Tuesday, July 31, 2007
We are, of course, delighted with the result. Plaintiff Ervin sued Johnson & Johnson on a claim that the prescription medicine Remicade caused a blod clot that resulted in the amputation of part of his leg. J&J moved in limine under Daubert to exclude the testimony of plaintiff's expert and filed a motion for summary judgment. The trial court granted both motions, and the Seventh Circuit affirmed.
On the other hand, this was a little like shooting fish in a barrel. Plaintiff relied on a single expert, Dr. Lee McKinley, who opined to a reasonable degree of medical certainty that the use of Remicade was "the major contributing factor to Ervin's thrombotic arterial occlusion and subsequent below knee amputation." Dr. McKinley's differential diagnosis "ruled in" Remicade as a possible cause of the arterial thrombosis based on (1) the temporal proximity between the drug infusion and the development of the clot, (2) a Google search that revealed one case report of an arterial thrombosis following Remicade infusion, and (3) a handful of "line entries" from FDA printouts that contained basic descriptions of adverse events, but no patient histories, descriptions of treatment, or analyses. Dr. McKinley identified no study, textbook, medical article, or paper showing that Remicade is associated with an increased risk of thrombosis.
If we had only that to run with, we'd feel pretty good about defending this case.
But it gets better.
The expert did not "rule in" the plaintiff's elevated platelet count or diabetes as possible causes of the thrombosis, even though both of those conditions are associated with an increased risk of clotting. The expert "ruled out" the plaintiff's Protein S deficiency as a cause of the clot until he was shown a later Protein S report, which caused the expert to change his opinion. The expert thus changed his opinion about causation during his deposition, saying that he "didn't know" whether Remicade caused the thrombosis.
So the Seventh Circuit said the trial court didn't abuse its discretion in excluding this testimony under Daubert.
We've pleased that J&J picked this one off. But we have two questions:
First, why aren't we ever asked to defend cases that are filed in Aruba?
And, second, why don't we ever have cases where the plaintiff's expert gives testimony like this?
Maybe in our next lives, huh?
Monday, July 30, 2007
Guest Post: Crediting Preemption: Credit Suisse IPO case strengthens the FDA’s argument for the preemption of state law failure-to-warn claims
Anytime seven Supreme Court justices agree on anything these days is news. When seven justices agree on the same basic rationale used by the FDA (and those of us who defend drug manufacturers) to determine that many state failure-to-warn claims are preempted, that’s sure something we can use. So no, it’s not every day that tort guys like me look to the intersection of securities litigation and antitrust law to find inspiration in defending against pharmaceutical failure-to-warn claims. But the Supreme Court's 7-1 (Justice Kennedy recused) decision this term in Credit Suisse Securities (USA) LLC v. Billing, ___ U.S. ___, 127 S.Ct. 2383 (June 18, 2007), gives some hope that the Supreme Court will eventually come down on the side of the FDA (and our clients) in the ongoing preemption debate.
Without getting into the minutia, the Credit Suisse plaintiffs alleged that the defendant investment banks, acting as underwriters, violated the antitrust laws by essentially agreeing to require certain financial pre-conditions for investors who wished to purchase initial public offerings (“IPOs”) for hundreds of technology companies. The investment banks argued that the securities laws impliedly (the law was silent, leaving it to courts to come up with an answer) precluded application of the antitrust laws as to this conduct . Reversing the Second Circuit, the Supreme Court agreed with the investment banks and found the antitrust claims were precluded by the operation of the securities laws.
What does this have to do with preemption in prescription drug cases? The essential question the Court asked was whether two groups of laws purporting to regulate the same activity can be applied simultaneously, or whether the application of one legal framework necessarily precluded the other’s application. The specific question the Court asked was whether there was a “plain repugnancy” between antitrust laws and securities laws. Id. at 2387.
Those questions should sound familiar to readers of this blog. In prescription drug cases, we argue that the FDA’s regulation of prescription drug labeling precludes application of state laws seeking to impact the same activity. Our “plain repugnancy” question is whether a perceived conflict between federal and state law “make[s] it ‘impossible’ for private parties to comply with both state and federal law,” or whether the state law conflicts with the FDA’s regulatory scheme. Geier v. Am. Honda Motor Co., 529 U.S. 861, 873 (2000).
The Credit Suisse Court used four factors to determine that the securities laws precluded application of the antitrust laws: (1) the existence of regulatory authority under the securities law to supervise the activities in question, (2) evidence that the responsible regulatory entities exercise that authority, (3) a resulting risk that the securities and antitrust laws, if both applicable, would produce conflicting guidance, requirements, duties, privileges, or standards of conduct, and (4) whether the possible conflict affected practices that lie squarely within an area of financial market activity that the securities law seeks to regulate. Substituting the FDA for the SEC, it is easy to see how this analysis supports preemption of claims alleging inadequate FDA-approved warnings. Credit Suisse, 127 S.Ct. at 2392.
First, the FDA has the regulatory authority under the FDCA to supervise the labeling of prescription drugs. The FDA, like the SEC, “possesses considerable power to forbid, permit, encourage, tolerate, limit, and otherwise regulate virtually every aspect of the practices” at issue. Compare id. at 2392-2393 (listing SEC regulations) with 21 U.S.C. §331 (defining the prohibited acts under the FDCA on the adulteration and misbranding of drugs); 21 U.S.C. §332 (allowing the FDA to bring proceedings to enjoin prohibited acts); 21 U.S.C. §333 (a) and (b) (defining criminal penalties, including fines and imprisonment, for those who engage in prohibited acts, including the sale of misbranded drugs); 21 U.S.C. §335(b) (civil penalties for obstructing FDA’s processes); 21 U.S.C. §372(e)(2) (execute search and arrest warrants); 21 U.S.C. §372(e)(3) (seizure of misbranded drugs).
Second, the FDA does exercise its authority, both in the pre-approval and post-approval process. For example, as the SEC has with respect to IPOs, the FDA has “defined in detail” what drug manufacturers “may and may not do and say during” the pre-approval process (the parallels between an IPO and the approval of a new drug are not few). Credit Suisse, 127 S.Ct. at 2393. Like the SEC, the FDA has the authority to bring actions against those who violate FDA regulations.
But the really good stuff in Credit Suisse was the Court’s answer to the third question – whether the regulatory schemes conflicted. The Court held that the SEC’s expertise was required to draw the often fine line between conduct that is prohibited and conduct that is permitted, or even encouraged. Is a commission illegally excessive? The Court asked “who but the SEC itself” could make the distinction with confidence. See id., at 2394-2395. In our context, is a prescription drug warning appropriate, to weak, or excessive? Who but the FDA itself is best to judge?
The Credit Suisse Court certainly didn’t think that nonexpert judges or juries should be judging these kinds of issues “in light of the nuanced nature of the evidentiary evaluations necessary to separate the permissible from the impermissible.” Id. at 2395. The Court was concerned about the “unusually high risk that different courts will evaluate similar fact circumstances differently.” Id. The FDA has recognized the same problem in failure-to-warn cases – which are far more numerous than antitrust litigations and present far more opportunities for inconsistent results — noting the regulatory chaos that would result if the ultimate sufficiency of prescription drug labeling were left to hundreds of lay juries or 50 state governments.
In Credit Suisse, the Court summed up the conflict this way:
Now consider these factors together – the fine securities-related lines separating the permissible from the impermissible; the need for securities-related expertise ; the overlapping evidence from which reasonable but contradictory inferences may be drawn; and the risk of inconsistent court results.
Credit Suisse, 127 S.Ct. at 2395. Change a word or two, and it sounds a lot like one of the FDA’s amicus briefs.
As far as the consequences of these conflicts are concerned, in the securities context the Court was concerned that underwriters would be discouraged not only from engaging in improper activity, but also from acting in a way the securities laws encourage under the threat of “antitrust mistakes” which could lead to treble damages. Id. at 2396. Just as the Court recognized that antitrust lawsuits could alter underwriter conduct in “undesirable ways,” so has the FDA recognized that manufacturers might end up diluting good warnings in favor of over-warning in an effort to avoid lawsuits (and punitive damages). Id. If the SEC is the best judge to balance these considerations in its area of expertise, so should the FDA be the best judge to balance identical considerations within its purview. Right?
If there is a caveat, it comes at the end of the Credit Suisse decision where the Court considered the enforcement need for antitrust actions. The Court noted that private litigants damaged by unlawful practices had the ability to bring suit under the securities laws (that the SEC also disapproved of the conduct at issue did not prevent the Court from finding a conflict with the antitrust laws). Id. The FDCA does not provide a similar avenue to those who use prescription drugs, which would allow plaintiffs to argue for a more open door to state enforcement in prescription drug cases.
But Credit Suisse goes on to slam that door shut. It emphasizes the role of the SEC in enforcing the rules and taking into account considerations that might harm certain investors. Id. The FDA certainly plays a similar role in protecting consumers. So when preemption makes it to the Supreme Court, the decision might just turn on how well the justices believe the FDA is doing it job.
Justice Breyer’s majority opinion in Credit Suisse didn't discuss of the level of deference due to the SEC, which unsurprisingly believed that application of the antitrust laws “would threaten to disrupt the full range of the Commission’s ability to exercise its regulatory authority.” Id. But the Court’s 7-1 holding was squarely on the SEC’s side of the argument, and the rationale endorsed by the seven-member majority can be easily transplanted into a FDA-preemption analysis – making Credit Suisse a difficult case to ignore as the preemption battle moves forward.
Sunday, July 29, 2007
Essentially nothing, right?
One stray assessment is not statistically significant. It has not been reproduced. It has no known error rate. In the world of science, a case report may be an interesting anecdote, but's it's proof of nothing. And, under Daubert, that one report would not be sufficient scientific proof even to get a case to a jury.
Next question: Under Daubert, what's the persuasive value of one jury verdict that a drug caused a plaintiff's injury?
Essentially nothing, right?
That jury verdict suffers from all of the flaws of a case report. It's not statistically significant, reproducible, or proof of anything. Indeed, it's probably less persuasive than a case report or a relatedness assessment, because a jury verdict is not even a scientist's best judgment; it is only the best judgment of a jury of twelve (or fewer) lay people.
Last question: Under Parklane Hosiery and the doctrine of non-mutual offensive collateral estoppel, what's the persuasive value of one jury verdict that a drug caused a plaintiff's injury?
Plaintiffs' lawyers would tell you that it's the whole ball game -- past, present, and future. Counsel would (and do) assert that a single jury's determination that a drug caused one plaintiff's injury resolves an issue that was in dispute -- general causation -- in a context in which the issue should have been fully and fairly litigated. Counsel thus assert that the doctrine of collateral estoppel means the issue of general causation is forever decided adversely to the drug company; the drug company should be barred from re-litigating the general causation issue in any other case.
