Tuesday, September 30, 2008

A Note on Ackermann v. Wyeth, Learned Intermediaries, and the Heeding Presumption

Since Herrmann argued this case, and Bexis contributed an amicus brief, we're going to be quite guarded in what we write here. But please remember the existence of Ackermann v. Wyeth, 526 F.3d 203 (5th Cir. 2008), the next time you're briefing whether a so-called "heeding presumption" applies in cases involving the learned intermediary doctrine.

On that issue, Ackermann hits the trifecta for the defense. Ackermann holds, first, that "the read-and-heed presumption does not apply to Texas cases involving learned intermediaries." That's strong precedent for cases pending in the Lone Star State, and one could plainly suggest that other states should follow Texas's lead.

Ackermann holds, second, that, even if a read-and-heed presumption did apply, in the context of learned intermediaries, that presumption would mean "'only that the physician would have incorporated the additional risk into his decisional calculus,'" not that the physician would automatically have decided not to prescribe the drug.

And Ackermann holds, third, that, "even if the [heeding] presumption applied, it would not change the result" in Ackermann itself, given the testimony of the treating physician.

That makes the Fifth Circuit decision in Ackermann an exceptionally strong precedent when plaintiffs assert that a court should presume that a physician would not have prescribed a drug if the package insert had contained some altered warning.

(Oh, yes: If you've ever arguing about whether a drug company should have included a "black box warning" in its package insert, Ackermann's footnote 13 is helpful on that score, correctly suggesting that manufacturers cannot unilaterally add black box warnings, but rather can give those warnings only when the FDA requires them.)

Monday, September 29, 2008

Interesting Stuff On The Web

Every once in a while, we run into interesting stuff on the web.

Today, we thought we'd share a few things with you.

First, Professor William Rubinstein of Harvard Law School hosted the Class Action Prof Blog until he seemingly gave up the ghost last year. But, in his last post, he linked to this outline of cases decided under CAFA. The outline appears to be fairly comprehensive through the date on which it was prepared, in August 2007.

Second, the Federal Evidence Blog has this history explaining why recently enacted new Federal Rule of Evidence 502 does not contain a provision addressing selective waiver of the attorney client privilege or work product doctrine.

Finally, the Federal Civil Practice Bulletin has this post collecting many of the cases holding that, for purposes of assessing diversity jurisdiction, the citizenship of a Limited Liability Company is determined by the citizenship of all of its members. That should save you some time doing research when you next confront that question.

Thursday, September 25, 2008

Living On The Point Of The Spear

Probably the most unexpected aspect of blogging has been fielding all these calls from reporters. But it does make us wonder sometimes about the quality of the news we hear anywhere. Honestly, would you trust reporters with sources like us?

And one of the most common questions we get asked – well, not exactly, but it’s what the questions turn into – is about the practical difference between express and implied preemption. The question usually starts out as either, “Is Wyeth v. Levine really as important as both you guys and the other side say?” or “What’s the big deal with Levine after you guys won Riegel?”

It all gets back to the differences between express and implied preemption.

Express preemption (Riegel) is all about what Congress said – in the express preemption clause (that’s why it’s called “express”), and about what it meant. It’s just about entirely statute specific. You look at the words of the statute. If the words are ambiguous (something one side or the other inevitably argues), you look at whatever Congress said when the statute was being passed. Since it’s statutory, one side or the other – or both – will resort to “canons” of statutory construction.

You gotta love “canons” of statutory construction, because for each canon (such as “remedial statutes are to be construed broadly”), there’s an equal and opposite one (such as “statutes in derogation of the common law are to be construed narrowly”). Lawyers make sure the law is like that. It keeps us employed.

Because it’s sort of a canon of construction, express preemption land is where our pet peeve, the presumption against preemption, lives.

Express preemption can be broader than implied preemption. That’s because Congress, if it wants to, can tell states that they can’t do anything in a certain field. That’s why there’s no state regulation of airlines, to take one example, or of the astounding interest rates charged by a lot of credit card companies.

But the fundamental limitation of express preemption is that it depends on what a particular statute says – its dependent on the language (if any) that Congress used in determining the preemptive reach of that individual piece of legislation. That’s why our side winning Riegel is no guarantee that it will win Levine.

Congress has always addressed preemption – if at all – on a statute-by-statute basis. While, theoretically, it could pass some general preemption statute and provide that that statute supersedes (preempts?) all statute-specific preemption language, it’s never done that or, as far as we know, even seriously considered such a thing. There’s no express preemption in the air. It’s all statute specific.

Implied preemption is just the opposite – it’s “implied” in the absence of anything Congress said or even thought about. It operates because the Supremacy Clause in the Constitution has for some 200 years been construed to place independent limits on state power whenever the states interact with the federal government.

Among other things, we fought a civil war over that.

Implied preemption is a way of looking at federal-state conflicts. Is it “impossible” to do what both the state and the feds are telling you to do? Or is what the state tells you to do going to “obstruct” either the goals of the feds or the means Congress has given the feds to reach those goals? If the answer to either of these questions is “yes,” then there’s preemption – whether Congress said so or not. Whether Congress thought about it or not.

Why? Because the Constitution itself says so, and neither Congress nor the states can overrule the Supremacy Clause short of a constitutional amendment.

So we’re sort of stuck with implied preemption. It’s a gift, or a curse (depending on whose ox is being gored), left to us by the Founding Fathers.

Congress can take away express preemption by changing a statute’s express preemption language. There are already rumblings in Congress from the other side, threatening to do that with the Medical Device Amendments in order to wipe out our win in Riegel.

Congress can’t take away implied preemption – at least not without taking away the FDA’s authority over drug labeling – so that’s another reason why Levine’s a big deal. If we win Levine, then even if Congress takes away Riegel, there would still be implied preemption for medical devices under whatever principles the Court sets out in Levine.

Why? Because implied preemption is not statute specific. This means that whatever implied preemption principles the Court adopts for the FDCA in Levine would be equally applicable to the Medical Device Amendments. Now, as long as the preemption clause interpreted in Riegel stands unamended, that’s probably an academic issue – because the express preemption provided under the statute is broader than what implied preemption would provide. At the risk of gross oversimplification, under Riegel there’s preemption of anything “different from or in addition to” (because that’s what the statute says) what the FDA requires, while implied preemption would preempt only the “different from” prong.

But if we win Levine, and Congress … say, deleted the MDA's express preemption provision altogether, then medical device manufacturers would still have available whatever implied preemption Levine recognized, even if express preemption goes away altogether.

And express preemption can’t touch that. The Court has ruled several times that implied preemption operates independently of express preemption. It first did that in tort preemption cases involving cars. Freightliner Corp. v. Myrick, 514 U.S. 280, 288 (1995) (well, a truck, if you want to get picky); Geier v. American Honda Motor Co., 529 U.S. 861, 869 (2000), and applied that principle in our neck of the woods in Buckman Co. v. Plaintiffs’ Legal Committee, 531 U.S. 341, 352 (2001).

Why?

Repeat after us: Because implied preemption is not statute specific.

And this non-statute specific nature of implied preemption effectively puts our clients at the point of the preemption spear. We (pharma defense lawyers, that is) are out there making the law every day, good or bad. And in Levine, the principles we establish, or fail to establish, will be applicable to all claimed conflicts between state common law and other federal regulatory schemes.

Here’s a recent example:

Apparently some lawyers on the other side have convinced themselves (if nobody else) that the ubiquitous cell phone gives off radiation that causes brain cancer. So they sue the manufacturers, claiming that every cell phone that can be used without a headset – that’s every cell phone we’ve ever seen – is defective. But the government, which regulates cell phones through the Federal Communications Commission, has looked at this issue and concluded that the cancer claims are bogus. The government hasn’t required all of us to use headsets with our cell phones. So the cell phone defendants asserted that the claims are preempted.

Sound familiar?

It certainly should to regular readers of this blog, since we're like broken records on preemption.

And guess what? The cell phone defendants won. Earlier this month a court in the Eastern District of Pennsylvania held that the claims were preempted. See Farina v. Nokia, 2008 WL 4058686 (E.D. Pa. Sept. 2, 2008). Not only that, but the court’s preemption holding was contrary to an appellate decision in identical litigation (just how identical was something else the court also had to address) from only a couple of years ago. Compare, Pinney v. Nokia, Inc., 402 F.3d 430 (4th Cir. 2005).

What happened?

The EDPA is in the Third Circuit, and that circuit issued its prescription drug preemption decisions in Colacicco and Pennsylvania Employees Benefit Trust Fund, that’s what. After denying express preemption (the presumption against preemption and all that rot) the court held, in accordance with the rationales adopted by the Third Circuit in the drug preemption cases, that the FCC’s actions concerning cell phones preempted the plaintiffs' attempt to make us all wear headsets. 2008 WL 4058686, at *20-23. From the precedent Farina cites (Lohr and Fellner, in addition to big block quotes from two of our favorites), you’d think it was an FDCA case.

It wasn’t. It was just the rest of the spear, following the point and piercing the heart of those plaintiffs' claims.

