Monday, April 30, 2007

CAFA's Mass Torts Provisions: Lowery

Judge Tjoflat did it up in a big way a couple of weeks ago in Lowery v. Alabama Power Company, Nos. 06-16324 & 06-16325, slip op. (11th Cir. Apr. 11, 2007). We're not sure if we're providing a link to the case itself or to the "opinions" page of the Eleventh Circuit website; if we've forced you to hunt around, just plug in the date or case name and you'll find the opinion. (Sorry about the inconvenience, chief.)

Lowery was an environmental pollution case filed in Alabama state court. After assorted amendments to the pleadings, the operational complaint pleaded claims on behalf of more than 400 plaintiffs against 14 named defendants and 120 fictitious entities. The last-named defendant removed under the "mass action" provisions of the Class Action Fairness Act of 2005. In the words of the trial court that remanded the case, there was nothing in the original complaint to distinguish "between a plaintiff who may be claiming severe lung disease from one who may be claiming grit in her grits." Lowery v. Honeywell Int'l Inc., 460 F. Supp. 2d 1288, 1291 (N.D. Ala. 2006). The Eleventh Circuit granted a motion for leave to appeal the remand order.

Although Judge Tjoflat wrestled with many issues at length in his 77-page opinion, we're cutting to the chase on the preliminary stuff to get to the things that interest us. Here's the chaff: First, the parties agreed that CAFA applied to the case, because the removing defendant, Alabama Power, had been joined after CAFA's effective date. Second, Alabama Power had the power, by itself, to remove the entire action, including all claims brought by all plaintiffs against all defendants. Third, the "mass action" provisions of CAFA were poorly written, in ways that will challenge future courts to resolve some awfully thorny issues. (One of those issues is whether the "mass action" provisions authorize only expanded removal jurisdiction or whether they also apply to federal courts' original jurisdiction. Lowery, slip op. at 32 n.41.)

Now, here's the wheat: CAFA makes certain actions naming 100 or more plaintiffs and involving an aggregate amount of $5 million in controversy removable, "except that jurisdiction shall exist only over those plaintiffs whose claims in a mass action satisfy the jurisdictional amount requirement under subsection (a)," which is $75,000. What does this mean? Defendants asserted that the court had jurisdiction over the entire case if the aggregate amount in controversy was $5 million; the claims of individual plaintiffs with less than $75,000 in controversy could then be remanded. Plaintiffs, conversely, insisted that the entire lawsuit was removable only if there were both $5 million in controversy in the aggregate and all plaintiffs had individual claims worth $75,000. The court wrestled with more issues of statutory interpretation and legislative history than you would imagine existed (all of which will be useful background for folks briefing these issues in the future) and concluded that the defendants were right. If there's $5 million in controversy in the aggregate, the entire case is removable, and the individual claims of any plaintiffs placing less than $75,000 in controversy can then be remanded. Slip op. at 41-42.

Second, the court did not reach the question of which party bore the burden of proving that particular plaintiffs' claims do not place $75,000 in controversy. The court hinted, however, that the burden may properly be placed on plaintiffs. Id. at 49 n.55.

Finally, the court held that the defendants did not meet their burden of proving that the Lowery complaint placed an aggregate of $5 million in controversy. The court held, first, that in assessing the amount in controversy, the trial court could examine only "the notice of removal and accompanying documents." Id. at 61. The court did, however, analyze the contents of a supplement to the notice of removal that the defendants had filed after receiving plaintiffs' motion to remand. Id. at 60-61. We hope this means that trial courts can routinely consider materials that defendants file in opposition to a motion to remand, but we can't be sure. Careful counsel may choose to err on the side of submitting all of their evidence supporting removal in (or accompanying) the notice of removal itself.

The Eleventh Circuit also held that it would be error for a trial court to permit a defendant to take discovery after removal to prove that the amount in controversy requirement was satisfied. Id. at 63-64. "A district court should not insert itself into the fray by granting leave for the defendant to conduct discovery or by engaging in its own discovery. Doing so impermissibly lightens the defendant's burden of establishing jurisdiction." Id. at 68.

Finally, the court held that, at least on the facts before it, the defendant could not establish the aggregate amount in controversy by showing that plaintiffs in other similar cases often receive large recoveries, which would, if recovered by the plaintiffs in Lowery, total more than $5 million in the aggregate. "[I]n the present dispute -- with a record bereft of detail -- we cannot possibly ascertain how similar the current action is to those the defendants cite." Id. at 75.

This is tough medicine, for two reasons. First, if defendants must establish the jurisdictional amount in controversy at the time of removal based only on evidence obtained in the very case at issue, removals will naturally be effected later in litigation. We're not at all sure that's what Congress had in mind when it passed CAFA. Beyond that, removing defendants are always making a hard tactical decision about the proper time to remove: If they remove too early, without sufficient evidence of the amount in controversy, they can be forced to pay the attorney's fees plaintiffs incur in obtaining remand. But, if defendants wait too long to remove, they can be told that they missed the 30-day window for removal (after a case first becomes removable) and will face remand for that reason. If the Eleventh Circuit really wants defendants to wait, that's okay -- but we hope we're not going to routinely hear in later cases that defendants are being remanded for unduly delaying removal.

Second, we're not at all sure that the Eleventh Circuit means what it says about not being able to compare the amounts recovered in earlier lawsuits to the claims plaintiffs are asserting in the case being removed. Perhaps, in some circumstances, that's true. Environmental contamination claims are sometimes serious and sometimes not; if plaintiffs suffered "lung disease" in the early case and "grit in their grits" in the later case, the cases are not comparable.

But what about other types of litigation? Can't a court reasonably assume that the recovery in a wrongful death or "bad baby" case will be in the range of recent recoveries in similar cases? We suspect -- and hope -- that later courts will retreat from the Eleventh Circuit's overbroad language in Lowery and, in some cases, permit defendants to establish the amount in controversy by analogy to past precedent. Until those later courts do in fact retreat, however, defense counsel will be forced to play a treacherous game of removal at their clients' peril.

Saturday, April 28, 2007

Our Space On The Web

The Drug and Device Law Blog occupies its own niche on the web. We think mainly about the law, but we also care about the pharmaceutical and medical device industries generally. We thought we'd take a minute to identify other players in our two fields.

First, the legal side. Justia blawg search categorizes us as a "product liability" blog. Fair enough; that's what we are. Justia identifies a total of ten product liability blogs on the web. The Asbestos Law Blog hasn't had a new post in nearly three years, and the California Asbestos Law Blog has seemingly been dormant for six months; we won't even bother providing links.

Plaintiff's-side bloggers include Drug Injury Watch, Prescription Drug Liability Law Blog, the Benzene and Asbestos Law Blog, and the Asbestos and Mesothelioma Blog. We don't agree with what they say, but we'll defend to the death their right to say it.

The other side of the coin includes the New York Asbestos Defense Litigation Blog. That's in the field of product liability, but it's not drugs or devices, and so is not in our power alley.

Juvan's Health Law Blog is also classified by justia as a "product liability" blog, although we're not sure the classification makes much sense. The blog covers pharmaceutical and health care issues generally, but it doesn't spend much time on the issues dear to product liability lawyers' hearts.

The last "product liability" blog captured by justia is the Product Liability Prof Blog. This is a different kind of creature. The blog is hosted by three law professors, who have the time and inclination to think about the issues, and they tend to post about stuff that's noteworthy. Along the same lines, we like Bill Childs' Torts Prof Blog. It's also part of the law profs network of blogs, and Professor Childs makes a real contribution to the field. He led the league in coverage of the violation of a protective order in the Zyprexa litigation, and he often identifies new issues that are worth considering. The last of the law profs network that's of direct interest to us is the Mass Tort Litigation Blog. To our eye, too many of the posts there don't really add value. They simply report that a product has been recalled or a warning has been issued, rather than analyzing cases or thinking about litigation strategy. But the hosts occasionally focus on legal issues and, when they do, they treat them thoughtfully. And, hey -- who knows? -- maybe those guys save their deep thoughts for the law reviews.

Others commenting on the law include the crew at the Manhattan Institute, who post at pointoflaw.com and overlawyered.com. We really like those folks, because they pick up the political spectrum to our right on legal issues, and we hadn't realized we'd left any breathing room there. They make us feel better about ourselves. Those blogs, however, don't limit themselves to product liability (or drug and device) law; they analyze litigation much more generally.

In addition to product liability law, drug and device folks care about FDA regulatory law. A recent entry in that area is the FDA Law Blog, hosted by some lawyers at Hyman Phelps & McNamara. They cover case law on FDA-related issues, and we assume they'll continue to do a good job of it. An older blog that covers related space is the Orange Book Blog, but that one focuses on the intersection of patent law and FDA law. Those of us who can just barely spell "IP" don't visit often, but some readers of this blog might like that one.

That's the legal side of the coin. There's also the business side. For business news about the pharmaceutical industry, visit pharmalot. The host there is dedicated and quickly drawing a following in the blogosphere. Eye on FDA covers warning letters, advisory committe meetings, and other events at the agency.

Many of those blogs include "blogrolls," linking to additional blogs that may be of interest. (We have a blogroll, too, over at the bottom of the right-hand column, but we're both under- and over-inclusive. We link to only a select few blogs (which is not the preferred way of doing these things), and we include links to websites that are not blogs, but simply provide resources that may be of value to our readers.)

If there are other websites or blogs that we should visit or link to, please let us know. We'd like the Drug and Device Law Blog to be a useful central resource for folks, like us, who defend pharmaceutical product liability cases for a living.

Thursday, April 26, 2007

Preemption and FDA Archaelogy

One of the more insistent refrains that we hear from plaintiffs in prescription drug cases where implied preemption is at issue is that the FDA’s current position – foursquare in favor of preemption in six specified circumstances – should be ignored because the Agency’s pro-preemption position is “inconsistent” with the supposedly anti-preemption viewpoint that it is said to have previously taken.

We think that argument’s beside the point (but then, that's how we feel about most plaintiff legal arguments – that’s our job), primarily because administrative inconsistency by itself is hardly a disabling factor in this kind of case. “[T]hat the agency has from time to time changed its interpretation. . .does not. . .lead us to conclude that no deference should be accorded. . . . An initial agency interpretation is not instantly carved in stone.” Chevron U.S.A., Inc. v. Natural Resources Defense Council, Inc., 467 U.S. 837, 863-64 (1984). Administrative agencies “must be given ample latitude to “adapt their rules and policies to the demands of changing circumstances.” Motor Vehicle Manufacturers Ass’n v. State Farm Mutual Automobile Insurance Co., 463 U.S. 29, 42 (1983). “This Court has rejected the argument that an agency’s interpretation is not entitled to deference because it represents a sharp break with prior interpretations of the statute in question.” Rust v. Sullivan, 500 U.S. 173, 186 (1991) (citation and quotation marks omitted).

