Wednesday, March 05, 2008

There Oughta Be A Law (An Odd Implication of Kent)

As the whole drug and device world knows by now, Warner-Lambert v. Kent played to a 4 to 4 tie on Monday.

The Supreme Court decision thus "lacks a precedential effect,"Plaut v. Spendthrift Farm, 514 U.S. 211, 215 n.1 (1995), and the case law remains where it was two weeks ago.

Thus, if Michigan residents sue drug companies in a federal court in the Sixth Circuit (which covers Michigan, Ohio, Kentucky, and Tennessee), the plaintiffs automatically lose -- their claims are statutorily barred. See Garcia v. Wyeth-Ayerst Labs. 385 F.3d 961 (6th Cir. 2004).

But if those same plaintiffs sue those same drug companies in a federal court in the Second Circuit (which covers New York, Connecticut, and Vermont), the plaintiffs do not automatically lose. Under the Second Circuit's decision in Desiano v. Warner-Lambert (now affirmed by the 4 to 4 tie in the Supreme Court under the name Warner-Lambert v. Kent), the Michigan immunity statute is subject to a fraud-on-the-FDA exception. The plaintiffs have some chance that their cases will go forward.

As we've said before, expect massive forum-shopping: If plaintiffs have a choice, they will file suit in the Second Circuit.

But think about what this means in the context of multidistrict litigation. In a mass tort, hundreds or thousands of cases are often filed throughout the federal court system. The MDL Panel is then asked to centralize those cases before a single judge for coordinated pretrial proceedings. The MDL Panel might, for example, choose to send all the cases to a federal court in Cleveland or Detroit -- situated in the Sixth Circuit -- or the Panel might choose to send the cases to New York or Hartford -- in the Second Circuit.

Here's the rub: The court that receives those cases -- the "transferee" court -- will apply local federal circuit precedent to all pretrial rulings. See In re Korean Air Lines Disaster, 829 F.2d 1171 (D.C. Cir. 1987), and its progeny. Thus, if the MDL Panel chooses to centralize the cases in Cleveland, all Michigan plaintiffs automatically lose under controlling circuit law. But if the MDL Panel chooses to centralize those same cases in New York, Michigan plaintiffs do not automatically lose.

And remember: Seven other states have immunity laws that resemble in some ways the Michigan law. So the MDL Panel's choice of transferee court will decide whether Texas plaintiffs can recover for failure-to-warn claims, whether New Jersey plaintiffs can recover punitive damages, and similar issues for residents of five other states.

Rarely have higher stakes been involved when the MDL Panel was making the seemingly easy administrative decision of choosing a court to hear a bunch of cases.

We have two pleas:

MDL Panel, be beyond reproach. The stakes have gotten awfully high; don't leave yourself open to charges of politicization.

And, Supreme Court, seize the next opportunity to resolve the confusion caused by your tie vote in Kent.

The existing situation is no way to run a country.


Anonymous said...

An interesting twist to the Kent case (and one that supports your call for immediate resolution of the issue left unresoled by the Supreme Court) is that all the Rezulin cases in the MDL involving Michigan plaintiffs were originally filed in Michigan. That means (assuming no settlement) that all the suits will return to federal district court in Michigan for trial at the conclusion of pre-trial proceedings.

At that point, whose law (the Second Circuit's or the Sixth Circuit's) should the Michigan federal district court be applying to Kent and his friends? The plantiffs will obviously argue that the court should ignore Sixth Circuit law and apply the Second Circuit's decision under law-of-the-case doctrine. But there is substantial authority (particularly a recent 11th Circuit decision) going the other way.

Narconon Vista Bay said...

Well, there oughta be one, but what do you do when there's none?

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