Farina illustrates that what happens to our clients in the FDCA theater of action will profoundly affect everybody else in the implied preemption war. At one time it was the auto guys. Now it's us. We’re on point.

To take another example with a little more history to it, consider our favorite case, Buckman. It’s been around for seven years. Its rationale for implied preemption of fraud on the FDA (again, grossly oversimplified) is that it would interfere with federal authority for states to adjudicate whether a regulated entity defrauded its federal regulator.

If, as we’ve been saying, implied preemption is not statute specific, then agency fraud claims involving any federal agency should be preempted under the same rationale.

Has that happened?

You betcha.

Fraud on the Environmental Protection Agency? Preempted. Nathan Kimmel, Inc. v. DowElanco, 275 F.3d 1199, 1204-1206 (9th Cir. 2002); Beck v. Koppers, Inc., 2006 WL 2228910, at *1 (N.D. Miss. April 7, 2006); Hill v. Brush Engineered Materials, Inc., 383 F. Supp.2d 814, 822 (D. Md. 2005); Williams v. Dow Chemical Co., 255 F. Supp.2d 219, 232 (S.D.N.Y. 2003); Redelmann v. Alexander Chemical Corp., 2002 WL 34423377 (Ill. Cir. July 26, 2002). Evidently, this was the plaintiffs’ favorite, other than the FDA.

Fraud on the National Highway Traffic Safety Administration? Preempted. Zavala v. TK Holdings Inc., 2004 WL 2903981, at *8 (Cal. App. Dec. 16, 2004); Zwiercan v. General Motors Corp., 58 Pa. D. & C.4th 251, 266 (Pa. C.P. Philadelphia Co. 2002).

Fraud on the Occupational Safety & Health Administration? Preempted. Hill, 383 F. Supp.2d at 822.

Fraud on the Federal Energy Regulatory Commission? Preempted. Transmission Agency of Northern California v. Sierra Pacific Power Co., 295 F.3d 918, 932 n.10 (9th Cir. 2002).

Fraud on the Department of Energy? Preempted. Morgan v. Brush Wellman, Inc., 165 F. Supp.2d 704, 722 (E.D. Tenn. 2001).

Fraud on the Health Care Financing Administration? Preempted. McCall v. Pacificare, Inc., 21 P.3d 1189, 1199 n.9 (Cal. 2001) (dictum).

We’ve looked. All these cases cite Buckman as the basis for their decisions. In fact, that’s how we know about them. We read every case that cites Buckman – because they tend to be very interesting cases.

So it’s not just us defense lawyers theorizing. Implied preemption of tort cases is a big deal because how the Supreme Court addresses implied preemption in Levine – the legal principles it recognizes as controlling – will be applicable to analogous regulatory conflict situations involving any other product and any other agency.

It’s as simple as that. That's what being non-statute specific is all about.

So, with that out of the way, what potentially broadly applicable implied preemption issues are before the Court in Levine? We’ve gone through those, in our best legalese, several times before now.

Don’t worry, we’re not doing that again.

This time, like one cave man said to the other about why their last meal wasn't so good, "Let's not eat the bones."

For now, not only are we canning the legalese, we’re also sticking just to the questions. We're not going to say what we think the answers should be. You can probably guess our position, anyway.

So here are some preemption issues – phrased generally – that the Supreme Court could decide in Levine. That’s not to say the Court will decide them all, or even most, of them. Courts are like that. It helps them stay employed. But all of the following issues are lurking in the Levine case:
  • Because the plaintiff in Levine sued about the defendant’s failure to contraindicate (that’s medicalese, not legalese – it's how doctors say “prohibit”) a use that the FDA had looked at and said was okay, Levine presents the question, once the government says “you can do X,” can tort plaintiffs sue you on a theory that you shouldn’t have done X? How the Court answers that question will affect a lot of FDA-related situations (comparative claims, off-label risks, class warnings, summarized warnings, and more), but beyond that, the same preemption question comes up in every situation – from cars to chemicals – from cigarettes to securities – where the government is in the business of specifically telling people what they can or can't do with things they sell to the public.
  • Levine also presents the question whether there is a presumption against preemption in an implied preemption case. Obviously, a decision on this question, whichever direction it goes, will change the slope of the playing field in every future implied preemption case.
  • Another question in Levine is whether there are any differences in scope between the two flavors of implied preemption – “impossibility” and “obstacle” – and specifically whether “obstacle” preemption should get its wings clipped. An answer necessarily affects the future scope of any claim of “obstacle” preemption, and that's most implied preemption claims these days.
  • Plaintiff in Levine argues that there’s no conflict where a manufacturer can choose to keep doing what the government tells it to do, but at the cost of paying tort judgments. This is a longstanding argument against tort preemption generally, and probably the last of that genre that the Court hasn’t explicitly shot down. If the Court adopted this view, there wouldn’t be much implied preemption left in tort cases.
  • The defendant (and the FDA) assert(s) a government policy against “overwarning” in Levine. Is preventing overwarning a valid basis for implied preemption? Since every labeling decision about what should go into a warning is also a decision about what should be left out, Supreme Court acceptance of the preemptive effect of such a policy would have ramifications for just about all other government-approved warnings.
  • There’s a dispute in Levine about whether FDA requirements are “minimum” or “optimum” standards – a dispute that also masquerades as the “floor” versus “ceiling” argument. There are a lot of government requirements out there, and how the Court goes about drawing the line between what's “minimum” and what's “optimum” could create a template against which the preemptive effect of these other requirements are judged.
  • The plaintiff side in Levine criticizes the FDA a lot. Our side responds by saying that, even if the criticisms were true, it’s not a proper function of state law to force Congress to fix flawed administrative agencies. If the Court were to say anything about this, it could affect the validity and weight of complaints by tort plaintiffs about the conduct of other federal agencies.
  • Plaintiff argues in Levine that government acceptance or rejection of a warning on a particular subject doesn't preclude common law liability for not using a slightly differently phrased warning on the same subject. How the Court analyzes that question could affect the size of the preemptive shadow cast by a lot of decisions by agencies other than the FDA.
  • How broadly will “emergency situation” exceptions to agency pre-clearance requirements be interpreted? The Court could construe the FDCA’s emergency provision (the so called “changes being effected” exception) in accordance with either it’s supposed “plain meaning” or in accordance with the FDA’s narrower interpretation. Which option the Levine court selects would affect the preemptive scope of other regulatory schemes having such exceptions.
  • Because the two sides disagree about how to interpret the CBE regulation, and the FDA has weighed in on the point, the question of how much, if any, deference is owed to an agency’s construction of its own preemptive power is before the Court in Levine. A ruling on this question would affect the amount of legal force behind everything administrative agencies say about preemption.
  • Another CBE-related dispute in Levine is about whether preemption turns on there being an actual CBE filing that the agency rejects. The outcome could have significant practical effects on the number of petitions of this sort that are filed, and thus the workload facing federal agencies.
That’s a bunch of general preemption questions that the Supreme Court could decide in Levine. Almost certainly the Court won’t reach all of them. But equally certainly (unless somebody recuses and we have Kent II – blech….), the Court will answer some of them.

And because implied preemption is not statute specific (we can’t say that enough; it’s the key takeaway from this post), these questions put Levine squarely at the point of the preemption spear for all tort litigation, and more. What the Court decides will go a long way in deciding how sharp and how broad the point of that spear will be.

And also who gets to throw it at whom.

More On New FRE 502

Professor Henry Noyes, of Chapman University School of Law, has posted on SSRN an article analyzing the implications of new Federal Rule of Evidence 502.

Here's a link to "Federal Rule of Evidence 502: Stirring the State Law of Privilege and Professional Responsibility With a Federal Stick."

According to Professor Noyes:

"Rule 502 quietly takes the first steps toward federalization of two areas of law that have traditionally been subject to state regulation: The law governing waiver of the attorney client privilege and the law governing an attorney’s duties of professional conduct. . . .

"This initial foray into the area of state privilege law and state law of professional responsibility has long been resisted because of abiding concern with comity, issues of federalism and respect for the autonomous operation of state courts and state litigation systems. This Article identifies and considers the significant (and unforeseen) practical consequences of breaching the protective zone that has previously existed surrounding the States’ operation of their own court systems, state rules of procedure and state rules of professional responsibility."

Wednesday, September 24, 2008

Gunvalson v. PTC Update

Gunvalson v. PTC Therapeutics is the case in which a federal trial court ordered a drug company to provide an experimental drug to a patient outside of the context of a clinical trial. We previously posted about Gunvalson here and here. (And Pathophilia commented on the case here and, before that, here.)

We have three pieces of new news to report:

First, last week, the Third Circuit issued a stay of the trial court injunction. Here's a link to the Third Circuit order.

Second, PTC has filed its opening brief in the Third Circuit. For the benefit of those who are watching this case, here's a link to that brief.

Finally, we reported a couple of weeks ago that Bexis' firm had been retained to work on this appeal, so he was not participating in drafting blog posts about the case.

Herrmann has now been retained to file an amicus curiae brief in this appeal, so he, too, has developed a conflict. We won't be saying much more about this case publicly, although we may yet report, in a neutral fashion, that a brief has been filed or an opinion issued.

