We knew we were picking on a tough bunch when we decided yesterday to defend the Twombly/Iqbal pleading standard against the onslaught of criticism from academia.
The scholars may disagree with us, but they haven't tried to hide our argument.
We welcome new readers who have joined us through links to our Twombly/Iqbal post recently created at the Civil Procedure Prof Blog, Mass Tort Litigation Blog (here and here), Administrative Law Prof Blog, and Workplace Prof Blog.
(We wouldn't object if one academic could find it in his or her heart to agree with us. But, short of that, we'll settle for the new visitors. Welcome aboard!)
Friday, May 29, 2009
Tort Reform in Oklahoma and Ysbrand
It's already been reported elsewhere that significant tort reform was recently passed in Oklahoma, along with some of the details. But when someone mentions Oklahoma to us in the context of litigation - we free associate "Ysbrand," as in Ysbrand v. DaimlerChrysler Corp., 81 P.3d 618 (Okla. 2003), which is the leading (and nearly only) case in the country to adopt "principal place of business" as a choice of law principle in class action cases. The Ysbrand ruling has made Oklahoma a magnet for all sorts of multi-state class actions that couldn't be certified anywhere else due to manageability problems created by the applicability of multiple state laws.
Even the ALI's Principles of the Law of Aggregate Litigation, hardly a conservative source, characterize Ysbrand as an "outlier" case on this point. PLAL §2.06, Reporters' Notes to comment c.
So we wondered if the recent tort reform addressed Ysbrand. Unfortunately, the posts we read, while tantalizing, didn't say specifically. So we went looking for a copy of the new legislation (called House Bill 1603) itself to see for ourselves. We think we've found it, here . Lo and behold, the legislation does address multi-state class actions – by essentially prohibiting them in with the following language:
It doesn't deal with the choice of law question directly, but the prohibition on participation by non-residents in Oklahoma class actions achieves the same result. So unless declared unconstitutional, it looks like Ysbrand-based multi-state class actions are history in Oklahoma.
There's lots more interesting stuff in the bill, such as a removing plaintiffs' choice of forum from forum non consideration, a 24-month grace period from pre-judgement interest in personal injury cases, certificates of merit in malpractice cases, an appeal bond cap, no appeal bonds for punitive damages, interlocutory appeals of class action determinations, frivolous lawsuit provisions, broader summary judgment procedure, expert witness disclosure, but correcting the Ysbrand problem was something we're interested in and we hadn't seen specifically discussed.
Even the ALI's Principles of the Law of Aggregate Litigation, hardly a conservative source, characterize Ysbrand as an "outlier" case on this point. PLAL §2.06, Reporters' Notes to comment c.
So we wondered if the recent tort reform addressed Ysbrand. Unfortunately, the posts we read, while tantalizing, didn't say specifically. So we went looking for a copy of the new legislation (called House Bill 1603) itself to see for ourselves. We think we've found it, here . Lo and behold, the legislation does address multi-state class actions – by essentially prohibiting them in with the following language:
Section 16(D).For actions filed after November 1, 2009, class membership shall be limited, unless otherwise agreed to by the defendant, only to individuals or entities who are:
a. residents of this state, or
b. nonresidents of this state who:
(1) own an interest in property located in this state where the property is relevant to the class action, or
(2) have a significant portion of the nonresident’s cause of action arising from conduct occurring within the state;
It doesn't deal with the choice of law question directly, but the prohibition on participation by non-residents in Oklahoma class actions achieves the same result. So unless declared unconstitutional, it looks like Ysbrand-based multi-state class actions are history in Oklahoma.
There's lots more interesting stuff in the bill, such as a removing plaintiffs' choice of forum from forum non consideration, a 24-month grace period from pre-judgement interest in personal injury cases, certificates of merit in malpractice cases, an appeal bond cap, no appeal bonds for punitive damages, interlocutory appeals of class action determinations, frivolous lawsuit provisions, broader summary judgment procedure, expert witness disclosure, but correcting the Ysbrand problem was something we're interested in and we hadn't seen specifically discussed.
Thursday, May 28, 2009
In Praise Of “Short And Plain” Pleadings After Twombly And Iqbal
The other day we – allegedly belatedly – posted about the Supreme Court’s decision in Ashcroft v. Iqbal, 2009 WL 1361536 (U.S. May 18, 2009). We say “allegedly” because, whilst Herrmann can blame being out of pocket if he wants, Bexis (although likewise at ALI) doesn’t rely upon that excuse. He believed all along that the prohibition of “anything goes” pleading in Bell Atlantic Corp. v. Twombly, 550 U.S. 544 (2007), would apply across the litigation board, and thus he didn’t think that Iqbal was all that big of a deal.
Yeah, we know what you’re thinking. If one of you thinks the issue’s stale, and the other thinks it’s self-evident, why are you bothering with it again?
Well, it turns out (we looked) that Judge Sotomayor has never decided a product liability case involving prescription drugs or medical devices, so one idea for today’s blog post went down the drain.
But more important than that is what we observed in our earlier post on Iqbal. While the other side’s apologists have been out in force gnashing their teeth and rending their clothes, support (at least in the blogosphere) has been sparse for what’s really a quite practical and common-sense pair of decisions. That’s something we can do something about.
We say “pair” because the other side’s complaints are at least as much about Twombly as they are about Iqbal. Since the federal rules of civil procedure are (unless stated otherwise) transubstantive – a law-professor-type word meaning that the same rules apply regardless of the substantive law involved – everything goes back to the original 1937 language of Rule 8, which governs pleadings. For seventy years, Rule 8 has stated that any complaint “must contain . . . a short and plain statement of the claim showing that the pleader is entitled to relief.”
The relevant language – “short and plain” – says nothing about dispensing with factual support for the relevant allegations. How can a plaintiff be “entitled to relief” if no facts support the allegations? Nor does Rule 8 even include the term “notice pleading,” a phrased often used as if it were some sort of antidote to the need for facts to bolster mere allegations.
Twenty years later, the Supreme Court, in Conley v. Gibson, 355 U.S. 41 (1957), interpreted Rule 8 as precluding the dismissal of a complaint for failure to state a claim (meaning that the complaint was inadequately pleaded on its face) “unless it appears beyond doubt that the plaintiff can prove no set of facts in support of his claim which would entitle him to relief.” Id. at 46 (citing three circuit courts, but no Supreme Court precedent).
Basically, the capacious Conley standard allowed (among other things) plaintiffs to file complaints that contained nothing but legal conclusions – and then, when challenged, they could ask the court to imagine facts not found anywhere in the complaint in order to defeat a motion to dismiss for failure to state a claim.
The Conley gloss on Rule 8 effectively neutered the provisions of Rule 12(b)(6), that provided for immediate, pre-discovery dismissal of inadequately pleaded complaints.
Well, what’s so bad about that?
Maybe not all that much in 1957, but that was before the advent of modern discovery practice, which came about as a result of other rules changes that began in 1966.
We’re not here to rehash our gripes about discovery (that would take at least a dozen posts), but suffice it to say that the change to unfettered discovery – once plaintiffs learned how to weaponize it – multiplied the cost of litigating cases many times over. In the kind of mass torts that we do, discovery probably amounts to maybe 80% of the effort and 90% of the cost involved in the litigation.
And now electronic discovery, which has become a favorite MDL playground, only multiplies the discovery expense further.
Uncontrolled discovery is a huge part of why these days charges for litigation expenses can make the balance sheets of large, otherwise profitable companies show losses (Don’t believe us? Just google “litigation charge” (we did) and take a look at the results).
The only way to avoid discovery in federal court (the same is true in the states, but this is a federal rules issue) – other than to settle – is to win a motion to dismiss, the same motion that the Conley interpretation of Rule 8 effectively eviscerated.
Conley was the law for fifty years before Twombly came along and gave it a well deserved, if unreasonably delayed, burial.
Twombly involved a conspiracy claim in the anti-trust (restraints of trade) context. It was also a class action – and for triple damages – precisely the sort of litigation that’s large enough to warrant the scorched earth application of all the most expensive and abusive discovery techniques.
What did the plaintiff allege in Twombly as the basis for setting the clanking machinery of modern litigation into motion?
The “ultimate allegation” in Twombly didn’t even purport to be based on any fact. Instead “Plaintiffs allege upon information and belief that [defendants] have entered into a contract, combination or conspiracy to prevent competitive entry.” 550 U.S. at 551.
The key phrase in that sentence is “information and belief.” That’s a fancy way of saying “I don’t know if this is true, but somebody else (usually the person’s lawyer) said it’s true and I believe it.” As the on-line definitions all make clear, “information and belief” is a way to qualify an oath so that, if the statement is untrue, it’s not perjury. It is,
Legaltech on demand.
And in Twombly, that’s all the plaintiff offered as a reason for forcing the defendants to endure millions of dollars of discovery expense – an allegation, not known to be true, that was only one step removed from perjury.
Given the realities modern litigation, it’s no wonder that the Supreme Court retreated from the old Conley any-imaginable-set-of-facts standard. And that’s exactly what the Court held in Twombly:
It’s all about the crushing cost of feeding the litigation beast. With modern, virtually untrammeled discovery, an interpretation of Rule 8 that allowed claims to proceed to that stage, even where they were facially devoid of factual basis, was an expensive luxury that the overburdened legal system could no longer afford. The Court thus rejected the apologists for endless litigation:
550 U.S. at 560 n.6 (emphasis added) (this is a quote from an article by Judge Easterbrook).
We know from hard experience that the discovery expense in pharmaceutical mass torts is no less – and the standard of pleading no more – than in Twombly. Thus, we had little doubt that Twombly would come to our neighborhood. For instance, we’ve seen more complaints than we can count that allege that the defendant “violated FDA regulations” without stating either what regulation was violated or what the defendant did that allegedly broke the law. That’s what Twombly puts an end to – fishing expeditions – discovery into “any set of facts” that could fit within the bare-bones violation that was pleaded.
Thus Iqbal only confirmed that the federal rules impose a single, transubstantive, set of procedures, which we already knew. Twombly “was based on our interpretation and application of Rule 8. That Rule in turn governs the pleading standard ‘in all civil actions and proceedings in the United States district courts.’” 2009 WL 1361536, at *16 (citations omitted). Even the four dissenters in Iqbal do not dispute the general applicability of Twombly to all types of litigation. Rather, they dispute whether a defense concession as to the substantive law caused the plaintiff’s allegations to satisfy Twombly. 2009 WL 1361536, at *23-24.
Iqbal involved a prison inmate’s allegations that certain government defendants, entitled to qualified immunity from suit, deprived him of constitutional rights by discriminating against him on religious grounds.
According to the Iqbal majority’s more limited view of that defense concession, as in Twombly the plaintiff didn’t plead any actual facts – at least in support of the discrimination aspect of the case. All the plaintiff alleged was that the defendants “knew of, condoned, and willfully and maliciously agreed to subject [him] to harsh conditions of confinement as a matter of policy, solely on account of [his] religion, race, and/or national origin and for no legitimate penological interest.” 2009 WL 1361536, at *14. That allegation was, the majority concluded, “nothing more than a formulaic recitation of the elements of a constitutional discrimination claim.” Id. (quotation marks omitted). Conclusory allegations don’t cut the mustard any longer – not in antitrust, and not anywhere else:
Id. (quote from Twombly omitted – we've quoted it enough).
