, but blasted this particular regulation as “adding” only “confusion” to the preemption analysis:

[Plaintiffs’] reading of §808.1(d)(1), however, would allow a claim for tortious mislabeling to escape pre-emption so long as such a claim could also be brought against objects other than medical devices.  All in all, we think that §808.1(d)(1) can add nothing to our analysis but confusion.

Id.  That was a 180° reversal of Lohr.  More would follow.

Moreover, the same negative inference from the lead opinion in Lohr, that Congress wouldn’t “without comment, remove all means of judicial recourse” for medical device plaintiffs, didn’t work go over so well in Riegel:

[A]s we have explained, this is exactly what a pre-emption clause for medical devices does by its terms.  The operation of a law enacted by Congress need not be seconded by a committee report on pain of judicial nullification.

Id. at 326 (rejecting Lohr rationale).  Even though the FDA in Riegel supported preemption, the majority “found it unnecessary to rely upon that agency view because we think [§360k(a)] itself speaks clearly to the point at issue.”  Id.  So much for all the ambiguity that Lohr professed to find in the same language.

Finally, Riegel declined to decide anything concerning parallel violation claims, because that issue was waived.  Id. at 330 (plaintiffs “made no such contention in their briefs before the Second Circuit, nor did they raise this argument in their petition for certiorari”).  However, Riegel included some dictum in the paragraph about waiver – “§360k does not prevent a State from providing a damages remedy for claims premised on a violation of FDA regulations; the state duties in such a case ‘parallel,’ rather than add to, federal requirements,” id. – that has been universally converted by the lower courts (probably to the surprise and chagrin of the Riegel majority) into an endorsement of the concept of “parallel claims,” something that the Riegel Court in fact declined to decide.

Next, in Wyeth v. Levine, 555 U.S. 555 (2009), a prescription drug implied preemption case not dealing with anything analogous to §360k(a), the presumption against preemption was back in full force.  “[I]]n all pre-emption cases, and particularly in those in which Congress has ‘legislated . . . in a field which the States have traditionally occupied,’ . . . we ‘start with the assumption that the historic police powers of the States were not to be superseded by the Federal Act unless that was the clear and manifest purpose of Congress.’” Id. at 565 (quoting Lohr, 518 U.S. at 485).  Since Levine dealt with implied preemption and drugs, as opposed to express preemption and medical devices, not much else in Levine is particularly relevant to this post.  For completeness, here is a list of every Lohr citation in the 6-3 majority opinion in Levine:

  • “While agencies have no special authority to pronounce on pre-emption absent delegation by Congress, they do have a unique understanding of the statutes they administer”  Id. at 576-77 (citing Lohr).

That’s it − only this one other Lohr citation in Levine.  Moreover,  the agency deference decision in Levine was not at all supportive of the deference that Lohr accorded the Agency’s regulation:

[T]he Court has performed its own conflict determination, relying on the substance of state and federal law and not on agency proclamations of pre-emption.

Id. at 576.  Otherwise, the majority in Levine evidently did not think that Lohr was particularly relevant to any substantive preemption points, and to that extent we agree.

PLIVA, Inc. v. Mensing, 564 U.S. 604 (2011) (“Mensing”), like Levine, involved implied preemption and prescription drugs, finding preemption extended to bar common-law warning claims concerning generic drugs.  For present purposes, that aspect of Mensing doesn’t matter.  What does matter is that a majority of the Court refused outright to place reliance on an FDA regulation to interpret the preemptive scope of the FDCA.  Mensing completely rejected this pillar of the Lohr decision:

Although we defer to the [FDA’s] interpretation of its regulations, we do not defer to an agency’s ultimate conclusion about whether state law should be pre-empted.

Id. at 613 n.3 (citing Levine, 555 U.S. at 576).