And -- oh, yeah -- how the heck will we ever explain this to Jeremy?

Sebok on Wyeth v. Levine

In this week's FindLaw column, Anthony Sebok and Benjamin Zipursky discuss the facts of Wyeth v. Levine and urge the Supreme Court to "decide Levine quite narrowly (however it decides) and we are cautiously optimistic that it will do so."

Among other things, Sebok and Zipursky say that:

"The problem with Levine is that the jury and the judges in Vermont handed Wyeth a loss it clearly did not deserve, because they stretched tort law to its limit (and perhaps beyond) to respond to the gripping facts before them. For any number of basic reasons, the result in Levine is pathological as a matter of products liability law."

Hat tip to Torts Prof.

We're Depressed: Johnson v. GlaxoSmithKline

At this blog, we root for the drug industry.

Film at 11.

So the California Court of Appeal's recent decision in Johnson v. GlaxoSmithKline, No. B199453, slip op. (Cal. Ct. App. Sept. 19, 2008) (link here), left us a little depressed.

Several different groups of plaintiffs have sued GlaxoSmithKline pleading that GSK deceptively advertised Paxil as nonhabit-forming.

In 2002, plaintiffs filed a motion in federal court to certify a subclass of "[a]ll persons who have used Paxil and who reside in 3 states, including California, [with laws] identical to California's [unfair competition law] where plaintiff need not show reliance, causation or damage." Slip op. at 5. The federal judge held that individual issues in that case, such as whether the putative class members "had seen the advertisements," barred class certification. Id.

In 2003, the federal plaintiffs filed a second motion seeking, among other things, to certify a class of California residents prescribed Paxil after 1992 who sought an injunction prohibiting certain GSK advertising statements and to recover restitution. The federal judge again denied certification because, among other things, "some plaintiffs may never have seen or heard the statements sought to be enjoined." Id. at 6.

So Kevin Johnson filed a new class action -- this time in state court -- on behalf of "all California residents, who are not deceased, who have been prescribed, and have taken Paxil at any time after 1992 until the present." Id. at 3.

Under a recent California appellate decision, "the doctrine of collateral estoppel permits a prevailing party to enforce a ruling denying class certification, made in a prior action, against an absent putative class member seeking to pursue a class action." Id. at 7 (citing Alvarez v. May Dept. Stores Co., 143 Cal. App. 4th 1223 (2006)). GSK thus moved for summary adjudication to preclude Johnson's lawsuit from proceeding as a class action.

The trial court granted that motion, but the Second District Court of Appeal reversed. The appellate court held that the previous federal class certification decisions "were litigated before the voters approved Proposition 64 . . . which significantly restricted the previously broad standing requirements for pursuing a private cause of action" under the California unfair competition laws. Id. at 16. The state court class action, in contrast, relied on the narrower concept of standing recognized after Proposition 64 passed. Because the earlier decisions denying class certification did not resolve the identical issue that Johnson raised in his later case, the appellate court reversed the grant of summary adjudication.

But don't be too depressed. Although Johnson's motion for class certification is not barred by collateral estoppel, it may yet be denied on other grounds. The appellate court was "not deciding Johnson has established the existence of both an ascertainable class and a well-defined community of interest among class members." Id. at 22. Nor did it "hold that Johnson's claims . . . are typical of the class or that Johnson has proved he can adequately represent the class." Id.

Those arguments will be available to GSK on remand.

And, naturally enough from our vantage point, we think they ought to be plenty to defeat class certification.

Oh, happy day!

Tuesday, September 23, 2008

New Federal Rule of Evidence 502 – A Modest Improvement?

This guest post was written by David B. Alden of Jones Day, who may know more about the attorney-client privilege than any other living human being. Because it's Dave's work, Beck and Herrmann are off the hook -- they claim no credit for what follows.



Both Houses of Congress have passed Senate Bill No. 2450, and President Bush signed it into law as Public Law No. 110-322 on September 19, 2008. This law creates a new evidence rule, Federal Rule of Evidence 502, limiting attorney-client privilege and work product waivers. It applies in "all proceedings commenced after" its enactment date and, "insofar as is just and practicable, in all proceedings pending" on that date. More about that in a minute, but first a little history.

A Little History

Before 1975, the law of evidence was left to the common law or, as some call it, judge-made law. The Federal Rules of Evidence (or "FRE"), which became effective in 1975, fairly comprehensively codified the law of evidence. Entire law school courses are devoted to the FRE, which have multiple, detailed rules concerning most every area of evidence law – judicial notice, presumptions, relevance, authentication, etc. For example, the FRE not only define hearsay and render it inadmissible, but have 24 exceptions for available “declarants,” 5 more for unavailable ones, and a residual exception for good measure (and creative lawyers).

Yet the FRE basically ignore a major area of evidence law – privilege. It was not supposed to be that way. The FRE, as sent to Congress, had 13 specific privilege-related rules, including rules covering the attorney-client privilege rule (proposed FRE 503), voluntary waivers (proposed FRE 511), and compelled productions of privileged materials (proposed FRE 512). But Congress objected, so we have FRE 501, which says that, unless state law applies or the Constitution or a federal statute says otherwise, federal privilege law “shall be governed by the principles of the common law.” Enough history.

What FRE 502 does

New FRE 502 does four things. First, it limits “subject matter” waivers. When there has been an intentional disclosure in a federal proceeding that waives the attorney-client privilege or work product protection, FRE 502(a) provides that the waiver extends to undisclosed privileged or protected communications on the “same subject matter” only if “they ought in fairness to be considered together.” The rule bars a waiver finding in both federal and state proceedings. This “no subject matter waiver unless fairness requires it” rule is the current rule in most (perhaps all) jurisdictions, but the new rule makes that clear.

Second, the new rule provides a “do over” for some unintentional productions. When there has been an inadvertent disclosure of privileged or protected materials in a federal proceeding, FRE 502(b) provides that there is no waiver if the privilege-holder took “reasonable steps” both to “prevent disclosure” in the first instance and “to rectify the error.” Like FRE 502(a), FRE 502(b)’s inadvertent disclosure rule bars a waiver finding in both federal and state proceedings. And again, the new rule codifies what already was the general rule, but removes any lingering uncertainty.

Third, when a disclosure is made in a state proceeding and is not subject to a state-court waiver order, FRE 502(c) provides that there is no waiver in a federal proceeding if either (a) there would be no waiver under FRE 502 if the disclosure had been made in a federal proceeding, or (b) there is no waiver under the state law where the disclosure occurred. This provides that the federal or state rule that is most protective against waiver applies. It is new.

Finally, FRE 502(d) provides that federal court non-waiver orders relating to federal proceedings bind other federal and state courts, and FRE 502(e) provides that a non-waiver agreement between parties to a federal proceeding binds only the parties unless the agreement is incorporated into a court order. FRE 502(d) is new, while FRE 502(e) is the general rule now.

What FRE 502 does not do

In the areas that FRE 502 addresses, some uncertainties remain. For example, FRE 502(a)’s “no subject matter waiver unless fairness requires it” rule will require courts to interpret and define both what is the “same subject matter” and when “fairness” requires a waiver. Similarly, FRE 502(b)’s “no waiver through inadvertent disclosure” rule neither identifies whose intent matters for purposes of determining whether the initial disclosure was “inadvertent” nor details what “reasonable steps” before and after the production are required to avoid waiver. But courts have grappled with all of these issues under the common law and presumably will be able to do so under FRE 502(a) and FRE 502(b).

There are also issues in the general area of privilege waiver that the new rule does not address. For example, corporations that have conducted internal investigations sometimes “voluntarily” disclose privileged and protected materials to government investigators and regulators as a sign of cooperation. These “voluntary” waivers became commonplace after the Justice Department’s so-called “Thompson Memo” effectively directed prosecutors to seek them. When plaintiffs pursuing other litigation against the corporation later seek the privileged and protected documents provided “voluntarily” to the government, corporate defendants have urged courts to find that there was only a “selective waiver,” which would extend to the government, but no further. Courts generally have rejected “selective waiver” claims, but early versions of FRE 502 would have permitted them. FRE 502 does not speak to “selective waivers.”

Also, there may be constitutional problems with the provisions in FRE 502(a), FRE 502(b), and FRE 502(d) that make federal privilege rules (and federal courts’ orders applying them) binding on state courts. If so and courts find that Congress could not give federal courts this power, then much of the “certainty” provided by FRE 502 will have been illusory. But that is a topic for another day, and probably for another blogger.

The net, net

Having lived with the federal common law of privilege for 33 years, we now have doubled the number of federal privilege-related evidence rules with new FRE 502. Because FRE 502(a) and FRE 502(b) largely codify major chunks of what already is the common law of attorney-client privilege and work product waiver, they should bring more predictability to an area where, currently, it does not always exist. But they really aren’t all that new and probably aren’t that big a big deal.