Happily, Parklane Hosiery itself provides many escapes from this absurd result, including the unfairness that it would create. Although we haven't researched this issue recently, our sense is that courts rarely find that a single plaintiff's verdict in a product liability case (or in the first of a series of cases) conclusively reolves the general causation issue as a matter of law.
But isn't Daubert another reason for judges to laugh plaintiff's counsel out of the courtroom when they press this position? If a single case report or relatedness assessment by a scientist would be considered unscientific evidence and unpersuasive proof of general causation under Daubert, shouldn't a single jury verdict be entitled to even less respect? And, if so, isn't it crazy -- and inconsistent with the Supreme Court's intentions when it decided Daubert -- to suggest that one jury verdict somehow conclusively resolves the scientific issue of general causation?
If we're right, we'd sure like to se defense counsel start raising that point, and we'd hope to see it begin to appear in the case law.
Thursday, July 26, 2007
[O]ur analysis of the scope of the statute’s pre-emption is guided by our oft-repeated comment, that the purpose of Congress is the ultimate touchstone in every pre-emption case. As a result, any understanding of the scope of a pre-emption statute must rest primarily on a fair understanding of congressional purpose.519 U.S. at 485-85 (emphasis original). See, e.g., Lorillard Tobacco Co. v. Reilly, 533 U.S. 525, 541 (2001) (“Congressional purpose is the ultimate touchstone of our inquiry”) (citing Cipollone v. Liggett Group, Inc., 505 U.S. 504, 516 (1992)). Throwing the three terms “purpose,” “touchstone,” and “preempt!” in the same paragraph in Westlaw produced 16 hits just in the United States Supreme Court – as recent as Watters v. Wachovia Bank, N.A., 127 S.Ct. 1559, 1578 (2007), just a few months ago. Basically, respect for congressional intent/purpose is something that turns up in most of the big tort preemption cases – as is no doubt desirable.
Something we’ve also noticed is that respect congressional intent is just as often embraced by judges finding against preemption as those finding in favor of it. Lohr, after all, found against medical device preemption, and the Watters citation was in a dissent opposing preemption.
So what exactly has the Supreme Court considered this “touchstone” to be? The Watters dissent opposing preemption looked to: the “complex history” of the statute in question, related statutes, and Federal Register statements of the relevant agency. 127 S. Ct. at 1578-79. In Lorillard the Court examined a “predecessor pre-emption provision and the circumstances in which the current language was adopted,” 533 U.S. at 542, which included a three-page nalysis of legislative and administrative history. Id. at 543-46. In Lohr, the Court relied upon “legislative history,” 518 U.S. at 491, 494, and the FDA’s interpretation of the preemption provision. Id. at 496-97. In Cipollone, the Court discussed two related statutes, their “regulatory context,” and their respective legislative histories. 505 U.S. at 519-23. The other “touchstone” cases likewise rely on a variety of sources:
- Pharmaceutical Research & Manufacturers of America v. Walsh, 538 U.S. 644, 685 (2003) (other statutory sections, House report) (concurring and dissenting opinion supporting preemption).
- Livadas v. Bradshaw, 512 U.S. 107, 122-28 (1994) (extensive prior labor law precedents; provisions of collective bargaining agreement).
- District of Columbia v. Greater Washington Board of Trade, 506 U.S. 125, 136-37 (1992) (“both the legislative history of [the statute] and prior holdings by this Court”) (dissenting opinion opposing preemption).
- Gade v. National Solid Wastes Management Ass’n, 505 U.S. 88, 98-100(1992) (related statutory sections, legislative history, and administrative “contemporaneous interpretation”).
- Ingersoll-Rand Co. v. McClendon, 498 U.S. 133, 141-43 (1990) (other sections of statute; legislative history).
- Fort Halifax Packing Co. v. Coyne, 482 U.S. 1, 9 (1987) (legislative history).
- Pilot Life Insurance Co. v. Dedeaux, 481 U.S. 41, 45-48(1987) (other statutory sections; legislative history).
- California Federal Savings & Loan Ass’n v. Guerra, 479 U.S. 272, 284 (1987) (“the background of [the statute’s] legislative history and historical context”).
- Wisconsin Dept. of Industry, Labor & Human Relations v. Gould, Inc., 475 U.S. 282, 290 (1986) (prior labor precedent).
- Metropolitan Life Insurance Co. v. Massachusetts, 471 U.S. 724, 751-57 (1985) (legislative history; lack of legislative history).
- Allis-Chalmers Corp. v. Lueck, 471 U.S. 202, 212-13 & n.6 (1985) (multi-factor judicial test).
- Malone v. White Motor Corp., 435 U.S. 497, 504-12 (1978) (other sections of statute; subsequent amending statute; legislative history of subsequent statute)
Anyway, one thing that seems pretty clear to us is that in deciding whether there’s preemption or not, the Supreme Court has routinely looked beyond the statute itself, to things like legislative history, regulatory history, prior statutes, and the like. It's examined legislative history specifically in maybe three quarters of its preemption cases ... maybe more.
But strange things happen – especially in state court – when preemption is applied to product liability actions. A case in point is the recent decision in Ferrari v. American Home Products Corp., 2007 WL 1933129 (Ga. App. July 5, 2007), concerning the National Childhood Vaccine Injury Compensation Act (“Vaccine Act”). Ferrari is an express preemption case interpreting a clause stating:
No vaccine manufacturer shall be liable in a civil action for damages arising from a vaccine-related injury or death. . .after [Oct. 1, 1988] if the injury or death resulted from side effects that were unavoidable even though the vaccine was properly prepared and was accompanied by proper directions and warnings.
42 USC §300aa-22(b)(1).
There’s rock solid legislative history establishing that the intent of this limitation was to mandate that in every case involving a covered vaccine there was to be an across-the-board “unavoidably unsafe product” defense derived from Restatement (Second) of Torts §402A, comment k (1965):
Subsection (b) Unavoidable Adverse Side Effects; Direct Warnings. – This provision sets forth the principle contained in Comment K of Section 402A of the Restatement of Torts (Second) that a vaccine manufacturer should not be liable for injuries or deaths resulting from unavoidable side effects even through the vaccine was properly prepared and accompanied by proper directions and warnings.
The Committee has set forth Comment K in this bill because it intends that the principle in Comment K regarding “unavoidably unsafe” products, i.e., those products which in the present state of human skill and knowledge cannot be made safe, apply to the vaccines covered in the bill and that such products not be the subject of liability in the tort system. The vaccines addressed in this legislation certainly present the hardest case for the application of Comment K. In such a case, the plaintiff is almost invariably a young child, often badly injured or killed, and free from wrongdoing. And, even if the defendant manufacturer may have made as safe a vaccine as anyone reasonably could expect, a court or jury undoubtedly will find it difficult to rule in favor of the 'innocent' manufacturer if the equally “innocent” child has to bear the risk of loss with no other possibility of recompense.
The Committee believes that this bill offers another, better, alternative[,]. . . a no-fault compensation system that goes far beyond even the most expensive ruling issued by in a court in a vaccine case. . . .
Given the existence of the compensation system in this bill, the Committee strongly believes that Comment k is appropriate and necessary as the policy for civil actions seeking damages in tort. . . . [I]f [Vaccine-injured persons] cannot demonstrate under applicable law either that a vaccine was improperly prepared or that it was accompanied by improper directions or inadequate warnings should pursue recompense in the compensation system, not the tort system.
H.R. Rep. 99-908, at 25-16, 1986 U.S.C.C.A.N. 6344, 6366-67.
You can’t get much more explicit than that. Prior to Ferrari, every court that had considered Vaccine Act preemption had found non-comment-k claims preempted. Sykes v. Glaxo-SmithKline, 484 F. Supp.2d 289, 299-302 (E.D. Pa. 2007); Blackmon v. American Home Products Corp., 328 F.Supp.2d 659, 663-66 (S.D. Tex. 2004); Militrano v. Lederle Laboratories, 769 N.Y.S.2d 839, 843 (N.Y. Sup. 2003), aff’d, 810 N.Y.S.2d 506 (N.Y.A.D. 2006).
So how did Ferrari come out the opposite direction? Recognizing the obvious, it observed that the Act’s provisions concerning the unavoidably unsafe product defense “expressly convey Congress’s intent to supersede, or preempt, state tort law standards.” 2007 WL 1933129, at *3. Having so conceded, in the next breath the Ferrari court simply ignored what Congress had said. So what happened to the supposed “touchstone” of preemption analysis?
Based upon an apparently unprecedented reading of certain language in Bates v. Dow Agrosciences LLC, 544 U.S. 431, (2005), Ferrari held that the good old “presumption against preemption” trumped congressional intent. 2007 WL 1933129, at *4. The Ferrari court found three statements from Bates pertinent:
- Bates found that the defendants there had not offered any “plausible alternative reading” of the statute that supported broad preemption, and that “[e]ven if” there had been a plausible alternative reading, “we would nevertheless have a duty to accept the reading that disfavors pre-emption.”
- “Because the States are independent sovereigns in our federal system, we have long presumed that Congress does not cavalierly pre-empt state-law causes of action.”
- “In areas of traditional state regulation, we assume that a federal statute has not supplanted state law unless Congress has made such an intention clear and manifest.”
2007 WL 1933129, at *4 (quoting Bates, 544 U.S. at 449).
These statements in Bates, the court held, “changed traditional preemption analysis.” 2007 WL 1933129, at *4. Supposedly, they turned what had been a mere “rebuttable” presumption against preemption into “a duty to accept the reading of an express preemption statute that disfavors preemption.” Id. Second, the court held “preemption analysis ends with an examination of the statutory language alone” and “legislative history should no longer be examined to discern Congressional intent when an express preemption clause has two plausible alternative readings.” Id.
Wow. We’re going to find against preemption, congressional intent be damned. It looks like the court figuratively ran the Stars and Bars back up the flagpole on the Golden Dome in Bexis’ home town. The “independent sovereign” state of Georgia is now going to ignore congressional intent whenever and wherever possible in preemption cases.
Having thus established the controlling “law,” Ferrari finished the job by pointing out that the Vaccine Act itself only recited the comment k “unavoidably unsafe” standard. 2007 WL 1933129, at *4. The court then divined “two alternative, plausible readings” for the Act. One reading – supported by pages and pages of legislative history and unanimous prior precedent – required states to apply comment k to all covered vaccines. The second reading – supported by nothing – would give states leeway to apply comment k on a “case by case basis.” Id.
So which preemption “alternative” must a court pick? The one “that when the contemporaneous legislative history. . .is examined,” shows that “Congress’s intent to preempt this issue [is] clear”? Id. at *5. Or the one that preempts more narrowly, but is contrary to congressional intent? Why the latter, of course, because under Bates “we have a duty to accept the reading of the Vaccine Act that disfavors pre-emption, and we cannot resort to an examination of legislative history to discern Congress’s intent.” Id. (quoting Bates). The result may be “anomalous” given what Congress actually said, but the “broad” pronouncement in Bates demanded it. Id.