To date, courts have respected the FDA’s current preemption positions even when there has actually been an outright reversal of prior views. For example, the Supreme Court unanimously found preemption in Buckman Co. v. Plaintiffs’ Legal Committee, despite the FDA unquestionably having previously taken a contrary position. See 531 U.S. 341, 354 n.2 (2001) (noting 1994 “FDA amicus brief that “took the position that state-law tort suits alleging fraud in FDA applications for medical devices do not conflict with federal law”) (Stevens, J. concurring).

As to pre-market approved medical devices, the FDA’s current position in favor of broad tort preemption is a 180ยบ reversal of the Agency’s prior position, but because the current position is well-explained, it remains worthy of deference. Riegel v. Medtronic, Inc., 451 F.3d 104, 125 (2d Cir. 2006) (“It is certainly true that FDA previously took a different view, but. . .an agency may change its course so long as it can justify its change with a ‘reasoned analysis’”) (citation and quotation marks omitted); Horn v. Thoratec Corp., 376 F.3d 163, 179 (3d Cir. 2004) (“We cannot agree that the FDA’s position is entitled to no deference, or ‘near indifference’ simply because it represents a departure from its prior position”).

But beyond the “foolish consistency is the hobgoblin of small minds” argument, we wondered about the accuracy of the factual underpinning of the plaintiffs’ “inconsistency” argument. Some of the briefs we’ve seen attack the FDA’s position as some sort of Bush administration conspiracy. That’s just hooey. The FDA’s first three pro-preemption amicus briefs were filed in 2000 by the Clinton administration FDA and Justice Department. See our prior post on FDA amicus briefs for details, here.

So just how accurate is the other factual assumption that plaintiffs make – that the FDA once steadfastly opposed implied preemption of tort law by its regulations? This has been called the “era of good feelings” argument. Richard A. Epstein, “Why the FDA Must Preempt Tort Litigation: A Critique of Chevron Deference and a Response to Richard Nagareda,” 1 J. Tort Law Art. 5 at p. 4 (2006). This argument pre-supposes an administrative consensus before 2000 that conflict preemption was unnecessary because tort law and the FDA “administrative state” peacefully coexisted.

Well, now we’ve looked, and we can tell you – t’aint exactly so. If there’s a case to be made for FDA “inconsistency,” it’s during the pre-2000 period. We now have evidence.

That evidence is an FDA amicus brief filed in 1992 – squarely during the commissionership of Dr. David Kessler, the last FDA commissioner that plaintiffs don’t say bad things about – arguing in favor of implied preemption by reason of conflict in a state tort suit called Biffle in Texas. A copy of that brief is here.

The FDA’s Biffle brief concerned the propriety of state-law discovery rather than a state-law cause of action, but be that as it may, the point we’re making is the same. Once the FDA came around in 2000 to the pro-preemption position that it continues to hold to this day, the Agency has been more consistent in its views on preemption than it ever was before 2000 when plaintiffs allege that the FDA adhered to an anti-preemption party line. That being the case, how can courts justify dismissing the FDA’s current position as “inconsistent” with a prior position that wasn’t consistently held in the first place? In light of the FDA’s pro-preemption position in Biffle, the contention that the FDA was “consistently” anti-preemption prior to 2000 is exposed as the myth that it is.

So what went on in Biffle? It was yet another anti-depressant suicidality case, and that case apparently was the FDA’s first brush with how profoundly destructive that litigation has been of practically every FDA administrative policy with which it has come into contact. In addition to the usual discovery, plaintiffs demanded that the defendant produce the Adverse Drug Experience reports (“ADEs”) that it had received from doctors around the country – reports that the defendant was obligated to submit, in turn, to the FDA.

The dispute centered over the defendant’s insistence – in conformity with FDA regulations at the time – that the confidentiality of the doctors who filed the ADEs be respected. The defendant insisted on redacting the doctors’ identifying information, and the plaintiffs refused. The trial court gave the back of its hand to the FDA’s promise of confidentiality to the medical profession and ordered production of unredacted reports.

At this point the FDA became involved. To encourage physicians to prepare ADEs, the FDA had written reporter confidentiality into its regulations. “Regulations governing the disclosure of information. . .expressly prohibit FDA from revealing the information Plaintiffs seek here.” Biffle br. at 2 (citing 21 C.F.R. §430(e) (1992)). Unfortunately, the regulations covered only the FDA – allowing plaintiffs to argue that nothing prevented them from obtaining unredacted ADEs directly from manufacturers through discovery.

FDA said “no.” The regulations, although not precisely applicable, reflected an Agency policy of encouraging reporting by offering confidentiality to litigation-adverse physicians:


Underlying this regulatory scheme is FDA’s policy judgment, based on decades of experience, that maintaining the confidentiality of the reporters’ identities is necessary to ensure the viability of the system for reporting of adverse drug reactions.
Biffle br. at 4.

In the FDA’s view, once it had established a confidentiality policy, state-law discovery requirements that did not preserve reporter confidentiality were subject to implied conflict preemption. Biffle br. at 5-6. Moreover, the FDA argued in favor of “obstacle” preemption – demonstrating that the Agency has never adhered to the view that this form of preemption was in any way impaired by uncodified 1962 language that some plaintiffs have recently seized upon:


[T]he [state court] orders compel disclosure of the reporters’ identities while the regulations are premised on a policy to prevent such disclosure. This Court’s orders effectively stand as an obstacle to the accomplishment and execution of the full purposes and objectives of the federal regulations.
Biffle br. at 7 (emphasis added). And again, later on:


[T]he orders are pre-empted not because the regulations prohibit Defendants from disclosing the reporters’ identities, but because they are facially inconsistent with the policies underlying those regulations and thus impede the accomplishment of the federal objectives.
Biffle br. at 9-10 (emphasis added). Clearly, a claim that the 1962 language excluded “obstacle” preemption would have been news to the FDA – even though at the time of the Biffle brief, that language had already been moldering for thirty years.

Finally, in Biffle, the FDA made clear that it wasn’t arguing any form of field preemption (“not to suggest that federal regulation of pharmaceuticals. . .pre-empts all efforts by state courts or legislatures to regulate the industry”). Biffle br. at 7. It couldn’t, even if the Agency had wanted to, because the FDA’s confidentiality regulations did not “impede, or even address” substantive tort law. But with respect to reporter confidentiality, where the FDA had in fact spoken, “any state efforts inconsistent with firmly established federal policy and regulations must yield.” Id.

So what happened after the FDA filed its brief in Biffle? Two things: First, the Texas Supreme Court deferred to the FDA’s confidentiality policy and entered a mandamus order.


The FDA regulations clearly embody a vital public interest in confidential voluntary reporting that is eviscerated as equally by a manufacturer’s compelled disclosure as by the FDA’s disclosure. While [defendant] claims no privilege per se in maintaining reporter confidentiality, we do not doubt its protectable economic interest – in addition to the public interest, as asserted here by the FDA – in maintaining the free flow of information derived from adverse reaction reports. Consequently, we agree that the congressional objective of fostering post-approval reporting of possible adverse reactions for all FDA-approved drugs is severely compromised by the trial court's order of wholesale disclosure of reporters' identities.
Eli Lilly v. Marshall, 850 S.W.2d 155 (Tex. 1993) (Marshall was the judge who was subject to mandamus, the Biffles were the real parties in interest). It must be pointed out, however, that this ruling rested on voluntary deference, not preemption. Marshall held only that the defendant was “ordered to act in a manner inconsistent with the public interest concerns manifested by federal law, and without due consideration having been given to those concerns, that order is erroneous as a matter of law.” Id. at 160.

Second, because the Marshall court (and others) did not pay sufficient heed to the Agency’s preemption arguments, the FDA undertook formal rulemaking in 1994 to make federal preemption of contrary state law explicit. See 59 Fed. Reg. 3944 (FDA Jan. 27, 1994); 21 C.F.R. §20.63(f)(2). Sound familiar? The parallel to the current situation – where FDA also filed pro-preemption amicus briefs before resorting to the Federal Register – is unmistakable. Indeed, the Preemption Preamble cites the Agency’s post-Biffle/Marshall rulemaking as an example of how it “previously preempted State law requirements relating to drugs in rulemaking procedures.” 72 Fed. Reg. 3922, 3935 (FDA Jan. 24, 2006).

So there it is – further proof that the sudden harping upon FDA “consistency” in the preemption context is a bunch of malarkey. What’s undeniable is that, since early 2000, the FDA has more consistently supported implied preemption than it previously had ever consistently opposed implied preemption.

Tuesday, April 24, 2007

Reader Response to "Shouting 'Credibility'"

Last Tuesday, April 17, we posted about "Shouting 'Credibility' and Praying for Trial." Our position was this: If the treating physician says that he already knew about a drug's risks, or that he would not have passed on to the patient different warnings if the package insert had contained them, a product liability case is over. No additional warnings would have avoided the patient's alleged injuries, so the learned intermediary doctrine's requirement of causation bars the plaintiff's claim. Summary judgment should be granted.

We received three comments about that post. One was posted on-line, so you can read it after last Tuesday's post. Although we of course have a reaction to that reader's comment (and we thank him or her for posting it), we're not able to post a response on-line. We're keenly aware that plaintiffs' lawyers, including plaintiffs' lawyers opposing us in litigation, visit this blog, so anything that we write could (improperly, we might add) be used against us in court. We thus have certain ideas or positions that we simply cannot express in writing in this forum. We apologize for that, but such is life.

The other two comments about last Tuesday's post were not posted on-line, but instead came to the two of us by e-mail. One visitor wrote that, in Pennsylvania, case law occasionally permits a case to go to trial even where the fact witness testimony all points in one direction. For example, suppose that all of the witnesses say that the light was red. But physical evidence -- skid marks, the point of impact of the vehicles, etc. -- suggest that the light was green. There's a disputed issue of fact, so a court should not grant summary judgment.

We don't disagree with that rule in that specific hypothetical. But it's not ours. In the learned intermediary context, if the treating physician says that a different warning would not have changed his decision to prescribe a drug or the warnings that he gave the patient, the game is over. There's no possible physical evidence to dispute that testimony. If the physician says different warnings wouldn't have mattered, and plaintiff can do no more than hope the jury will disbelieve that testimony, then there should be no trial. The plaintiff bears the burden of proof on causation, and "no evidence" -- the situation if the treater is cross-examined into oblivion -- simply cannot carry the plaintiff's burden of proof.