What’s more, the four Iqbal dissenters “agree that the two allegations selected by the majority, standing alone, do not state a plausible entitlement to relief for unconstitutional discrimination,” id. at *23, but concluded that a defense concession obviated the need to plead the remaining elements. Id. at *25.
In essence, all nine justices agreed in Iqbal that Twombly precludes “bare assertions” and “formulaic recitation of the elements” as being insufficient to state a claim, and further that such allegations do not justify proceeding to discovery. Nobody was disputing the Twombly standard itself any longer – the justices simply divided over whether or not this particular complaint is conclusory in light of the defendants’ concession.
So, then, what of the arguments made by the defenders of anything goes pleading? Well, one thing we hear is that stricter pleading requirements will deter meritorious suits.
We don’t think so.
First of all, this is the same allegation of “Type II” (false negative) error that plaintiffs strenuously reject when we argue that litigation (the aforementioned hundred-million-dollar “litigation charges”) deters the development of new and improved drugs and medical devices. To care more about deterrents to lawsuits than deterrents to potentially lifesaving medical advances suggests misplaced priorities, so that argument has something of a “doth protest too much” air about it – particularly in the sandbox where we play.
But more importantly, we believe that the hallmark of a meritorious case is that it’s factually supported from the get go. Maybe at the outset it’s “only” a product liability case, and not a far more involved negligence per se or conspiracy case, but it’s a case that warrants resort to discovery. A meritorious case is one with an identifiable aspect of a warning that’s arguably inadequate, that has known medical consequences attributable to the alleged defect, and as a result of those consequences, there’s an actual injury. That’s the kind of case that’s entitled to accrue the expense of discovery. If things then turn up that indicate something more afoot, the plaintiff can seek to amend the complaint to allege that something more.
The meritorious case, we think, doesn’t have any Twombly problems to start with – except maybe around the edges should the plaintiff overplead.
A meritorious case is not one where the plaintiff pleads that the product was “defectively designed” and leaves it at that.
Another argument we’ve read is that Twombly and Iqbal are contrary to the forms that are attached to the rules. Those forms “suffice under these rules and illustrate the simplicity and brevity that these rules contemplate.” Fed. R. Civ. P. 84. They “are sufficient to withstand attack under the rules under which they are drawn, and . . . the practitioner using them may rely on them to that extent.” 1946 Comment to Rule 84.
OK – and the forms don’t seem to have been updated since 1946 – even before Conley. There is, for example, a simple three-paragraph complaint (Form 10) for negligence involving a two-car accident. Does anybody (except maybe pro se litigants) actually use this form? We don't think we've ever seen a three paragraph complaint about anything.
There’s certainly no product liability form complaint, no conspiracy form, no negligence per se form, no multi-count complaint of any sort – nothing remotely resembling catch-all, kitchen-sink 25-count complaints of the sort we see today. The forms that come after the rules are simple. They were designed to be that way. They plead things that happened at one particular time and one particular place.
In short, they plead things the way law was practiced (maybe) before the 1966 liberalization of discovery.
Rely on them “to that extent,” as the comment to Rule 84 states. But don’t rely upon them to think it’s proper to plead a 7-year conspiracy (Twombly) or a constitutional violation by “numerous” people (Iqbal) without facts that make the allegations hold together in some plausible fashion. Even these 1946-era forms require “dates” and “places.” In our neck of the woods, for example, if somebody’s going to accuse our clients of “violating” an FDA regulation, s/he had better: (1) tell us what it is (Form 7(b)), tell us who did it and when (all of the forms), and describe how the violation occurred (Form 14(5)).
Other critics trot out the Seventh Amendment right to jury trial. That’s been tried – and failed – as an objection to practically every procedural device that results in dismissal of an action before trial. Summary judgment, for example, was upheld against Seventh Amendment challenge ninety years ago by Justice Brandeis. See Pease v. Rathbun-Jones Engineering Co., 243 U.S. 273, 279-79 (1917). The Seventh Amendment wasn’t even an issue when summary judgment practice was liberalized in Celotex Corp. v. Catrett, 477 U.S. 317 (1986).
And it’s not just summary judgment. “[M]any procedural devices developed since 1791 that have diminished the civil jury’s historic domain have been found not to be inconsistent with the Seventh Amendment.” Parklane Hosiery Co., Inc. v. Shore, 439 U.S. 322, 336 (1979) (discussing collateral estoppel). “In numerous contexts, gatekeeping judicial determinations prevent submission of claims to a jury’s judgment without violating the Seventh Amendment.” Tellabs, Inc. v. Makor Issues & Rights, Ltd., 127 S. Ct. 2499, 2512 (2007) (citing Daubert, judgment n.o.v., and summary judgment). In particular, both the courts and Congress have “power to prescribe what must be pleaded to state the claim.” Id. (discussing heightened pleading rules for fraud). Moreover, the federal courts had much more onerous pleading requirements for 150 years before the Federal Rules were adopted. None of those was declared unconstitutional under the Seventh Amendment.
Notably, there were dissents in both Twombly and Iqbal. Not even the dissenting justices raised the Seventh Amendment jury trial right as a basis for disagreeing with the majority. That’s as good a measure as any of the amendment’s inapplicability.
Finally, we’ve also looked at Swierkiewicz v. Sorema N. A., 534 U.S. 506 (2002), which some of the critics mention. In part Swierkiewicz is based on Conley, which the Court cited for the proposition that Rule 8 “relies on liberal discovery rules and summary judgment motions to define disputed facts and issues and to dispose of unmeritorious claims.” 534 U.S. at 512. Well, if Twombly settled anything, it’s that. All the block quotes we’ve set out above (there was method to our madness) establish that liberalized discovery is a reason for tougher, not looser, pleading requirements. So to that extent, we have to conclude (and we’re not alone) that Swierkiewicz was impliedly overruled. After all, that opinion cited Conley four separate times, and Twombly (officially rendered transubstantive by Iqbal) firmly relegated Conley to the dustbin of legal history.
That the legal rationale of Swierkiewicz is now impaired doesn’t mean that it’s holding – something about pleading a prima facie case in Title VII cases – is necessarily reversed. For all we know, a requirement to plead such a case may well exceed anything that Twombly requires (a unanimous Court in Swierkiewicz labeled that “evidentiary”). All we can say is that plaintiffs can no longer use Conley as an easy way out when they want to allege everything, but plead nothing.
What none of Twombly/Iqbal’s critics address – probably because nobody likes to look foolish denying the obvious – are the fundamental economic premises that drove the Court to overrule the extraordinary liberal gloss that Conley put on Rule 8 a half-century ago. Liberal discovery is what killed liberal pleading. That’s pretty obvious from Twombly. Critics of more rigorous interpretations of Rule 8’s “short and plain” pleading standard aren’t likely to get anywhere as long as they completely ignore or at best give short shrift to the elephant that’s in the room.
Yeah, we know what you’re thinking. If one of you thinks the issue’s stale, and the other thinks it’s self-evident, why are you bothering with it again?
Well, it turns out (we looked) that Judge Sotomayor has never decided a product liability case involving prescription drugs or medical devices, so one idea for today’s blog post went down the drain.
But more important than that is what we observed in our earlier post on Iqbal. While the other side’s apologists have been out in force gnashing their teeth and rending their clothes, support (at least in the blogosphere) has been sparse for what’s really a quite practical and common-sense pair of decisions. That’s something we can do something about.
We say “pair” because the other side’s complaints are at least as much about Twombly as they are about Iqbal. Since the federal rules of civil procedure are (unless stated otherwise) transubstantive – a law-professor-type word meaning that the same rules apply regardless of the substantive law involved – everything goes back to the original 1937 language of Rule 8, which governs pleadings. For seventy years, Rule 8 has stated that any complaint “must contain . . . a short and plain statement of the claim showing that the pleader is entitled to relief.”
The relevant language – “short and plain” – says nothing about dispensing with factual support for the relevant allegations. How can a plaintiff be “entitled to relief” if no facts support the allegations? Nor does Rule 8 even include the term “notice pleading,” a phrased often used as if it were some sort of antidote to the need for facts to bolster mere allegations.
Twenty years later, the Supreme Court, in Conley v. Gibson, 355 U.S. 41 (1957), interpreted Rule 8 as precluding the dismissal of a complaint for failure to state a claim (meaning that the complaint was inadequately pleaded on its face) “unless it appears beyond doubt that the plaintiff can prove no set of facts in support of his claim which would entitle him to relief.” Id. at 46 (citing three circuit courts, but no Supreme Court precedent).
Basically, the capacious Conley standard allowed (among other things) plaintiffs to file complaints that contained nothing but legal conclusions – and then, when challenged, they could ask the court to imagine facts not found anywhere in the complaint in order to defeat a motion to dismiss for failure to state a claim.
The Conley gloss on Rule 8 effectively neutered the provisions of Rule 12(b)(6), that provided for immediate, pre-discovery dismissal of inadequately pleaded complaints.
Well, what’s so bad about that?
Maybe not all that much in 1957, but that was before the advent of modern discovery practice, which came about as a result of other rules changes that began in 1966.
We’re not here to rehash our gripes about discovery (that would take at least a dozen posts), but suffice it to say that the change to unfettered discovery – once plaintiffs learned how to weaponize it – multiplied the cost of litigating cases many times over. In the kind of mass torts that we do, discovery probably amounts to maybe 80% of the effort and 90% of the cost involved in the litigation.
And now electronic discovery, which has become a favorite MDL playground, only multiplies the discovery expense further.
Uncontrolled discovery is a huge part of why these days charges for litigation expenses can make the balance sheets of large, otherwise profitable companies show losses (Don’t believe us? Just google “litigation charge” (we did) and take a look at the results).
The only way to avoid discovery in federal court (the same is true in the states, but this is a federal rules issue) – other than to settle – is to win a motion to dismiss, the same motion that the Conley interpretation of Rule 8 effectively eviscerated.
Conley was the law for fifty years before Twombly came along and gave it a well deserved, if unreasonably delayed, burial.
Twombly involved a conspiracy claim in the anti-trust (restraints of trade) context. It was also a class action – and for triple damages – precisely the sort of litigation that’s large enough to warrant the scorched earth application of all the most expensive and abusive discovery techniques.
What did the plaintiff allege in Twombly as the basis for setting the clanking machinery of modern litigation into motion?
The “ultimate allegation” in Twombly didn’t even purport to be based on any fact. Instead “Plaintiffs allege upon information and belief that [defendants] have entered into a contract, combination or conspiracy to prevent competitive entry.” 550 U.S. at 551.
The key phrase in that sentence is “information and belief.” That’s a fancy way of saying “I don’t know if this is true, but somebody else (usually the person’s lawyer) said it’s true and I believe it.” As the on-line definitions all make clear, “information and belief” is a way to qualify an oath so that, if the statement is untrue, it’s not perjury. It is,
a phrase often used in legal pleadings (complaints and answers in a lawsuit), declarations under penalty of perjury, and affidavits under oath, in which the person making the statement or allegation qualifies it. In effect, he/she says: “I am only stating what I have been told, and I believe it.” This makes clear about which statements he/she does not have sure-fire, personal knowledge (perhaps it is just hearsay or surmise) and protects the maker of the statement from claims of outright falsehood or perjury.