Like we said, strange things happen when state courts encounter preemption in product liability litigation. Here we have Ferrari holding, in effect, that the United States Supreme Court was wrong to consider legislative history in Lohr, Lorillard and literally scores of other preemption cases. That’s a pretty extraordinary claim, and we’re like Carl Sagan in this regard – extraordinary claims require extraordinary support.
If that support is to be found anywhere, it’s got to be in Bates. Did the Supreme Court really go psycho without us hearing about it? Let’s see if there’s really a preemption version of the Nullification Act in Bates.
So what was Bates about? Bates involved express preemption and the Federal Insecticide, Fungicide, and Rodenticide Act (“FIFRA”). Obviously FIFRA had an express preemption clause: “State[s] shall not impose or continue in effect any requirement for labeling or packaging in addition to or different from those required under FIFRA.” 7 USC §136v(b).
The Bates Court observed, first, that the statute also expressly allowed states to “regulate the sale or use” of a regulated product as long as it did “not permit any sale or use prohibited” by federal law. 544 U.S. at 439 (quoting statute). Given this statutory allowance, there was ample room for States and localities to supplement federal efforts.” Id. at 442.
After rejecting the plaintiffs’ claim that “requirements” did not include common law actions, 544 U.S. at 443, the Bates Court turned to the heart of the argument – what was the “scope” of the statute’s preemptive reach. Id. at 443. There were two scope-related limits: first, preemption only reached state requirements “for labeling or packaging,” and second, preemption only reached state requirements that were “in addition to or different from” federal law. Id. at 444.
The court found that lower court preemption rulings had outstripped these limits. First of all, there were many product liability claims (defective design, defective manufacture, negligent testing, and breach of express warranty) that did not mandate changes to “labeling or packaging,” and thus could not possibly be preempted. Id. at 444. A broader test that would have preempted claims thought to “induce” changes to labeling or packaging was rejected in light of the aforementioned “ample room” that FIFRA otherwise left for state regulation. Id. at 445-46. None of the language that the Ferrari court seized upon appeared in that part of Bates.
Bates next analyzed so-called “equivalent” fraud and negligence claims. Id. at 431. Here, the Court held that the statute’s other limitation preserved certain state-law claims that were “equivalent to, and fully consistent with, FIFRA’s misbranding provisions.” Id. at 447. Given what we know about congressional intent in the Vaccine Act, the statutory context of Bates seems to us to be diametrically the opposite of what not even the court denied was at issue in Ferrari.
Nevertheless, it was in connection with the defendants’ arguments for preemption of these “equivalent” claims that Bates made the statements relied upon in Ferrari. The Court held that the defendants had not offered any “plausible” reading of FIFRA that did not read the “different/additional” limitation “out of the statute.” Id. at 448. That alone was enough to establish that “equivalent” claims were not preempted. Id. at 449 (“That Congress added the remainder of the provision is evidence of its intent to draw a distinction between state labeling requirements that are pre-empted and those that are not.”).
That was it. The discussion of preemption could have ended there.
Instead, Bates launched into its “even if” discussion that Ferrari quoted. That’s classic dictum folks – discussion in an opinion beyond that necessary to decide the issues before the court. So the first place where Ferrari went wrong is to rely on mere dictum to effect a radical change in “traditional” preemption analysis.
But that’s not the only place that Ferrari went off the tracks.
Unlike Bates where no plausible alternative reading was offered, there was such an alternative in Ferrari – the across-the-board reading supported by extensive legislative history. Thus, because there was no alternative at all in Bates, the court never had to decide the effect of legislative history upon statutory construction. Where a preemption clause (or any other part of a statute, for that matter) is unambiguous, there’s no reason to resort to legislative history. Exxon Corp. v. Hunt, 475 U.S. 355, 362 (1986). That rule has never been extended to a situation where – by definition – there is more than "plausible" reading, in short, an ambiguity.
Is there anything at all in Bates that bears upon the rule barring consideration of legislative history that Ferrari purported to tease out of that opinion? Yes there is. In Bates, the Court in fact did consider extra-statutory material such as legislative history – and did so more than once.
Initially, the Bates court found that the evolution of the statute over time supported a reading that left “equivalent” claims unpreempted:
[T]his history emphasizes the importance of providing an incentive to manufacturers to use the utmost care in the business of distributing inherently dangerous items. Particularly given that Congress amended FIFRA to allow EPA to waive efficacy review of newly registered pesticides (and in the course of those amendments made technical changes to [the preemption clause]), it seems unlikely that Congress considered a relatively obscure provision. . .to give pesticide manufacturers virtual immunity.
544 U.S. at 450. Then the Court did it again a few pages further along:
The legislative history of the 1972 amendments suggests that Congress had conflicting state labeling regulations in mind when crafting [the preemption clause]. [quotation omitted] Hearings on Federal Pesticide Control Act of 1971 before the House Committee on Agriculture, 92d Cong., 1st Sess., 281-283 (1971) (statement of Robert L. Ackerly). By contrast, the lengthy legislative history is barren of any indication that Congress meant to abrogate most of the common-law duties long owed by pesticide manufacturers.
544 U.S. at 452 n.26.
Thus, the assertion in Ferrari that Bates somehow created a presumption against preemption on steroids that bars resort to legislative history in determining the scope of ambiguous express preemption clauses is belied by what actually happened in Bates itself. The so-called “rule” in Ferrari is nowhere found in Bates – neither in the holdings of the Court nor in the manner in which it conducted its preemption analysis.
It’s no wonder that, more than two years after Bates, Ferrari could find only one unpublished intermediate court decision supposedly recognizing a similar rule. 2007 WL 1933129, at *4 (citing the Matter of: Blue Flame Energy Corp., 2006 WL 3775856, at *9 (Ohio App. Dec. 26, 2006)). Even that case does not support Ferrrari. Blue Flame did no more than cite the Bates dictum as a boilerplate proposition – and then promptly turned to legislative history in deciding the non-tort preemption question before it. Blue Flame, 2006 WL 3775856, at *10 (discussing legislative history of the National Securities Market Improvement Act of 1996).
On the other hand, it is quite common, post-Bates, for courts to go beyond the four corners of the statute itself in deciding preemption issues in cases as to which the court has (rightly or wrongly) asserted a presumption against preemption. We’ve already pointed out the extensive discussion of statutory history and administrative interpretation in the Watters Supreme Court dissent. It just so happens that Justice Stevens, who wrote that dissent, also authored Bates. Plainly, he recognized no such limitation upon the extra-statutory sources that courts can appropriately consider. Likewise in Merrill Lynch, Pierce, Fenner & Smith, Inc. v. Dabit, 126 S. Ct. 1503, 1514 (2006), the court relied upon legislative history in a post-Bates preemption case.
Against the one (inapposite) case that Ferrari cited in support of its supposed “rule,” there are probably hundreds of other post-Bates decisions that go the other way and continue the time-honored reliance upon legislative history in presumption cases. A Westlaw search that’s might well be underinclusive (requiring use of the phrase “legislative history”) turned up over one hundred – including as recently as three days ago. See VivaA International Voice for Animals v. Adidas Promotional Retail Operations, 2007 WL 2080000, at *6 (Cal. July 23, 2007). To add just a few more cases relying on “legislative history” is preemption/presumption situations: National Ass'n Of State Utility Consumer Advocates v. F.C.C., 457 F.3d 1238, 1257 (11th Cir. 2006); City of Chicago v. Comcast Cable Holdings, L.L.C., 2007 WL 1453055, at *10 (Ill. App. May 17, 2007); Giordano v. Giordano, 913 A.2d 146, 148 (N.J. Super. A.D. 2007); Charvat v. Telelytics, LLC, 2006 WL 2574019, at *9 (Ohio App. Aug. 31, 2006); Cf. Allen v. Wright, 644 S.E.2d 814, 820 (Ga. 2007) (resorting to state legislative history to determine preemptive effect of state statute in light of similar state anti-preemption presumption).
To us, Ferrari’s tilt at the windmill of the Supremacy Clause is looking more and more like a Lost Cause.
And that’s not the end of it. For the sake of argument, let’s say that Bates did everything that Ferrari says it did. Even then, a state-law attempt to eliminate the Vaccine Act’s unavoidably unsafe product defense through “case by case” analysis would be preempted – if not expressly, then impliedly by reason of the direct and conceded conflict with the manner in which Congress specified that this defense is to be applied.
In this regard, we’d first point out the paucity of Supreme Court precedent supporting the existence of any sort of presumption against preemption in cases that arise directly under the Supremacy Clause by virtue of actual conflict with federal law. See our previous post on that subject. Ferrari has followed many other lower courts into the error of applying a constitutional presumption in a context where there is no Supreme Court authority for it.
Putting that aside – since so far we’ve just been shouting into the wind on that issue – one thing that is pretty clear in preemption jurisprudence is that whatever happens with express preemption doesn’t affect, one way or the other, the applicability of implied so-called “conflict” preemption. The two are quite “different”:
[T]his Court traditionally distinguishes between “express” and “implied” pre-emptive intent, and treats “conflict” pre-emption as an instance of the latter. . . . [T]he Court has never before required a specific, formal agency statement identifying conflict in order to conclude that such a conflict in fact exists. . . . To insist on a specific expression of agency intent to pre-empt. . .would be in certain cases to tolerate conflicts that an agency, and therefore Congress, is most unlikely to have intended.
Geier v. American Honda Motor Co., 529 U.S. 861, 884-85 (2000). That there is “an express definition of the pre-emptive reach of a statute. . .does not mean that the express clause entirely forecloses any possibility of implied pre-emption.” Freightliner Corp. v. Myrick, 514 U.S. 280, 289 (1995). “At best” that would “support an inference” against implied preemption. Id. at 290. See Ingersoll-Rand, 498 U.S. 142 (“[e]ven if there were no express pre-emption in this case, the [tort claim] would be pre-empted because it conflicts”).
The Geier court went on to analyze the circumstances of the history of the regulation before it that supported implied conflict preemption notwithstanding more than mere statutory silence. There was actually an express saving clause in Geier. 529 U.S. at 885-86. We won’t bore you with the details, but Geier went through pages and pages of legislative, administrative, and other history (id. at 874-81) before concluding that – notwithstanding lack of express preemption – the tort claim (for failure to install airbags) at issue fell in the face of its conflict with readily apparent congressional and administrative intent:
The rule of state tort law for which petitioners argue would stand as an “obstacle” to the accomplishment of that objective. And the statute foresees the application of ordinary principles of pre-emption in cases of actual conflict. Hence, the tort action is pre-empted.