The last comment asks this: Suppose the treating physician says that different warnings would not have changed his conduct, but plaintiff proffers a medical expert witness from the treater's specialty who says that, if the warnings had been different, the standard of care would have required treating physicians to act differently? Competent physicians would not have prescribed the drug (or would have given the patient different warnings). Wouldn't that testimony prevent summary judgment?

Not in our courts, it wouldn't. Product liability cases are not medical malpractice cases. If the treating physician would have violated a standard of care by his conduct, then the treating physician might theoretically be liable for malpractice. But that's not the question in a product liability case. In a product case, the question is whether different warnings would have prevented the plaintiff's injury. If the treating physician would still have prescribed the drug and given the patient the same warnings -- properly or not -- then the manufacturer could have done nothing to prevent the plaintiff's injury. The causal link required in a product liability case has been broken, whether or not there might be intervening malpractice along the way.

Whether we agree with our readers' comments or not, and whether the comments are posted on-line or sent to us by e-mail, we're delighted to receive your feedback. It's sometimes mighty lonely sitting here behind this computer screen, and it's always nice to have tangible evidence that the world is paying attention.

Keep those cards and letters coming.

Sunday, April 22, 2007

Why The Texas Vioxx Decision Matters

Last weekend, we did a post on why preemption matters. The story has now evolved.

Judge Randy Wilson, in Harris County, Texas, is overseeing the Texas statewide coordinated Vioxx proceedings. Judge Wilson announced late last week (April 12, more or less) that he would be entering an order ruling in favor of Merck on a preemption-related issue. The Wall Street Journal was the first to report this news. The Journal had heard that Judge Wilson's decision would be based on preemption generally -- the notion that the FDA's approval of a drug's package insert bars private plaintiffs from later claiming that the FDA-approved warnings are inadequate under state law. (We'd previously collected cases on that point; here's a link to relevant precedents as of December 2006.) We thus posted last Saturday about "why preemption matters."

Later press coverage slightly changed the story. Judge Wilson would not in fact be issuing a ruling that analyzed preemption generally. He would instead be issuing a ruling analyzing whether Texas Civil Practice & Remedies Code section 82.007(b)(1) is preempted.

The suspense is over now. Judge Wilson has spoken, and the later reports were correct. The decision turns on preemption of a specific provision of a Texas statute. Here's a link to the decision that Judge Wilson handed down on Friday, April 20.

That prompts today's post, which is more refined than last week's: Why does the Texas Vioxx decision matter?

First, a disclaimer. Jim Beck and I do not normally identify the author of any particular post on this blog. We have the computer sign all posts "Beck/Herrmann," so no reader can spy the particular man behind the curtain. But this post is different. Beck's firm is helping to defend Merck in the Vioxx litigation, and he is therefore not participating in drafting this one post. This post is the work of Mark Herrmann only.

Why does the Texas Vioxx decision matter?

First, what does the decision hold? A Texas statute says that, if the warnings accompanying a "pharmaceutical product" were approved by the FDA, then "there is a rebuttable presumption that the" drug manufacturer is "not liable with respect to the allegations involving failure to provide adequate warnings." Tex. Civ. Prac. & Rem. Code Sec. 82.007. The package insert for Vioxx was, of course, approved by the FDA, so, under this law, Merck cannot be liable for any failure-to-warn claims -- which is the heart of the Vioxx litigation.

But the law goes on. A plaintiff can rebut the presumption of non-liability established by subsection (a) "by establishing that" the drug manufacturer "withheld from or misrepresented to the United State Food and Drug Administration required information that was material and relevant to the performance of the product and was causally related" to the plaintiff's injury. Tex. Civ. Prac. & Rem. Code Sec. 82.007(b)(1). To take advantage of this exception, the Vioxx plaintiffs pled (and every plaintiff in every Texas pharmaceutical product liability case will inevitably plead) that the defendant misled the FDA. If this "fraud-on-the-FDA" exception is viable, these allegations would let a jury decide, first, whether the drug company misled the FDA and then, if the company did, whether the drug's warnings were inadequate and the drug company should be liable to the plaintiff.

Not so fast. Six years ago, in a different context, the U.S. Supreme Court held that private plaintiffs cannot pursue claims of fraud on the FDA. In Buckman v. Plaintiffs' Legal Committee, 531 U.S. 341 (2001), plaintiffs pled that Buckman Company made fraudulent statements that caused the FDA to approve a medical device that then injured the plaintiffs. The Supreme Court held that the plaintiffs could not pursue these claims. It is the FDA's exclusive responsibility to "police fraud consistently with the Administration's judgment and objectives," and private plaintiffs should not be allowed to claim that the FDA had been defrauded in situations where the FDA itself does not believe that it has been defrauded. Private "fraud-on-the-FDA" claims are thus "preempted;" they are displaced by the federal regulatory scheme.

If straightforward "fraud-on-the-FDA" claims are preempted under Buckman, can Texas plaintiffs nonetheless argue that proof of fraud on the FDA eliminates the presumption under Texas state law that FDA-approved drug warnings are adequate? Judge Wilson says no. Buckman means that private plaintiffs are not allowed to pursue claims of fraud on the FDA either to support a claim directly or to overcome a presumption established by statute. "Given the extent of federal regulation, and the extent to which the FDA is empowered to investigate and regulate drug manufacturers who fail to provide required information, permitting a Texas jury or judge to make the same inquiry would impinge on a uniquely federal issue." Ledbetter v. Merck & Co., Inc., No. 2005-59499, slip op. at 9 (Harris County, Tex. Apr. 20, 2007).

Merck's warnings are therefore presumptively adequate under Texas law, and the plaintiff cannot overcome that presumption by proving fraud on the FDA. Because the plaintiff did not seek to overcome the presumption any other way, all of her failure to warn claims are dismissed.

Although Judge Wilson issued that decision in the case of Ruby Ledbetter, the same reasoning would apply to all of the other cases involving Texas law pending before Judge Wilson. The judge therefore certified his decision for an expedited ruling from the Texas appellate court, and all of the other Vioxx cases pending before Judge Wilson will be put on ice while the parties wait for the appellate court to rule.

Why does this decision matter to Merck?

First, there are a ton of cases pending against Merck in Texas. (The precise number is hard to determine. The Houston Chronicle reported that there are 888 cases pending before Judge Wilson. Merck's press release says that "more than 1300 cases were filed after the 2003 Texas law was enacted. In addition, there are approximately 2,000 cases pending in other jurisdictions that may be subject to this Texas law.") So, if Judge Wilson's decision is affirmed on appeal, we're talking about Merck winning, as a matter of law, a couple of thousand cases, give or take a thousand. That's not a bad day's work.

Moreover, Texas is not the only state that declares FDA-approved warnings to be adequate unless plaintiffs prove fraud on the FDA. In Michigan, FDA-approved drugs are "not defective or unreasonably dangerous" unless a statutory exception applies. Mich. Comp. Laws Sec. 600.2946(5). And one of the statutory exceptions says that the bar on liability "does not apply" if a drug manufacturer "[i]ntentionally withholds from or misrepresents to" the FDA "required" information about the drug. Id. at Sec. 600.2946(5)(a).

And, in Arizona, a law prohibits punitive damage claims against manufacturers of FDA-approved drugs. Ariz. Rev. Stat. Ann. Sec. 12-701(A)(1). But that protection does "not apply" if the plaintiff proves that the drug manufacturer withheld from the FDA "information known to be material and relevant to" the plaintiff's injury. Ariz. Rev. Stat. Ann. Sec. 12-701(B). Although a decision by a Texas state court about the Texas statute will not automatically bind judges in Michigan and Arizona, Judge Wilson's reasoning may nonetheless persuade judges in other states to reach the same result under other states' laws.

Why does the Texas Vioxx decision matter to drug manufacturers other than Merck? Because they get sued in Texas (and Michigan, and Arizona), too, and a precedent that eliminates failure-to-warn claims in those states helps everyone in the drug industry.

Emotions run high when people discuss both the preemption issue generally and the Texas preemption issue in particular. Lawyers for allegedly injured plaintiffs express outrage that their clients' claims have been eliminated "without even providing a day in court." But lawyers for industry say that it's nuts to have an expert federal agency -- the FDA -- carefully consider (and often dictate) the words to be included in a drug's labeling only later to permit juries, with no expertise and sitting in a courtroom with an injured plaintiff, to second-guess the FDA's decision. Those juries, trying to help one plaintiff, may inadvertently upset a regulatory scheme that is maximizing public health as a whole.

We defend drug companies for a living, so you know where our rooting interest lies -- and we think we're right. We'll surely watch with interest as this issue percolates through the courts.

Thursday, April 19, 2007

“If Only My Expert Had Treated Me”: “Reasonable” Physicians Don’t Prove Warning Causation

We have to admire the creativity of plaintiffs’ lawyers in learned intermediary rule cases, even while we shake our heads at their frequent departures from not just the law but fundamental logic as well. Take warning causation, for instance – we do all the time. The prescriber testifies unequivocally that I’m a responsible doc. I keep up on medical controversies in my field, and I knew all about the risk involved in the case. Because of plaintiff X’s condition, I would have used this drug (or device) anyway, in the same way, and I’d still make that decision today.

Summary judgment city, right? There are dozens of cases that say where an additional warning would not have changed the prescriber’s decision, then as a matter of law there’s no causation, and any claim based upon inadequate warnings fails. Just look in Bexis’ book, for one thing. There’s a footnote almost four pages long – in that tiny print that we old guys can't read anymore – with nothing but cases in which this kind of evidence has defeated causation.

“Wait a minute,” says the plaintiffs’ lawyer. “I’ve got the best expert money can buy – he’s even a medical doctor. He’s going to testify that, no matter what this prescriber says, a ‘reasonable physician’ would never have prescribed the drug had there been a proper warning. That creates an issue of fact.”

We beg to differ. If the plaintiff is going to accuse his or her prescriber of acting unreasonably, then that’s an entirely different kind of litigation, and it doesn’t involve our client. Warning causation – whether or not a “better” warning would have made a difference – is inextricably linked to the facts of the particular case. The only difference the learned intermediary rule makes is to change who evaluates the risk, and thus who’s knowledge is important.

Aside from the identity of the actor, the knowledgeable prescriber creates the same situation as the plaintiff’s decedent who, after saying “hold my beer and watch this,” goes out and wins him/herself a Darwin Award. A plaintiff’s decision to disregard a known risk defeats causation in a “normal” product liability case. The plaintiff can’t defeat summary judgment by bringing in, say a driving expert, to testify that a “reasonable” person wouldn’t have done what the plaintiff did, and therefore the plaintiff can recover because the fence in front of the cliff didn’t have a big enough “Danger” sign on it. Contrafactual “expert” physician testimony – testimony that the prescriber shouldn’t have done what s/he did – is no different.

