In their unending quest to make a plaintiff out of everyone, some creative members from the other side of the “v.” have concocted a claim that we call “fourth-party payor” liability. Regular blog readers are certainly familiar with “third-party payor” actions brought – entirely for economic losses – by insurers, pension funds, and other organizations
Imagine a conspiracy so vast that it includes not only your usual plaintiff-side fantasy of the FDA conspiring with a drug company, but also high FDA officials, President Obama, Robert Mercer (noted Trump supporter and reputed Breitbart financier), a number of other investors, and just for good measure President and Hillary Clinton.
We’ve been thinking a lot about class actions lately. One reason is that the Rule 23 Subcommittee of the (federal) Advisory Committee on Civil Rules just came out with a “sketch” of possible amendments – and from the defense perspective they’re frankly horrible. Bexis has been working with the Lawyers for Civil Justice to respond to a proposal that would: (1) allow classes where most members aren’t injured at all; (2) allow free reign for non-predominance “issue classes”; (3) legitimize “cy pres” donations of class funds to charities that foment litigation; and (4) allow settlement classes that ignore the rest of Rule 23, among other things. We’ll certainly have more to say on this if these “Frankenclass” amendments move forward, but for now, we just caution our pro-defense friends to remain alert and support LCJ.
The reason for such proposals is that, under the current rules, we on the defense side are generally not doing so badly, at least in prescription medical product third-party payor (“TPP”) cases. The latest win is in In re Actiq Sales & Marketing Practices Litigation, ___ F.R.D. ___, 2015 WL 1312015 (E.D. Pa. March 23, 2015), in which the plaintiffs (including, of all entities, the Pennsylvania Turnpike Commission) had their class bounced out on its ear.
So, what happened? First, plaintiffs proposed a nationwide class alleging the usual – off-label promotion of a drug that (this time a heavy-duty pain reliever approved under even more restrictive marketing scheme authorized by 21 C.F.R. §314.520 (so-called “Subpart H”), because of the drug’s known risks) that they never alleged was either ineffective or injurious to any of those prescribed. Rather, “[f]or many patients, Actiq proved effective for alleviating their pain.” Actiq, 2015 WL 1312015 at *6 (footnote omitted). In short, Actiq was another TPP strike suit, an attempt to gin up “damages,” or should we say “unjust enrichment,” that didn’t exist in fact.
Yesterday the Third Circuit upheld a District of New Jersey decision denying class certification as to plaintiffs’ consumer fraud and unjust enrichment claims. Grandalski v. Quest Diagnostics Inc., 2014 U.S. App. LEXIS 17543 (3d. Cir. Sep. 11, 2014).
Plaintiffs alleged that Quest had overbilled them for testing services and their complaint proposed multiple nationwide…
We’ve seen an increase in allegations of “unjust enrichment,” particularly in strike suits seeking recovery of purely economic loss. A number of states don’t even recognize this theory as a separate cause of action (according to Bexis’ book, these include California, New Jersey, Pennsylvania, and Tennessee), and others preclude it when there is an “adequate…
We start June with a fabulous two-fer: yes, that is two cases discussed in the same post. But wait, there’s more. The two cases each discuss civil RICO claims against drug companies and state law claims. For an unknown, but surely exorbitant, cost to the defendants, the courts, and maybe even the third party payors…
We’re a bit too tired from going late into the evening watching the Oscars to say much of anything pithy today. We’ll just complain. Argo was a very good movie. But Best Picture good? Maybe, but maybe not. It’s certainly not as shaky as last year’s pick, The Artist. Cute and different doesn’t mean best. Does anyone remember Crash winning best picture for 2005? How the heck did that happen? That might not even have been a good movie, no less best. And Shakespeare In Love? How does its victory over Saving Private Ryan look in retrospect?
Against these historic mistakes, the selection of Argo isn’t bad. As we said, it really was a good movie. A historically based movie is unquestionably good when it can get your teen-aged son to look at you with wide eyes during the last 20 minutes and say, “Man, this is intense.” Its selection as Best Picture also created a second, “hey, can you believe Ben Affleck just won an Oscar” moment. Those are always fun. He’s gotten pretty good at making movies. The Town was a good one too. So we’re really not complaining about Argo.