529 U.S. at 886.
So in our view, Ferrari’s torturing of Bates to extract from it rules that even Bates itself doesn’t follow was not only cruel and unusual, but totally unnecessary. Assuming that it were even possible for Bates to displace legislative history from express Vaccine Act preemption (which it certainly didn’t), all that would accomplish is to open the door for consideration of the same legislative history under the rubric of implied conflict preemption. Even Ferrari concedes that, once legislative history is considered, the conflict with the plaintiffs’ view of Georgia common-law is obvious.
Plaintiff's counsel was Andy Vickery, of Houston, who has tried two of the three previous antidepressant suicide cases that went to verdict. (Vickery was one and one historically. We're pleased to report that he's now one and two.)
Plaintiff's experts were Joseph Glenmullen and Ronald Maris, with David Healy called as a rebuttal expert.
The trial ran from July 10 through July 24. The 12-person jury deliberated for three hours before returning a unanimous defense verdict.
Visitors to this blog who are defending antidepressant manufacturers should feel free to contact us off-line for details. There's not much we can post publicly about this, but we're always happy to help others in our defense fraternity.
Monday, July 23, 2007
Does The Rise Of The Consumer Fraud Class Action Mean The Decline Of The Learned Intermediary Doctrine? Nah!
A couple of weeks ago, I guest posted about the Federal Judicial Center’s April report on the Class Action Fairness Act’s effects. The FJC reported that federal class action filings had indeed increased in the months since CAFA, just as everyone predicted.
Two things were particularly noteworthy about the report’s findings: personal injury class action filings were down; and state-law fraud class actions were up, way up. The fact that state-law fraud class actions had increased was not remarkable; we all expected it and CAFA’s sponsors all but promised it. But the extent to which those filings had increased (they tripled) was impressive.
Reflecting the sentiment of most of this blog’s readers, I commented that these fraud-based class actions are merely products liability cases by another name. Open the shiny new box with the pretty ribbon, and inside you find the same lump of coal. Class certification had become next to impossible in traditional products liability cases, so plaintiffs’ lawyers took a page from the marketing world and rebranded their cases with a trendy new moniker: “consumer fraud.”
It turns out that I got it backwards. The plaintiffs’ bar isn’t turning to consumer fraud to make class certification easier. They’re doing it because the drug companies and device manufacturers left them no alternative.
That, at least, is what the plaintiffs’ lawyers responsible for the latest round of consumer fraud class actions would have us believe. Fortuitously, the same day my guest post appeared (July 9), The National Law Journal published an article by the excellent Amanda Bronstad entitled “Consumer Class Actions Usurping Personal Injury Claims.” The bloggers over at pointoflaw.com mentioned the story in a July 19 post, as well.
Ms. Bronstad’s article is based on interviews with lawyers and anecdotes, not the hard data of the FJC report. But it identifies the same trend that emerges from the FJC report’s hard data: consumer fraud class actions up, products liability class actions are down, and greater disparity in those numbers can be expected. One thing in particular jumped out at me in reading the article. It was what attorney Robert Brava-Partain, the ubiquitous suer of pharmaceutical companies, had to say. According to him, “[t]here are more [consumer fraud class action] cases now because the drug companies are more aggressive with these drugs.” Aggressive with what? According to the article, “marketing and advertising” of prescription drugs.
Ah, of course. Where’s my head? The tripling of consumer fraud class actions in federal court – of which, I’m willing to bet, a substantial number are against drug and device manufacturers – is a consequence of pharmaceutical company marketing, not the plaintiff class action bar’s rebranding campaign.
I don’t buy it. And I’m sure none of the defense-oriented types reading this buys it either. That said, the argument that direct-to-consumer marketing is responsible for increased consumer class actions against drug companies is worth taking seriously, because the venerable learned intermediary doctrine is likely to be the subject of more frequent challenges in the consumer fraud class action world.
Now, a lot of bandwidth has been devoted to the learned intermediary doctrine on this blog in recent weeks, but I thought it would be worthwhile to take a closer look at the doctrine in the context of the consumer fraud class action.
What will become of the learned intermediary doctrine in the face of the ascendant consumer fraud class action? Will courts get queasy applying it outside the traditional tort box? Can we expect to see more courts pulling a Karl (the name of the West Virginia decision pilloried by Herrmann and Beck a few weeks ago) and looking for ways to avoid applying the doctrine?
The short answers are:
1) The doctrine is not going anywhere. If anything, it will only get stronger.
2) No, quite the opposite.
I took a look at the few decisions where the issue has been directly addressed and was encouraged by what I found.
Texas has become a much better place to be a class action defendant than it was even a few years ago, thanks to substantive and procedural reforms. Thus, you might expect it to do the right thing with the learned intermediary doctrine. You’d be right.
The Texas Supreme Court hasn’t weighed in, but several Texas courts of appeal have. They have held – as far as I can tell, unanimously – that the doctrine applies to consumer fraud (or “deceptive trade practices act”) claims, just as it applies to traditional products liability cases. See, e.g., Bean v. Baxter Healthcare Corp., 965 S.W.2d 656, 661 (Tex.App.-Houston [14th Dist.] 1998, no writ); Jordan v. Geigy Pharmaceuticals, 848 S.W.2d 176 (Tex.App.-Fort Worth 1992, no writ). The Fifth Circuit, predicting that the Texas Supreme Court would do the same, held that the learned intermediary doctrine barred consumer fraud claims in In re NorPlant Contraceptives Prods. Liab. Litig., 165 F.3d 374, 377-79 (5th Cir. 2003). That case is noteworthy, because the Fifth Circuit rejected the argument that the learned intermediary doctrine was a common law “defense” and, thus, inapplicable to statutory consumer fraud claims; according to the Fifth Circuit, it is instead a common law “doctrine,” which makes a difference. See id. at 378. If you want to explore why it makes a difference and why that difference matters, read the decision.
The news is also good in Pennsylvania. At least twice, its courts have applied the doctrine to bar consumer fraud claims. See Albertson v. Wyeth Inc., 2003 WL 21544488 (Pa. Com. Pl. July 8, 2003); Luke v. American Home Products Corp., 1998 WL 1781624 (Pa. Com. Pl. Nov. 18, 1998); see also Heindel v. Pfizer Inc., 381 F. Supp. 2d 364 (D.N.J. 2004) (applying Pennsylvania law and holding that learned intermediary doctrine barred Pennsylvania consumer fraud claims). In Albertson, the court flatly rejected the argument that direct-to-consumer marketing called for an exception, observing that “the consumer still require[s] a prescription from a physician, a learned intermediary, to acquire [a drug].” Albertson, 2003 WL 21544488 at *12.
One pleasant surprise is New Jersey. While New Jersey recognizes the learned intermediary doctrine, it created an exception in direct-to-consumer marketing cases in Perez v. Wyeth Labs., Inc., 161 N.J. 1, 734 A.2d 1245, 1247 (1999). That case was discussed in one of the earlier posts on the doctrine. In spite of Perez, in a case involving consumer fraud claims aimed at the direct-to-consumer marketing of Claritin (then a prescription drug), the court in New Jersey Citizen Action v. Schering-Plough, 842 A.2d 174 (N.J. Super. Ct. 2003), applied the learned intermediary doctrine’s animating rationale – but not the doctrine itself – to hold that the consumer fraud claims were barred: “The intervention by a physician in the decision-making process necessitated by his or her exercise of judgment whether or not to prescribe a particular medication protects consumers in ways respecting efficacy that are lacking in advertising campaigns for other products.” Id. at 177-78. The court summed up why a consumer alleging fraud in the marketing of a prescription drug shouldn’t win: “The ultimate consumer is not in fact free to act on claims made in advertising.” Id. at 178. Who cares whether you call it the learned intermediary doctrine or not. If it gets the claim dismissed, it’s good enough for me. I put this in the “win” column.
Though there’s no published Florida state court decision just yet, last month, a Florida federal district court predicted that the Florida courts would likewise apply the doctrine to consumer fraud claims, and proceeded to hold that the plaintiffs’ Florida consumer fraud claims were barred. The case is Beale v. Biomet, Inc., – F. Supp.2d –, 2007 WL 1836696 (S.D. Fla. June 15, 2007), and the opinion has some real muscle. Because it didn’t have any Florida case law to work with (other than that recognizing and applying the doctrine in traditional tort cases), the court turned to other federal decisions. Surveying that landscape, the court concluded that most federal courts to have considered the issue have held that the learned intermediary doctrine trounces consumer fraud claims. The court wasn’t taken in by the plaintiffs’ attempt to disguise the nature of their claims by using the “consumer fraud” label: “While Plaintiffs have provided various names for their claims against [the defendant], the claims are ultimately based upon [the defendant’s] alleged failure to warn of the risks of the device.” Id. at *10. And that was more than enough to trigger the learned intermediary doctrine. Even better, the court stomped on the idea that there should be some sort of exception for direct-to-consumer marketing, noting that Perez stands alone (or stood alone until Karl). Beale, 2007 WL 1836696 at *13.
If the handful of decided cases thus far is any indication, the learned intermediary doctrine has a bright future in the emerging “no-injury,” consumer fraud class action world.
Thursday, July 19, 2007
That’s what we got recently in In re Baycol Products Litigation, 2007 WL 2004432 (D. Minn. July 9, 2007). Now we have irons in the Baycol fire, and thus we can’t say much about any of the product-specific arguments or facts, but we can blog about the legal points raised in the court’s comprehensive Daubert opinion, most of which we heartily endorse.
One of the main issues was comparative toxicity. Generally, in a situation where there are a number of competing prescription medical products all serving more or less the same need, courts have held that there’s no duty to warn about the attributes of competing products.
[Defendant] is under no duty to provide information on other products in the marketplace. Such a duty would require drug manufacturers to rely upon the representations made by competitor drug companies. This arrangement would only lead to greater liability on behalf of drug manufacturers that were required to vouch for the efficacy of a competitor’s product. Furthermore, such a duty would raise serious implications regarding the free flow of commerce in that industry.Pluto v. Searle Laboratories, 690 N.E.2d 619, 621 (Ill. App. 1997). Accord Johnson v. American Cyanamid Co., 718 P.2d 1318, 1326 (Kan. 1986); Barnes v. Kerr Corp., 418 F.3d 583, 591 (6th Cir. 2005) (OTC product) (applying Tennessee law); Ackley v. Wyeth Laboratories, 919 F.2d 397, 405 (6th Cir. 1990) (applying Ohio law); Brooks v. Medtronic, Inc., 750 F.2d 1227, 1233 n.13 (4th Cir. 1984) (applying South Carolina law); Adamson v. Ortho-McNeil Pharmaceutical, Inc., 461 F. Supp.2d 496, 504 (D.N.J. 2006); Doe v. Ortho-Clinical Diagnostics, Inc., 335 F. Supp.2d 614, 626-27 (M.D.N.C. 2004); McConkey v. McGhan Medical Corp., 144 F. Supp.2d 958, 964 (E.D. Tenn. 2000); Smith v. Wyeth Laboratories, Inc., 1986 WL 720792, at *10 (S.D.W. Va. Aug. 21, 1986).