“Reasonable physician” evidence has nothing to do with establishing causation in a particular case. The learned intermediary rule requires plaintiffs to prove to the jury that their own prescribing physicians – not some nonexistent “reasonable prescriber” who never treated them – would have altered their behavior and not prescribed if there had been “adequate” warnings.

The learned intermediary rule doesn’t operate in the abstract. The “failure of [the prescribers] to perform their duties from that point forward does not operate to create, or to extend, a manufacturer’s duty.” Ellis v. C.R. Bard, Inc., 311 F.3d 1272, 1283 (11th Cir. 2002). A manufacturer “may reasonably assume that the physician will exercise his informed judgment in the patient’s best interests,” Tracy v. Merrell Dow Pharmaceuticals, Inc., 569 N.E.2d 875, 878-79 (Ohio 1991). It is the physician’s responsibility to:
take into account the propensities of the drug, as well as the susceptibilities of his patient. His is the task of weighing the benefits of any medication against its potential dangers. The choice he makes is an informed one, an individualized medical judgment bottomed on a knowledge of both patient and palliative.
Reyes v. Wyeth Laboratories, 498 F.2d 1264, 1276 (5th Cir. 1974) (emphasis supplied). We could cite lots more cases like these, but why beat a dead horse?

Because the learned intermediary rule is predicated upon “individualized medical judgment” that involves weighing “potential dangers” against patient “susceptibilities,” the law rightly requires that causation be proven individually within each plaintiff’s physician/patient relationship.


[T]he important issue is whether [the prescriber] would have done anything different. . .after reading an adequate [warning]. If she would not have changed her conduct. . .the causal chain is broken, and [defendant] is absolved of liability.
Mazur v. Merck & Co., 742 F.Supp. 239, 262 (E.D. Pa. 1990).

Still plaintiffs try. There are a fair number of cases where courts have had to grapple with testimony from a paid plaintiff’s expert that what actually happened should be ignored because a “reasonable physician” would have done it differently. Most recently, in Stafford v. Wyeth, 411 F. Supp. 2d 1318 (W.D. Okla. 2006) “reasonable physician” testimony was rejected as irrelevant:


Likewise irrelevant is plaintiff’s argument regarding what a reasonable physician would do. The question in the learned intermediary context is not what an objective physician would decide, but rather what plaintiff's doctor would determine based on his knowledge of the drug in question and the plaintiff's risk factors.

Id. at 1322.

Offering expert “reasonable physician” testimony seems to be fairly common (if not very successful) in fen-phen litigation. Stafford was a fen-phen case, as were several recent trial court decisions in Philadelphia that likewise gave such testimony the back of the judicial hand:

Contrary to [plaintiff’s] assertions, the affidavit of [an expert], attesting to what a “reasonable doctor” would have done had a different warning been supplied is insufficient evidence to create a material issue of fact and satisfy her burden on proximate causation. As [the law] makes clear, the evidence required to establish a reasonable likelihood is evidence that the learned intermediary. . ., and only [him], would provide to the effect that he. . .would have altered his behavior. Accordingly, an affidavit or testimony of [an expert] as to what a “reasonable doctor” would have done with appropriate knowledge is not admissible, is irrelevant and is contrary to the legal standard long established.

Gronniger v. American Home Products Corp., 2005 WL 3766685, at *5 (C.P. Philadelphia Co. Oct. 21, 2005); accord Anderson v. Wyeth, 2005 WL 1383174, at *5-6 (C.P. Philadelphia Co. June 7, 2005); Leffler v. American Home Products Corp., 2005 WL 2999712, at *5 (C.P. Philadelphia Co. Oct. 21, 2005).

Stafford relied on an earlier case that pointed out the “curious” effect of “reasonable physician” opinions is to ignore what the actual prescriber actually did:

[T]he court [would be] required to take the rather curious action of ignoring what the treating physician says he would have done given a certain factual setting for no other reason than the fact that he is not an “objective” physician, i.e., any physician other than the actual physician who diagnosed, treated and prescribed medication to the patient. . . . The court does not believe this construction. . .is supported by [state] case law.

Woulfe v. Eli Lilly & Co., 965 F. Supp. 1478, 1484 (E.D. Okla. 1997). See also Fraley v. American Cyanamid Co., 589 F. Supp. 826, 828 (D. Colo. 1984) (“The acts of the treating physician, not the average or ‘reasonable’ physician, are the acts relevant to proximate cause.”); Dyer v. Danek Medical, Inc., 115 F. Supp. 2d 732, 742 (N.D. Tex. 2000) (rejecting “objective” learned intermediary causation standard where contrary to actual conduct of prescriber). What a hypothetical physician who never actually treated plaintiff might have done is irrelevant and immaterial. Causation under the learned intermediary rule turns solely on what the actual prescriber did or would have done in light of additional warnings.

The only fly in the ointment (isn’t there always something) is dictum in Thomas v. Hoffman-LaRoche, Inc., 949 F.2d 806 (5th Cir. 1992). Thomas did deign to consider expert testimony of this nature – but ultimately found that the expert opinion did not establish any factual question and affirmed summary judgment for the defendant because the plaintiff had not established any basis for concluding that a different warning would have changed the result. Id. at 812 (“the plaintiff must establish that an adequate warning would have convinced the treating physician not to prescribe the product”). The Thomas court held a “reasonable physician” expert opinion was insufficient to defeat summary judgment because “the possibility that [the prescriber] would have changed his decision if he had been warned. . .is too remote to create a genuine issue of fact with respect to warning causation.” Id. at 817.

Thus, while “reasonable physician” evidence has its place in learned intermediary rule litigation, that place is solely in determining the adequacy of the warning. The causative effect of a warning, by contrast, is inherently case specific, as it makes no sense to ignore what actually happened in favor of a nonexistent hypothetical.

But after saying all this, we don’t expect the plaintiffs to stop trying. We just expect the defendants to go on winning the point because not only the law, but logic as well, are on our side.

Tuesday, April 17, 2007

Shouting "Credibility" And Praying For Trial

Hypothesize a car crash case. The only witness says that the light was red. The party with the burden of proving that the light was green cannot possibly prevail, so there's no reason to have a trial. That case can be decided on summary judgment, right?

Not according to the plaintiffs we encounter in drug and device product liability cases.

Hypothesize a prescription drug case. The treating physician says that he or she was aware of the risk of the side effect that the plaintiff claims to have suffered. No additional warnings would have changed the treater's decision to prescribe the drug or otherwise act as he did. Plaintiff bears the burden of proving "but for" causation – that a changed warning would have altered the treater's conduct in a way that would have prevented injury to the plaintiff. Plaintiff cannot possibly prevail, so there's no reason to have a trial. That case can be decided on summary judgment, right?

Not so fast, say our typical plaintiffs. Counsel says that the treating physician is somehow biased – he's trying to avoid malpractice exposure; received a grant from the drug manufacturer to support his research; received free drug samples from the manufacturer; received an honorarium for speaking at a medical education seminar about one of the manufacturer's drugs; whatever. Counsel says that he will cross-examine the heck out of the treater at trial, which will cause the jury to disbelieve the treater and render a plaintiff's verdict. That possibility, says plaintiff's counsel, should preclude granting summary judgment.

Nonsense. In the drug case, like the car crash case, there is no possibility that the plaintiff can carry the burden of presenting affirmative proof of his case. No matter how badly the treating physician is discredited on cross-examination, there is no possibility that the plaintiff can present proof that a changed warning would have altered the physician's conduct. The drug manufacturer is entitled to summary judgment.

Happily, the cases typically so hold. For example, in Plummer v. Lederle Laboratories, 819 F.2d 249 (2d Cir.), cert. denied, 484 U.S. 898 (1987), the treating physician testified that “giving the[] warnings . . . wasn’t necessary” because the risks were small and a stronger warning could “scare off patients from bringing children in for future vaccinations, which . . . were much more important than the warning.” Id. at 352 (citation omitted). To establish causation, that plaintiff asserted that the treating physician’s “testimony that he had a practice of failing to warn his patients of the risk of contact polio should not be credited because he was an interested witness.” Id. at 359. The Second Circuit disagreed, stating that the treating physician’s “testimony was the only testimony on the issue of proximate cause. Even if the jury failed to credit him, [plaintiff] ha[d] not proven an essential element of his case. Furthermore, even if the warnings had been stronger, a reasonable jury could not have concluded that [the treating physician] would have warned the vaccinee’s mother.” Id. The Second Circuit therefore vacated a plaintiff’s verdict and directed the entry of judgment for the defendant.

Similarly, Wyeth-Ayerst Labs. Co. v. Medrano, 28 S.W. 3d 87 (Tex. App. – Texarkana 2000, no pet.), reversed a plaintiff’s jury verdict. Medrano found that, after the treating physician “testified that the information would not have affected her decision,” the defendant “was entitled to a directed verdict” because the plaintiff had, “as a matter of law, . . . failed to prove that . . . warnings were the cause of her injuries.” Id. at 95; see also Alexander v. Smith & Nephew, P.L.C., 98 F. Supp. 2d 1310, 1320 n.12 (N.D. Okla. 2000) (“disregard[ing] [the treating physician’s] testimony . . . would not correct Plaintiff’s failure to put forth any issue of material fact warranting submission of her case to the jury.”); Windham v. Wyeth Labs., Inc., 786 F. Supp. 607, 612 (S.D. Miss. 1992) (rejecting claim that “jury should determine whether an additional warning would have changed [treating physician’s] course of conduct;” “this is not a question for the jury in view of [the physician’s] unequivocal testimony”).

“[M]erely recit[ing] the incantation, ‘Credibility,’ and hav[ing] a trial on the hope that a jury may disbelieve factually contested proof” is insufficient to defeat summary judgment. Curl v. IBM, 517 F.2d 212, 214 (5th Cir. 1975) (citations omitted), cert. denied, 425 U.S. 943 (1976).

So now we won't have to spend time quibbling about that any more, right?

Sunday, April 15, 2007

Why Does Preemption Matter?

On Thursday afternoon, the Wall Street Journal called.

Herrmann fielded the call, because Beck had a conflict -- his firm is defending Merck in the Vioxx litigation.

The reporter told us that Judge Randy Wilson is overseeing the Texas statewide coordinated Vioxx proceedings. Judge Wilson had announced that he will soon be dismissing one Vioxx complaint on the ground of federal preemption and staying proceedings in the other 1000 Vioxx cases pending before him to allow appellate review of his preemption decision. Why, the reporter asked, does that matter?