Mensing also rejected Lohr’s refusal to take Congress at its preemptive word.  If the manner in which Congress wrote the statute included broad preemption, the Court would not usurp the power of Congress to “fix” what Congress did:

[I]t is not this Court’s task to decide whether the statutory scheme established by Congress is unusual or even bizarre. . . .  We will not distort the Supremacy Clause in order to create similar pre-emption across a dissimilar statutory scheme.  As always, Congress and the FDA retain the authority to change the law and regulations if they so desire.

Id. at 625-26 (citation and quotation marks omitted).

In 2015, a then-obscure appellate judge named Gorsuch decided the PMA medical device preemption case Caplinger v. Medtronic, Inc., 784 F.3d 1335 (10th Cir. 2015).  Judge (now Justice) Gorsuch thus had a close encounter with the mess that Lohr’s refusal to interpret §360k(a)’s preemptive language according to its terms had created over the course of (then) almost two decades.  We’ve already discussed these observations at length, so we’ll only hit the highlights here – in another set of bullet points:

  • Congress “[e]xercis[ed] its authority under the Supremacy Clause” in enacting 21 U.S.C. §360k(a).  Caplinger, 784 F.3d at 1336.
  • “Section 360k(a) preempts ‘any requirement’ imposed by states on manufacturers that differs from or adds to those found in the FDCA.  Given this expansive language one might be forgiven for thinking all private state law tort suits are foreclosed.”  Id. at 1337.
  • Since Lohr, judges have “struggle[d]” to make sense of medical device preemption, since The Supreme Court’s “divergent views” about §360k(a) have “yielded considerable ‘uncertainty’ among the lower courts.”  Id. at 1337-38.
  • The “damages remedy” that Lohr found not “different from” FDCA requirements is “nowhere provided for in federal law.”  Id. at 1338.
  • Lohr’s parallel claims analysis “doesn’t appear in the statute, so its meaning was left entirely to judicial exposition.”  Id.
  • “Now, you might ask, why isn’t a narrower state law requirement at least ‘different from’ a broader federal requirement − and thus preempted by §360k(a)’s express terms?  The Lohr majority acknowledged that a state duty imposing a ‘narrower requirement’ is indeed ‘different from’ the federal rules in a literal sense.’  And when it comes to interpreting the text of a statute, that’s often the sense that matters most.”  Id.
  • “[A]gain read literally, it would seem ‘any’ federal requirement imposed by the FDCA is capable of preempting any different or additional state requirement.  But again the Lohr majority held otherwise,” and instead required a “regulation ‘specific’ to a ‘particular device.’”  Id. at 1339.
  • Despite the “clear” language of 21 U.S.C. §337(a), “lower courts must now accept . . . the notion that §360k(a) permits private tort suits that do no more than parallel the MDA.”  Id.
  • All three subsequent Supreme Court decisions – Buckman, Riegel, and Levine – “cut back on the scope of [Lohr’s] initial decision” and “retreated from” Lohr’s rationale.  Id. at 1339-40.
  • “It’s no small mystery why the same word – ‘any’ − should bear such different meanings in two such similar clauses that lie cheek by jowl in the same statutory subsection.”  Id. at 1340.
  • “[W]e may find the state law claim preempted only if there exists a device-specific federal requirement, though this test admittedly finds no analogue when it comes to the state requirement clause interpreted in Riegel.”  Id.
  • Section 360k(a) “specifies its preemptive reach plainly and broadly: any state requirement that adds to federal requirements and that relates to the safety or effectiveness of the device is preempted. No other qualification exists.”  Id. at 1345.
  • “[I]t is not for this court to revise [§360k(a)] by beating a new path around preemption nowhere authorized in the text of the statute.”  Id. at 1347.
  • Not just pre-market approval, but “something like it,” should have preemptive effect.  Id. at 1339.

Thus, with respect to Lohr, Judge Gorsuch couldn’t “help but wonder if perhaps some of those rules warrant revisiting and reconciliation.”  Caplinger, 784 F.3d at 1340.  We think that’s a great idea – the sooner the better.