Likewise, in product liability cases generally, courts have declined to force manufacturers to discuss the relative safety of competing products. E.g., Rastelli v. Goodyear Tire & Rubber Co., 591 N.E.2d 222, 225-26 (N.Y. 1992); Firestone Steel Products Co. v. Barajas, 927 S.W.2d 608, 614 (Tex. 1996); Mitchell v. Sky Climber, Inc., 487 N.E.2d 1374, 1376 (Mass. 1986); Brown v. Drake-Willock International, Ltd., 530 N.W.2d 510, 515 (Mich. App. 1995); Fricke v. Owens-Corning Fiberglas Corp., 618 So.2d 473, 475 (La. App. 1993); Powell v. Standard Brands Paint Co., 212 Cal. Rptr. 395, 398 (Cal. App. 1985); Baughman v. General Motors Corp., 780 F.2d 1131, 1133 (4th Cir. 1986) (applying South Carolina law).
The FDA has also contributed its two cents worth. The Agency imposes strict limits on so-called “comparative advertising.” Unless the FDA otherwise allows, there are to be no comparative claims concerning regulated products unless supported the manufacturer can back them up with “adequate and well controlled studies.” 21 C.F.R. §201.57(c)(3)(v); see 44 Fed. Reg. 37434, 37441 (item 35), 37446 (item 58) (FDA June 28, 1979) (discussing this requirement).
Well, that's not what the Baycol court did. It only had Daubert motions before it. So instead of addressing the substantive product liability issue directly, the Baycol court accomplished the same result by excluding all of the expert opinion that purported to make safety comparisons with competing drugs. 2007 WL 2004432, at *3-9, 11, 14, 18-19, 23, 27, 31, 32-33, 36. The court held that it was improper to analyze adverse drug reports (“ADRs”) in order to compare the safety of competing drugs. We’ve already posted extensively on plaintiffs’ misuse and abuse of ADRs (also called “ADEs”), so we’re not going to repeat all that. Suffice it to say that the Baycol court held that:
[G]iven the limitations inherent in AER data, there is insufficient evidence before the Court as to the known or potential rate of error, and no evidence has been submitted to demonstrate that such an analysis is generally accepted.2007 WL 2004432, at *7. The court observed that even the articles upon which the plaintiffs’ expert relied specifically noted that ADRs could not be used to calculate the relative frequency of adverse reactions. Id. at *7-8. We think that’s exactly right. After all, there are “lies, damn lies, and statistics.” If our clients ever engaged in the kind of statistical shennanigans that plantiffs’ experts regularly seek to pass off as science, the plaintiffs would be seeking punitive damages.
As to whether the ADRs had any other valid evidentiary purpose, such as notice, the MDL court left the decision to the various trial courts that would eventually try individual remanded cases. Id. at *9.
Also in the “lies, damn lies, and statistics” category, the Baycol court refused to allow a plaintiffs’ expert to “recalculate” a published study. The court was perfectly willing to permit criticism of the study’s claimed biases. Id. at *10. We have no problem with that because we recognize bias as an inherent limitation of all epidemiology. Any study’s going to have one bias or another, and that’s fair game for criticism. We’d have a field day on cross, though, comparing the magnitude of the claimed biases in the studies we like with the huge biases inherent in ADE data upon which the same expert professes to rely.
The court properly drew the line right there – at bias-related criticism – and did not permit the expert to cook the books and thus change the result:
[Plaintiffs’ expert] went beyond challenging the study, however. He also recalculated the study by making statistical adjustments; the basis of which come from adverse event data. As discussed previously, however, such data has substantial limitations that result from the inherent uncertainties in the numerator and denominator used. Accordingly, [this] recalculation. . .is not scientifically reliable.Id. Another expert’s attempt to recalculate the same study by adding an arbitrary 40% risk factor was likewise shot down. Id. at *13. We’d like (actually we woultn’t like) to see the FDA’s reaction if a drug manufacturer (hopefully not our client) added a fudge factor of that kind of magnitude in a study submitted for agency review. It’s one of the ironies of this sort of litigation that plaintiffs’ counsel demand that a regulated manufacturer’s statistics have to be purer than Caesar’s wife, while simultaneously encouraging all manner of statistical manipulation by their own experts. Kudos to the Baycol court for recognizing these experts for what they were.
Another plaintiffs’ expert in Baycol presumed to offer expert opinions concerning “the adequacy of [the defendant’s] submissions to the FDA.” Id. at *19. We’re also quite pleased with the exclusion of this sort of second-guessing. In the particular context of submissions to federal agencies, this type of allegation is facially preempted by Buckman Co. v. Plaintiffs’ Legal Committee, 531 U.S. 341 (2001), and that’s what the court held. After discussing Buckman, the court concluded:
[T]o the extent. . .testimony is offered only to show that the FDA was misled, or that information was intentionally concealed from the FDA, the testimony must be excluded.2007 WL 2004432, at *20, see also Id. at *35. As support for the exclusion the court cited, Bouchard v. American Home Products Corp., 213 F. Supp.2d 802 (N.D. Ohio 2002). We like Bouchard plenty, but we’d hasten to add In re Prempro Products Liability Litigation, 2006 WL 3806391, at *6 (E.D. Ark. Dec. 27, 2006), and Swank v. Zimmer, Inc., 2004 WL 5254312 (D. Wyo. Apr. 20, 2004), to what we hope will be a growing list of Buckman-based evidentiary rulings.
Another laudatory aspect of the Baycol decision is it’s forthright exclusion of opinion testimony concerning the defendant’s “state of mind” and “corporate ethics.” 2007 WL 2004432, at *21. It’s become something of a fad these days for plaintiffs to hire experts and try to put them before juries for the purpose of opining that the defendant is a bad person. That strikes us as a new low in the misuse of expert testimony, and in this instance the court agreed:
Personal views on corporate ethics and morality are not expert opinions. Further, expert testimony that is merely speculation or pure conjecture based on the expert’s impressions of the physical evidence must be excluded as not based on any reliable methodology or scientific principle.Id. See also Id. at *26 (excluding testimony about ethics in clinical trials). The court cited a couple of pharmaceutical standbys for this conclusion: In re Rezulin Products Liability Litigation, 309 F. Supp.2d 531, 544 (S.D.N.Y.2004), and In re Diet Drugs Products Liability Litigation, 2001 WL 454586 at *9 (E.D. Pa. Feb. 1, 2001).
Because we particularly abhor this type of “oath-helper” testimony about the purported moral shortcomings of our clients, we’d like to point out a number of other decisions that have reached similar results. Wayne v. Shadeowen, 15 Fed. Appx. 271, 285 (6th Cir. 2001) (expert’s “conclusory value judgments” and “subjective philosophical judgments” properly excluded); DiBella v. Hopkins, 403 F.3d 102, 121 (2d Cir. 2005) (“the real issue in the case was not whether [defendant] acted ethically”); DePaepe v. General Motors Corp., 141 F.3d 715, 720 (7th Cir. 1998) (corporate motive testimony excluded); New Mexico Savings & Loan Ass’n v. U.S. Fidelity & Guarantee Co., 454 F.2d 328, 335 (10th Cir. 1972) (state of mind “was not properly the subject of expert testimony”); In re Welding Fume Products Liability Litigation, 2006 WL 4507859, at *20 (N.D. Ohio 2006) (“jurors decide the vast majority of claims brought against corporations without help from an expert business ethicist”); Highland Capital Management, L.P. v. Schneider, 379 F. Supp.2d 461, 470, 473 (S.D.N.Y. 2005) (excluding testimony about “motivation” and claims of criminality); Bouchard v. American Home Products Corp., 2002 WL 32597992, at *6 (N.D. Ohio May 24, 2002) (excluding “corporate intent” opinion testimony as ethics opinions).
Yet another interesting ruling had to do with the relevance of the regulatory standards of other countries to American product liability litigation. The court held that expert testimony that, in effect, sought to put the common law at odds with FDA regulation by holding defendant to regulatory standards set by other countries was improper:
[T]he Court finds that allowing the admission of evidence of foreign regulatory actions, in a case that is governed by domestic law, would likely cause jury confusion. Given that notice is not dependent on governmental action, and to avoid jury confusion, the Court finds [expert] testimony concerning foreign regulatory actions must be excluded.2007 WL 2004432, at *22. We haven’t really encountered this issue before, so it just goes to show that we’re never too old to learn. The court doesn’t cite any other pharmaceutical cases that excluded foreign regulatory standards, so that suggests we are not alone in this condition. Any reader knowing of similar precedent is cordially invited to contact us and save us the hassle of doing additional research. We happily take freebies.
The Baycol court also held that certain expert witnesses were “not qualified” to opine that the defendant’s labeling “complied with FDA regulations.” Id. at *32, *35. While we’re sure that was the case, to us the more definitive basis for excluding such an opinion is that a conclusion on FDA compliance violates the prohibition of expert testimony on questions of law. We agree with the view in Steele v. Depuy Orthopaedics on this point:
[W]hether the FDA’s approval of a PMA supplement imposes requirements on a particular device is a question of law to be determined by the Court, not a question of fact for the jury. Consequently, [expert] opinion regarding the nature and scope of the FDA’s [regulations] would neither assist the trier of fact to understand evidence, nor help the jury to determine a fact in issue.295 F. Supp.2d 439, 446 (D.N.J. 2003). Sure, we have our own FDA experts who will testify that our client’s compliance history was pure as the driven snow – and they’re more qualified than the plaintiff’s experts (think we’d ever say otherwise?) – but we’d frankly prefer to save the money.
Thus, in our hearts of hearts we think that “FDA expert” testimony consisting of legal conclusions about whether there was regulatory compliance should be excluded because it’s not a proper subject of expert testimony. Accord Livingston v. Wyeth Inc., 2006 WL 2129794, at *6 (M.D.N.C. July 28, 2006); United States v. Caputo, 374 F. Supp.2d 632, 646 (N.D. Ill. 2005); Rezulin, 309 F. Supp.2d at 546-47; Smith v. Wyeth-Ayerst Laboratories Co., 278 F. Supp.2d 684, 700 (W.D.N.C. 2003); Moses v. Danek Medical, Inc., 1998 WL 34024164, at *3 (D. Nev. Nov. 30, 1998); Purnell v. United States, 1987 WL 13790, at *3 (E.D. Pa. July 8, 1987).
A final point on which we are in full agreement with the Baycol opinion is it’s preclusion of expert testimony relying on animal studies.