For interested readers, the resulting article was posted on wsj.com (subscription required) on the night of Thursday, April 12, and the article appeared in the print edition of the Journal on Friday, April 13, on page A3.

That inquiry prompted this post. Readers who defend drug products liability cases for a living should pass on this post. It's not aimed at you. It's aimed at casual readers who have the same question that the WSJ did: Why does preemption matter?

We won't talk about the Vioxx litigation in particular, which might cause problems for Beck, but rather just about preemption in the abstract. Why is the preemption defense uniquely important in the pharmaceutical product liability world?

Let us count the ways.

First, preemption is potent. If applicable, the defense eliminates the entire failure-to-warn piece of the plaintiff's case, which typically includes the strict liability, negligence, warranty, and consumer protection act claims that are based on alleged inadequacies in the drug's package insert.

In most pharma products cases, failure-to-warn is the whole ball game.
Plaintiffs routinely plead that the defendant defectively manufactured the drug, but that's hokum. There's almost never evidence of a manufacturing defect. And plaintiffs routinely plead that the defendant defectively designed the drug, but that's hokum, too. Plaintiffs almost never have proof that a prescription pharmaceutical product -- developed over a period of years at a cost of tens (or hundreds) of millions of dollars -- should have been tweaked some way to make it better. Even the most malleable plaintiff's expert typically won't swear that he's ginned up some better formulation of, say, penicillin.

But, unlike manufacturing defect and design defect claims, failure-to-warn is easy to plead and "prove." The alleged sin is the failure to have warned appropriately about whatever side effect a particular plaintiff suffered. If there's no warning about that side effect, then, the plaintiff says, the manufacturer should have included one. If there is a warning about the side effect, then the manufacturer should have made it stronger: the side effect should have been included in the "warnings" or "contraindications" part of the label, instead of in "precautions." Or the warning should have been in a black box. Or the manufacturer should have sent a "dear doctor" letter to all physicians telling them about the risk. Or some aspect of the plaintiff's unique usage of the drug -- a high dose, or long-term use, or something else -- should have been identified. Whatever. It doesn't matter what the drug's label said; if only the label were re-jiggered slightly, then this plaintiff supposedly would not have used the drug and would not have been injured. Failure-to-warn cases are thus a plaintiff's dream -- essentially effortless to plead and "prove."

If the defendant wins the failure-to-warn claims, he's won the whole case. Preemption is potent.

Second, preemption is generic. If a defendant prevails on the ground that failure-to-warn claims are displaced by the FDA's regulation of a drug's labeling, then no plaintiff can win. As to that particular drug, every plaintiff's claim is barred.

And the defense may not be limited to just that particular drug. Depending on how the law plays out, it may be that all failure-to-warn claims based on all prescription drugs' labeling are preempted. That result would largely eliminate product liability claims against the manufacturers of prescription drugs -- which is a consummation devoutly to be wished. It would put the regulation of drug labeling firmly in the hands of the expert FDA, not to be second-guessed later by a lay jury deciding whether to transfer money from a drug company to a sympathetic injured plaintiff.

Third, preemption is a legal question. Most defenses in product liability cases are tied to a particular plaintiff's facts: What did the treating physician say? What dose did the plaintiff ingest? When did the plaintiff take the drug?

But preemption has nothing to do with a particular plaintiff. The only question is whether the FDA regulated the drug's labeling. Some courts will decide that question on a motion to dismiss, before the parties have spent tens (or hundreds) of thousands of dollars on discovery. Because preemption presents a pure question of law, it's an easy and elegant route to victory.

Fourth, preemption is severable. Even if a particular court does not view preemption as a pure question of law, the factual issues underlying preemption are severable from the rest of the case. If a court wants to hear evidence about a drug's labeling history, the discovery into that issue is discrete. The defendant can produce the relatively few documents related to the drug's labeling history, produce a single knowledgeable witness for a deposition (if even that much is needed), the parties can brief the issue, and the court can rule. In the world of product liability litigation, that's a no-muss, no-fuss victory.

In short, there are few defenses that are potent, generic, legal and severable. That's why preemption matters.

(Our more sophisticated readers shouldn't worry that this digression into a basic topic reflects a fundamental change in this blog. No, no; don't you fret. We'll return to the incomprehensible stuff -- choice of law in MDLs, the Reexamination Clause of the Seventh Amendment, heeding presumptions -- in our upcoming posts. We've got your back.)

Thursday, April 12, 2007

ALI Draft Would Abolish "Reasonable Degree of Professional Certainty" Requirement

With the ALI annual meeting approaching, the new drafts of the various restatements and other projects are becoming available. We’ve been reviewing Tentative Draft No. 5 of the Restatement (Third) of Torts, Liability for Physical and Emotional Harm. Like all ALI publications, it’s available for purchase from the ALI, see: here

The thing that catches our eye at the moment (the thing is over 140 pages long, after all), is this stub chapter – Chapter 5 “Factual Cause” – which has only one section in it, §28. Why it’s numbered “28” we don’t know. Section 28 states a general rule that plaintiffs have the burden of causation in the first paragraph, and then a version of the old Summers v. Tice form of alternative causation in the second paragraph. If we remember correctly, that was §433B of the second Restatement. There is only one comment under §28, incongruously denominated “comment e,” and that comment has very little to do with either of the black letter paragraphs.

Instead, comment e purports to abolish – that’s right, abolish – any requirement that an expert witness testify to a “reasonable degree of medical certainty” or “medical probability” or any of the similar formulations that courts have used for generations to ensure that in-court expert witnesses use the same standards before a jury that they would use in their everyday practices. This was one of the projects that neither of us signed on for the Members’ Consultative Group (because it had been underway for too long when ALI let us in), so don’t blame us! We can't be everywhere. There'd be no time to blog.

Instead of any such standards, an expert witness would be allowed to state an opinion – in a civil case, anyway – that he or she held merely as “more likely than not”:

[T]his section adopts the same preponderance standard that is universally applied in civil cases. Direct and cross examination can be employed to flesh out the degree of certainty with which an expert’s opinion is held and to identify opinions that are speculative and therefore inadmissible.

Restatement (Third) of Torts, Liability for Physical and Emotional Harm §28, comment e (Tentative Draft 5, 2007).

The comment offers three reasons for doing away with the “reasonable professional certainty” requirement:


First: The old standard “is problematic because the medical and scientific communities have no such ‘reasonable certainty’ standard.” Id.

Second: “There is a troubling inconsistency in imposing a higher threshold for the admissibility of expert testimony than is required for a party to meet the burden of proof.” Id.

Third: “[T]he reasonable-certainty standard provides no assurance of the quality of the expert’s qualifications, expertise, investigation, methodology, or reasoning.” Id.

We respectfully dissent.

We come from Ohio and Pennsylvania, and we’re both very comfortable with the “reasonable degree of professional certainty” standard that both these states employ. See State v. Jackson, 751 N.E.2d 946, 961 (Ohio 2001); McMahon v. Young, 276 A.2d 534, 535 (Pa. 1971); Corrado v. Thomas Jefferson University Hospital, 790 A.2d 1022, 1027, 1031 (Pa. Super. 2001). Nor do our experts seem to have much trouble with the standard. Of course, our experts are doing what experts are supposed to do, and that’s evaluate cases by the same standards that they would use when they’re not in court. It’s only when experts seek to fudge their ordinary professional standards in order to give lesser in-court testimony that the problems arise.

“Reasonable degree of medical certainty” has always been a relatively rigorous standard under the law. It’s supposed to be. It’s the same standard that the law requires for “pulling the plug” in the “right-to-die” context. See Ala. Code §22-8A-3; Cal. Prob. Code §4701; 16 Del. Code §2501; Ga. Code §31-39-2; Iowa Code §144A.2; Neb. Rev. Stat. §30-3402; N.J. Stat. Ann. §26:2H-55; N.Y. Surr. Ct. Proc. Act §1750-b (4); N.C. Gen. Stat. §90-321; 20 Pa. Cons. Stat. Ann. §5401; Ohio Rev. Code §§2133.02(A)(2-3), 1337.13(E). This standard arose to enforce the same standards of professional certainty in court that experts use in their regular employment. E.g., McMahon, 276 A.2d at 535 (“doctors must make decisions in their own profession every day based on their own expert opinions”).

Let’s critically examine the three reasons given by comment e. The first is that the relevant communities don’t employ professionally a “reasonable certainty” standard. That’s probably true in the abstract – doctors and other professionals probably don’t frame the decisions that they make in these terms. But so what? “More likely than not” is little more than a coin flip. It’s supposed to be, because juries have to reach decisions. But juries aren’t skilled professionals. Is a coin flip standard really what well-educated professionals use to make decisions in their non-legal practices? We rather doubt it.

We’re going to stick to medical doctors here, because that’s what we know best. We know that we would be very uncomfortable with an attending physician who is willing to make a life or death medical decision – like the “pulling the plug” statutes mentioned previously – on the basis of the beneficial result simply being “more likely” than some other, adverse result. We’re not physicians ourselves, but we remember that somebody in that profession once said something like “first, do no harm.” A diagnosis based upon a mere “more likely than not” standard doesn't meet that standard. Rather, it seems to fly in the face of a great deal of advances in medical skill. Even if a particular treatment objectively offers less than 50% likelihood of success, a physican only employs it because s/he's determined that there’s nothing else that offers a better chance – not because s/he flipped a coin to judge which treatment might work best.

So while it’s true that “reasonable certainty” is not the way in which doctors (and, we presume other professionals like the economists at the Federal Reserve) articulate their decisionmaking process, that fact doesn’t support the change that Draft Restatement comment e proposes. If anything, it’s a step in the wrong direction. “More likely than not” seems to us to be farther away from the actual comfort level that professionals need before making a decision than the existing “reasonable professional certainty” standard.

According to the Reporter’s Notes (pp. 135-36), somebody did some ad hoc research among some doctors and scientists attending a recent medico-legal conference (not necessarily a representative sampling, we suspect, given the setting) by eliciting criticism of the “reasonable medical certainty” standard. We don’t think that all the necessary questions were asked. We wonder what the commentary would have been if these same professionals were asked if they reached decisions by flipping a coin.

So considering the first justification for draft comment e – while the underlying fact is probably true, it’s a non sequitur. We don’t see that fact as supporting the direction in which this comment seeks to take the law.

The second critique is that it’s “inconsistent” to judge expert testimony by a higher standard than that which the lay jurors are called upon to reach their ultimate decision. We don’t think so. There’s only an inconsistency if one doesn't consider the reasons why the legal system requires expert testimony in so many situations. Experts are called upon to give opinions on scientific and technical matters that lay jurors aren’t supposed to be capable of evaluating on their own.