Legaltech on demand.
And in Twombly, that’s all the plaintiff offered as a reason for forcing the defendants to endure millions of dollars of discovery expense – an allegation, not known to be true, that was only one step removed from perjury.
Given the realities modern litigation, it’s no wonder that the Supreme Court retreated from the old Conley any-imaginable-set-of-facts standard. And that’s exactly what the Court held in Twombly:
We alluded to the practical significance of the Rule 8 entitlement requirement . . . when we explained that something beyond the mere possibility of loss causation must be alleged, lest a plaintiff with a largely groundless claim be allowed to take up the time of a number of other people, with the right to do so representing an in terrorem increment of the settlement value. So, when the allegations in a complaint, however true, could not raise a claim of entitlement to relief, this basic deficiency should be exposed at the point of minimum expenditure of time and money by the parties and the court. Some threshold of plausibility must be crossed at the outset before a . . . case should be permitted to go into its inevitably costly and protracted discovery phase.550 U.S. 557-58 (lots of quotation marks and case citations omitted) (emphasis added).
Thus, it is one thing to be cautious before dismissing [a] complaint in advance of discovery, but quite another to forget that proceeding to antitrust discovery can be expensive. As we indicated over 20 years ago, a district court must retain the power to insist upon some specificity in pleading before allowing a potentially massive factual controversy to proceed.
It’s all about the crushing cost of feeding the litigation beast. With modern, virtually untrammeled discovery, an interpretation of Rule 8 that allowed claims to proceed to that stage, even where they were facially devoid of factual basis, was an expensive luxury that the overburdened legal system could no longer afford. The Court thus rejected the apologists for endless litigation:
It is no answer to say that a claim just shy of a plausible entitlement to relief can, if groundless, be weeded out early in the discovery process through careful case management, given the common lament that the success of judicial supervision in checking discovery abuse has been on the modest side. And it is self-evident that the problem of discovery abuse cannot be solved by careful scrutiny of evidence at the summary judgment stage, much less lucid instructions to juries, the threat of discovery expense will push cost-conscious defendants to settle even anemic cases before reaching those proceedings. Probably, then, it is only by taking care to require allegations that reach the level suggesting [an actionable claim] that we can hope to avoid the potentially enormous expense of discovery in cases with no reasonably founded hope that the discovery process will reveal relevant evidence to support a . . . claim.550 U.S. 559 (emphasis added). And again:
Given the system that we have, the hope of effective judicial supervision is slim: The timing is all wrong. The plaintiff files a sketchy complaint (the Rules of Civil Procedure discourage fulsome documents), and discovery is launched. A judicial officer does not know the details of the case the parties will present and in theory cannot know the details. Discovery is used to find the details. The judicial officer always knows less than the parties, and the parties themselves may not know very well where they are going or what they expect to find. A magistrate supervising discovery does not – cannot – know the expected productivity of a given request, because the nature of the requester's claim and the contents of the files (or head) of the adverse party are unknown. Judicial officers cannot measure the costs and benefits to the requester and so cannot isolate impositional requests. Requesters have no reason to disclose their own estimates because they gain from imposing costs on rivals (and may lose from an improvement in accuracy). The portions of the Rules of Civil Procedure calling on judges to trim back excessive demands, therefore, have been, and are doomed to be, hollow. We cannot prevent what we cannot detect; we cannot detect what we cannot define; we cannot define “abusive” discovery except in theory, because in practice we lack essential information.
550 U.S. at 560 n.6 (emphasis added) (this is a quote from an article by Judge Easterbrook).
We know from hard experience that the discovery expense in pharmaceutical mass torts is no less – and the standard of pleading no more – than in Twombly. Thus, we had little doubt that Twombly would come to our neighborhood. For instance, we’ve seen more complaints than we can count that allege that the defendant “violated FDA regulations” without stating either what regulation was violated or what the defendant did that allegedly broke the law. That’s what Twombly puts an end to – fishing expeditions – discovery into “any set of facts” that could fit within the bare-bones violation that was pleaded.
Thus Iqbal only confirmed that the federal rules impose a single, transubstantive, set of procedures, which we already knew. Twombly “was based on our interpretation and application of Rule 8. That Rule in turn governs the pleading standard ‘in all civil actions and proceedings in the United States district courts.’” 2009 WL 1361536, at *16 (citations omitted). Even the four dissenters in Iqbal do not dispute the general applicability of Twombly to all types of litigation. Rather, they dispute whether a defense concession as to the substantive law caused the plaintiff’s allegations to satisfy Twombly. 2009 WL 1361536, at *23-24.
Iqbal involved a prison inmate’s allegations that certain government defendants, entitled to qualified immunity from suit, deprived him of constitutional rights by discriminating against him on religious grounds.
According to the Iqbal majority’s more limited view of that defense concession, as in Twombly the plaintiff didn’t plead any actual facts – at least in support of the discrimination aspect of the case. All the plaintiff alleged was that the defendants “knew of, condoned, and willfully and maliciously agreed to subject [him] to harsh conditions of confinement as a matter of policy, solely on account of [his] religion, race, and/or national origin and for no legitimate penological interest.” 2009 WL 1361536, at *14. That allegation was, the majority concluded, “nothing more than a formulaic recitation of the elements of a constitutional discrimination claim.” Id. (quotation marks omitted). Conclusory allegations don’t cut the mustard any longer – not in antitrust, and not anywhere else:
As such, the allegations are conclusory and not entitled to be assumed true. To be clear, we do not reject these bald allegations on the ground that they are unrealistic or nonsensical. . . . It is the conclusory nature of [plaintiff’s] allegations, rather than their extravagantly fanciful nature, that disentitles them to the presumption of truth.
Id. (quote from Twombly omitted – we've quoted it enough).
What’s more, the four Iqbal dissenters “agree that the two allegations selected by the majority, standing alone, do not state a plausible entitlement to relief for unconstitutional discrimination,” id. at *23, but concluded that a defense concession obviated the need to plead the remaining elements. Id. at *25.
In essence, all nine justices agreed in Iqbal that Twombly precludes “bare assertions” and “formulaic recitation of the elements” as being insufficient to state a claim, and further that such allegations do not justify proceeding to discovery. Nobody was disputing the Twombly standard itself any longer – the justices simply divided over whether or not this particular complaint is conclusory in light of the defendants’ concession.
So, then, what of the arguments made by the defenders of anything goes pleading? Well, one thing we hear is that stricter pleading requirements will deter meritorious suits.
We don’t think so.
First of all, this is the same allegation of “Type II” (false negative) error that plaintiffs strenuously reject when we argue that litigation (the aforementioned hundred-million-dollar “litigation charges”) deters the development of new and improved drugs and medical devices. To care more about deterrents to lawsuits than deterrents to potentially lifesaving medical advances suggests misplaced priorities, so that argument has something of a “doth protest too much” air about it – particularly in the sandbox where we play.
But more importantly, we believe that the hallmark of a meritorious case is that it’s factually supported from the get go. Maybe at the outset it’s “only” a product liability case, and not a far more involved negligence per se or conspiracy case, but it’s a case that warrants resort to discovery. A meritorious case is one with an identifiable aspect of a warning that’s arguably inadequate, that has known medical consequences attributable to the alleged defect, and as a result of those consequences, there’s an actual injury. That’s the kind of case that’s entitled to accrue the expense of discovery. If things then turn up that indicate something more afoot, the plaintiff can seek to amend the complaint to allege that something more.
The meritorious case, we think, doesn’t have any Twombly problems to start with – except maybe around the edges should the plaintiff overplead.
A meritorious case is not one where the plaintiff pleads that the product was “defectively designed” and leaves it at that.
Another argument we’ve read is that Twombly and Iqbal are contrary to the forms that are attached to the rules. Those forms “suffice under these rules and illustrate the simplicity and brevity that these rules contemplate.” Fed. R. Civ. P. 84. They “are sufficient to withstand attack under the rules under which they are drawn, and . . . the practitioner using them may rely on them to that extent.” 1946 Comment to Rule 84.
OK – and the forms don’t seem to have been updated since 1946 – even before Conley. There is, for example, a simple three-paragraph complaint (Form 10) for negligence involving a two-car accident. Does anybody (except maybe pro se litigants) actually use this form? We don't think we've ever seen a three paragraph complaint about anything.
There’s certainly no product liability form complaint, no conspiracy form, no negligence per se form, no multi-count complaint of any sort – nothing remotely resembling catch-all, kitchen-sink 25-count complaints of the sort we see today. The forms that come after the rules are simple. They were designed to be that way. They plead things that happened at one particular time and one particular place.
In short, they plead things the way law was practiced (maybe) before the 1966 liberalization of discovery.
Rely on them “to that extent,” as the comment to Rule 84 states. But don’t rely upon them to think it’s proper to plead a 7-year conspiracy (Twombly) or a constitutional violation by “numerous” people (Iqbal) without facts that make the allegations hold together in some plausible fashion. Even these 1946-era forms require “dates” and “places.” In our neck of the woods, for example, if somebody’s going to accuse our clients of “violating” an FDA regulation, s/he had better: (1) tell us what it is (Form 7(b)), tell us who did it and when (all of the forms), and describe how the violation occurred (Form 14(5)).
Other critics trot out the Seventh Amendment right to jury trial. That’s been tried – and failed – as an objection to practically every procedural device that results in dismissal of an action before trial. Summary judgment, for example, was upheld against Seventh Amendment challenge ninety years ago by Justice Brandeis. See Pease v. Rathbun-Jones Engineering Co., 243 U.S. 273, 279-79 (1917). The Seventh Amendment wasn’t even an issue when summary judgment practice was liberalized in Celotex Corp. v. Catrett, 477 U.S. 317 (1986).
And it’s not just summary judgment. “[M]any procedural devices developed since 1791 that have diminished the civil jury’s historic domain have been found not to be inconsistent with the Seventh Amendment.” Parklane Hosiery Co., Inc. v. Shore, 439 U.S. 322, 336 (1979) (discussing collateral estoppel). “In numerous contexts, gatekeeping judicial determinations prevent submission of claims to a jury’s judgment without violating the Seventh Amendment.” Tellabs, Inc. v. Makor Issues & Rights, Ltd., 127 S. Ct. 2499, 2512 (2007) (citing Daubert, judgment n.o.v., and summary judgment). In particular, both the courts and Congress have “power to prescribe what must be pleaded to state the claim.” Id. (discussing heightened pleading rules for fraud). Moreover, the federal courts had much more onerous pleading requirements for 150 years before the Federal Rules were adopted. None of those was declared unconstitutional under the Seventh Amendment.
Notably, there were dissents in both Twombly and Iqbal. Not even the dissenting justices raised the Seventh Amendment jury trial right as a basis for disagreeing with the majority. That’s as good a measure as any of the amendment’s inapplicability.
Finally, we’ve also looked at Swierkiewicz v. Sorema N. A., 534 U.S. 506 (2002), which some of the critics mention. In part Swierkiewicz is based on Conley, which the Court cited for the proposition that Rule 8 “relies on liberal discovery rules and summary judgment motions to define disputed facts and issues and to dispose of unmeritorious claims.” 534 U.S. at 512. Well, if Twombly settled anything, it’s that. All the block quotes we’ve set out above (there was method to our madness) establish that liberalized discovery is a reason for tougher, not looser, pleading requirements. So to that extent, we have to conclude (and we’re not alone) that Swierkiewicz was impliedly overruled. After all, that opinion cited Conley four separate times, and Twombly (officially rendered transubstantive by Iqbal) firmly relegated Conley to the dustbin of legal history.