Expert opinion testimony has been excluded when the expert fails to take into account the critical differences in animal data and human experiences, including but not limited to extrapolation in dosing. . . . The inclusion of such an opinion would only be relevant in this case if the jury were to infer from such studies that [the drug] is the most toxic in humans.2007 WL 2004432, at *33 (citing Soldo v. Sandoz Pharmaceuticals, Inc., 244 F. Supp.2d 434, 546 (W.D.Pa.2003); Bourne v. E.I. Dupont de Nemours & Co., 189 F. Supp.2d 482, 496 (S.D.W. Va. 2002). We’d also point out that the Supreme Court affirmed exclusion of animal study-based opinions in General Electric Co. v. Joiner, 522 U.S. 136, 144-46 (1997), so the favorable animal study exclusion precedent goes right to the top. They’re a lot more cases on this point, and Bexis goes through a lot of them in chapter 10 of his book, so we’ll only add a few more cases involving prescription medical products: In re Rezulin Products Liability Litigation, 369 F. Supp.2d 398, 429-30 (S.D.N.Y. 2005); Siharath v. Sandoz Pharmaceuticals Corp., 131 F. Supp.2d 1347, 1366-69 (N.D. Ga. 2001); In re Diet Drugs Products Liability Litigation, 2001 WL 454586, *15 (E.D. Pa. Feb. 1, 2001); Hall v. Baxter Healthcare Corp., 947 F. Supp. 1387, 1407-11 (D. Or. 1996).
The Baycol opinion makes a number of other rulings concerning the admissibility of the experts in question. However, those are more fact-based with respect to the drug itself. As we said before, we are involved in this litigation, and thus we don’t feel that we can comment on anything that implicates the facts. That’s somewhat unsatisfying, but that’s what the law business requires. We highly recommend reading the opinion, as in our book it’s one of the top Daubert decisions of the year.
Tuesday, July 17, 2007
Back in February, this blog discussed an article that one of the blog’s co-hosts, Mark Herrmann, and I wrote titled “Making Book On The MDL Panel: Will It Centralize Your Products Liability Cases?” Here’s a link to that post. As regular readers of this blog know, the dynamics of products liability litigation can change in a heartbeat if the Judicial Panel on Multidistrict Litigation (the “MDL Panel” or “Panel”) grants (or denies) a motion to centralize related cases in a single district court. Accordingly, for our article, we analyzed all the transfer decisions ever issued by the MDL Panel involving products liability cases to help lawyers and clients predict whether a motion to transfer and centralize their products liability cases will be granted or denied. We identified and analyzed many factors that influence how the Panel decides such motions (you can follow the link above and read the article to learn what they are). And we were proud of our hard work. But then, last month, I got worried.
On June 14, 2007, Judge John G. Heyburn II was appointed as the MDL Panel’s new chairman. When a new Supreme Court justice (or, these days, even a circuit judge) is appointed, dire predictions that settled precedent will be overturned and the face of American jurisprudence will change forever fill the air. “Oh no!,” I thought: “What if everything we said about predicting the future in the MDL Panel becomes worthless because the MDL Panel members change, and different judges with different philosophies start making different rulings?”
So I thought, and I researched, and then I relaxed. Our guidance is still sound, because the changing face of the MDL Panel – while theoretically having the potential to change the Panel’s direction – is not likely to have any meaningful effect on the Panel’s decisions for the foreseeable future.
The MDL Panel consists of “seven circuit and district judges designated from time to time by the Chief Justice of the United States, no two of whom shall be from the same circuit.” 28 U.S.C. § 1407(d). Even small changes in the Panel’s composition have the potential to affect the Panel’s decisions, because “[t]he concurrence of four [of the seven] members shall be necessary to any action by the panel.” Id.
And the Panel’s make-up will change from year-to-year. Originally, the Chief Justice’s appointments were open-ended, and judges sat on the Panel for long stretches. “Interview, Chair of Judicial Panel Sees Role as Gatekeeper,” The Third Branch, Nov. 2005, at 11. But in 2000, then-Chief Justice Rehnquist changed the policy and established staggered, seven-year terms. “Judicial Panel on Multidistrict Litigation Reorganized,” The Third Branch, June 2000, at 3. The terms are staggered so that a new member is appointed to the Panel each year, and a new Panel chairman is appointed every seven years. Id. But for four reasons, these regular changes likely will not significantly change the direction of the Panel.
First, the Panel’s specialized purpose probably insulates it from political, philosophical, and ideological influences that arguably affect other bodies. Remember, we’re not talking about death penalty or free speech cases here. The MDL Panel aptly describes itself as the mere “traffic cop” of the federal court system. Gregory Hansel, “Extreme Litigation: An Interview With Judge Wm. Terrell Hodges, Chairman Of The Judicial Panel On Multidistrict Litigation,” 19 Maine Bar J. 16, 21 (Winter 2004). Its job is limited to determining whether “civil actions involving one or more common questions of fact . . . pending in different districts” would benefit from being “transferred to [a] district for coordinated or consolidated pretrial proceedings.” 28 U.S.C. § 1407(a). The mission is so narrow that there simply isn’t room for ideology to operate. While police officers may face certain discretionary decisions in the line of duty that might be influenced by their personal politics, none of those likely arises on traffic detail. So, too, with judges on the MDL Panel.
Second, the aim of the MDL Panel – increased judicial efficiency – is something that people of all political stripes seem to (and should) favor. Although, as discussed below, the MDL Panel’s muscle has been flexed most strongly by Republican-appointed judges, the statute creating the Panel was passed by a Democratic-controlled Congress (the 90th) and signed by a Democratic president (Lyndon Johnson). And there seem to be equal parts good and bad in the MDL process for the litigation interests that conventional wisdom aligns with each side of the aisle. For example, while corporate defendants can use the MDL process to make large-scale litigation more efficient (and thus, in some respects, less threatening) and to move cases out of suspect jurisdictions where plaintiffs’ lawyers have a perceived advantage, the MDL process, by aggregating cases in a single court, can also give plaintiffs’ lawyers leverage akin to that in a certified class action for settlement purposes. Thus, no matter who you are or what you believe, there are plenty of pros and cons to the MDL process in general, and to its application in a specific case.
Third, to the extent that political, philosophical, or ideological influences are, in fact, at play on the MDL Panel, those influences are much more stable than the regular turn-over of the Panel’s membership would suggest. While approximately 60% of sitting federal judges were appointed by Republican presidents (so say the results of a search of sitting judge biographies on the Federal Judicial Center website, http://www.fjc.gov/), all seven current members of the Panel, all appointed by either Chief Justice Rehnquist or Chief Justice Roberts, were appointed to the federal bench by a Republican president. And all seven Panel members before that were appointed to the bench by Republican presidents. This can be no coincidence. And, with a relatively young, Republican-appointed Chief Justice at the helm, the trend seems likely to continue. Thus, while there may be yearly turn-over in the Panel’s membership, there likely will be long-term consistency in the Panel’s judicial philosophy.
Fourth, even if a rogue agent were somehow to slip onto the Panel, he or she would have little to work with to try to persuade other Panel members to change their views or deviate from Panel precedent. The Supreme Court and appellate court annals are replete with examples of views originally held by a lone dissenter that, through time and persistence, came to be held by the majority. But on the MDL Panel, dissenting views just aren’t expressed. Although 28 U.S.C. § 1407 requires the concurrence of only four members for the Panel to act, Judge Wm. Terrell Hodges, the previous Panel chairman, explained that, in his experience, unanimity was the rule: “we have a unique record on the Panel. So long as I’ve served on it, we have not yet encountered any decision that wasn’t determined unanimously. We had one abstention one time, but it was not a dissent. We come to a consensus rather well on the Panel.” “Interview, Chair of Judicial Panel Sees Role as Gatekeeper,” The Third Branch, Nov. 2005, at 11. Thus, if a newly appointed Panel member were hell-bent on changing the Panel’s direction, he or she would lack an existing platform from which to mount his or her campaign.
Any attempt to test these conclusions by a statistical comparison of decisions rendered by different Panel make-ups over time has inherent problems, not the least of which is that it would be terribly boring for me to write and for you to read. But it is worth painting with some broad numerical strokes. Through most of Judge Hodges’ chairmanship (from 2000 through August 2006), the Panel granted motions to transfer products liability cases at an 89% clip. When Judge John Nangle was Panel chairman (from 1990 to 2000), motions to transfer products liability cases were granted 78% of the time. During Judge Andrew Caffrey’s tenure as Panel chairman (from 1980 to 1990), however, denials outnumbered grants 14 to 6. Although Democratic-appointed judges outnumbered Republican-appointed judges on the MDL Panel during part of Judge Caffrey’s tenure, this denial-to-grant ratio probably tells us more about the cases that Judge Caffrey’s panel faced that it does about the panel’s members.
Several of the products liability transfer motions that the MDL Panel faced during the 1980s involved asbestos litigation, which many differently-constituted panels have wrestled with (and typically declined to coordinate) over the years. Also, it only makes sense that, as the volume of mass tort cases increased over time, the Panel would face more, bigger, multi-jurisdictional proceedings worthy of transfer for coordinated treatment. Thus, no matter the Panel’s make-up, one would expect the Panel to have coordinated fewer cases in the past than it does now.
The names and faces on the MDL Panel will change from year-to-year. For at least the foreseeable future, however, the Panel’s practice of transferring products liability cases where certain minimum threshold criteria are present will likely stay the same.
Thursday, July 12, 2007
Maybe we are. After all, we’re used to being told we’re full of it by our opponents, which occasionally include the folks at Berger & Montague – a top-tier plaintiffs’ class action firm in Philly – whose Peter Norberg hosts Blog 702. However, such rebukes usually come with a bit more explanation than the “we’re right and you’re not” quality of the initial Blog 702 comment.
Anyway, we made a request that they kindly tell us why we’re full of it a little more fulsomely. Lo and behold, a post doing just that (scroll down) appeared June 22. We would have liked to respond sooner, but then the West Virginia Supreme Court dissed the learned intermediary rule, and we spent more time last week than was probably healthy dealing with that.
Anyway, better late than never we say.
Before turning to the Blog 702 post, let’s review the bidding.
Our original post stated that we didn’t (and still don’t) like the ALI’s proposal because it “dumbed down” expert testimony, removing any link to the “professional” standards of such witnesses’ professions and replacing it with little more than a coin flip – that being the same “more likely than not” standard that juries apply in civil cases.
The ALI gave three justifications for proposing a change: (1) “Reasonable degree of professional certainty” isn’t how the relevant professions express professional opinions. (2) It’s “inconsistent” to impose a “higher threshold” on experts than the standard by which juries decide the cases in which such witnesses testify. (3) Requiring a “reasonable degree of professional certainty” doesn’t assure the “quality” of any aspect of expert testimony.