Unlike an ordinary witness, an expert is permitted wide latitude to offer opinions, including those that are not based on firsthand knowledge or observation. Presumably, this relaxation of the usual requirement of firsthand knowledge. . .is premised on an assumption that the expert’s opinion will have a reliable basis in the knowledge and experience of his discipline.

Daubert v. Merrell Dow Pharmaceuticals, Inc., 509 U.S. 579, 592 (1993).

Experts are therefore held to a standard commensurate with their purpose in the legal system – that of their own discipline. “It is to make certain that an expert, whether basing testimony upon professional studies or personal experience, employs in the courtroom the same level of intellectual rigor that characterizes the practice of an expert in the relevant field.” Kumho Tire Co., Ltd. v. Carmichael, 526 U.S. 137, 152 (1999) (emphasis added); see McMahon, supra. That’s why we have never wanted experts who purport to give professional opinions that, in reality, are barely better than a coin flip. We want them to apply their expertise as fully and as rigorously in the courtroom as outside it.

If the legal system were intended to operate with coin-flip experts, then why have experts at all? We could just let lay juries decide technical questions themselves. Juries, not experts, apply the “more likely than not” standard because jurors and experts play fundamentally different roles in the process. Jurors have to decide cases. Experts are only tolerated when their professional opinions are “helpful” to what the jury has to do. An expert whose opinion is no more certain than what the jury could reach on its own just isn’t “helpful.”

There’s also a flip side to the “inconsistency” argument. One of the benefits of the “reasonable professional certainty” standard is that it’s uniform across all forms of litigation. The leading Ohio “reasonable professional certainty” decision, after all, is a criminal case. To clear up the “inconsistency” that draft comment e identifies would require the employment of internally inconsistent standards to identical expert testimony depending on the type of case to which it was relevant. Only certain types of civil cases allow juries to reach decisions based upon what is “more likely than not.” Other civil cases (most commonly, fraud) employ a “clear and convincing” standard. Criminal cases require a “beyond a reasonable doubt” standard. If the law requires expert testimony to match the standard that the jury is called upon to decide, then the admissibility of identical testimony – say an accountant evaluating the damage caused by a disputed transaction – could be determined by at least three different (or should we say “inconsistent”) standards, depending upon whether the accountant’s testimony were relevant to damages in a contract case, damages in a fraud case, or amount of harm in a criminal case.

Thus we reject the inconsistency argument on two grounds: (a) it ignores the different roles that expert witnesses and lay jurors play in the legal system, and (b) it just trades one kind of inconsistency for another.

The third and final ground offered is that the “reasonable professional certainty” standard offers “no assurance” of the “quality” of any aspect of expert testimony. The basic problem is that the comment's solution offers even less protection for "quality." This last argument sets up the perfect as the enemy of the good. If preserving "quality" is the ideal, then an “absolute certainty” standard would undoubtedly be the best – but then we’d almost never have admissible expert testimony.

The “reasonable professional certainty” standard has the great advantage that it emphasizes the “professional” aspect of expert testimony. The “more likely than not standard” does away with any link to an expert’s professionalism, and thus permits opinions that would probably amount to professional malpractice if offered anywhere outside of the courtroom. It is certainly true that there’s no “assurance” of “quality” with the “reasonable professional certainty” standard. Dumbing that standard down to a coin flip, however, offers even less “assurance” that expert testimony will serve the purposes for which it is intended.

We do agree with comment e on one point, however, and that’s that the “reasonable professional certainty” standard could do with more content. In keeping with the reasons for expert testimony, that content should not come from legal formulations, but rather from paying more heed to how the relevant profession actually reaches decisions. That requires resort to source material outside the ordinary legal realm. Again, we’re most familiar with doctors so what we can offer in this regard is limited to medical literature.

There is, in fact, quite a body of medical literature devoted to the process of medical decisionmaking. This literature makes extremely clear that, in the diagnosis and treatment of patients, physicians routinely employ rigorous decision-making analyses, not coin flips:

In the diagnostic process, the clinician makes a series of inferences about the nature of malfunctions of the body. These inferences are derived from existing observations (historical data, physical findings, and routine tests) as well as from invasive tests and responses to various manipulations. Inferential reasoning proceeds until the clinician has discovered a diagnostic category sufficiently acceptable to either establish a prognosis, yield a therapeutic action, or both.

Jerome P. Kassirer, “Diagnostic Reasoning,” 110 Ann. Intern. Med. 893 (1989).

Over the past ten to fifteen years, physicians have come to place considerable reliance upon what the medical community calls “evidence-based medicine.” This approach supplements a treating physicians’ own experiences, observations and instincts with scientific and epidemiologic data to achieve the best possible diagnosis and appropriate treatment. The expectation is that physicians will seek out the best evidence to assist in making medical decisions. This means no cherry-picking and no rote reliance on just what a medical expert is handed by his or her employer.

Evidence-based practice is the integration of best research evidence with clinical expertise and patient values. In clinical applications, providers use the best evidence available to decide, together with their patients, on the suitable options for care.

Kathleen N. Lohr, “Rating the Strength of Scientific Evidence: Relevance for Quality Improvement Programs,” 16 Int’l J. for Quality in Health Care 9, 10 (2004). The medical community realizes that scientific or statistical evidence cannot be applied in a vacuum, and clinical experience and observations will always play a key role in the diagnosis and treatment of patients:

Clinical experience and the development of clinical instincts (particularly with respect to diagnosis) are a crucial and necessary part of becoming a competent physician. Many aspects of clinical practice cannot, or will not, ever be adequately tested. Clinical experience and its lessons are particularly important in these situations. At the same time, systematic attempts to record observations in a reproducible and unbiased fashion markedly increase the confidence one can have in knowledge about patient prognosis, the value of diagnostic tests, and the efficacy of treatment. In the absence of systematic observation one must be cautious in the interpretation derived from clinical experience and intuition, for it may at times be misleading.

American Medical Association Evidence-Based Medicine Working Group, “Evidence-Based Medicine: A New Approach to Teaching the Practice of Medicine,” 268 JAMA 2420, 2421 (1992). Successful practice of medicine is not something that can be accomplished by reading a few medical records:

Competence depends on using expert scientific, clinical and humanistic judgment in clinical reasoning. Although expert clinicians often use pattern recognition for routine problems and hypothetico-deductive reasoning for complex problems outside their area of expertise, expert clinical reasoning usually involves working interpretations that are elaborated into branching networks of concepts. These networks help professionals initiate a process of problem solving from minimal information and use subsequent information to refine their understanding of the problem. Reflection allows practitioners to examine their own clinical reasoning strategies.

Ronald M. Epstein, et al., “Defining and Assessing Professional Competence,” 287 JAMA 226, 226-27 (2002). See A. Cecile J.W. Janssens, et al., “A New Logistic Regression Approach for the Evaluation of Diagnostic Test Results,” 25 Medical Decision Making 168 (2005) (detailing statistical models for determining the usefulness of further diagnostic testing of patients to increase the certainty of diagnosis).

The medical literature consistently emphasizes the need for an integrated approach to decision-making, using all available evidence, to achieve the highest possible accuracy and confidence available under the circumstances. Application of state-of-the-art methodology for statistical analysis requires approaches that go beyond mere “subjective judgments”:

In the end, statistical inference. . .can take us only so far. In fact, our clinical decisions are rarely based on subjective judgments or objective data alone, but rather on something between and beyond the two – the ethical doctrines that ultimately imbue the decisions with meaning and value. . . . The current emphasis on clinical outcomes and prescriptive guidelines is a clear reflection of both the influence on modern medical practice and the importance of probabilistic reasoning to clinical decision-making. In this context, good decisions succeed in balancing the objective scientific data against our subjective ethical values; they are evidence-based, but not evidence bound.

George A. Diamond, et al., “Prior Convictions: Bayesian Approaches to the Analysis and Interpretation of Clinical Megatrials,” 43 J. Am. Coll. Cardiol. 1929, 1936 (2004).

Thus the literature establishes that doctors should take an integrated approach to clinical decision-making, combining evidence-based approaches with their own experience and perspective, to reach the highest degree of confidence – not mere 51% – in diagnosis and treatment:

Mindfulness [in the clinical setting] can link evidence-based and relationship-centered care to help overcome the limitations of both approaches. The success of evidence-based approaches depends on the ability of the practitioner to decide which issues require further investigation and how to frame a question. These, in turn, require that the practitioner identify his or her own biases and the influences of the patient-physician relationship on framing of the question to investigate. This personal knowledge should also be considered a form of evidence and could be integrated into decisions making to incorporate patients’ preferences. Evidence-based data that are not specific to one patient-physician relationship would then be applied in a more mindful way.

Ronald M. Epstein, “Mindful Practice,” 282 JAMA 833, 837 (1999).

The overriding theme of all these discussions in the medical literature (and we've barely scraped the surface) is that doctors should seek all available methods to attain the most accurate and appropriate diagnosis and treatment for each patient. In discussing the principles of evidence-based medicine, the Evidence-Based Medicine Working Group of the AMA outlined a hierarchy of medical evidence based upon its reliability and usefulness to treating physicians, and emphasized that:

Foremost among these principles are that value judgments underlie every clinical decision, that clinicians should seek evidence from as high in the hierarchy as possible, and that every clinical decision demands attention to the particular circumstances of the patient.

Gordon H. Guyatt, et al., “Users’ Guides to the Medical Literature, XXV. Evidence-Based Medicine: Principles for Applying the Users’ Guides to Patient Care,” 284 JAMA 1290, 1295 (2000).

Medical and research professionals constantly refine and improve their diagnostic approaches – to drive medicine as far away from the essentially random chance model of 51% as possible. “A fundamental tenet of all scientific and scholarly work is that every aspect of it must be subjected to critical appraisal; only those findings and principles that withstand such appraisal become established.” Tom Jefferson, et al., “Measuring the Quality of Editorial Peer Review,” 287 JAMA 2786 (2002). The National Academy of Sciences, the National Academy of Engineering and the Institute of Medicine have all stated that “[i]ndividual scientists have a fundamental responsibility to ensure that their results are reproducible, that their research is reported thoroughly enough so that the results are reproducible, and that significant errors are corrected when they are recognized.” Responsible Science: Ensuring the Integrity of the Research Process, at 7 (National Academy Press 1992).