What is a big deal here is FRE 502(d). It provides that “[a] Federal court may order that the privilege or protection is not waived by disclosure connected with the litigation pending before the court – in which event the disclosure is also not a waiver in any other Federal or State proceeding.” Effectively, FRE 502(d) will make a federal court non-waiver order a “trump” card in other federal courts, as well as in all state courts. Thus, so long as they have the prior blessing of a federal court order – a “no-waiver order” – litigants may (a) produce privileged and protected documents in federal proceedings with no pre- or post-production privilege review, yet (b) retain otherwise applicable attorney-client privilege and work product claims and (c) assert them when the adversary attempts to use the documents. If that is what FRE 502(d) means and producing parties elect to proceed in this manner, this could be a huge cost-savings, as privilege reviews plainly can be expensive.

But before parties rely on FRE 502(d) to eliminate the privilege review portion of their document production process, they should recognize that doing so has potential pitfalls. First, while the substance of some privileged or protected communications could hardly matter less, other communications may involve information that the privilege-holder really wants to keep confidential, particularly as against the litigation adversary to whom the production is being made. The no-privilege-review approach, although cheap, destroys this confidentiality. Thus, while FRE 502(d) will preserve the privilege-holder’s privilege and work product claims, the adversary will know the substance of the still-privileged and protected communications. The proverbial “cat” will be “out of the bag” (or Elvis will have “left the building”).

A second and related concern is that the right to raise privilege or work product claims that FRE 502(d) preserves may, as a practical matter, be of little use. A litigation adversary can “use” the document containing your privileged or protected communication in many ways that give you no opportunity to object. For example, the adversary may formulate questions or trial strategies that are based on or informed by privileged or protected documents. In that event, objecting may be either impossible or pointless. Similarly, if the adversary has fact or expert witnesses review and rely on privileged or protected documents (of course, before the claims are asserted and sustained), it will be impossible to have those witnesses “unlearn” that information and difficult to excise the resulting knowledge from their testimony or opinions.

Third, the claims of privilege or protection that FRE 502(d) preserves may conflict with and ultimately yield to other interests. Suppose, for example, that a litigation adversary claims that information in a privileged or protected document “impeaches” the privilege-holder’s witness’s testimony. How trial courts will resolve the privilege claims in that context remains to be seen.

Fourth, FRE 502(d)’s “produce now and assert later” approach may create practical problems. The current paradigm is that privileged and protected documents are reviewed and, for the most part, removed from the production process and, therefore, are unavailable to litigation adversaries. In a new “produce first, assert claims later” world, privileged and protected documents will, by assumption, be produced in substantial numbers. As a result, courts will be forced to resolve far more privilege and work product claims during depositions and at trial, where the privilege-holder presumably still would have to object to preserve the claims. My predictions are that busy courts will not like this new world and that many will respond in ways and with rules and rulings that privilege-holders will not appreciate.

For example, courts may set deadlines for privilege-holders to assert claims of privilege or protection in produced documents, either before depositions begin or before trial, which may significantly reduce any cost savings. Similarly, unless the producing party reviews and identifies privileged and protected documents after production but before depositions or trial, which defeats the cost-savings goal, each of the privilege-holder’s counsel will need to become expert at quickly spotting privileged and protected documents as the adversary uses them in any deposition or at trial and then objecting and defending the basis for those claims “on the fly.” Counsel’s inability to quickly raise and support the claims that FRE 502(d) preserved may mean that they are simply waived later through different conduct. And courts may ultimately decide that the new burdens that FRE 502(d) places on them are unwarranted and simply decline to enter FRE 502(d) “no-waiver” orders.

On balance, if a litigant’s privileged and protected documents are unimportant and voluminous, and the litigant is reviewing them before production only to avoid sweeping “subject matter” waiver claims that might reach more important communications, FRE 502 may provide real benefits in terms of cost-savings with little corresponding negative effects. But in the more typical situation where privileged and protected communications may matter or may even matter a great deal, FRE 502(d)’s “promise” to preserve privilege and work product claims for documents produced to litigation adversaries may mean little and come only at a heavy cost.

Monday, September 22, 2008

A Multidistrict Litigation Compendium

We've been thinking about MDL practice the last couple of weeks, and we've decided to do a wrap-up post on that subject. Here's everything you need to know about the Judicial Panel on Multidistrict Litigation.

We have a link to the MDL Panel's website over in the right-hand column of this blog. For your convenience, here's another link to that website. There's an awful lot of useful information there.

In addition to linking to the MDL Panel website, we published "An MDL Bibliography" on this blog nearly two years ago. That was a good resource then (if we do say so ourselves), and it remains a good resource today -- it identifies the leading book and most of the leading articles describing the MDL process.

We'll take this opportunity to update that slightly dated bibliography with two recent noteworthy publications. First, there's the Tulane Law Review symposium issue on "The Problem of Multidistrict Litigation." We posted about that previously, and the articles in that symposium may be useful resources for folks playing in the MDL sandbox.

You'll be startled to hear that we also like the piece that one of your humble scribes co-authored for BNA's Class Action Litigation Report, "Making Book On The MDL Panel: Will It Centralize Your Products Liability Cases?," about which we posted here. (Herrmann's co-author, Pearson Bownas, contributed this follow-up guest post explaining that the Panel played it by the book when it recently denied a motion to centralize the shoulder pain pump litigation.)

James M. Wood, Monique Hunt McWilliams, and Delaney M. Anderson took a different spin on the "Making Book" article in the November 2007 issue of DRI's For The Defense. Their article, "The Selection of a Transferee Court for MDL," looks at how the MDL Panel has historically chosen transferee courts when it decided to centralize cases.

Not surprisingly, we also like the two blog posts that we've published about the MDL Panel in the last couple of weeks. We summarized the MDL Panel's procedure in this post, and we explained how to estimate how long it will take the MDL Panel to decide motions, and how long it will take transferee courts to schedule their first status conferences, here.

[Here's proof that we can look into the future: In 2009, the Federal Judicial Center and MDL Panel published two booklets, "A Guide for Multidistrict Litigation Transferee Judges," and "A Guide for Multidistrict Litigation Transferee Court Clerks." On August 7, 2009, we published this post, which links to where those two publications are available free of charge at the FJC website. Also, on September 1, 2009, we linked to Margaret Williams and Tracey George's "Between Cases and Classes: The Decision to Consolidate Multidistrict Litigation," which analyzes a sample of 90 orders issued by the MDL Panel to determine the most significant factors relied on by the Panel in deciding (1) whether to coordinate cases, (2) choice of transferee court, and (3) choice of transferee judge. ]

For the wrap-up to this wrap-up, we're going on a tour of the web. If you type the words "MDL Panel" into Google, you'll find a bunch of stuff, although its quality and utility is wildly varied. You'll find the MDL Panel itself first, which is a happy result.

And you'll find us -- one of our posts -- second, which we think is awfully nifty.

You'll find the websites of a few defense firms publicizing their MDL experience and, on the other side of the "v.," a few websites hosted by plaintiffs' lawyers describing the MDL Panel or commenting on its processes. Some of that material is pretty good, and some is just plain stupid. We found this, for example, at a fairly prominent blog hosted by a plaintiff's lawyer:

"To receive certification by the MDL Panel, under Rule 23 you must have: (1) plaintiffs so numerous that joinder is impossible (numerosity); (2) class claims which present common questions of law or fact (commonality); (3) plaintiffs' claims that are typical of those of the class (typicality); and (4) plaintiffs who are adequate representatives of the putative class (adequacy)."

Those words show how dangerous it can be to rely on the internet to do legal research. Rule 23 has absolutely nothing to do with the MDL process; centralization by the MDL Panel and certification of a class action are separate events, governed by different rules. The paragraph that we quoted above is dangerous gibberish -- but it's out there.

If you keep searching, you'll find links to news reports about cases that the Panel has centralized, and you'll find links to some of the analogues to the MDL Panel established by state court systems. Here, for example, is a link to the Texas site.

Eventually, you'll find this interview with Judge John Nangle, then Chair of the MDL Panel, that appeared in The Third Branch in 1995. (But we already told you about that one -- we included it in our on-line MDL bibliography.)

And you'll find this post at the CAFA Law Blog, summarizing Judge William Young's decision in Delaventura v. Columbia Acorn Trust. Judge Young expresses concern about some aspects of the multidistrict litigation process. (We'd forgotten about that one; this blogging stuff is good for us.)

You'll also find links to books that mention the MDL Panel, such as Judge Weinstein's Individual Justice In Mass Tort Litigation, and to cases that mention the Panel, such as this one.

And then, if you're like us, you'll give up. Google says we'd have to look at more than a half million websites to plow through all the hits to "MDL Panel" and, much as we love you, dear reader, we don't love you that much.

For the most part, what we found makes us pretty happy with what we're doing here at the Drug and Device Law Blog. If you stick to the links that we gave you in the first seven paragraphs of this post, you'll have virtually everything that you need, and all from sources that are pretty reliable.

Maybe we're doing some good by hosting this blog, after all.

Thursday, September 18, 2008

Defense Amici – One Stop Shopping

No law this time. This is a purely practical post.