As to the first of the ALI’s excuses, we didn’t disagree – but we pointed out that “more likely than not” is not how professionals express their opinions either. Then we undertook to prove that (in the medical field, anyway) with a slew of citations to medical literature demonstrating that doctors make diagnostic decisions through thought processes that are about as far removed from flipping a coin as it’s philosophically possible to get.
As to the second of these excuses, we pointed out that the ALI is merely exchanging one kind of inconsistency for another – that experts offer opinions in cases decided under other burdens of proof, such as “beyond a reasonable doubt” and “clear and convincing evidence,” in addition to the minimal civil standard of “more likely than not.” We doubted that, in anywhere other than in a courtroom, would witnesses purporting to offer “professional” opinions change their spots as dramatically as these differing proof burdens require.
Finally, we argued that, even accepting the proposition that the “reasonable degree of professional certainty” standard for expert testimony didn’t assure the “quality” of the testimony – something that we don’t believe is true, especially in non-Daubert jurisdictions – lowering the standard for reaching an opinion would undeniably reduce the “quality” of such testimony, thereby leading to a result diametrically opposed to the thrust of the original criticism.
Anyway, with that prologue, let’s examine what Blog 702 has to say in defense of letting experts testify to opinions that are only “more likely than not” true.
The first part of the Blog 702 response is more of a history lesson than anything else. It takes issue with our statement that the “reasonable degree of professional certainty” standard has been around “for generations.” Based on a law review article, Blog 702 says the standard dates from the “1960s.” To us that seems like an irrelevant quibble. A “generation” can be a lot of things, we suppose, but we think of it as about 20 years – after all, isn’t the Baby Boom Generation generally considered to be those kids (like us) born between 1946 and 1966? So even assuming a 1960s provenance amounts to two generations.
In any event, “reasonable degree of professional certainty” long predates either of us practicing law, or even graduating from high school – and that’s old (at least by our standards).
We do this in our spare time, so we don’t have the wherewithal to refute a whole law review article. But we do have computers and fixed fee contracts with the online services. So we threw “reasonable degree” within five words of “certainty” into Westlaw and looked at pre-1960s results.
Whoa! 1292 cases – all from before the earliest time that Blog 702 says “reasonable degree of professional certainty” had gained wide acceptance. I guess we’re going to have to limit it to “medical certainty” even though that will probably cause us to miss some relevant cases (it appears that the standard first became widespread to deal with damages experts, rather than medicine).
That did cut it down all right, to forty cases.
So what states do we have? In addition to the Illinois cases that Blog 702 mentions, we’ve found Missouri, Ohio, Wisconsin, New York, Oklahoma, North Carolina, Indiana, and Texas (we don’t think providing cites for all these old cases is worth the bother, so you’ll just have to run your own search if you don’t believe us). All before 1960. To be fair, all fifteen of the pre-1948 cases were in Illinois. Not only that, a lot of these cases simply quote opinion questions that lawyers had asked their experts. That suggests to us that the standard was probably considerably more widespread than our quickie research limited to published appellate opinions indicates – since the lawyers of the time had evidently already incorporated the “professional certainty” standard into their witness examination habits. They had to learn it from somewhere.
All and all, we’d have to say that Blog 702’s first shot out of the box is at best of questionable import. If you dig down into their origins, most rules of law probably originated, if not by chance, then in response to this or that local peculiarity (for example, the earliest product liability case involving a drug we think is a New York case from 1852, and the first application of the learned intermediary rule case is another New York case from 1948). It’s the reason for their spread that’s important.
To use a Darwinian perspective, a peculiar standard arising from local conditions is not going to become a nationally (or nearly so) adopted rule unless it meets (or can be converted to) some generally felt need. That’s survival of the fittest in practice. Otherwise, it would remain just a local rule of limited import. The judicial requirement that an expert member of a profession should express opinions in accordance with professional standards of certainty plainly met such a need – and we think still does.
The next argument Blog 702 makes is that the “reasonable degree of professional certainty” standard is less necessary nowadays due to the widespread adoption of Daubert-related tests for expert testimony. Daubert, however, is a rule of procedure, while the requirement of professional certainty is a matter of substantive state law. That’s why ALI saw fit to address the latter in a Restatement in the first place. That also means that Daubert and the professional certainty standard are directed at two different things. Here’s a pretty good discussion of the difference:
In re Paoli Railroad Yard PCB Litigation, 35 F.3d 717, 751-52 (3d Cir. 1994) (Becker, J.).
[W]e must decide whether experts were required to testify with a reasonable degree of medical certainty. We conclude that they were. Although if it were purely a rule of admissibility Pennsylvania’s standard would not apply in federal court, Pennsylvania’s rule also constitutes part of the plaintiff’s burden of proof. As a rule of admissibility, Pennsylvania’s standard is in conflict with Rules 702 and 703 which require a reliable methodology and reliable data but nowhere require a reasonable degree of medical certainty.
If Pennsylvania’s rule were only a standard of admissibility in conflict with Federal Rules of Evidence Pennsylvania’s rule would be rationally capable of classification as procedural and the Federal Rules of Evidence would govern. However, we think that Pennsylvania’s rule is more than a requirement of admissibility, but rather it is an element of plaintiff'’ burden of proof. In Cohen [v. Albert Einstein Medical Center], the Pennsylvania Superior Court stated that:
“When a party must prove causation through expert testimony the expert must testify with reasonable certainty that in his professional opinion, the result in question did come from the cause alleged ... [I]f the plaintiff’s ... expert cannot form an opinion with sufficient certainty so as to make a [professional] judgment, there is nothing on the record with which a [factfinder] can make a decision with sufficient certainty so as to make a legal judgment.”
592 A.2d [720,] 723 [(Pa. Super. 1991)]. Thus, the Cohen court strongly implied that, even if admissible, testimony with less than a reasonable degree of medical certainty was insufficient to prove causation.
As part of the burden of proof, then, Pennsylvania’s rule is a substantive one, not in conflict with Federal Rules of Evidence, and thus governs in federal court.
So we think it’s wrong to say that now, with Daubert, it’s not necessary to have any other constraints on expert testimony. Now, “Daubert” means a lot of things to a lot of people, so it’s possible that in some states, there might be an expansive variant of Daubert that overlaps or incorporates “reasonable degree of professional certainty.” But most of them don’t, and not every state has even adopted Daubert (Bexis says Pennsylvania has not).
To us, Daubert, deals primarily with methodology and scientific validity, while the “reasonable degree of professional certainty” requirement gets at something that’s more fundamental to the role that experts play in modern litigation. The reason we have experts at all is because they know something that lay witnesses (and lay jurors) do not. For the most part, they have specialized training – and all doctors certainly do. They’re allowed to give opinions from the stand, and not limited to testifying to personally known facts. In short, they’re permitted to testify because they’re members of a learned profession. If that’s what they are, then we think that, in fairness, they should be required to bring to bear the same standards of professional conduct in the courtroom that they are required by their own professional standards to exercise in their other professional activities. That’s what linking expert testimony to a “professional” standard does.
Moreover, we come at the whole Daubert argument from the opposite direction. To us, the trend that the “Daubert” name now personifies (poor guy, Mr. Daubert, since his name is now indelibly attached to a concept that threw him out of court) is a judicial attitude that the system could no longer tolerate an “anything goes” approach to expert testimony. The “reasonable degree of professional certainty” standard is another, independent means of enforcing the same attitude. In short, Daubert reinforces the same salutary judicial philosophy as the professional certainty rule – we don’t want, and won’t permit speculative expert testimony.
Because of our view that a “professional” standard for expert opinion is inextricably linked to the “professional” status of the expert him or herself, we can’t subscribe to the fundamental assumption of Blog 702’s next argument – that the standard is a rule “to limit civil liability for certain specific kinds of claim.” To us, anyone with the pretense of being an “expert” is in some sort of “profession,” whether legislatively sanctioned or not. Thus, a doctor opines to reasonable medical certainty, an economist to reasonable economic certainty, and an accident reconstructionist to reasonable scientific/physical certainty. If a professional standard cannot be articulated, then the witness is likely not an expert at all.
So we don’t view the professional opinion standard as unique to any particular type of claim. There should be no “favored classes” of cases with regard to whether experts should testify in accordance with professional standards. Other substantive rules of law might require expert testimony to prove a certain type of case – medical malpractice being a prime example – but it is those rules, not the professional opinion standard, that reflect liability-limiting jurisprudential policies.
That is not to deny that the effect of the “reasonable degree of professional certainty” standard often operates to preclude liability – or that we, as defense lawyers, applaud that effect. The Blog 702 argument draws a distinction between the “admissibility” of expert testimony and its “sufficiency” to sustain a verdict. It’s a legitimate distinction, but we don’t think it can be discussed adequately without considering the burden of proof. In most situations plaintiffs bear the burden of proving their claims. That’s as it should be, because it’s the plaintiffs that are trying to change the status quo, usually by asking the judicial system to transfer some of the defendant’s money to them.
To a party bearing the burden of proof, the distinction between “admissibility” and “sufficiency” is almost always academic. What’s the probative value of evidence that can’t get somebody to the jury in the first place? Particularly with experts – with their jury-swaying aura of infallibility recognized by case after case (in Daubert arguments and elsewhere) – admitting legally insufficient opinions would be an engraved invite to jury confusion and legally insufficient verdicts. Courts wisely won’t do that. Thus, for those bearing the burden of proof, admissibility and sufficiency typically collapse into the same thing.
Defendants, on the other hand, rarely bear the burden of proof. Thus, defense experts are often allowed to offer opinions that, while admissible, would not be sufficient to establish a jury question. E.g., Neal v. Lu, 530 A.2d 103, 110 (Pa. Super. 1987) (“the ‘certainty’ standard. . .applies only to expert medical testimony that a litigant offers as proof of a necessary fact in support of recovery”). So to that extent, there is a difference between admissibility and sufficiency – defense evidence can be admissible without being sufficient to prove anything, precisely because defendants are not required to prove anything. The risk defendants run is that jurors won’t believe a less certain expert, so defendants typically have their experts conform to the professional certainty standard even if that’s not legally required.
As to Blog 703’s next argument…. Hold on, there isn’t any next argument. There’s a footnote dissecting certain Ohio and Pennsylvania case law that’s more tendentious than anything else. The point is, why isn’t the “reasonable degree of professional certainty” standard as good an idea as we’ve said it is? For that matter, where’s the defense of any of the ALI’s three justifications for a contrary rule?
We’re disappointed, because this is the kind of stuff we like to do.