We could go on – indeed, in other forums we have gone on – about how a coin flip approach to expert testimony is contrary to what the law is trying to accomplish with such testimony. We think the point, however, is clear. To the extent that the “reasonable professional certainty” standard needs more content to make it explicable to both lay jurors and experts alike, that content is not to be found in yet another legal standard like “more likely than not” (or “clear and convincing” or “beyond a reasonable doubt”), but rather in the standards that the relevant profession chooses to follow.

Wednesday, April 11, 2007

A Very Brief Add-On

Last week we discussed the Rowe case on New Jersey conflict of laws and its possible implications. We have now learned that last Friday, the New Jersey Supreme Court granted review in the Sinclair class action that we mentioned as probably being implicated/impaired by the Rowe decision.

Tuesday, April 10, 2007

Filing Fees Due After Severance For Misjoinder

We've previously posted on the ridiculous misjoinders frequently seen in mass tort cases. To avoid paying filing fees, plaintiffs' lawyers join the claims of scores -- or hundreds, or thousands -- of unrelated plaintiffs in a single complaint. As we noted in our earlier post, courts usually see through those shenanigans and order severance and re-filing of the complaints as separate lawsuits on behalf of individual plaintiffs.

But now there's a new wrinkle: plaintiffs' counsel sometimes insist that they shouldn't have to pay separate filing fees for each of the new complaints. It's no surprise that plaintiffs make that argument. After all, the filing fee is $350 per complaint. Multiply $350 times a few thousand complaints, and pretty soon you're talking real money.

But should plaintiffs nonetheless be required to pay those fees? Of course they should.

First, the statute requiring the payment of filing fees is unambiguous:


The clerk of each district court shall require the parties instituting any civil action, suit or proceeding in such court, whether by original process, removal or otherwise, to pay a filing fee of $350, except that on application for a writ of habeas corpus the filing fee shall be $5.

28 U.S.C. Sec. 1914(a). That language should be dispositive. When claims are severed for misjoinder and new complaints are filed, a civil action has surely been instituted "by original process, removal or otherwise."

Happily, courts regularly so hold. For example, in In re Diet Drugs, 325 F. Supp. 2d 540, 542 (E.D. Pa. 2004), app. dism'd, 418 F.3d 372 (3d Cir. 2005), 62 plaintiffs filed a single product liability complaint in Mississippi state court. After removal and transfer to the pending MDL proceeding, the federal court severed the plaintiffs' claims for misjoinder and ordered the filing of separate complaints. The court properly interpreted the broad language of Section 1914(a) to require the payment of filing fees for each of the new complaints:

While it is true that the plaintiffs started out with one civil action, this court has now compelled the filing of separate complaints for each of the plaintiffs. The filing of a separate complaint constitutes the institution of a civil action or proceeding -- if not by original process or removal, then otherwise.
Id. at 542 (emphasis in original). Similarly, in In re Seroquel Products Liability Litigation, No. 6:06-md-1769-Orl-22DAB, 2007 WL 737589 (M.D. Fla. Mar. 7, 2007), the court severed the claims of misjoined plaintiffs and ordered each plaintiff to pay a filing fee. Plaintiffs sought to reduce the fee because, if the fee were not reduced, plaintiffs' counsel would immediately be forced to pay more than $2 million in filing fees. The court denied plaintiffs' motion both because filing fees are a "gatekeeping feature" and because the court was entitled to be paid a fee that defrays from the cost of managing plaintiffs' individual cases. Id. at *3.

Those decisions are not alone. See also, e.g., Baumgardner v. Wyeth Pharmaceuticals, No. 05-05720-JF, slip op. at 3 (E.D. Pa. May 11, 2006) ("There really are 10 separate cases. If plaintiffs wish to proceed in this court, each set of plaintiffs must pay the appropriate filing fee."); DIRECTV v. Loussaert, 218 F.R.D. 639, 644 (S.D. Iowa 2003) (each plaintiff must pay filing fee for new action after claims severed for misjoinder); DIRECTV v. Beecher, 296 F. Supp. 2d 937, 945 (S.D. Ind. 2003) (severing misjoined claims and granting plaintiff option "to file separate actions, if it chooses to do so, with new complaints and filing fees"): Aaberg v. ACandS, 152 F.R.D. 498, 501 (D. Md. 1994) (if new complaints filed after severance for misjoinder, "any such filing must be accompanied by the appropriate filing fee").

We don't like spilling ink (or, in this cyber-world, is it "wasting electrons"?) over routine administrative matters such as the obligation to pay filing fees. But if plaintiffs are going to try to short-change the courts, we feel obliged to speak up for the system.

We've done it, and we feel much better now.

Saturday, April 07, 2007

MDL Choice of Law: Direct Filing Stipulations

We love the choice-of-law issues that arise in multidistrict litigation.

Are we weird, or what?

The most recent judge to wrestle with MDL choice-of-law issues is Judge Eldon Fallon in In re Vioxx Products Liability Litigation, MDL No. 1657, slip op. (E.D. La. Mar. 22, 2007). Here's a link. In typical mass tort multidistrict litigation, diversity cases are filed in federal courts across America. The MDL Panel then transfers the cases to the MDL transferee district. The transferee court then, quite logically, applies the choice-of-law rules of the original forum to decide the substantive law applicable to the case.

That's easy enough. But, once a centralized MDL proceeding is in place, why jump through the hoop of having additional cases filed in their home courts, knowing that the MDL Panel will transfer them, as night follows day, to the MDL transferee court? It doesn't make much sense to have scores of cases filed in, say, New Jersey, knowing full well that the MDL Panel will be shipping them to an MDL transferee court in, say, Louisiana. Why not just stipulate that the cases can all be filed directly in Louisiana, with the defendant waiving objections to venue and the parties agreeing that the cases will ultimately be transferred to an appropriate venue for trial?

That's precisely what happened in the Vioxx litigation. The parties agreed, and Judge Fallon ordered, that cases could be filed directly in the Eastern District of Louisiana, that the defendant (Merck) would not object to venue, and that, at the completion of pretrial proceedings, the court would transfer those cases to proper venues for trial "based on the recommendations of the parties to that case." (That last provision strikes us as a little optimistic. As sure as we're sitting here, the parties will disagree over the proper venue for some of these cases; future litigants might want to anticipate those disputes and provide a more explicit mechanism for resolving them.)

As Judge Fallon's direct filing order allowed, three plaintiffs -- one from Alabama, whose case technically belonged in an Alabama court; one from Tennessee, whose case belonged in Tennessee; and one from Kentucky -- filed their complaints in the Eastern District of Louisiana. Then the fun starts.

First, choice of law in a federal diversity case is governed by the law of the state in which the federal court sits. So a federal judge sitting in Louisiana should ordinarily apply Louisiana choice-of-law rules to diversity cases pending before it. But what happens when the diversity case was (and could only be) brought in Louisiana because the parties stipulated to the temporary propriety of a Louisiana forum for reasons of administrative convenience? These cases should have been brought in Alabama, Tennessee, and Kentucky, and everyone knew it. Shouldn't the choice-of-law rules of Alabama, Tennessee, and Kentucky govern those cases?

Judge Fallon didn't have to resolve that issue: "Louisiana's choice-of-law rules ensure that the plaintiffs do not ultimately realize this potentially significant benefit of direct filing, rendering this a non-issue in these cases." Id. at 8. But later litigants may not be so lucky. In your next MDL, the stipulation allowing for direct filing should (1) permit filing in the MDL transferee district, (2) cause the defendant to waive objections to venue in those cases, and (3) provide that the MDL transferee court should apply the choice-of-law rules of the state where the plaintiff was prescribed, bought, used, and was injured (if at all) by the drug (or, if those factors don't all point in the same direction, according to some other specified set of rules).

The fun doesn't stop there. Judge Fallon also noted (slip op. at page 8, note 2) another peculiarity caused by the direct filing order in the Vioxx litigation. In a typical mass tort MDL, the case is filed in, say, New Jersey, and the MDL Panel then ships the case to, say, Louisiana. That makes New Jersey the "transferor" court and Louisiana the "transferee" court. Under Ferens v. John Deere Co, 494 U.S. 516 (1990), the Louisiana court would apply New Jersey choice-of-law rules.

When a complaint has been directly filed in Louisiana, however, the roles are reversed. When pretrial proceedings are concluded and the case is shipped to New Jersey for trial, Louisiana is technically the "transferor" court. A litigant might assert that the New Jersey "transferee" court should therefore apply Louisiana choice-of-law rules. That result is crazy, of course, but a litigant might say that it's compelled by Ferens.

That possibility suggests that stipulations that allow for direct filings in future MDLs should have a provision to cover this situation, too. Future litigants should stipulate, and MDL courts should order, that, after the transfer for trial of cases directly filed in the MDL court, the choice-of-law rules of the trial court -- not the MDL court -- govern the proceedings.

At that point, you're covered.

Well, you're probably not covered. More issues will surely arise as litigants confront even thornier choice-of-law questions in future MDLs. But you're as covered as you can be. Our proposed terms are the current state-of-the-art for stipulations governing direct filings in MDLs.

Friday, April 06, 2007

Restricting Government by Contingent Fee - A Welcome Development

We’ve been leery of the practice of government’s hiring private personal injury lawyers on a contingency fee basis to press lawsuits against non-resident product manufacturers from the moment that practice arose not very long ago. The government is supposed to be neutral and unbiased – something that’s impossible where attorneys conducting government business don’t get paid unless they recover money from the people they sue. Especially when such contracts are awarded without public bidding they create, at minimum, an appearance of improper alliance between public and private interests. See, e.g., Robert A. Levy, “The Great Tobacco Robbery: Hired Guns Corral Contingent Fee Bonanza,” Legal Times, at p. 27 (Feb. 1, 1999) (describing ethical issues involving non-bid contingent fee contracts in Texas).

Government attorneys are “the representative not of an ordinary party to a controversy, but of a sovereignty whose obligation to govern impartially is as compelling as its obligation to govern at all.” Berger v. United States, 295 U.S. 78, 88 (1935). A governmental unit’s delegation of its police powers to private persons with a financial interest in the outcome of the case has always struck us as unseemly and dangerous. We know how contingency fees generate powerful financial incentives, see, e.g., Lewis v. Casey, 518 U.S. 343, 374 n.4 (1996), and when mixed with the people’s business, these incentives can work to the detriment of the public interest in the hope of a large recovery – incentives not ordinarily shared by public prosecutors and other government attorneys.

Another problem is that “the participation of states and cities in a lawsuit brings credibility and a ‘moral authority’ to the cause.” Bryce A. Jensen, "From Tobacco to Health Care and Beyond – A Critique of Lawsuits Targeting Unpopular Industries," 86 Cornell L. Rev. 1334, 1370 (2001). In such litigation, the government’s participation can generate “credibility” and “moral authority” for otherwise novel and far-fetched claims against manufacturers of lawful products and others.