We’ve done quite a few posts that have presented the legal arguments we’ve found in various defense-side amicus briefs – mostly in the “FDA Cubed” cases (Riegel, Kent, and twice in Levine) that have so serendipitously (for us) happened to coincide with our blog’s comparatively brief existence on the Web. Without the three Supreme Court cases, what would we have had to blog about?

And, more importantly, who would want to listen to us? (Don't answer that).

We’ve done those posts that because we think that defense-side amici in big cases put together arguments that the rest of us mere mortals can use to our clients' benefit in our own cases.

But how do we mere mortals get these guys when we need them?

That’s what this post is about.

Suppose one of us mere mortals – representing, say, a small medical device company or a bit player in some multidistrict litigation morass – ends up grabbing the tiger by the tail. We get a major win (yay!), or worse, take a significant hit (boo! – but it does happen). The case goes up on appeal and is affirmed (or reversed, it doesn’t really matter for purposes of this post) in an unpublished opinion.

Then lightning strikes.

The Supreme Court (state or federal) decides to take your case.

All of a sudden your case is a very big deal. All of a sudden, your opposing counsel disappears, and the plaintiff is now represented by the Public Citizen Litigation Group.

All of a sudden, you need amicus curiae help of your own. It can happen. Just ask Pamela Buckman (or her lawyer).

You don’t want to get slimed. So…. Who ya gonna call?

It ain’t ghostbusters in this business.

And that’s what this post is all about. We’ve reached out to the major defense-side amicus groups to get the basic information that defense counsel in such a situation need to bring a case to their attention. This post is still something of a work in progress at this point, and we’ll try to update as we get more information (assuming we do).

One general piece of advice: If you need them, don’t waste any time in contacting these folks. Any amicus group needs (and, as importantly, likes) sufficient time to consider the merits of a case, to make a decision, to engage a brief writer, and to get a brief written. In most jurisdictions (but there are notable exceptions) the timing for amicus briefs is tied to the due date for the principal brief filed by the side they are supporting. That means, especially if you’ve lost below and are going to be submitting your brief first as appellant, you need to get your client on board, contact these groups, and submit your case to them as soon as possible after your case has been accepted for further appellate review.

We can’t emphasize the importance of timing enough. The likelihood of getting an amicus is very much related to the time available to get a brief approved, written, and filed.

With that, here are the amicus players in the drug and device area that we know enough about to ask, and here’s how to ask them to appear as amici:

Advamed (Advanced Medical Technology Ass’n): Advamed is a major trade association for medical device manufacturers, so medical device cases are the primary focus of its amicus activity. Advamed primarily appears in the United States Supreme Court, but will consider other courts if the case is important enough. The contact person for submitting a case for Advamed’s consideration is Christopher White (cwhite@advamed.org). There are no particular forms to fill out. A detailed email with the opinion and relevant pleadings attached will suffice. Advamed has an amicus committee, and prefers six weeks lead time to consider a case. It will not consider a case submitted with a less than three week lead time. Advamed may join another amicus brief or file its own as the needs of the case require. It helps, but is not essential, for the client to be an Advamed member.

ATRA (American Tort Reform Ass’n): ATRA’s signature issue is tort reform, but it will file briefs on other important tort law issues. You (or your client) have to be an ATRA member for any request to be considered. Contact people for submitting a case for ATRA’s consideration are Tiger Joyce (ShermanJoyce@atra.org) or Matt Fullenbaum (mfullenbaum@atra.org). ATRA has no specific turnaround time requirements. There’s no set form to fill out, and ATRA will tell you what it needs in any given case.

DRI (Defense Research Institute): As “The Voice of the Defense Bar,” DRI will consider appearing as amicus in any case raising substantive or procedural issues important in the defense of personal injury cases. The contact person for submitting a case for DRI’s consideration is John Kouris (johnrkouris@dri.org). The case will then be submitted to a seven-person committee. DRI requests at least three weeks turnaround time for filing a brief, although it has “fast track” procedures for late, but particularly important matters. DRI has affiliates in every state, so if the case presents an issue involving a single state’s law, expect the case to be referred to one of those state affiliates. There are no particular forms to fill out, but the letter/email submitting the case should state the issue involved and include relevant briefs and opinions. DRI membership is not needed to submit a case.

GPhA (Generic Pharmaceutical Ass'n):  GPhA is the major trade association for manufacturers and marketers of generic prescription drugs.  GPhA's primary focus is on patent and preemption issues related to generic drugs and regulatory issues involving approval of generic drugs and generic exclusivity.  The contact person for submitting a case to GPhA is Bob Billings (bbillings@gphaonline.org).  Cases are submitted to GPhA's board of directors, and they have three weeks to decide whether GPhA will appear as amicus.  Cases submitted with less than three weeks notice must be "extraordinary" to be considered, so act quickly.  GPhA has no particular submission form to complete; a letter explaining the matter and the reasons why it should intervene is sufficient.  Applicants are expected to submit whatever information they believe GPhA's board reaonably needs to evaluate the case.  Submitters are typically GPhA members, but membership is not required.

MDMA (Medical Device Manufacturers Ass’n): MDMA is a major trade association for medical device manufacturers, so medical device litigation is the primary focus of its amicus activity. To submit a case for MDMA's consideration, contact Mark Leahey (mleahey@medicaldevices.org). MDMA prefers a month's notice for any case submission. There are no forms to fill out; an email with a description of the issue will suffice as an initial submission. If MDMA needs additional information or documentation, it will so inform the submitter. MDMA has no separate amicus committee, and where necessary uses its board for that function. MDMA frequently joins other organizations' amicus briefs. It helps: (1) if the client is a MDMA member, and/or (2) the submission includes an offer by an outside lawyer (not, of course, retained by a party) to do the actual writing.

NAM (National Ass’n of Manufacturers). NAM is interested in all issues of broad importance to product manufacturers – tort and product liability litigation among them. To submit a case for NAM’s consideration, contact Quentin Riegel (qriegel@nam.org) or Jan Amundson (jamundson@nam.org). NAM prefers as much time as possible to consider a case and to prepare a brief, but has no amicus committee and is capable of responding quickly if the case warrants it. There are no forms to fill out, and NAM will tell you what documentation it wants. On a marginal case, it helps to be a NAM member.

PhRMA (Pharmaceutical Research & Manufacturers of America): PhRMA is the major trade association for producers of non-generic prescription drugs, so the primary focus of its amicus activity concerns cases involving product liability, antitrust, and patent issues that are of unique concern to the research-based pharmaceutical industry. The contact person for submitting a case to PhRMA is Melissa Kimmel (mkimmel@phrma.org) or 202-835-3559. There are no specific forms to fill out, and information is requested on an ad hoc basis. PhRMA has an active amicus committee that decides not only whether to take a case, but what arguments to present, thus PhRMA prefers two weeks to make a decision, although it can move faster in an emergency. It usually takes another two to three weeks to prepare the brief, so lead times of less than a month will decrease the likelihood that PhRMA will participate. PhRMA membership does not influence its decision to appear as amicus.

PLAC (Product Liability Advisory Council): PLAC’s range of interest extends to any issue that affects the litigation of product liability cases. The contact person for submitting a case to PLAC is Jonathan Harrison (jharrison@plac.net). Submitted cases are considered by a committee that meets regularly every two weeks. Cases submitted with less than three weeks lead time are significantly less likely to be accepted. PLAC requires the completion of a case submission form. The documentation PLAC requires is stated in the form. Except where the case involves a writ, PLAC considers cases involving members and non-members on an equal basis. PLAC only briefs writs for members. Members have more influence over what PLAC says in its briefs than non-members.

United States Chamber of Commerce: The Chamber is interested in is all issues of broad importance to the business community – tort and product liability litigation among them. To submit a case for the Chamber’s consideration contact Robin Conrad (rconrad@uschamber.com) or Amar Sarwal (asarwal@USChamber.com). The Chamber requires no particular form to submit a case. It will almost certainly want the opinion being appealed from and usually the briefs. To get the Chamber’s help, it definitely helps to be a member of the Chamber and, better yet, the Chamber’s Litigation Center. The Chamber does have a case selection committee, so it is best to provide as much lead time as possible, ideally a month. Cases can be expedited if the circumstances demand it.

WLF (Washington Legal Foundation): WLF is most receptive to amicus requests where the theme of the brief would be: (1) avoiding excessive government regulation; or (2) avoiding unwarranted tort liability. To submit a case, contact Rich Samp (RSamp@WLF.org). There is no standard procedure for soliciting WLF amicus support and no forms to fill out. WLF will tell you what it needs in any given case. WLF has a Litigation Review Board that approves all amicus work, so it usually takes about a week to process any request. WLF then prefers at least an additional two weeks to get the brief written. WLF favors requests that come with an offer by an outside lawyer (not, of course, retained by a party) to do the actual writing. WLF has no “members” and does not consider possible financial contributions in deciding whether to appear as amicus.

Finally, if any of our readers either has more (or better) information about the entities we’ve listed, or has information about other defense-oriented amicus groups that should be listed here, don’t be shy about contacting us.