That the legal rationale of Swierkiewicz is now impaired doesn’t mean that it’s holding – something about pleading a prima facie case in Title VII cases – is necessarily reversed. For all we know, a requirement to plead such a case may well exceed anything that Twombly requires (a unanimous Court in Swierkiewicz labeled that “evidentiary”). All we can say is that plaintiffs can no longer use Conley as an easy way out when they want to allege everything, but plead nothing.
What none of Twombly/Iqbal’s critics address – probably because nobody likes to look foolish denying the obvious – are the fundamental economic premises that drove the Court to overrule the extraordinary liberal gloss that Conley put on Rule 8 a half-century ago. Liberal discovery is what killed liberal pleading. That’s pretty obvious from Twombly. Critics of more rigorous interpretations of Rule 8’s “short and plain” pleading standard aren’t likely to get anywhere as long as they completely ignore or at best give short shrift to the elephant that’s in the room.
Wednesday, May 27, 2009
A Suggestion For Medical Malpractice Insurers
Companies that provide medical malpractice insurance tend to be pretty large and pretty sophisticated.
It's thus not surprising that the way they handle most of their business makes a lot of sense to us: They hire lawyers on a "wholesale" basis, asking law firms to defend a high volume of medical malpractice litigation for relatively low rates. The insurers win some cases and lose others, but, overall, the companies presumably maximize their profits by taking this approach.
We don't mean to over-generalize in this next paragraph, but we will: Insurers know what they're getting when they hire lawyers who spend their time trying medical malpractice cases on a high-volume, low-rate basis. Because dispositive motions are rarely available in med mal cases, lawyers who defend those cases typically don't hone their skills in writing dispositive motions. The med mal defense lawyers know a ton of medicine, have a great deal of trial experience, and are good on their feet, but their written work occasionally leaves a little something to be desired.
(We said we were over-generalizing there, but let the nasty comments nonetheless begin.)
Here's our question: Once in a blue moon, an appeal in a med mal case presents an important issue of broad application that will affect the results in many future cases. We're thinking about, for example, issues relating to the information that physicians must disclose in the informed consent process, how statutes of limitations apply, or how courts handle certain aspects of off-label use.
Lose an appeal on the question whether a physician must disclose aspects of his educational background, personal problems, or the like as part of informed consent and many new cases may follow in the wake of the bad precedent. So, too, for a liberal interpretation of the "discovery" of a claim for statute of limitations purposes, or the admissibility of evidence of off-label use to prove the standard of care.
In those types of situations, doesn't it make sense for med mal insurers to retain on appeal lawyers with more expertise writing briefs and framing appellate issues?
If so, why don't insurance companies routinely do that?
We've seen an awful lot of med mal cases where good-on-their-feet-but-not-so-good-on-paper med mal defense trial lawyers briefed and argued appeals, and those appellate results are not always happy ones. Those bad precedents foment more litigation, which costs the med mal insurers a lot of money.
Shouldn't medical malpractice insurance companies have an appellate specialist on staff (or on retainer) to flip through appeals and segregate run-of-the-mill appeals involving discretionary evidentiary rulings (where there's no need to hire appellate counsel) from broadly-applicable-legal-issue appeals that could eliminate a whole area of litigation (where specialized appellate counsel could do a lot of good)?
If that makes economic sense, then why don't the insurance companies do this?
Someone suggested to us that the insurers don't care: If the insurer loses an appeal and ultimately pays out more in claims, the insurer will simply raise its rates and maintain its profitability.
But that can't be right: The law of supply and demand says that, as prices go up, demand goes down. Thus, if insurance companies are forced to raise their rates, they'll sell less insurance. Ultimately, that has to decrease profitability.
Which leaves us with our suggestion: Medical malpractice insurers should try to sort out high-value appeals from the usual chaff (to mix a metaphor) and should retain specialized appellate counsel to increase the chance of success in the appeals that really matter.
Or, if insurers don't do that, they should at least let us know what we're overlooking. We'd be happy to be educated.
It's thus not surprising that the way they handle most of their business makes a lot of sense to us: They hire lawyers on a "wholesale" basis, asking law firms to defend a high volume of medical malpractice litigation for relatively low rates. The insurers win some cases and lose others, but, overall, the companies presumably maximize their profits by taking this approach.
We don't mean to over-generalize in this next paragraph, but we will: Insurers know what they're getting when they hire lawyers who spend their time trying medical malpractice cases on a high-volume, low-rate basis. Because dispositive motions are rarely available in med mal cases, lawyers who defend those cases typically don't hone their skills in writing dispositive motions. The med mal defense lawyers know a ton of medicine, have a great deal of trial experience, and are good on their feet, but their written work occasionally leaves a little something to be desired.
(We said we were over-generalizing there, but let the nasty comments nonetheless begin.)
Here's our question: Once in a blue moon, an appeal in a med mal case presents an important issue of broad application that will affect the results in many future cases. We're thinking about, for example, issues relating to the information that physicians must disclose in the informed consent process, how statutes of limitations apply, or how courts handle certain aspects of off-label use.
Lose an appeal on the question whether a physician must disclose aspects of his educational background, personal problems, or the like as part of informed consent and many new cases may follow in the wake of the bad precedent. So, too, for a liberal interpretation of the "discovery" of a claim for statute of limitations purposes, or the admissibility of evidence of off-label use to prove the standard of care.
In those types of situations, doesn't it make sense for med mal insurers to retain on appeal lawyers with more expertise writing briefs and framing appellate issues?
If so, why don't insurance companies routinely do that?
We've seen an awful lot of med mal cases where good-on-their-feet-but-not-so-good-on-paper med mal defense trial lawyers briefed and argued appeals, and those appellate results are not always happy ones. Those bad precedents foment more litigation, which costs the med mal insurers a lot of money.
Shouldn't medical malpractice insurance companies have an appellate specialist on staff (or on retainer) to flip through appeals and segregate run-of-the-mill appeals involving discretionary evidentiary rulings (where there's no need to hire appellate counsel) from broadly-applicable-legal-issue appeals that could eliminate a whole area of litigation (where specialized appellate counsel could do a lot of good)?
If that makes economic sense, then why don't the insurance companies do this?
Someone suggested to us that the insurers don't care: If the insurer loses an appeal and ultimately pays out more in claims, the insurer will simply raise its rates and maintain its profitability.
But that can't be right: The law of supply and demand says that, as prices go up, demand goes down. Thus, if insurance companies are forced to raise their rates, they'll sell less insurance. Ultimately, that has to decrease profitability.
Which leaves us with our suggestion: Medical malpractice insurers should try to sort out high-value appeals from the usual chaff (to mix a metaphor) and should retain specialized appellate counsel to increase the chance of success in the appeals that really matter.
Or, if insurers don't do that, they should at least let us know what we're overlooking. We'd be happy to be educated.
Tuesday, May 26, 2009
On Iqbal And Twombly
We failed you.
Iqbal v. Ashcroft, __. U.S. __ (May 18, 2009) (here's a link to the decision through the Supreme Court website), came down last Monday, holding that the more rigorous pleading standards set forth in Bell Atlantic v. Twombly, 550 U.S. 544 (2007), apply to all civil actions.
The blogosphere was all a-twitter. (Oops! Technology caused an ambiguity there: We don't really mean that the blogosphere was all a-twitter, because we don't follow anyone on Twitter. In fact, the blogosphere was all a-blogger.)
And where were we?
Both of us were on the road and out of pocket, so we weren't able to cover this case in real-time. Instead, we offer only our apologies and this belated, and largely derivative, coverage of Iqbal.
In a nutshell: The feds arrested Iqbal, a Pakistani Muslim, after 9/11, and Iqbal filed a Bivens action claiming that he was deprived of various constitutional protections while in federal custody.
(Most people think that the "alleged terrorist" part of this decision is the exciting stuff. Shows what they know.)
From where we sit, these are the money quotes: "Our decision in Twombly expounded the pleading standard for 'all civil actions' . . . ." Iqbal, slip op. at 20. We'd been arguing for that result for a while; we're delighted to see the folks in the robes agree.
And then the implications: "Two working principles underlie our decision in Twombly. First, the tenet that a court must accept as true all of the allegations contained in a complaint is inapplicable to legal conclusions. Threadbare recitals of the elements of a cause of action, supported by mere conclusory statements, do not suffice." Id. at 14. "Second, only a complaint that states a plausible claim for relief survives a motion to dismiss." Id. at 14-15.
In ordinary times, we'd then read the decision and react to it. But these are not ordinary times -- we were too busy to blog! -- so we'll just give you a sense of what others have said about the decision.
First, Point of Law provides a comprehensive set of links to web-based commentary about Iqbal and Twombly.
Second, reaction to the decision:
Michael Dorf (of Cornell) is outraged:
"Form 11, which accompanies the Rules and is thus supposed to be authoritative, gives the following example of a legally sufficient complaint: 'On date, at place, the defendant negligently drove a motor vehicle against the plaintiff.' That's all. It is harder to imagine a more 'bare-bones' complaint; yet the Form makes clear that this suffices. . . . It is hard to see how, exactly, [the Iqbal majority's] statement of the Rule is consistent with the 'unadorned' allegation of negligence that the authoritative Form 11 itself accepts."
Howard Wasserman (Florida International) even more so:
"[T]he evaluation of facts as more or less likely (such as the explanation for a policy decision and resulting governmental conduct) really ought to be for a jury. So Iqbal, even more than Twombly, Suja Thomas' arguments that 12(b)(6), as now understood, invades the jury's fact-finding provenance, in violation of the Seventh Amendment, is beginning to look very strong." [The dropped words, or something, are in the original, but you get the point.]
Tobias Wolff (Penn) via Workplace Prof Blog:
"I fear that the shock waves that Twombly sent through the lower courts will be as nothing compared to the impact of Iqbal. The Court has just transformed the litigation process and given lower courts a license to dismiss factually specific complaints when their 'common sense' tells them that the allegations have 'obvious alternative explanations.'"
Scott Dodson (University of Arkansas) at the Civil Procedure Prof Blog:
"[A]pplying a restrictive pleading standard transsubstantively will surely result in fewer meritorious cases filed, more meritorious cases dismissed, and less unlawful conduct redressed, particularly for cases in which a less restrictive standard could achieve a better balance between efficiency and justice."
And, in a pre-Iqbal piece, even -- egad! -- Richard Epstein (University of Chicago) criticizes Twombly in a full-length law review article:
"The Supreme Court's general disapproval of Conley sweeps far too wide. Discovery should only be denied when the plausible inferences that can be drawn from the complaint and publicly available evidence clearly imply further discovery is of little value. Accordingly, the Federal Rules of Civil procedure should explicitly acknowledge that in a small set of cases motions on the pleadings can properly function as truncated and disguised motions for summary judgment."
Now, the other side of the coin:
Remarkably, the other side of the coin has not yet been minted.