This is more about Django Unchained. We knew it never had a chance to win. Quentin Tarantino makes unusual movies. They’re loaded with violence, cursing and one odd circumstance piled on top of or backed into another. And Tarantino himself sometimes comes off as a know-it-all when it comes to cinema. But, man, what a move that was. It must have been incredibly difficult to craft a movie about such a painful part of our history and yet have it at once be action-packed, terrifying, funny, exhausting, exhilarating, realistic, cartoonish, unpredictable and wonderfully predictable – and then to wrap it all up in a spaghetti western. Who would even think to do such a thing, no less accomplish it? For those of you who saw it, wasn’t it great to cheer Django on as he whipped the heck out of his former slave master? We bet you’d never thought you’d get that experience at a movie. Or wasn’t it a surreal movie-going moment to laugh along with the entire crowd as the KKK members complained about the guy who improperly cut the eye holes into their hoods? And then be thrilled when Django shoots the KKK leader, Big Daddy (Don Johnson), off his horse. Tarantino doesn’t make the type of movie that gets selected as Best Picture. The Academy seems more comfortable throwing him a Best Screenplay award from time to time instead. But you’ll likely never see another movie like that one again. And you’ll definitely see more Argos. Maybe Django Unchained should have been picked.
Who knows? McConnell thinks a lot about these things and sees all the Best Picture nominees. He’ll probably straighten this all out on Wednesday.
Now for your entertainment . . . . a third-party-payer case called Employer Teamsters-Local Nos. 175/505 Health and Welfare Trust Fund v. Bristol Myers Squibb Co., No. 2013 U.S. Dist. LEXIS 21589 (S.D. W.Va. Jan. 29, 2013). As cases go, if you like courts dismissing plaintiffs’ claims for all sorts of reasons, this one should keep your attention.
We can’t say all that much about Merck & Co. v. Ratliff, ___ S.W.3d ___, 2012 WL 413522 (Ky. App. Feb. 10, 2012), because of our involvement in the Vioxx litigation, but we’d be remiss not to point out that the Kentucky appellate court joined the vast majority of other jurisdictions in rejecting “fraud…
With Herrmann in-house and retired (from blogging, at least), only one of us is currently a member of the American Law Institute (“ALI”). That said, Bexis headed down to DC yesterday to attend the ALI’s annual meeting.
With the Aggregate Litigation Project now done, we’re finding the Institute’s meetings less white-knuckle than they used to be – but that’s not to say that they’re boring. Rather, there’s always something interesting going on when the ALI gets together.
Which means there’s something worthwhile to blog about.
This time it was the wrapping up of another ALI project – one that’s been going on for over a decade (since 1997) – the Restatement (Third) of Restitution and Unjust Enrichment. The last part of this project was brought to a final vote yesterday. It passed. True, the ALI grinds slowly, but its final product is finer than anything you’ll find just about anywhere.
One of the things that means is that a lot of the … umm, that’s quite a mouthful so we’ll just call it the “R3RUE” for short … was finished well before Bexis ever joined the ALI. Talk about being late to the party. But not knowing what went on has never stopped Bexis from putting his two cents in before, and it didn’t this time.
That last chunk of the R3RUE that was up for discussion included “defenses to restitution” – leading off with the most basic: §62 entitled “Recipient Not Unjustly Enriched.” This defense was described in the draft:
The defense stated in §62 may appear redundant. If a well-pleaded complaint alleges unjust enrichment, it must be a proper answer (and not an affirmative defense) to plead “no unjust enrichment.” . . .[T]he practical application of the present rule is to a more limited class of cases. These arise when the claimant alleges facts supporting a prima facie claim in unjust enrichment . . . but the recipient is able to show that the resulting enrichment is not unjust, in view of the larger transactional context in which the benefit has been conferred.
R3RUE §62, comment a, Tentative Draft No. 7 (March 10, 2010).
That got us (well, Bexis) interested when he read it on the train down to DC early yesterday morning. There’s a set of recent cases in prescription drug product liability litigation that seem to fit into the pattern described in this part of the R3RUE.
We wrote yesterday about how common sense had gone missing from the Southern District of Illinois. But common sense is like the Dow Jones index – some days it is down 1,000 points in a few minutes, other days it is up 400 points. Today we’re bullish. Specifically, we are happy to report about a…