We also think it’s politically dangerous. Industry-wide liability actions brought by governmental units amount to attempts to raise taxes for governmental programs through lawsuits rather than through the legislature. Antipathy to “taxation without representation,” was a major basis why this country was founded. Politicians don’t like to raise taxes, though, so the temptation to use the judicial system to demand payments from non-resident corporations with little or no political clout in the particular jurisdiction can be overwhelming.

It seems like someone’s finally heard us. It’s reported today in The Recorder (a California legal publication, for those who don’t know) that the judge supervising municipal litigation against lead paint manufacturers has told the government plaintiffs that they can’t proceed using private lawyers hired on contingent fee. See Matthew Hirsch, "Judge Stops Fee Pacts in Lead Paint Suit," The Recorder (Apr. 6, 2007). Here's a link to law.com.

In reaching its decision, the court followed prior California precedent holding that “a contingent fee arrangement between [a governmental unit and a private attorney] is antithetical to the standard of neutrality that an attorney representing the government must meet when prosecuting a public nuisance abatement action.” See County of Santa Clara v. Atlantic Richfield Company, No. 1-00-CV-788657, slip op. at 2 (Cal. Super. Ct. Apr. 4, 2007) (quoting People ex rel. Clancy v. Superior Court, 705 P.2d 347, 353 (Cal. 1985)). Here's a link.

Clancy recognizes that, unlike cases brought for private plaintiffs, the court said, this class of civil actions “involves a balancing of interests” and a “delicate weighing of values” that “demands the representative of the government to be absolutely neutral.” 705 P.2d 352. The court continued that “[a]ny financial arrangement that would tempt the government attorney to tip the scale cannot be tolerated,” which “precludes the use in such cases of contingent fee arrangement.” Id.

The newspaper article says that the cities and their contingent fee lawyers have vowed to appeal. We welcome that, too. It’s long past time for somebody to set some firm legal rules on what can, and can’t, be done in this area.

Thursday, April 05, 2007

"Changes Being Effected" Labeling and Novelty

When you argue implied preemption as much as we do in prescription drug product liability litigation cases, you get to know the plaintiffs’ come back arguments in your sleep. Chief among them is that because the FDA’s so-called “changes being effected” (“CBE”) regulation, 21 C.F.R. §314.70(c), allows drug manufacturers to strengthen safety language without prior FDA approval.

The argument is that, because CBE warning changes can be made without prior FDA approval, there’s no conflict between the FDA’s regulatory scheme and a tort claim demanding an unapproved labeling change. E.g., McNellis v. Pfizer, Inc., 2006 WL 2819046, at *7 (D.N.J. Sep. 29, 2006). This argument typically ignores regulatory practice, the regulation’s requirement that any CBE warning changes be simultaneously submitted to the FDA, and that the FDA has ultimate authority to approve or reject the labeling change. E.g., Sykes v. Glaxo-SmithKline, 2007 WL 957337, at *18 (E.D. Pa. Mar. 28, 2007) (“A manufacturer may, under FDA regulations, strengthen a labeling warning, but in practice manufacturers typically consult with FDA before doing so to avoid implementing labeling changes with which the agency ultimately might disagree”).

Nevertheless, because a lot of judges dislike preemption for one reason or another, the CBE argument has prevailed on a number of occasions recently. E.g., Levine v. Wyeth, 2006 Vt. Lexis 306, at *12-13 (Vt. Oct. 27, 2006); McNellis, supra; Laisure-Radke v. Par Pharmaceutical, Inc., 2006 WL 901657, at *4 (W.D. Wash. Mar. 29, 2006); Caraker v. Sandoz Pharmaceuticals Corp., 172 F. Supp.2d 1018, 1033-34 (S.D. Ill. 2001). In giving credence to this argument, courts have stretched a small regulatory exception for emergency situations beyond recognition, and use it to swallow the general rule – that warnings on FDA-regulatory products are subject to prior FDA review and approval. The result is that the intensive FDA review process, in product liability litigation, becomes merely a “minimum” standard that judges applying state law are free to ignore at their pleasure.

There are a lot of objections that can be – and have been – made to this state of affairs. We’re focusing on just one here, and that’s how §314.70(c) has been improperly applied to non-emergent situations. There are, after all, a lot of drug risks that have been reported in the literature for many years. Drug manufacturers have to keep up with known risks on a routine basis, and their labeling reflects these risks. As a result there is often extensive regulatory history as the manufacturer and the FDA consult about exactly what kind of “precaution,” “warning,” “contraindication” or other labeling a particular risk warrants based upon the current state of medical knowledge.

There’s simply no basis for applying §314.70(c) in opposition to preemption in a case involving a previously known risk where the plaintiff’s claim amounts to a disagreement about whether existing risk information warranted a more emphatic warning than what the FDA has approved. The provision for CBE labeling is supposed to address a very specific situation – that of newly discovered and scientifically significant evidence. Such evidence may either require the addition or strengthening of a warning, or a change in dosage or administration. §314.70(c)(6)(iii) (A, C). CBEs are solely interim, emergency steps. “[T]he determination whether labeling revisions are necessary is, in the end, squarely and solely FDA’s.” 71 Fed. Reg. 3922, 3934 (FDA Jan. 24, 2006). Section 314.70 was adopted by the FDA in essentially its present form in 1982. The FDA specified that CBE labeling changes were intended to streamline procedures for “newly discovered” drug risks:
[S]ome information, although still the subject of a supplement, would no longer require agency preclearance. These supplements would describe changes placed into effect to correct concerns about newly discovered risks from the use of the drug.

47 Fed. Reg. 46622, 46623 (FDA Oct. 19, 1982) (emphasis added). Later in the same document, the FDA reiterated that CBEs are intended to speed up dissemination of “new” safety information:
Although most changes in labeling would require the applicant to submit a supplement and obtain FDA approval before making a change, the following changes in labeling, which would make available important new information about the safe use of a drug product, could be made if the applicant submits a supplement when the change is made: Changes that add or strengthen a contraindication, warning, precaution, or statement about an adverse reaction, drug abuse, dependence, or overdosage, or any other instruction about dosage and administration that is intended to improve the safe use of the product.
Id. at 46635 (emphasis added).

Some of the more nuanced judicial discussions of §314.70 likewise recognize that the regulation doesn’t open the door broadly to any sort of unapproved label “strengthening” that a plaintiff might advocate in a particular case. Weiss v. Fujisawa Pharmaceutical Co., 464 F. Supp.2d 666, 675 (E.D. Ky. 2006) (under §314.07 “a drug manufacturer may warn patients and healthcare providers should they discover new evidence of a particular risk following the approval of the original label); Perry v. Novartis Pharmaceuticals Corp., 456 F. Supp.2d 678, 685-86 (E.D. Pa. 2006) (“This particular regulation was promulgated precisely to allow drug-makers to quickly strengthen label warnings when evidence of new side effects are discovered”). Other cases recognize the limitation – and inconsistently proceed to ignore it. Witczak v. Pfizer, Inc., 377 F. Supp.2d 726, 729 (D. Minn. 2005) (same as Perry); Zikis v. Pfizer Inc., 2005 WL 3019409, at *3 (N.D.Ill. Nov. 8, 2005) (§314.70 “allows for an amendment to a label without extended delay when a drug manufacturer learns of new dangerous side effects”).

While the “new information” trigger to §314.70 is unfortunately not express within the regulation itself, it is explained repeatedly in the both the regulatory history and in the more perceptive case law governing the rule. Beyond that, recognition of the limited role that the Agency has always envisioned for CBE warning revisions harmonizes this regulation with the FDA’s view of the circumstances under which preemption is appropriate. Fully three of the FDA’s six categories of preempted cases deal with situations where the risk at issue is not “newly discovered”:

(4) claims that a drug sponsor breached an obligation to warn by failing to include a statement in labeling or in advertising, the substance of which had been proposed to FDA for inclusion in labeling, if that statement was not required by FDA at the time plaintiff claims the sponsor had an obligation to warn. . .; (5) claims that a drug sponsor breached an obligation to warn by failing to include in labeling or in advertising a statement the substance of which FDA has prohibited in labeling or advertising; and (6) claims that a drug’s sponsor breached an obligation to plaintiff by making statements that FDA approved for inclusion in the drug’s label.

71 Fed. Reg. at 3936 (emphasis added).

The FDA is rightly concerned with tort litigation that seeks to overturn regulatory decisions the Agency has already made by: (1) declining to require something, (2) prohibiting something, or (3) mandating something. This concern is simply the flip side of how the CBE regulation has always been supposed to function. By definition, none of these three preemptive situations can involve “newly discovered” risks. Necessarily the information that is in dispute has already been submitted to, and passed upon by, the FDA. The FDA's primary and ongoing responsibility for the content of prescription drug labeling simply cannot be reconciled with case law that assumes that manufacturers can make whatever “strengthening” changes to their labeling they want, whenever they want, and for as long as they want after that labeling has already been approved by the FDA.

Cases that isolate §314.70 from everything else for which the FDA has responsibility forget that “[s]tatutory construction is a holistic endeavor.” U.S. National Bank v. Independent Insurance Agents of America, Inc., 508 U.S. 439, 455 (1993). What a statute or regulation means is often “clarified” by its context in an overall scheme that rules out other “permissible meanings”:

Statutory construction. . .is a holistic endeavor. A provision that may seem ambiguous in isolation is often clarified by the remainder of the statutory scheme. . .because only one of the permissible meanings produces a substantive effect that is compatible with the rest of the law.

United Savings Ass’n v. Timbers of Inwood Forest Associates, Ltd., 484 U.S. 365, 371 (1988).

Thus, where the information in question is not “newly discovered,” but rather has already been addressed in existing drug labeling that has been approved by the FDA, courts should let the FDA’s decision stand and not misconstrue §314.70 to apply to this situation. A science-based FDA determination based upon a mix of technical information that has not changed significantly is entitled to deference from the courts. E.g., Weinberger v. Bentex Pharmaceuticals, Inc., 412 U.S. 645, 653-54 (1973); Alpharma, Inc. v. Leavitt, 460 F.3d 1, 6 (D.C. Cir. 2006); Nutraceutical Corp. v. Von Eschenbach, 459 F.3d 1033, 1043 (10th Cir. 2006); Mylan Pharmaceuticals, Inc. v. FDA, 454 F.3d 270, 275-76 (4th Cir. 2006); NVE, Inc. v. Department of HHS, 436 F.3d 182, 196 (3d Cir. 2006).