In about a half hour of searching the web (when we were writing this post, which was several days ago), we didn't find any serious analysis defending the Court's decision. (There are a few pieces quoting defense lawyers shouting "hallelujah," but no one yet explaining why the decision is right.)
Maybe we haven't been scooped, after all.
There's still some work to be done here.
Iqbal v. Ashcroft, __. U.S. __ (May 18, 2009) (here's a link to the decision through the Supreme Court website), came down last Monday, holding that the more rigorous pleading standards set forth in Bell Atlantic v. Twombly, 550 U.S. 544 (2007), apply to all civil actions.
The blogosphere was all a-twitter. (Oops! Technology caused an ambiguity there: We don't really mean that the blogosphere was all a-twitter, because we don't follow anyone on Twitter. In fact, the blogosphere was all a-blogger.)
And where were we?
Both of us were on the road and out of pocket, so we weren't able to cover this case in real-time. Instead, we offer only our apologies and this belated, and largely derivative, coverage of Iqbal.
In a nutshell: The feds arrested Iqbal, a Pakistani Muslim, after 9/11, and Iqbal filed a Bivens action claiming that he was deprived of various constitutional protections while in federal custody.
(Most people think that the "alleged terrorist" part of this decision is the exciting stuff. Shows what they know.)
From where we sit, these are the money quotes: "Our decision in Twombly expounded the pleading standard for 'all civil actions' . . . ." Iqbal, slip op. at 20. We'd been arguing for that result for a while; we're delighted to see the folks in the robes agree.
And then the implications: "Two working principles underlie our decision in Twombly. First, the tenet that a court must accept as true all of the allegations contained in a complaint is inapplicable to legal conclusions. Threadbare recitals of the elements of a cause of action, supported by mere conclusory statements, do not suffice." Id. at 14. "Second, only a complaint that states a plausible claim for relief survives a motion to dismiss." Id. at 14-15.
In ordinary times, we'd then read the decision and react to it. But these are not ordinary times -- we were too busy to blog! -- so we'll just give you a sense of what others have said about the decision.
First, Point of Law provides a comprehensive set of links to web-based commentary about Iqbal and Twombly.
Second, reaction to the decision:
Michael Dorf (of Cornell) is outraged:
"Form 11, which accompanies the Rules and is thus supposed to be authoritative, gives the following example of a legally sufficient complaint: 'On date, at place, the defendant negligently drove a motor vehicle against the plaintiff.' That's all. It is harder to imagine a more 'bare-bones' complaint; yet the Form makes clear that this suffices. . . . It is hard to see how, exactly, [the Iqbal majority's] statement of the Rule is consistent with the 'unadorned' allegation of negligence that the authoritative Form 11 itself accepts."
Howard Wasserman (Florida International) even more so:
"[T]he evaluation of facts as more or less likely (such as the explanation for a policy decision and resulting governmental conduct) really ought to be for a jury. So Iqbal, even more than Twombly, Suja Thomas' arguments that 12(b)(6), as now understood, invades the jury's fact-finding provenance, in violation of the Seventh Amendment, is beginning to look very strong." [The dropped words, or something, are in the original, but you get the point.]
Tobias Wolff (Penn) via Workplace Prof Blog:
"I fear that the shock waves that Twombly sent through the lower courts will be as nothing compared to the impact of Iqbal. The Court has just transformed the litigation process and given lower courts a license to dismiss factually specific complaints when their 'common sense' tells them that the allegations have 'obvious alternative explanations.'"
Scott Dodson (University of Arkansas) at the Civil Procedure Prof Blog:
"[A]pplying a restrictive pleading standard transsubstantively will surely result in fewer meritorious cases filed, more meritorious cases dismissed, and less unlawful conduct redressed, particularly for cases in which a less restrictive standard could achieve a better balance between efficiency and justice."
And, in a pre-Iqbal piece, even -- egad! -- Richard Epstein (University of Chicago) criticizes Twombly in a full-length law review article:
"The Supreme Court's general disapproval of Conley sweeps far too wide. Discovery should only be denied when the plausible inferences that can be drawn from the complaint and publicly available evidence clearly imply further discovery is of little value. Accordingly, the Federal Rules of Civil procedure should explicitly acknowledge that in a small set of cases motions on the pleadings can properly function as truncated and disguised motions for summary judgment."
Now, the other side of the coin:
Remarkably, the other side of the coin has not yet been minted.
In about a half hour of searching the web (when we were writing this post, which was several days ago), we didn't find any serious analysis defending the Court's decision. (There are a few pieces quoting defense lawyers shouting "hallelujah," but no one yet explaining why the decision is right.)
Maybe we haven't been scooped, after all.
There's still some work to be done here.
Friday, May 22, 2009
Defendants Aren't Plaintiffs' Bagmen
One of the things that fell by the wayside as the ALI's Principles of the Law of Aggregate Litigation evolved was a provision discussing (with approval) the supposed power of MDL courts to create "common benefit funds" from which the plaintiffs' coordinating counsel get paid. A fund, in itself, isn't so bad - except: (1) when it's created in part with assessments against plaintiffs who aren't before the court (typically cases in state court), and (2) defendants are supposed to help collect these funds, which of course finance their adversaries. This second objectionable aspect is enforced through restrictions on the ability of defendants to settle cases against them.
We opposed these sorts of orders when they first showed up in the ALI draft:
"Latest Draft Of ALI Principles Of Aggregate Litigation: Three Steps Forward, Two Steps Back" (5/9/07). Thankfully, this proposal was promptly deleted in the ALI proceedings.
But this kind of shakedown is still with us in actual MDL proceedings.
We had one of these orders imposed on us during the Bone Screw litigation years ago, but eventually concluded it wasn't worth the trouble of opposing. But it still left a bad taste in our mouths.
Now, a decade or more later, we're pleased to discover that at least one defendant has decided to stand up and fight such an order. In the Aredia/Zometa MDL, defendant Novartis (represented by Spriggs & Hollingsworth) has objected to a proposal by the plaintiffs that defendants be forced to deduct fees for plaintiffs' MDL counsel from settlement of non-MDL cases. The grounds: that "the proposed Order (1) purports to grant the Court jurisdiction it does not have, and (2) unfairly and improperly prejudices [defendants]." Brief at 1. The principal authority cited? The same case we found when we looked at the issue two years ago.
We highly recommend that MDL defense counsel read this brief and consider whether their clients' interests would be advanced by raising similar objections. We're tired of defendants being forced to serve as collection agents for the benefit of the very lawyers who are suing them.
We opposed these sorts of orders when they first showed up in the ALI draft:
In its black letter, the Draft supports allowing courts to order non-consenting plaintiffs in “other proceedings” to pay “common costs” to lawyers they have not retained. The draft now cites a District Court case allowing the practice. That's not very impressive authority, given that the only appellate authority we know of which actually examined this type of arrangement flatly rejected it as a abuse of power. In re Showa Denko K.K. L-Tryptophan Products Liability Litigation-II, 953 F.2d 162, 166 (4th Cir. 1992).
"Latest Draft Of ALI Principles Of Aggregate Litigation: Three Steps Forward, Two Steps Back" (5/9/07). Thankfully, this proposal was promptly deleted in the ALI proceedings.
But this kind of shakedown is still with us in actual MDL proceedings.
We had one of these orders imposed on us during the Bone Screw litigation years ago, but eventually concluded it wasn't worth the trouble of opposing. But it still left a bad taste in our mouths.
Now, a decade or more later, we're pleased to discover that at least one defendant has decided to stand up and fight such an order. In the Aredia/Zometa MDL, defendant Novartis (represented by Spriggs & Hollingsworth) has objected to a proposal by the plaintiffs that defendants be forced to deduct fees for plaintiffs' MDL counsel from settlement of non-MDL cases. The grounds: that "the proposed Order (1) purports to grant the Court jurisdiction it does not have, and (2) unfairly and improperly prejudices [defendants]." Brief at 1. The principal authority cited? The same case we found when we looked at the issue two years ago.
We highly recommend that MDL defense counsel read this brief and consider whether their clients' interests would be advanced by raising similar objections. We're tired of defendants being forced to serve as collection agents for the benefit of the very lawyers who are suing them.
Thursday, May 21, 2009
ALI’s Principles Of The Law Of Aggregate Litigation Now Final – Sort Of
Since we blogged last week about the American Law Institute’s (“ALI”) imminent final consideration of the Principles project on Aggregate Litigation (“PLAL”) – that is to say, class actions and similar proceedings – we thought we owed our readers a report on how it turned out.
All three of the motions we discussed: about predominance/issue classes, medical monitoring, and choice of law, were sufficiently agreed to by the Reporters that each of the movants (John Beisner, the blog’s own Bexis, and Vic Schwartz, respectively) agreed to withdraw them subject to relevant revisions being made in the draft. No fireworks.
With that, we thought that the most problematic remaining issues in PLAL were sufficiently modified that the overall draft was acceptable. In the best of all possible worlds, we would have been content without the PLAL at all, but at least on those issues relevant to what we do (and thus to what we know most about), it’s now pretty innocuous, and in places downright helpful. For example, the PLAL will be yet another something we can cite for the proposition that class actions are affirmatively disfavored in personal injury litigation.
In the end, the PLAL passed without a dissenting vote – something we never thought would have been possible when we first got involved in that ALI project several years ago.
Since none of the expected debate over the merits of the pending motions actually happened, probably the most interesting development to us (other than Sen. Arlen Specter's speech at yesterday’s lunch describing a CIA briefing he received as “perjurious” – Speaker Pelosi’s got a friend in Pennsylvania) was the loophole that the PLAL (if acted on by the states) would create in the so-called “aggregate settlement rule” (“ASR”).
Briefly, the ASR requires unanimous consent, after full disclosure, whenever multiple plaintiffs represented by the same counsel agree to a joint settlement of litigation. It originated with multi-passenger auto accidents and other prosaic litigation, but also applies to mass tort litigation. The requirement of unanimous plaintiff consent to aggregate settlements creates an ethical minefield for the other side and leads to a variety of problems, such as hold-out plaintiffs shaking down other plaintiffs for a bigger share of a limited settlement pot. We’ve heard throughout the PLAL process that the ASR is an accepted ethical rule in all fifty states. That degree of unanimity tells us that the ASR must have some strong reasons behind it. Thus some commentators have been very much against changing it.
As defense lawyers, we have mixed feelings about the ASR. On the one hand, anything that makes mass torts harder to settle is to some degree a deterrent to their being brought in the first place. On the other hand, it’s not all that great a deterrent (just look at all the mass torts), and once we’re in a mass tort, we’d like to be able to settle it when we’re offered terms that are acceptable to our client.
What the PLAL does is create an alternative to the existing ASR –a new procedure (described in detail PLAL §3.17(b)) under which a plaintiff “would be bound by a substantial majority vote of all claimants concerning an aggregate-settlement proposal.” This is accompanied by a bunch of additional procedural provisions about informed consent and the like, but that agreement is at the heart of the new exception in the PLAL.