Then, in Lohr’s twentieth anniversary year, the decision’s most important doctrinal underpinning was flat out overruled.  As we’ve also discussed before, the Supreme Court abolished the presumption against preemption in express preemption cases where Congress has included language explicit preemption language such as §360k(a):

The plain text of the [preemption clause] begins and ends our analysis. . . .  And because the statute contains an express pre-emption clause, we do not invoke any presumption against pre-emption but instead focus on the plain wording of the clause, which necessarily contains the best evidence of Congress’ pre-emptive intent.

Puerto Rico v. Franklin California Tax-Free Trust, ___ U.S. ___, 136 S. Ct. 1938, 1946 (2016) (“Franklin”).  Accord Watson v. Air Methods Corp., 870 F.3d 812, 817 (8th Cir. 2017) (following Franklin and rejecting presumption against preemption in express preemption case); EagleMed LLC v. Cox, 868 F.3d 893, 903, (10th Cir. 2017) (same); Atay v. Cty. of Maui, 842 F.3d 688, 699 (9th Cir. 2016) (same); Conklin v. Medtronic, Inc., ___ P.3d ___, 2017 WL 4682107, at *2 (Ariz. App. Oct. 19, 2017) (under Franklin courts may not invoke a presumption against preemption in PMA preemption cases); Olmstead v. Bayer Corp., 2017 WL 3498696, at *3 n.2 (N.D.N.Y. Aug. 15, 2017) (plaintiff’s assertion of presumption against preemption in PMA preemption case held “frivolous” after Franklin).

That turned out the lights on Lohr.

Bringing the chronology to a close, earlier this year, the FDA itself reiterated that “safety and effectiveness” was baked into the §510(k) “substantial equivalence” review process by the SMDA.  See FDA, “Public Health Interests and First Amendment Considerations Related to Manufacturer Communications Regarding Unapproved Uses of Approved or Cleared Medical Products” (Jan. 17, 2017).  Thus, the FDA recognizes that “principles of safety and effectiveness underlie the substantial equivalence determination in every 510(k) review.”  FDA memo at 44 (footnote omitted).  Again, we discussed this development in detail when it happened, so we’ll simply summarize the FDA’s views here:

  • While “approval application (PMA) . . . and 510(k)) differ in various ways, they all . . . enable[] FDA to ensure that devices on the market are ones that have been determined by FDA to have a reasonable assurance of safety and effectiveness.”  Id. at 40.
  • “Congress . . . required FDA to evaluate whether a new device is as safe and effective as a predicate device.”  Id. at 44 n.137 (specifically discussing SMDA).
  • Under §510(k), “[c]lassification determinations must be based on an evaluation of the safety and effectiveness of the device.”  Id. at 41.
  • “Class II devices are devices for which general controls, by themselves, are insufficient to provide reasonable assurance of the safety and effectiveness of the device, and for which there is sufficient information to establish special controls necessary to provide such assurance.”  Id. at 41 n.122.
  • “During the 510(k) review, FDA considers the device’s safety and effectiveness in its substantial equivalence determination.”  Id. at 43.
  • [T]he 510(k) . . . review process reflects a determination of the level of control necessary to provide a ‘reasonable assurance of safety and effectiveness.’”  Id. at 44-45.

While the FDA’s 2017 public position on the nature of §510(k) clearance should be quite sufficient, since the SMDA was enacted in 1990 the FDA has issued a variety of other documents that contain similar statements.  For instance, in the currently posted discussion of “Regulatory Controls” on the FDA’s website, the description of “special controls” for “class II devices” makes clear that:  (1) “[s]pecial controls are regulatory requirements,” and (2) “Special controls are usually device-specific.”  The FDA’s “design control” regulation, 21 C.F.R. §820.30(a)(1), provides that, “[e]ach manufacturer of any . . . class II device . . . shall establish and maintain procedures to control the design of the device in order to ensure that specified design requirements are met.”  This regulation imposes additional requirements on design “development,” “input,” “output,” “review,” “verification,” “validation,” “transfer,” “changes,” and “history.”  Id. §§820.30(d-j).