Tuesday, September 16, 2008

Defense Reply Brief in Levine

We've got a copy of the Reply Brief filed by defendant Wyeth in the Wyeth v. Levine case. Here are the highlights as we see them (we're trying to stay away from the Phenergan or Wyeth specific stuff):
  • Conflict preemption operates by the direct force of the constitution. Express congressional intent to preempt thus is not an issue. It's enough that Congress intended to have drug labeling decisions made by the FDA. Contrary state-law claims interfere with the accomplishment of that objective, and are preempted by the Supremacy Clause. Neither the presence, nor absence, of expressly preemptive language makes a difference to a finding of actual conflict.
  • This is a failure to contraindicate case. It's a lot different from the 40+ year old drug product liability cases plaintiffs assert as "history." With respect to labeled uses, the FDA is required by law to balance the risks against the benefits of all labeled indications. As a matter of law, state law cannot obstruct federal regulation of drugs by imposing a different outcome to this balancing decision from the one reached by the FDA.
  • As a matter of fact, the FDA did address the risks and benefits of the particular method of drug delivery at issue in this case. It was required to do so by law. The agency told the defendant to use "identical" labeling to that which the jury held was inadequate under state law (our one foray into Phenergan-specific stuff).
  • Because plaintiffs and their amici cannot win on the facts of the case, they try to make it into something it is not. There are no allegations of concealment from the agency or of failure to make a label change in response to newly emerging risk information. Here the FDA had all the necessary information before it, and made a decision. Plaintiffs told the jury explicitly that they could, and should, ignore the FDA's determination. The court need not reach scenarios that are not before it.
  • The FDCA has always broadly prohibited unilateral changes to agency approved labeling, especially where methods of use are involved. This was not, and could not have been, a CBE case.
  • The FDA's interpretation of the CBE, supported by contemporaneous administrative history, as an administrative construction of the agency's own regulation, is entitled to considerable (Auer) deference. Thus the CBE regulation was always intended to apply solely to new, emergent information. There is not factual basis for the CBE regulation, as properly interpreted, to apply to this case.
  • The FDA regularly consults with manufacturers about possible CBE submissions. It's quite effective in making its wishes know. Therefore, it's hardly surprising that there aren't many enforcement actions based upon improper CBE submissions.
  • The FDA's "association with a serious hazard" standard (§ 201.80(e)) does not address when CBE submissions are to be filed, only the nature of the information that can be included. To interpret it in the broad fashion plaintiff does would render the CBE regulation itself a nullity.
  • The argument that defendants can simply pay judgments and continue doing what they are doing is meritless. That's another form of special pleading for tort claims that the Supreme Court has repeatedly rejected, most recently in Riegel, every time it has held that tort law is premised on legal duties and is therefore preempted.
  • The argument that the defendant must prove that a CBE submission would be unsuccessful to qualify for preemption would involve courts and juries in adjudicating hypothetical, contrafactual situations, which the Court has disapproved in analogous situations (including Buckman).
  • There are excellent discussions of Sprietsma, Bates, and Lohr as involving situations where the responsible agency was excused from making specific judgments that balanced safety and risk. The NDA process is federal safety review. This will be quite useful in other cases.
  • That devices, but not drugs, do not have express preemption language is an accident of history, as Congress didn't get into the habit of including express preemption clauses in statutes until after the original FDCA was enacted.
  • There's also an excellent discussion of why the legislative history of the 1933 version of the FDCA isn't relevant to the version that finally passed five years later, since the 1933 bill did not provide for FDA pre-approval of drugs and their labeling. This will also is useful in any case where the plaintiff makes the argument.
  • It's irrelevant what precise authority the FDA had before 2007 to order post-approval labeling changes, since that isn't what this case is about. The FDA told the defendant exactly how to address this particular risk at the time, and did so on full information.
  • Our pick for best quote: "No matter its purposes or benefits, tort law cannot be said to complement federal regulation when it imposes a state-law duty that contradicts manufacturers’ federal obligations and FDA’s labeling approval judgments." Reply brief at 27.

In short, there's a lot of good stuff here for those of us laboring in the preemption vineyards.

We're Duty-Bound To Post (Pre-Service Removal)

We really shouldn't complain about the burden after we voluntarily assume a duty.

After all, we created the Drug Preemption Scorecard, the Device Preemption Scorecard, the No Injury Scorecard, and the Cross-Jurisdictional Class Action Tolling Scorecard, and we know that, having created those resources, we're duty-bound to keep 'em current. (But we're not your lawyers! We're not giving legal advice here! And if we inadvertently overlook a case that belongs in one of those scorecards, you can't sue us for negligence!)

We wonder, however, why we feel duty-bound to alert you to the new "pre-service removal" cases as they come down.

Probably because no one else is paying attention to those cases, but they make an awful lot of difference to folks who toil in our field.

Anyway, add Sullivan v. Novartis Pharmaceuticals Corp., __ F. Supp. 2d __, 2008 WL 4148730 (D.N.J. Sept. 10, 2008), to the list of cases wrestling with the "pre-service removal" issue. (We're not going to repeat the entire list of those cases here. Instead, we'll link back to this one earlier post that, in turn, links back to our many other posts collecting cases on this topic.)

By now, you know the drill: 28 U.S.C. Sec. 1441 permits removal of diversity cases only if no defendant "properly joined and served" is a resident of the state in which the case was filed. In Sullivan, as in the earlier cases presenting this issue, defendants removed the action before plaintiff served the resident defendant. Plaintiff then moved to remand.

Judge Debevoise framed the issue squarely: Courts that allow removal in this situation rely on the plain statutory language -- "the principle of statutory construction which holds that courts should apply the plain meaning of a statute when the statutory language is clear and unambiguous." Id. at *2.

Judge Debevoise then noted "a less often cited, but equally important, principle of statutory construction which holds that when the literal application of statutory language would either produce an outcome demonstrably at odds with the statute's purpose or would result in an absurd outcome, a court must look beyond the plain meaning of the statutory language." Id.

Judge Debevoise "conducted a thorough examination of the published legislative history regarding the 1948 changes to Title 28" and found nothing explaining why Congress added the "properly joined and served" language to the statute. Id. at *3.

The judge could not "imagine what Congressional policy goal -- and Novartis, here, has offered no example -- which would be furthered by rewarding defendants for" the "gamemanship" of removing an action before the resident defendant was served. Id. at *5.

The court thus rejected removal based on diversity jurisdiction. It also rejected Novartis' arguments in favor of finding federal question jurisdiction, and the court remanded the case. Id. at *13.

We see the competing arguments in this situation, and we understand why courts are wrestling with them. But we (and others like us, and the courts) surely deserve a clear answer to the question whether pre-service removal is a permissible way to obtain federal jurisdiction in a case in which diversity would otherwise be lacking.

Orders remanding cases to state court are not appealable, which is a procedural obstacle to obtaining appellate guidance on this issue.

And orders denying motions to remand are interlocutory, so they typically cannot be reviewed until a final judgment is entered in the case, often years after the jurisdictional question is first raised.

We urge some court to deny a motion to remand and then certify the jurisdictional question for interlocutory appeal, which would let an appellate court weigh in on the question and give trial judges (and litigants) some much-needed guidance. How many hundreds of thousands of dollars of legal fees, and how much court time, must society spend before it learns the answer to what should be a simple threshold jurisdictional question that decides only the court in which a case will be heard?

Monday, September 15, 2008

We're Not Heartless, Jeremy!

Everybody's a critic.

We published a post last month analyzing Gunvalson v. PTC Therapeutics (here's a link), in which a federal judge ordered a company to provide an experimental drug to a dying patient who did not qualify for a clinical trial. We wrote:

"Basically, a drug company would be crazy to open a compassionate use program for just one person – nor could one person afford to pay the 'cost' of all the overhead compassionate use requires.

"The court dismissed these cost considerations as 'trivial.' Slip op. at 8. They’re not."

And what do we hear in response?

One of Herrmann's kids -- we'll call him "Jeremy," because, well, that's his name -- accused us of being heartless brutes.

Jeremy said that drug companies have a ton of money, and sick people usually don't. He said that the drug company possessed the only chance for a person to live. He said that he'd watched the movie "Lorenzo's Oil" in high school and, in that movie, parents had to fight to convince someone to produce the product that ultimately saved their child's life and the lives of many others.

How could the two of us be so heartless?

Where's our moral compass?

How could I be his dad?


Buck up, kid. You're stuck with me.


But we're not heartless; we're realists. (Maybe there's a thin line there.)

(Hey, Jere! It gets even worse -- at least from your perspective. PTC has hired Bexis' firm to handle the appeal in this case, so Bexis now has a conflict of interest. He couldn't participate in drafting this post; Dad wrote it alone.)

Here's why courts should not distort the "compassionate use" regulations by compelling companies to give experimental drugs to anyone those drugs might theoretically help.

First, by definition, the drug that Judge Martini ordered PTC to provide to Gunvalson was not proven to be either safe or effective. It might save him; it might kill him. No one knows -- that's what "experimental" means.

Yeah, says Jeremy, but it's the only chance Gunvalson's got. Surely PTC should give Gunvalson his one chance to survive.