We have two observations about this proposal, which the ALI has just approved:
First, §3.17 gives lip service to prospective plaintiffs having a choice between engaging counsel under the ASR and the new “substantial majority” exception that the ALI adopted. But that's really all it is. The proposal was amended at the ALI meeting to eliminate any legal requirement that a would-be plaintiff be offered this choice when retaining counsel. That being the case, we’d be surprised if any plaintiff's lawyer in his/her right mind would actually offer an option that would later restrict his/her ability to settle a case - if the lawyer doesn’t have to. Thus, we expect that any jurisdiction's adoption of the ALI’s proposal means the gradual but inevitable disappearance of the ASR. The exception will swallow the rule.
Second, assuming (contrary to observation one) that both ASR and “substantial majority” plaintiffs do exist simultaneously in the same litigation, we see fertile ground for sharp practice. The Final Draft is silent about whether plaintiffs can switch in and out of the two options after suit is filed, so we’ll assume they can – at least if their counsel agrees to modify the terms of representation.
What then? Well, we think it's inevitable that plaintiffs with stronger cases would gravitate to the ASR model (and maintain absolute control over settlement), while plaintiffs with weak to fanciful cases, which is always the majority in any large mass tort, would end up stuck with the “substantial majority” model. Under these circumstances, it’s not hard to see what a typical settlement would look like: The stronger plaintiffs cut their individual deals, while everybody else gets a lump “best I could do” settlement that they can either take or leave. That happens already, of course, but now the same lawyer would ethically be able to represent both groups of plaintiffs at the same time.
We (well, Bexis) brought that up at the ALI meeting. The Reporters' response was essentially, “Well, anybody can game the system if they try hard enough.” We found that unsatisfying, because, we’re lawyers and gaming the system – otherwise known as taking full advantage of our clients' legal rights – is one of the things that we’re hired to do. We been practicing long enough to know that any system that can be gamed, will be gamed. That’s inevitable. Lawyers are supposed to find and exploit whatever loopholes exist in the law. The rules of ethics call it "zealous representation."
So, in the case of the ASR exception, we expect to see the two classes of plaintiffs being played off against one another - only now, by their own counsel.
Finally, since this will probably be our last post on the PLAL, we thought we’d go back to the first one and – at least as to PLAL Chapter II, which is what was voted on yesterday – compare where we were and where we ended up.
So of all the many objections we had to PLAL Chapter Two way back when, all but two of them have been substantially or completely fixed (not counting the one we don’t object to anymore). And of those two, one of them isn’t as important as it used to be and the other doesn’t affect drug and medical device litigation.
Not only that, but the weird provision in the original ASR material (Part III) that would have made defendants financially responsible for inducing ethical lapses by their opposing counsel is gone, too. Good riddance.
So all and all we’re surprised - in a good way - with the way things have worked out with the PLAL.
Beyond that, we’ve learned something important for the future – if the issue’s important, a constructively phrased and offered written amendment is a great way to make sure your views are considered when the language of an ALI project is finalized. The ALI is a group that greatly prefers to operate by consensus, and well-supported motions are very likely to be incorporated. We expect to be active in the ALI for a long time, so we'll quite likely be filing more motions to amend.
All three of the motions we discussed: about predominance/issue classes, medical monitoring, and choice of law, were sufficiently agreed to by the Reporters that each of the movants (John Beisner, the blog’s own Bexis, and Vic Schwartz, respectively) agreed to withdraw them subject to relevant revisions being made in the draft. No fireworks.
With that, we thought that the most problematic remaining issues in PLAL were sufficiently modified that the overall draft was acceptable. In the best of all possible worlds, we would have been content without the PLAL at all, but at least on those issues relevant to what we do (and thus to what we know most about), it’s now pretty innocuous, and in places downright helpful. For example, the PLAL will be yet another something we can cite for the proposition that class actions are affirmatively disfavored in personal injury litigation.
In the end, the PLAL passed without a dissenting vote – something we never thought would have been possible when we first got involved in that ALI project several years ago.
Since none of the expected debate over the merits of the pending motions actually happened, probably the most interesting development to us (other than Sen. Arlen Specter's speech at yesterday’s lunch describing a CIA briefing he received as “perjurious” – Speaker Pelosi’s got a friend in Pennsylvania) was the loophole that the PLAL (if acted on by the states) would create in the so-called “aggregate settlement rule” (“ASR”).
Briefly, the ASR requires unanimous consent, after full disclosure, whenever multiple plaintiffs represented by the same counsel agree to a joint settlement of litigation. It originated with multi-passenger auto accidents and other prosaic litigation, but also applies to mass tort litigation. The requirement of unanimous plaintiff consent to aggregate settlements creates an ethical minefield for the other side and leads to a variety of problems, such as hold-out plaintiffs shaking down other plaintiffs for a bigger share of a limited settlement pot. We’ve heard throughout the PLAL process that the ASR is an accepted ethical rule in all fifty states. That degree of unanimity tells us that the ASR must have some strong reasons behind it. Thus some commentators have been very much against changing it.
As defense lawyers, we have mixed feelings about the ASR. On the one hand, anything that makes mass torts harder to settle is to some degree a deterrent to their being brought in the first place. On the other hand, it’s not all that great a deterrent (just look at all the mass torts), and once we’re in a mass tort, we’d like to be able to settle it when we’re offered terms that are acceptable to our client.
What the PLAL does is create an alternative to the existing ASR –a new procedure (described in detail PLAL §3.17(b)) under which a plaintiff “would be bound by a substantial majority vote of all claimants concerning an aggregate-settlement proposal.” This is accompanied by a bunch of additional procedural provisions about informed consent and the like, but that agreement is at the heart of the new exception in the PLAL.
We have two observations about this proposal, which the ALI has just approved:
First, §3.17 gives lip service to prospective plaintiffs having a choice between engaging counsel under the ASR and the new “substantial majority” exception that the ALI adopted. But that's really all it is. The proposal was amended at the ALI meeting to eliminate any legal requirement that a would-be plaintiff be offered this choice when retaining counsel. That being the case, we’d be surprised if any plaintiff's lawyer in his/her right mind would actually offer an option that would later restrict his/her ability to settle a case - if the lawyer doesn’t have to. Thus, we expect that any jurisdiction's adoption of the ALI’s proposal means the gradual but inevitable disappearance of the ASR. The exception will swallow the rule.
Second, assuming (contrary to observation one) that both ASR and “substantial majority” plaintiffs do exist simultaneously in the same litigation, we see fertile ground for sharp practice. The Final Draft is silent about whether plaintiffs can switch in and out of the two options after suit is filed, so we’ll assume they can – at least if their counsel agrees to modify the terms of representation.
What then? Well, we think it's inevitable that plaintiffs with stronger cases would gravitate to the ASR model (and maintain absolute control over settlement), while plaintiffs with weak to fanciful cases, which is always the majority in any large mass tort, would end up stuck with the “substantial majority” model. Under these circumstances, it’s not hard to see what a typical settlement would look like: The stronger plaintiffs cut their individual deals, while everybody else gets a lump “best I could do” settlement that they can either take or leave. That happens already, of course, but now the same lawyer would ethically be able to represent both groups of plaintiffs at the same time.
We (well, Bexis) brought that up at the ALI meeting. The Reporters' response was essentially, “Well, anybody can game the system if they try hard enough.” We found that unsatisfying, because, we’re lawyers and gaming the system – otherwise known as taking full advantage of our clients' legal rights – is one of the things that we’re hired to do. We been practicing long enough to know that any system that can be gamed, will be gamed. That’s inevitable. Lawyers are supposed to find and exploit whatever loopholes exist in the law. The rules of ethics call it "zealous representation."
So, in the case of the ASR exception, we expect to see the two classes of plaintiffs being played off against one another - only now, by their own counsel.
Finally, since this will probably be our last post on the PLAL, we thought we’d go back to the first one and – at least as to PLAL Chapter II, which is what was voted on yesterday – compare where we were and where we ended up.
- Material Advancement Test (we’re leaving out section and comment numbers, since they’ve all changed) – The test is still used, but now there are two explicit caveats: the newly phrased test: (1) “is not expected to make for substantial change in the law of aggregate litigation,” specifically “in terms of a predominance of common questions,” and (2) “is not intended to suggest that the tendency of aggregate treatment to make settlement more likely . . . should operate, in itself, as a consideration in favor of aggregate treatment.” So our original criticism was pretty fully been dealt with. Essentially a complete fix.
- Broad Use of Single Issue Classes – this is the subject of the Beisner amendment that the Reporters largely agreed to. We expect it to end up some neutral language and a statement regarding the law being divided on the point. We expect a substantial, if not complete, fix.
- Creative procedural arrangements and trial plans – “Creative” is gone. What’s better is that the final version expressly endorses trying cases, bellwether and otherwise. §2.02(b)(3). A complete fix, and maybe better than that.
- Liability versus remedy – The same fix that prevents the “material advancement” test from being circular also applies here. Beyond that, the illustrations have been revised and are no longer grossly unbalanced in favor if aggregating cases. Substantially fixed.
- Single-point pollution cases – This problem still exists in §2.03, Illustration 3, but it’s been limited to the geographic scope issue, so it’s not quite as bad. This isn’t fixed, but it’s not a drug/medical device issue, so we reluctantly let it go. No fix.
- Merchantability – It’s still there, but with the caveat that it “does not speak to the context of personal-injury claims. . ., which may pose additional complications may prevent aggregate treatment.” This is one of many places where the final draft reminds readers that class actions are peculiarly disfavored in cases of personal injury. Not a complete fix, but no problems will be caused with drugs or medical devices.
- Class certification in mass torts – The offending language, and the pre-AmChem/Ortiz case cites, have been entirely removed. A complete fix.
- Medical monitoring generally – The final draft now recognizes several reasons why medical monitoring classes are uncertifiable in given cases. Bexis’ amendment, which the Reporters largely accepted, collects these reasons in one place and acknowledges non-certification as the most common result. The final version will specify that no position is being taken on the viability of medical monitoring. An expected complete fix.
- Medical monitoring as indivisible remedy – The final draft already had illustrations going both ways, so that medical monitoring no longer appeared invariably certifiable as a mandatory, non-opt out case. Bexis’ amendment will sharpens this contrast further. This will end up as a complete fix, congruent with existing case law.
- Broad definition of indivisibility – The “simply receive” language is gone, and the section is much more nuanced on what facts are necessary to make a remedy indivisible. Essentially a complete fix.
- Choice of law/burden of proof – This discussion has been substantially clarified to specify that the defendant only has “to demonstrate the need to decide a choice-of-law question,” and that “some evidence” is enough. The defendant’s entitlement to preliminary discovery to make this showing is also explicitly provided. Thereafter, the burden is whatever the law of the relevant jurisdiction requires. That’s essentially a complete fix, in that this is basically what the law is where the issue has been considered.
- Principal place of business and choice of law – The reference is still there, but the next sentence now reads: “At the present time, choice-of-law principles that point towards application of the law of the defendant’s principal place of business remain quite rare across the various states.” This position is also now described as an “outlier” in the Reporters' Notes. The Schwartz amendment will add language to the effect that whatever choice of law principles are applicable to litigation generally apply equally to aggregated litigation. We’d rather not see principal place of business mentioned at all, but short of that, it’s essentially a complete fix.
- Patterns in substantive law – The selection of precedent in the Reporters' Note has been cleaned up and updated, but some pre-AmChem/Ortiz precedent remains. A substantial fix, but not complete. Also, since it’s just Reporters’ Notes, it’s relatively minor in the scheme of things.