Just the other day the FDA issued a guidance document on when a change to a §510(k) device requires submission of a new notification to the Agency.  That guidance reiterates that “whether submission of a new 510(k) is required depends on whether the change could significantly affect the safety or effectiveness of the device.”  FDA, “Deciding When to Submit a 510(k) for a Change to an Existing Device,” Guidance for Industry, at 8 (Oct. 25, 2017).  Likewise, an FDA working report from 2010 recognized:

[T]he 510(k) program has changed significantly since its inception.  The MDA established the premarket notification process as a simple check to assure proper device classification.  Through various statutory and regulatory modifications over time, it has become a multifaceted premarket review process that is expected to assure that cleared devices, subject to general and applicable special controls, provide reasonable assurance of safety and effectiveness, and to facilitate innovation in the medical device industry.

FDA, “CDRH Preliminary Internal Evaluations – Volume I, 510(k) Working Group Preliminary Report & Recommendations, at 34 (Aug. 2010) (§4.4 “The Current 510(k) Program”) (available online here) (emphasis added).  In many instances, device specific FDA guidance, regulatory manuals, and other similar documents will provide additional regulatory proof of actual preemptive requirements imposed by the Agency upon particular devices or device types.

At this point, Lohr plainly has two shadows from a jurisprudential perspective.  Essentially all of the propositions upon which its anti-preemptive rationale was based have been changed by Congress, or overruled by subsequent Supreme Court decisions.

First, The SMDA applied the same pre-market approval “reasonable assurance of safety and effectiveness” standard to §510(k) and gave the FDA the tools – a broad selection of “special controls” −  to create the kind of “device specific” controls that preemption under Lohr required.  The FDA has recognized on many occasions that safety and effectiveness is at the core of modern “substantial equivalence” determinations.

Second, Riegel held that the identical “rigorous” “reasonable assurance of safety and effectiveness” standard of FDA safety review is broadly preemptive.

Third, Franklin outright abolished the central guiding principle in Lohr − the presumption against preemption in express preemption cases is no more.

Fourth, Lohr’s gestalt approach allowing diffuse, general Congressional purpose to override preemptive statutory provisions has been rejected in Riegel and Mensing.  If the statute’s language requires preemption, then that is what Congress “intended” – unless and until Congress changes it.

Fifth, Lohr’s reliance on an agency regulation to constrict the preemptive scope of that agency’s organic statute was questioned in Riegel and Levine before being rejected outright in Mensing.

Sixth, to the extent that Lohr distinguished state statutory/regulatory enactments and state common law in interpreting “requirements” as that term was used in §360k(a), Riegel definitively rejected that distinction.

SeventhLohr’s “parallel” claim analysis was restricted in Buckman, and avoided as waived in Riegel.  Justice Gorsuch hates all the extra-textual hair splitting that has sprung up around the Riegel dictum, and as a result appears to be the kind of advocate we would want on Court for reconsidering and overruling Lohr.

So what do we need?

We need good cases – not kamikaze motions in MDLs with institutional (at least) bias against preemption.  We need cases where the FDA has, in fact, imposed device-specific special controls that specify design, warnings, clinical testing, and other relevant attributes of §510(k) medical devices.  Only in such carefully selected cases, and after the compilation of a full regulatory record, will the “careful comparison” that even Lohr recognized could lead to preemption be able carry the day for the defense.  That may change later on, once preemption becomes better established in post-SMDA §510(k) cases, but for now we’re not doing ourselves any favors making preemption motions on threadbare records or before judges predisposed to reject preemption arguments.

Lohr should be dead.  Long live preemption.