(Shoot -- if it were about 15 years ago, at this point I'd tell the kid to be quiet and go talk to his mother.)

Look: Drug companies develop lots of molecules that could conceivably cure diseases. Those companies are in the business of developing those molecules, and let's hope the companies succeed. But before the drugs can be sold, they must be tested and proven safe and effective. Companies can't be required to give experimental drugs to anyone who has no other hope, because that regime would effectively put drugs on the market (free of charge) before the drugs were ready for prime time.

It's not only drug companies that face questions like this one. Should a physician be required to treat any sick person who comes to his or her door? Should an insurance company be required to pay for a treatment that isn't covered by an insurance policy? Should Bill Gates or Warren Buffet be legally obligated to step in and help people who are in distress and might be helped by an existing, but terribly expensive, medical treatment?

You and I could probably debate the morality of different responses in those situations, but there's not much room to quibble about the law. In the United States, the law respects private property and certain notions of liberty; at the edges, those values may bump up against generalized notions of "always doing what's right."

We know that capitalism seems heartless to the young. People are starving overseas. Heck, people are starving right here in the United States -- but we don't confiscate the property of the rich to save the poor. Whether you approve of capitalism or not, it's created a dynamic economy in this country, and that economy develops a lot of new products (including drugs) in part because of the profit motive.

The law makes similar judgments in other situations, too. Suppose you see someone drowning in a lake. Do you have a duty to rescue him? Your heart may say yes, but the law generally says no. (Here's a link to the "duty to rescue" page of that leading legal resource for your generation -- Wikipedia.)

The absence of a legal "duty to rescue" is not without controversy. But here's how a legal scholar justifies that rule (and a link to the abstract of Alan Calnan's article at SSRN):

"To most people, the no-duty-to-rescue rule seems clearly at odds with the concept of moral fault. Instinctively, it feels wrong to stand idly by as another human being suffers harm. This instinct could be rooted in a number of possible sources. Many societies embrace values of benevolence and altruism. Most religions preach good samaritanism and denounce selfishness. Whatever their source, our sensibilities tell us that one who fails to rescue others is morally deficient.

"Because of its apparent immorality, the no-duty-to-rescue rule also seems unreasonable. However, as I will attempt to show in this brief essay, such a conclusion is by no means inescapable. . . . First, I shall demonstrate that the no-duty-to-rescue rule is actually a reasonable exception to a broader principle of cooperation, which forces people to make sacrifices for parties who take affirmative measures to defend their interests in emergencies. Second, I show how the rule satisfies the reasonable requirements of distributive and corrective justice, deftly balancing the interests of the parties and the state, while maintaining the integrity of the liberal value system of which it is a part."

Got that, kid? (I love how those guys write.)

Ultimately, if companies were required to provide drugs, free of charge, to anyone the drugs might theoretically help, then companies would become much more selective in the molecules they chose to develop.

Companies would also incur huge costs to supply drugs to anyone who might theoretically benefit from them, and that money has to come from somewhere -- probably the drug companies' research and development programs. By helping Gunvalson, you'd be using resources that might save more people if they were put to some other use.

Congress (and the FDA) has balanced these interests, created guidelines for compassionate use programs in appropriate situations, and written those guidelines into law.

If courts enforce those rules (including in ways that sometimes seem heartless), then companies will produce new medicines and help an awful lot of people. If courts distort those rules, then companies will be discouraged (or disabled) from producing new medicines, and society as a whole will suffer.

If society as a whole doesn't like the balance that the laws strike, then society should pass new laws. Maybe the government could pay for a program to provide experimental drugs to people who might benefit from them. (But then the taxpayers would start to squeal; it's easier for a court just to take the money from a drug company.)

Those truths may not tug at your heartstrings, but, with luck, the drugs those policies produce will cure what ails you if you get sick.

You're actually a pretty good sounding board for the other side of this issue, young man. The plaintiff's side of Gunvalson -- and every other case that resembles it -- is emotionally (if not legally) appealing, which is why Bexis and I are concerned that courts will be tempted to adopt it.

I'm proud of you for raising the issue.

(But what the heck are you doing reading this blog, anyway? Go back to studying.)

Is The FDA Really So Weak?

We've grown accustomed to hearing complaints that the Food and Drug Administration is powerless. "How can the Agency possibly cause companies to act responsibly?," critics (and plaintiffs' counsel) ask. Historically, the FDA lacked the power to order product recalls, and its authority is limited in other ways. Companies, we're told, run roughshod over the Agency.

We've always known (from personal experience and things we've heard in the industry) that this wasn't true, but it hasn't always been easy to find authority in the legal literature to belie these claims.

Now, there is.

If you're ever in need of helpful authority, take a look at Lars Noah, "The Little Agency That Could (Act With Indifferernce to Constitutional and Statutory Strictures)," 93 Cornell L. Rev. 901 (2008).

We offer these two tasty morsels from Professor Noah's work, just to whet your appetite:

"Congress originally granted the FDA only limited and procedurally cumbersome mechanisms for securing compliance with the statute: product seizures, injunctions, and criminal penalties. The agency has, however, deployed these tools in creative ways: for instance, the FDA may threaten to impose a sanction or withhold a benefit in the hopes of encouraging 'voluntary' compliance with a request that the agency could not impose directly on a regulated entity. . . .

"Such 'arm-twisting' succeeds, and evades judicial or other scrutiny, in part because companies in pervasively regulated industries believe that they cannot afford to resist agency demands."

Id. at 906.

Or how about this?

"The FDA generally lacks the statutory authority to order a recall of potentially dangerous products subject to its regulatory jurisdiction. . . . [T]he FDA generally has resisted proposals to provide it with explicit recall authority. Instead, the agency prefers encouraging voluntary recalls . . . .

"This strategy has succeeded because firms know that a failure to cooperate with an agency request would invite more draconian enforcement measures authorized by statute."

Id. at 908-09.

Needless to say, both of the preceding excerpts omit the usual detailed footnotes that one finds in scholarly work.

The next time your opponent is shedding crocodile tears about the FDA's lack of authority, use Noah's article to wipe away those tears. The FDA has plenty of power to cause industry to obey its "requests."

Thursday, September 11, 2008

Holding The Line On The Duty To Warn

Having been in this business (defending pharmaceutical product liability) for a long time now, we’ve learned that what happens to prescribing doctors often comes back to haunt our clients. Nowhere is that better illustrated than with the thankfully discredited theory of regulatory informed consent, which since we’ve already discussed it, here, we won’t go into again in any depth.

You can stop cheering now.

That theory – that the docs had to tell their patients about off-label use – was ginned up for the sole purpose of inducing prescribers to turn around and point the finger at our clients for supposedly encouraging the off-label use in the first place.

We ended up learning more about the law of informed consent than we had ever hoped (or feared) was possible. But Herrmann won that issue when it first arose in the Ohio state court system, and Bexis got cited by the U.S. Supreme Court, so it sort of evened out.

From that experience, and others, we’ve learned to keep up, at least generally, on what’s happening in medical malpractice litigation. If some new theory comes along, and the plaintiffs start hammering the docs with it, sooner or later the plaintiffs (and maybe the docs) are going to turn around and try out their new favorite toy on us.

Just what we need.

And that’s exactly what happened last week in Gourdine v. Crews, ___ A.2d ___, 2008 WL 4068177 (Md. Sept. 4, 2008) (PDF copy here). Thankfully the Court of Appeals of Maryland (which we’ll call the “Supreme Court” from now on because it’s less confusing to everyone not steeped in Maryland terminology) was having none of the new, expansive theory that the plaintiffs were peddling. If plaintiffs had gotten their way, pharmaceutical companies would have been liable, not just to the people who use their drugs, but potentially to anybody.

Here’s what went down in Gourdine. Defendant pharma company made a drug (or possibly a biologic) used by diabetics to maintain steady blood sugar levels. The drug – allegedly accompanied by defective warnings – was used by a patient who wasn’t the plaintiff. While driving a car, the patient lost consciousness, allegedly from low blood sugar. There was an accident, and in that accident the plaintiff’s decedent (who, again for simplicity’s sake, we’ll call “plaintiff”), who was the driver of the other car, was killed. Who gets sued? Why the deep-pocket pharma company, of course.

Now, the lower courts – admittedly in response to defense arguments – had taken the easy way out. They relied on the learned intermediary rule to hold that, because the defendant drug company had no duty to warn the patient directly, there obviously could be no broader duty to warn the public at large. See Gourdine v. Crews, 935 A.2d 1146, 1150 (Md. App. 2007), affirming, 2006 WL 5277412 (Md. Cir. June 28, 2006).