- Advocating reversal of Lexecon case – Gone. Complete fix.
- Punitive damages class actions – Punitives are no longer mentioned in the comment, but only in the Reporters’ Notes concerning limited fund classes. The issue of punitive damages classes being precluded entirely by due process is now discussed in a neutral fashion, but at some length. Complete fix.
- Due process rights of defendants – The due process rights of plaintiffs and defendants are now “parallel.” We still don’t like use of the word “admonition,” but that’s now immediately followed by, “Aggregation should not proceed if the court is unable to formulate an adjudication plan that ensures due process for a defendant.” The notes also discuss defendants’ due process rights in some detail. Almost complete fix.
- Common costs – The whole issue has been deleted. Complete fix.
- Opt-in class involving foreign litigation – It’s still here, but we dropped our opposition to it after hearing horror stories from lawyers who defend mass torts in foreign countries. Objection withdrawn.
- Seventh Amendment – The problematic discussion of constitutional law has been deleted and the Seventh Amendment simply identified generically as a constraint on aggregation. Complete fix.
- Collateral estoppel – It’s still there, and it still calls for reversal of Bridgestone/Firestone case (in which we were involved) case. But with the enactment of CAFA ("Class Action Fairness Act"), problem of plaintiffs shopping the same nationwide class in multiple state courts until somebody certifies it doesn’t happen anymore. We still don’t like it, but it’s not nearly as important. No fix, but much less of an issue.
- Trial Plans – Still there, but our main objection was to the original draft’s failure to consider the alternative of actually trying some cases. As already mentioned, that’s now specifically provided for as an alternative in §2.02(b)(3), so with that done, we don’t have any objection to trial plans per se. Complete fix elsewhere in the draft.
So of all the many objections we had to PLAL Chapter Two way back when, all but two of them have been substantially or completely fixed (not counting the one we don’t object to anymore). And of those two, one of them isn’t as important as it used to be and the other doesn’t affect drug and medical device litigation.
Not only that, but the weird provision in the original ASR material (Part III) that would have made defendants financially responsible for inducing ethical lapses by their opposing counsel is gone, too. Good riddance.
So all and all we’re surprised - in a good way - with the way things have worked out with the PLAL.
Beyond that, we’ve learned something important for the future – if the issue’s important, a constructively phrased and offered written amendment is a great way to make sure your views are considered when the language of an ALI project is finalized. The ALI is a group that greatly prefers to operate by consensus, and well-supported motions are very likely to be incorporated. We expect to be active in the ALI for a long time, so we'll quite likely be filing more motions to amend.
Administration Takes Preemptive Action
While we were at ALI yesterday, the administration released a presidential memorandum (technically not an Executive Order, if it makes any difference) regarding administrative agency statements regarding preemption. Not that we were expecting to be, but we won't be surprised by agency preemption declarations any time soon. Preemption determinations must be accompanied by codified regulations to that effect.
The memorandum also states that such codified preemption provisions should be limited - to "where such provisions would be justified under legal principles governing preemption, including the principles outlined in Executive Order 13132." According to a summary of EO 13132 issued by the National Conference of State Legislatures that prior order required:
Finally, the new memorandum directs all federal agencies to conduct a search and destroy mission for Bush administration administration preemption rulings. That's not what it says, of course (the new order covers the "last ten years"), but that's essentially what it means:
Our concern is whether the directive to review and revise preemption language will become an excuse to change non-preemption-related aspects of regulations - we're thinking primarily of the FDA's 2008 CBE regulation changes, but there are undoubtedly others - where the FDA brought the regulation in line with its stated original (pre-Bush) intent, but also included statements about preemption. We don't think there were any notice-and-comment related problems (both sides thoroughly addressed preemption) with that rule, so we're not even sure it's covered by the new order. But our side will need to be vigilent to make sure that the bounds of the new order are not exceeded.
The memorandum also states that such codified preemption provisions should be limited - to "where such provisions would be justified under legal principles governing preemption, including the principles outlined in Executive Order 13132." According to a summary of EO 13132 issued by the National Conference of State Legislatures that prior order required:
- All agencies, except independent agencies, must have a process in place through which they consult with state and local government elected officials and their representative national organizations on the development of regulations and legislative proposals that have federalism implications. This consultation must allow for both meaningful and timely input. Independent agencies may be encouraged to develop similar processes.
- Each agency must have a gatekeeper who is responsible for implementing this order and for sharing with the Office of Management and Budget (OMB) its plan for consulting with state and local government elected officials and their representative national organizations. The designation of the gatekeeper and formulation of the consultation plan must occur by November 2, 1999.
- The preamble of every rule about to be issued must contain a federalism impact statement. This statement must describe the consultation process, summarize our concerns, state the agency's need to issue the rule and state to what extent our concerns have been addressed and met. Every draft final regulation submitted to OMB must have a certification that the rule was developed in compliance with E.O. 13132. The same certification is mandatory for legislative proposals
Finally, the new memorandum directs all federal agencies to conduct a search and destroy mission for Bush administration administration preemption rulings. That's not what it says, of course (the new order covers the "last ten years"), but that's essentially what it means:
Heads of departments and agencies should review regulations issued within the past 10 years that contain statements in regulatory preambles or codified provisions intended by the department or agency to preempt State law, in order to decide whether such statements or provisions are justified under applicable legal principles governing preemption. Where the head of a department or agency determines that a regulatory statement of preemption or codified regulatory provision cannot be so justified, the head of that department or agency should initiate appropriate action, which may include amendment of the relevant regulation.While we think this is an unfortunate development, it's not particularly unexpected in these parts. As to drugs and devices - our playground - the preemption rules are pretty much entirely in the hands of the courts, now. The 2006 Preemption Preamble was dealt with in Levine, and we don't use it anymore anyway.
Our concern is whether the directive to review and revise preemption language will become an excuse to change non-preemption-related aspects of regulations - we're thinking primarily of the FDA's 2008 CBE regulation changes, but there are undoubtedly others - where the FDA brought the regulation in line with its stated original (pre-Bush) intent, but also included statements about preemption. We don't think there were any notice-and-comment related problems (both sides thoroughly addressed preemption) with that rule, so we're not even sure it's covered by the new order. But our side will need to be vigilent to make sure that the bounds of the new order are not exceeded.
Tuesday, May 19, 2009
Preemption Conference in Philadelphia June 3, 2009
Hear the perspectives from both sides. One of your co-hosts - Bexis (Herrmann couldn't make it) - leads off a day-long Harris-Martin conference on "Preemption in a Post-Levine World" at the Rittenhouse Hotel in Philadelphia on June 3, 2009. He's paired against Sol Weiss (Anapol Schwartz) discussing the topic "Did the Court Get It Right?"
Will it be sour grapes or fine whine? Come and find out.
Sol takes on Covington's Paul Schmidt later in the day (topic: "How Does This Affect the Pharmaceutical Industry?").
Other participating firms in addition to Dechert (Joe Hetrick's the conference co-chair): Reed Smith, Arnold & Porter, King & Spalding, and Pepper Hamilton for our side and Cohen, Placitella, Raynes McCarty, and Seeger Weiss representing the other side of the "v".
For a complete list of the pairings and the topics see the conference brochure.
Will it be sour grapes or fine whine? Come and find out.
Sol takes on Covington's Paul Schmidt later in the day (topic: "How Does This Affect the Pharmaceutical Industry?").
Other participating firms in addition to Dechert (Joe Hetrick's the conference co-chair): Reed Smith, Arnold & Porter, King & Spalding, and Pepper Hamilton for our side and Cohen, Placitella, Raynes McCarty, and Seeger Weiss representing the other side of the "v".
For a complete list of the pairings and the topics see the conference brochure.
Off-Label Promotion And RICO (Actimmune)
After a two-year investigation, the Department of Justice charged Intermune with misbranding the drug Actimmune by promoting it off-label to treat idiopathic pulmonary fibrosis.
(We like to use sentences like that. It gets our sophisticated readers salivating while discouraging the rest.)
After the deferred prosecution agreement and payment of the $42.5 million fine, the deluge.
(Readers with exceptional memories will recall that we discussed this case more than a year ago, when the DoJ chose to indict Intermune's CEO, which was an exceptional event.)
In re Actimmune Marketing Litig., No. C 08-02376-MHP, 2009 U.S. Dist. LEXIS 36133 (N.D. Cal. Apr. 28, 2009), involved the putative class action alleging that Intermune's allegedly illegal off-label promotion defrauded consumers and third-party payors into buying Actimmune. Plaintiffs pleaded claims for violations of RICO, state consumer protection statutes, and unfair enrichment. Defendants moved to dismiss. Judge Patel saw the light, granting the motions to dismiss all claims, but giving plaintiffs the chance to replead.
The RICO claims failed for several reasons. First, "many of plaintiffs' allegations conflate a false and misleading statement under the FDCA, i.e., one that occurs when the drug label does not match the promoted assertion about the drug, and a false and misleading statement about the drug itself that can give rise to a claim under RICO." Id. at *34-35 (italics in original).
Here's our translation of that sentence: A drug is approved to treat headaches. The drug also treats cancer, but the FDA hasn't yet approved the drug to treat cancer. If the manufacturer promotes the drug to treat cancer, that promotional statement might simultaneously (1) constitute misbranding in violation of the FDCA, and (2) be absolutely true. The Department of Justice may be able to prosecute the manufacturer under the FDCA, but private plaintiffs can't sue for fraud.
Judge Patel continued: "A RICO violation is not focused on the drug's label, but rather whether the promoted assertion was knowingly false as to a material matter about the drug, i.e., if it constituted actionable fraud." Id. at *35. "Plaintiffs need to pare down the allegations accordingly and focus on those sorts of representations in this action." Id.
The RICO allegations also failed to plead causation: "Purchasers of Actimmune do not suffer an injury cognizable under RICO simply because they paid for the drug. . . . Plaintiffs need to allege what specific information the individual plaintiffs or their physicians had about the drug, the extent to which they relied upon that information, and that the information relied upon was false . . . . Plaintiffs also need to allege when the drug was prescribed, purchased and administered, and whether these actions would not have been taken if not for the concealment/misrepresentations of facts made regarding the efficacy or lack thereof about Actimmune for treating IPF." Id. at *36 & *38.
Imposing that pleading standard properly forces plaintiffs to state a claim. If plaintiffs are able to plead that claim, it will be self-evident that the RICO claim isn't suitable to be certified as a class.
The court also dismissed the consumer protection and unjust enrichment claims. "First, the court looks askance at any attempt on the part of plaintiffs to use a fraud-on-the-market theory to circumvent the reliance element of the state law claims. The court will not let plaintiffs escape their burden to plead and prove the element of reliance by using a market-based fraud theory to handwave the requirements that there be a connection between the misdeed complained of and the loss suffered under state law." Id. at *45.
Not bad.
Second, "[i]t does not necessarily follow that off-label promotion plus resulting profits equals fraudulent conduct. . . . . Plaintiffs fail to allege that specific representations were made to the individual plaintiffs' physicians, let alone that such representations were misleading." Id. at *46. "The issue is whether the [published] studies themselves [reporting on the efficacy of the drug for the off-label use] could have provided another basis for physician reliance, apart from the allegedly misleading representations by defendants to physicians." Id. at *49.