In our original post, we quoted from a bunch of medical literature (we have even more to the same effect that we didn’t include) demonstrating that doctors don’t reach professional opinions based on a “more likely than not” standard. Rather they strive for as much “certainty” (there’s that dirty word again) as is professionally possible. We’ve searched through Blog 702’s post for any contrary evidence demonstrating a different, lower professional standard – or even for any argument for such a position. Not a word. We’d really like to see a defense of the proposition that “more likely than not” is closer to the standard that doctors really use in diagnosing their patients than “reasonable degree of medical certainty.” If there is such a doctor, s/he’s probably happy to live in a jurisdiction that holds medical malpractice experts to a higher standard than that.
Nor is the effect of inconsistent standards of proof addressed. Come on guys, do you think that experts in criminal cases ought to testify that they hold their opinions “beyond a reasonable doubt?” Or is the whole argument just another loophole to let plaintiffs’ experts in civil cases get away with murder by offering opinions that, if ever proven to rigorous professional standards, would win those guys bushels of Nobel Prizes?
Finally, how does lowering the standard for expert opinions from “professional certainty” to “more likely than not” do anything to improve the “quality” – as opposed to the quantity – of expert testimony? Please tell us how Ramirez or any other case has managed to repeal Gresham’s law with respect to expert testimony. Until anybody can prove otherwise, we’ll continue to believe that, if the standard for expert testimony is reduced to little more than a coin flip, then that’s all we’ll ever see in courtrooms across America.
And we think that’s wrong. Experts should be professionals, not just professional witnesses.
Monday, July 09, 2007
Last September, the Federal Judicial Center issued its “Second Interim Report” on the impact of the Class Action Fairness Act of 2005. That report, prepared by FJC senior researchers Thomas Willging and Emery Lee III, was big news. The National Law Journal ran a story on the findings, as did a number of “big city” legal newspapers.
The FJC report seemed to confirm what a lot of us had already assumed: federal class action filings (both original and removed cases) in the post-CAFA world were up compared with the pre-CAFA world. In fact, post-CAFA, removed class actions accounted for 23 percent of all class actions, compared with 18 percent in the period before CAFA. Diversity-based class actions post-CAFA accounted for 19 percent of all class actions, compared with 13 percent before CAFA.
Though an impressive piece of scholarship, that report was based on some pretty sketchy data. A mere four-and-a-half post-CAFA months of data were compared against several years of pre-CAFA data. But that was all the data that the FJC researchers had to work with.
Fortunately, the FJC researchers had no intention of stopping with four-and-a-half months of data. They promised another report covering an additional 12 months of post-CAFA data in Spring of ’07. CAFA geeks like me marked our calendars. The snow melted, spring arrived, and, true to its word, the FJC issued its “Third Interim Report” on CAFA’s impact on the federal courts on April 16. This new and improved report not only covers another 12 months or so, but also includes three additional district courts.
But no one seems to have noticed this new report. Odd, since the report has been available since May on the FJC website for anyone to download. Chalk it up to CAFA fatigue – please, not another CAFA symposium. Or perhaps the legal reporters who usually write about these sorts of things had been reassigned to cover Paris Hilton’s lock-up. Or maybe CAFA is just old news. Whatever the reason, the “Third Interim Report” hasn’t gotten any significant attention.
So, I thought I’d hit some of the highlights and offer some thoughts on what the data suggests. (The report itself really is worth a quick read on the plane or train.) Here goes.
First, good news. CAFA is working. There are more class actions in federal court based on diversity jurisdiction post-CAFA than there were pre-CAFA. A lot more. Pre-CAFA, on average, 27 such cases were filed per month. In the twelve months after CAFA, that number almost doubled, to 53.4 cases per month. In seven of the circuits studied, the number of diversity class actions was twice that of the pre-CAFA period.
It would be nice to compare the federal court numbers with some data on class action filings in state court, so that we could see whether CAFA’s putting the state-court class action racket out of business. But those numbers aren’t in the FJC report and I’m not aware of any reliable, systematic compilation of such figures. Perhaps someone should undertake that study.
Second, original filings account for a larger percentage of this increase than removals do. In this regard, the post-CAFA world is the reverse of the pre-CAFA world. Before CAFA, removals of diversity-based class actions generally outnumbered diversity-based class actions originally filed in federal court. Removals went from 147 in the January-June 2005 period, to 130 in the July-December 2005 period, and to 120 in the January-June 2006 period. Original class actions filings increased from 137 to 189 during that time.
The FJC researchers think that this suggests that plaintiffs see removal as a foregone conclusion. Plaintiffs save themselves the hassle and cost of a removal by filing in federal court to begin with. In addition, the FJC researchers seem to believe that filing in federal court in the first place gives the plaintiff’s lawyer some control over forum selection.
I’m not so sure. Unless the plaintiff’s lawyer intends to fight removal, filing in state court initially and leaving it up to the defendant to remove could actually save the plaintiff some money – after all, generally, filing fees are much lower in state court than in federal court; and the defendant has to pay the fee on removal to federal court. If the plaintiff doesn’t move to remand, there’s no extra cost. Besides, what self-respecting plaintiff’s lawyer doesn’t relish the thought of making the defense lawyer work a bit harder and foot the bill for the larger filing fee? After all, CAFA doesn’t require that plaintiffs file class actions meeting its jurisdictional requirements in federal court; it merely gives plaintiffs the choice.
I think the fact that original filings appear to be outstripping removals reflects other possibilities. For instance, it could suggest that plaintiffs’ lawyers aren’t as frightened of federal court as some of us might have thought (or hoped). Or it could suggest that the powerhouse, name-brand plaintiffs’ class action firms (i.e., the Cabrasers and Cohen Milsteins) – firms who know what they are doing in federal court and do it well – are responsible for an increasing share of federal class action filings. Maybe the FJC should take a look at which firms are doing the filing in future reports.
Third, diversity-based class actions alleging personal injury claims are down. Personal injury class actions reached their zenith in the January-June 2003 period, when there were 68 such filings. In January-June 2006, however, that number was down to 41.
When considered against the fact that personal injury cases as a whole have been increasing over the same time period, this decline is striking. According to FJC statistics, personal injury/product liability cases (including both class and individual actions) have gone from 10,510 in the twelve-month period ending June 30, 2001 to more than triple that number – 32,735 – in the twelve-month period ending June 30, 2005.
Two factors probably account for the decline in personal injury class actions in federal
court. For one thing, personal injury cases are class action dogs, and have been for a few years, a fact this blog has noted before. For another, to the extent a plaintiff’s lawyer is naive (or confident) enough to bring a true “personal injury” class action, that case could probably get into federal court without CAFA’s help, since showing that a named plaintiff’s personal injury claim exceeds $75,000 shouldn’t be too stout a showing. Once there, a motion for class certification would promptly be denied based on the litany of Castano-inspired case law.
The fact of the matter is that, as every defense lawyer knows, the personal injury class action is alive and well. It just goes by a different name. Plaintiff’s lawyers figured out that they could both avoid federal court and increase their odds of class certification by taking the “injury” out of the “personal injury” equation. They accomplished this by bringing no-injury class actions – cases where the plaintiff claims that a drug or product has a propensity to harm her or has harmed other people, though she claims no personal injuries herself – instead of class actions based on traditional tort or products liability theories. These types of “no-injury,” “unmanifested defect,” or “propensity to harm” cases are, instead, brought under state consumer protection and “deceptive trade practices” statutes. They’re basically the same old tort claims, just repackaged under state statutes and without the “and then I was physically injured” part. (The plaintiffs’ bar is skilled at giving the same old thing a different name, as evidenced by their recent name change from the “American Trial Lawyers Association” to the euphemistic “American Association for Justice” – while it is easy to be against trial lawyers, who can be against “justice”?) Which brings us to the fourth, and probably most significant, highlight for readers of this blog.
Fourth, state fraud claims account for the greatest increase in diversity-based class actions post-CAFA. They have tripled (!) in the months since CAFA. Why? Though the FJC doesn’t get into this level of detail in its report, I’d wager that this is because “fraud” encompass state consumer protection or “deceptive trade practices” claims brought under state statutes. These cases were notoriously difficult to remove in the pre-CAFA world due to the rule against aggregating damages, and CAFA obviously fixed that.
So, the no-injury consumer protection class actions will, for the most part, be in federal court. The question then becomes whether federal courts will be able to put the kibosh on these ridiculous claims once and for all. The FJC report obviously doesn’t tell us this, though the fact that original diversity-based class action filings outpace removals, coupled with the increase in “fraud”-based class actions in federal court, suggests that the plaintiffs’ bar isn’t afraid.
Only time will tell. But we on the defense side have a lot more going for us in federal court than we did in state court. There’s the usual litany – e.g., federal court gives us judges with life tenure and no reason to favor one side or the other; and we have Rule 23, which gives us some strict class certification requirements, a healthy body of precedent, and the ability to appeal a class certification decision (which you don’t get in many state systems). But there are other pros to being in federal court that could be just as significant, but that aren’t mentioned too often. For instance, we have rules of discovery that impose obligations on the plaintiffs as well as the defendants, and these rules can actually be enforced against plaintiffs with real consequences. We have the Seventh Amendment right to a jury trial, which arguably applies to state consumer fraud statutes, even if the state’s courts have concluded otherwise. Plaintiffs’ lawyers seem to prefer bench trials in “no-injury” cases – it is no doubt hard to persuade a jury that it should award an unseen class millions or billions of dollars for an unmanifested product defect based on the testimony of a perfectly healthy plaintiff.
Though hardly ever mentioned, there are two additional benefits to being in federal court: Daubert and the Federal Rules of Evidence. These may prove to be increasingly powerful tools against products liability cases masquerading as consumer protection class actions. There is a lot of nutty state precedent – which, depending on the court from which it came, the federal courts are supposed to follow – holding that consumer fraud requires causation but not reliance. So if the state’s Supreme Court has held that reliance isn’t required, a federal court can’t simply ignore that. But a federal judiciary accustomed to thinking inside the Daubert/federal rules box is more likely to look askance at the plaintiffs’ novel (i.e., absurd) injury and damages theories. A federal court will be less inclined to accept the sorts of things that pass for evidence of classwide causation, injury or damages than state court judges. At least we should expect federal courts to remember that plaintiffs have the burden of proof and to take that burden seriously. Fish-out-of-water theories like “fraud on the market” and “presumed reliance” should receive a colder reception in federal court than they have historically received in state court.
Since they will be dealing with the bulk of consumer fraud class actions, the federal courts, for all intents and purposes, will be making precedent in consumer fraud class actions, whether anyone cares to admit it. On balance, this should be good for defendants (or else the sponsors of CAFA have a lot of explaining to do), and should help bring some long overdue sanity to the litigation of no-injury, consumer protection class actions.
The FJC has promised future reports, including one this fall, examining the actual class action litigation process in federal court. In the meantime, federal courts are starting to issue some noteworthy decisions (on merits and class certification) in state consumer fraud class actions filed post-CAFA. These should give some guidance to how the reliance-v.-causation debate is playing out in federal court. Stay tuned.