Friday, January 26, 2007

More Thoughts On Pharmaceuticals Class Actions

Bexis got an unexpected present for his 51st birthday yesterday. The court denied certification of a nationwide suicidality class in the latest Paxil litigation. See Blain v. Smithkline Beecham Corp., 2007 WL 178564 (E.D. Pa. Jan. 25, 2007). This got us thinking more about what’s really going on with pharmaceutical class actions. We can’t talk about Paxil specifically, of course, given our representations, but Blain is paradigmatic of several current trends.

First, it doesn’t matter which pharmaceutical becomes the “flavor of the week” for plaintiffs’ counsel looking to create the next mass tort, as surely as night follows day someone’s going to file a purported class action. It doesn’t seem to matter how wildly different the facts of the supposed class member claims are, the class action complaints just keep on coming. Something else is at work here.

Second, when confronted with the class members’ individual circumstances – especially in personal injury putative classes – class counsel retreat to Rule 23(c)(4) “issue certification,” truly the “last refuge of a scoundrel” in this type of case. Fortunately most courts, like Blain, refuse to buy the expansive view of (c)(4) that would permit certification of any common issue at all, without regard to the overwhelming predominance of individualized issues in pharmaceutical personal injury class actions. Suicide, with its multiplicity of societal, familial, and medical aspects, is a archetype of the individualized injury. Throw in the learned intermediary rule and the added complication of off-label use and the divergent legal approaches states take to such use, and one has to wonder what the plaintiffs are thinking. On the criminal side, where we never practice, there’s a saying that a good prosecutor can get a grand jury to indict a ham sandwich. If the plaintiffs’ view of (c)(4) were to get any legal traction, it would allow courts to certify ham sandwiches as a class. Fortunately, the courts haven’t yet gone that route, at least in cases like Blain.

Third, when faced with the widely varying product liability laws of the fifty states, plaintiffs resort to claiming that the law of the state of incorporation should prevail over the law of all the states where the plaintiffs reside and were injured. Hello? We’ve both got some clients incorporated in places like North Carolina or Michigan that would just love to have their home state’s law applied to all their claims. If that argument ever catches on, then eventually there will be an exodus of businesses out of tort-friendly jurisdictions similar to the flow of corporations to Delaware once that state figured out how choice of law enabled it to export its corporate law all over the country. But again most courts have refused to bite – as this sort of choice of law argument is almost never seen outside of the class action context. Class actions, after all, are supposedly just a procedural device with no effect on substantive law. Yeah, right.

Fourth, except for a couple of recidivist district judges as to whom the question “what part of ‘reversed’ don’t you understand” might be asked, the vast majority of courts refuse to certify classes in prescription medical product tort actions. Blain is just the latest in a long line of such cases. See In re St. Jude Medical, Inc., 425 F.3d 1116 (8th Cir. 2005); In re Vioxx Products Liability Litigation, ___ F.R.D. ___, 2006 WL 3391432 (E. D. La. Nov. 22, 2006); Sanders v. Johnson & Johnson, 2006 WL 1541033 (D.N.J. June 2, 2006); Sweet v. Pfizer, 232 F.R.D. 360 (C.D. Cal. 2005); In re Prempro Products Liability Litigation, 230 F.R.D. 555 (E.D. Ark. 2005); Zehel-Miller v. AstraZenaca Pharmaceuticals, L.P., 223 F.R.D. 659 (M.D. Fla. 2004); Bostick v. St. Jude Medical, Inc., 2004 WL 3313614 (W.D. Tenn. Aug. 17, 2004); Harris v. Purdue Pharmaceuticals L.P., 218 F.R.D. 590 (S.D. Ohio 2003); In re Baycol Products Liability Litigation, 218 F.R.D. 197 (D. Minn. 2003); Benner v. Becton Dickinson & Co., 214 F.R.D. 157 (S.D.N.Y. 2003); In re Paxil Litigation, 212 F.R.D. 539 (C.D. Cal. 2003); In re Rezulin Products Liability Litigation, 210 F.R.D. 61 (S.D.N.Y. 2002); In re Phenylpropanolamine Products Liability Litigation, 208 F.R.D. 625 (W.D. Wash. 2002); In re Propulsid Products Liability Litigation, 208 F.R.D. 133 (E.D. La. 2002). That’s five years – enough free research on the point. So why do plaintiffs keep beating their heads against this wall?

There is, of course, the off chance that they will score big with some judge somewhere. These days, however, that’s a pretty forlorn hope – particularly in the federal system where CAFA ensures that these putative class actions will now wind up. As far as we know, there has not been a single contested class action in product liability, personal injury litigation that’s been affirmed anywhere in the federal system in the decade since the Supreme Court put the kibosh on such things with its Ortiz and AmChem decisions. That’s not limited to just pharmaceuticals, that’s every kind of product that’s made.

What has to be going on is some advantage inherent in the mere filing of a class action complaint, no matter how patently unmeritorious the class action allegations are. There’s only one such advantage that we know of – class action tolling of the statute of limitations (we won't get into procedural wrangling amongst the plaintiffs' bar inter se). Since American Pipe, the Supreme Court has embraced the rather bizarre doctrine that plaintiffs should be rewarded with classwide suspension of the statute of limitations simply because a class action complaint is filed. Whether the complaint has any merit doesn’t matter at all. That’s a most peculiar proposition. We can’t think of any other area where a party gets a substantive legal advantage just for filing a piece of paper that’s a stone cold loser.

American Pipe justified its unusual conclusion on practical grounds – that if class actions didn’t have a tolling effect, the courts would be inundated with duplicative filings by other plaintiffs worried that the statute of limitations would run against their claims if they waited. But then it became too much of a hassle to worry about whether anyone actually relied on a class action filing, so that element got removed, and tolling's justification became purely utilitarian.

Well, if anybody’s been watching, it’s become rather clear that the reason there’s a “mass” in “mass torts” is because courts are being inundated anyway. So as a justification for conferring a substantive advantage upon the mere act of filing, the “we’ll be swamped” argument has gotten pretty threadbare. More importantly, at the time American Pipe was decided, the concept of multi-district litigation was in its infancy. Today, we have (at least in the federal system) procedural mechanisms that make dealing with an avalanche of similar filings, if not routine, then at least routinized.

All of this leads us to a modest proposal. It’s time to stop rewarding the mere filing of meritless class actions. The laws of economics are at work here – as long as there’s benefit to doing something, people will keep doing it. The class action tolling rule has created a market for otherwise worthless putative pharmaceuticals (and other) class actions. Tolling is no longer saving the courts anything administratively that they aren’t well equipped to handle through the MDL process. Instead, it’s burdening the courts with meritless, yet “bet your company” sized cases, that demand a great deal of time and resources from both the parties and the courts to dispose of.

Chief Justice Roberts and company – how about getting rid of a bad idea whose time has passed? It’s well past time to abolish the failed doctrine of class action tolling.

1 comment:

Clint Kelly said...

Why do we keep beating our heads against the wall? Because we care about the health of consumers who ingest dangerous drugs. You don't. It will alwayts be that way. By the way, The federal courts are looking for the "right" monitoring case to certify. It will come.