The Supreme Court, which had only recently addressed the rule (Rite Aid Corp. v. Levy-Gray, 894 A.2d 563, 579 (Md. 2006) (“we adopted the ‘learned intermediary’ doctrine”)), found some problems with dismissing the case on this rationale. There was a factual problem. The learned intermediary rule only applies to prescription drugs. Both prescription and OTC (“over the counter,” meaning no prescription required) versions of this particular drug existed. And of course there was a factual dispute as to which version the patient had been using. See 2008 WL 4068177, at *1 nn. 5-6. There was also a legal hurdle – the plaintiff had conceded that there was no duty to warn the patient directly, and essentially didn’t care how the information would be transmitted to the product-using driver. See Id. at *1 n.2. Therefore, the dispositive question, as most of the Supreme Court saw it, wasn’t the learned intermediary rule at all, but rather the general scope of the duty to warn in product liability. Id. at *10. Cf. Id. at *19-21 (concurring opinion would affirm dismissal of the claims under the learned intermediary rule).

Oh goodie. We don’t see many pure no-duty-at-all cases in our line of work.

The plaintiff made two arguments: First, she claimed that, because it was “foreseeable” that a user of a diabetes drug could lose consciousness while driving if improperly warned about a risk of low blood sugar, she had a claim in negligence. Second, she argued that because she was injured by somebody else’s use of the product, she had a claim for “bystander” product liability.

The Supreme Court thankfully disagreed with both these arguments. We say “thankfully” because, if either of them were adopted, prescription drug makers would be exposed to a whole new wave of liability to various and sundry non-product users. Plaintiff was arguing for liability to “members of the motoring public,” 2008 WL 4068177, at *6, and in every subsequent case a duty would allegedly be owed to some similarly broad and amorphous group of non-users.

As to foreseeability, the court held: (1) that negligence and strict liability weren’t all that different and shared “duty” as an essential element, id. at *9-10; and (2) that the scope of duty in both negligence and strict liability actions was narrower than mere foreseeability. Id. at *11-12. That’s good because, with 20-20 hindsight, essentially anything can be described as “foreseeable.” Rather, “[d]uty requires a close or direct effect of the tortfeasor’s conduct on the injured party.” Id. at *12. Duty was constrained by “policy” considerations:


As a practical matter, legal responsibility must be limited to those causes which are so closely connected with the result and of such significance that the law is justified in imposing liability. Some boundary must be set to liability for the consequences of any act, upon the basis of some social idea of justice or policy.

Id. (citation and quotation marks omitted).

This is where the medical malpractice cases come in. All over the country, plaintiffs have for years been trying to tag doctors with professional duties to persons who aren’t their patients. They had tried that in Maryland and lost, in a case called Dehn v. Edgecombe, 865 A.2d 603 (Md. 2005). A doctor who performed a failed vasectomy wasn’t liable as a matter of law to the pregnant wife of the patient. Of course the claimed injury was “foreseeable,” but that wasn’t enough. “Policy” intervened. The court in Dehn refused to extend malpractice liability beyond the physician/patient relationship to essentially anybody with whom a plaintiff might have sex. 865 A.2d at 615.

The same policy rationale can be applied to preclude a drug manufacturer from being liable to anybody whom a user of its drug might injure due to some behavior linked to the effects of the drug. And that’s basically why the court in Gourdine refused to impose liability:

In the case sub judice [a fancy way of saying "this case"], there was no direct connection between [the defendant drug manufacturer’s] warnings, or the alleged lack thereof, and [plaintiff’s] injury. In fact, there was no contact between [the defendant] and [plaintiff] whatsoever. To impose the requested duty. . .would expand traditional tort concepts beyond manageable bounds, because such duty could apply to all individuals who could have been affected by [the patient] after her ingestion of the drugs. Essentially, [defendant] would owe a duty to the world, an indeterminate class of people, for which we have resisted the establishment of duties of care.


2008 WL 4068177, at *14 (citation and quotation marks omitted).

So from us here at Drug and Device Law, here’s a heart-felt thanks to our colleagues in the medical malpractice defense bar for being at the point of the spear on this issue. There’s more linking our respective clients than just the learned intermediary rule.

Getting back to Gourdine, the court next addressed the “bystander” issue, something we’re accustomed to thinking of as more of a strict liability than a negligence concept. The court didn’t, though. It concluded that bystander liability, as well, was a matter of “foreseeability” limited by policy. The court found a meaningful policy limitation in the fact that, in all prior bystander cases, the product itself had directly caused the injury. 2008 WL 4068177, at *14. With prescription drugs, however, the claimed “bystander” neither took the drug nor read any drug warnings. Id. at *14-15. All the plaintiff could come back with was more non-patient malpractice cases – from jurisdictions that used pure foreseeability to determine duty. Id. at *15. After Dehn, those cases were inapposite. Id.

So a second expression of thanks is due. The malpractice bar plowed this furrow first, too – even though they didn’t know it at the time.

Because the plaintiffs were asserting novel theories of liability, there were other interesting issues floating around in Gourdine. There was a preemption question, which the Supreme Court didn’t reach. See 2008 WL 4068177, at *1 n.4. But for that reason, you’ll find the trial court decision in Gourdine on our drug preemption scorecard.

Another really interesting issue the court did discuss was the attempted assertion of a negligence per se claim based on alleged violations of the Food, Drug and Cosmetic Act (“FDCA”). We’ve blogged before on the many reasons we believe that FDCA-based negligence per se claims are bogus, and we’re pleased (and relieved) to report that the Maryland Supreme Court agrees with us, at least on some points.

One of the limitations on negligence per se is the requirement that the supposedly violated statute establish a “specific” duty. That’s because there’s no good reason to set aside the ordinary negligence standard for something that’s just as vague as the common-law concept of “reasonable care.” A related limitation is that the statute in question, to qualify for negligence per se, must evince an intent to protect some particular class of persons – not the general public as a whole. 2008 WL 4068177, at *17.

In Gourdine, since the plaintiff was asserting a warning based claim, she relied upon the following FDCA provisions and FDA regulations: 21 U.S.C. §331(a)-(b) (prohibiting “adulteration” and “misbranding”); 21 U.S.C. §352(a) (imposing “false or misleading in any particular” standard for misbranding); 21 C.F.R. §201.56(b) (“labeling shall be informative and accurate” and not “false or misleading in any particular”); 21 C.F.R. §201.57(f)(2) (specifying contents of labeling); 21 C.F.R. §202.1(e)(5)(ii)-(iii) (extending “false or misleading” standard to advertising; adding “fair balance” requirement).

When we look at that list, we sit up and take notice. The adulteration/misbranding sections have been the most commonly invoked basis for FDCA-based negligence per se.

Not in Maryland. The court held that none of these sections could support negligence per se because they were too general to constitute obligations owed to any group other than the general public:


These statutes and regulations, however, are framed to protect the public in general, and, as we have heretofore stated, a statutory obligation which runs to everyone in general and no one in particular cannot impose a duty between two parties.

2008 WL 4068177, at *18 (citation and quotation marks omitted).

So we can move Maryland into our list of jurisdictions hostile to FDCA-based negligence per se. If we win preemption in Levine, this could be pretty important in dealing with any "parallel violation" claims that escape preemption.

Finally, the plaintiff asserted a fraud claim. The court blew out that cause of action as well. Gourdine imposed a tight limitation on fraud claims that required direct dealings between the plaintiff and the defendant:

Clearly, in order to sustain a cause of action based on fraud or deceit, the defendant must have made a false representation to the person defrauded. . . . In the case sub judice, [the defendant drug manufacturer] did not owe a duty to [plaintiff]; moreover, [plaintiff] was not a party to the alleged misrepresentations made by [defendant] to [the patient]. As a result, the Circuit Court did not err in entering summary judgment.


2008 WL 4068177, at *19 (footnote omitted) (emphasis original). The omitted footnote rejected an argument that Maryland law should follow Restatement (Second) of Torts §310-311 and allow indirect fraud.

While there’s a bit of “the bold face giveth and the fine print taketh away” quality to this part of Gourdine, our clients now have an argument that, in a real learned intermediary case where there are no direct-to-patient communications, fraud claims will not lie.

So Gourdine is one of those cases that we want to describe as a “big win” until we ask ourselves why?

It’s only “big” in the sense that our side prevented the adoption of an utterly unprecedented and wildly expansive theory of liability. While the decision puts a roadblock in the way of the other side’s never-ending quest to hold everybody liable to anybody for everything, after Gourdine our clients are essentially no better off than where they started – they’re just not a whole lot worse off. Our side has enough to worry about with liability to people who actually use its products. Opening up liability to the general public would amount to imposing national health insurance by contingent fee.

So while we’re grateful for the ruling in Gourdine – and, in particular, that the bottom line was unanimous – at the end of the day, we have to say that the opposite result simply would be too awful to contemplate.

To Arms!

This post, at TortDeform, tells us that a consortium of plaintiffs' firms will now be paying law students to work the new media -- blogs, forums, Facebook, Twitter, and the like -- in favor of plaintiff's-side causes:

"Initial duties will be to assist the firms with their public relations campaigns through blogging on the InjuryBoard.com blog network. A major goal of the coordinated effort by these firms is to educate the public on the importance of the civil justice system and why protecting the right to a jury trial is paramount. The firms need assistance from law students familiar with online social networking in general (forums, Facebook, LinkedIn, Twitter, etc) and the legal blogosphere in particular."

We don't know if there's any similar effort on the defense side, but we felt compelled to let the world know that this is happening.

Hat tip to Point of Law.