Along the way, the court applied Twombley in the context of this drug promotion case and cited Bridge v. Phoenix Bond for the proposition that plaintiffs must establish proximate cause in order to show injury "by reason of" a RICO violation.
This is a smart, well-reasoned opinion (and it's not the first by Judge Patel that we've liked). What we said in that prior post - "“Justice Patel” sounds pretty good to us" - is even more relevant today.
And speaking of relevance, if you're playing in the third-party payor/RICO sandbox, don't overlook Actimmune.
(We like to use sentences like that. It gets our sophisticated readers salivating while discouraging the rest.)
After the deferred prosecution agreement and payment of the $42.5 million fine, the deluge.
(Readers with exceptional memories will recall that we discussed this case more than a year ago, when the DoJ chose to indict Intermune's CEO, which was an exceptional event.)
In re Actimmune Marketing Litig., No. C 08-02376-MHP, 2009 U.S. Dist. LEXIS 36133 (N.D. Cal. Apr. 28, 2009), involved the putative class action alleging that Intermune's allegedly illegal off-label promotion defrauded consumers and third-party payors into buying Actimmune. Plaintiffs pleaded claims for violations of RICO, state consumer protection statutes, and unfair enrichment. Defendants moved to dismiss. Judge Patel saw the light, granting the motions to dismiss all claims, but giving plaintiffs the chance to replead.
The RICO claims failed for several reasons. First, "many of plaintiffs' allegations conflate a false and misleading statement under the FDCA, i.e., one that occurs when the drug label does not match the promoted assertion about the drug, and a false and misleading statement about the drug itself that can give rise to a claim under RICO." Id. at *34-35 (italics in original).
Here's our translation of that sentence: A drug is approved to treat headaches. The drug also treats cancer, but the FDA hasn't yet approved the drug to treat cancer. If the manufacturer promotes the drug to treat cancer, that promotional statement might simultaneously (1) constitute misbranding in violation of the FDCA, and (2) be absolutely true. The Department of Justice may be able to prosecute the manufacturer under the FDCA, but private plaintiffs can't sue for fraud.
Judge Patel continued: "A RICO violation is not focused on the drug's label, but rather whether the promoted assertion was knowingly false as to a material matter about the drug, i.e., if it constituted actionable fraud." Id. at *35. "Plaintiffs need to pare down the allegations accordingly and focus on those sorts of representations in this action." Id.
The RICO allegations also failed to plead causation: "Purchasers of Actimmune do not suffer an injury cognizable under RICO simply because they paid for the drug. . . . Plaintiffs need to allege what specific information the individual plaintiffs or their physicians had about the drug, the extent to which they relied upon that information, and that the information relied upon was false . . . . Plaintiffs also need to allege when the drug was prescribed, purchased and administered, and whether these actions would not have been taken if not for the concealment/misrepresentations of facts made regarding the efficacy or lack thereof about Actimmune for treating IPF." Id. at *36 & *38.
Imposing that pleading standard properly forces plaintiffs to state a claim. If plaintiffs are able to plead that claim, it will be self-evident that the RICO claim isn't suitable to be certified as a class.
The court also dismissed the consumer protection and unjust enrichment claims. "First, the court looks askance at any attempt on the part of plaintiffs to use a fraud-on-the-market theory to circumvent the reliance element of the state law claims. The court will not let plaintiffs escape their burden to plead and prove the element of reliance by using a market-based fraud theory to handwave the requirements that there be a connection between the misdeed complained of and the loss suffered under state law." Id. at *45.
Not bad.
Second, "[i]t does not necessarily follow that off-label promotion plus resulting profits equals fraudulent conduct. . . . . Plaintiffs fail to allege that specific representations were made to the individual plaintiffs' physicians, let alone that such representations were misleading." Id. at *46. "The issue is whether the [published] studies themselves [reporting on the efficacy of the drug for the off-label use] could have provided another basis for physician reliance, apart from the allegedly misleading representations by defendants to physicians." Id. at *49.
Along the way, the court applied Twombley in the context of this drug promotion case and cited Bridge v. Phoenix Bond for the proposition that plaintiffs must establish proximate cause in order to show injury "by reason of" a RICO violation.
This is a smart, well-reasoned opinion (and it's not the first by Judge Patel that we've liked). What we said in that prior post - "“Justice Patel” sounds pretty good to us" - is even more relevant today.
And speaking of relevance, if you're playing in the third-party payor/RICO sandbox, don't overlook Actimmune.
Monday, May 18, 2009
On Ex Parte Blogging
Who'd a thunk it? People write scholarly articles about the ethics of legal blogging!
(We probably should have thought about that before we started this gig, huh?)
Anyway, Rachel Lee's student note in the most recent Stanford Law Review is titled "Ex Parte Blogging: The Legal Ethics of Supreme Court Advocacy in the Internet Era." (In the printed edition, it's at 61 Stan. L. Rev. 1535 (2009). Ms. Lee frets that lawyers representing litigants in the Supreme Court will publish blog posts about their cases immediately after argument, and justices or clerks may read those arguments and thus have "ex parte" contact with litigants. The author worries that this ex parte blogging may threaten "the impartial administration of justice and will systematically disadvantage some litigants." Thus, she concludes, "the legal profession should consider regulating ex parte blogging, despite the contributions that counsel for parties and amici might make to public discourse about constitutional and legal issues."
Hmmm . . . we never thought about that before.
But we'll think about it now:
First of all, we object to the very concept of "ex parte" blogging. That term connotes one side making some sort of sneaky, secret contact with a court, without the knowledge of the other side. Sorry, but that ain't blogging. Everybody in the world can read what we say. Anybody can respond to what we say. On the spectrum of legally-related things to do, blogging has to be just about the least secretive activity imaginable. So right from the beginning, the Note puts the rabbit in the hat by slapping a pejorative label on what legal bloggers do.
As for the merits, on the one hand, Ms. Lee's concern is plainly too narrow. If it should be unethical to blog between argument and decision about cases pending in the Supreme Court, then surely it should also be unethical to blog between argument and decision about cases pending in state supreme courts, or in the federal trial and appellate courts - any court, for that matter. After all, why would the Supreme Court (with all the resources at its command) be more susceptible to influence from a lowly blawg like ours, compared to some other, less exaulted, judicial body.
So the thesis of this student note doesn't address the entire problem, if indeed there's a problem at all.
(N.B.: The thesis of the Note, as written, doesn't relate to anything that we've ever done on this blog. Neither of us has appeared in the Supreme Court on behalf of a party or an amicus curiae and then published a blog post about the case between the time of argument and decision.)
If the thesis of the Note is correct, however, then it should be broader. It should apply to publishing blog posts between argument and decision for all cases pending in all courts nationally.
That rule, of course, would put us out of business.
(We heard that! Stop cheering.)
It would put out of business all legal blogs by lawyers who represent clients in any court. Law professors could still blog, but the rest of us ink-stained (electron-zapped?) wretches would have to close up shop.
Between the two of us, we've had preemption motions pending somewhere -- in a state or federal trial or appellate court -- on every day since we started publishing this blog 2 1/2 years ago. We've had Daubert motions pending on many days, and learned intermediary motions pending on many days.
We've never tried to influence the result in any particular case that one of us was defending, but we're surely trying to influence generally the public debate about the issues that we discuss: That's one of the reasons for publishing this blog. And we like to think that we're improving the public discourse by sharing our ideas.
Another reason we blog is to ensure that everybody on the defense side has access to new and cutting edge arguments (and decisions) that might help win cases. That's why we devote a lot of time to what's being argued in Supreme Court briefs. Given the influence of precedent under the rule of stare decisis, the more the defense wins - wherever those wins occur and whoever wins them - the better off all our clients will be in the long run.
Maybe it's an oversight, but the two of us have never actually sat down and discussed what "ethical" rules we would apply to our blog posts, but we try to be reasonable about it. More or less unconsciously, we've sort of fallen into these rules:
(1) We've never hidden our bias. We represent drug and device companies for a living. We like what we do. If you're looking for pro-plaintiff blog posts, you've come to the wrong place.
(2) We generally steer clear of cases that we're working on. But sometimes Bexis will recuse himself from writing about a particular case that he's working on, and Herrmann alone will publish a post about the case, or vice versa. We do that both out of a sense of fairness and to avoid inadvertently offending the clients for whom we work. We're not sure it makes much difference in terms of the substance of a post, anyway, since we pretty much think in lockstep about the defense of these cases. But unless there's a good reason not to, we generally steer clear of cases that we're working on.
(3) If we do post about a case that we're working on (because, for example, it creates an important precedent that our readers should be aware of), we disclose that we're working on the case.
But all of that is driven by our sense of what's right, not by any code of ethics that is (or, to our eye, should be) imposed on us.
The Stanford Note worries that sophisticated litigants have a better sense of how to influence the Supreme Court and so might benefit disproportionately from just-in-time blogging, if the rules of ethics don't prohibit it. We don't mean to be crass here, but, if that's a problem, it's the gnat on the elephant's rear.
The rich, sophisticated litigant retains specialized, expensive Supreme Court counsel, gives that counsel an unlimited budget to write a brief and prepare for argument, runs counsel through a series of mock arguments, and then has a known and respected advocate appear before the Court.
The poor litigant retains Joe Sixlawyer who dictates and files a piece of garbage and then embarrasses himself at argument.
And we're gonna worry about blog posts?
Forgive us for not being overly concerned -- at least about the blog post part.
Throughout the note, there's an undercurrent that, when one side (particularly someone already "advantaged") comes up with something that might give it an "extra" benefit, that side should be penalized and silenced. Is there something in the water out there? We saw the same mindset in Kasky v. Nike, where the California Supreme Court gave the green light to suits against companies under the states consumer protection statute where the company had the audacity to defend itself against politically oriented attacks.
We beg to differ. We think the answer is more, not less, speech. If, say, the Stanford Law Review is concerned that blawgs disproportionately disadvantage particular groups, let them start their own counter-blog. On their blog, they could advocate for the positions of death-row inmates, criminal sex offenders, evicted tenants, drug addicts, would-be beauty queens, or GOP moderates - anybody and everybody from society's poor and downtrodden classes. Thus they can pursue blogging equality affirmatively, rather than by tearing down the other side.
On the other hand, maybe some bar association or state supreme court somewhere could adopt the thesis suggested by the Note and apply it not just to the Supreme Court, but to all pending cases.
It's true that that would put this blog out of business.
But at least we could get a decent night's sleep.
(We probably should have thought about that before we started this gig, huh?)
Anyway, Rachel Lee's student note in the most recent Stanford Law Review is titled "Ex Parte Blogging: The Legal Ethics of Supreme Court Advocacy in the Internet Era." (In the printed edition, it's at 61 Stan. L. Rev. 1535 (2009). Ms. Lee frets that lawyers representing litigants in the Supreme Court will publish blog posts about their cases immediately after argument, and justices or clerks may read those arguments and thus have "ex parte" contact with litigants. The author worries that this ex parte blogging may threaten "the impartial administration of justice and will systematically disadvantage some litigants." Thus, she concludes, "the legal profession should consider regulating ex parte blogging, despite the contributions that counsel for parties and amici might make to public discourse about constitutional and legal issues."
Hmmm . . . we never thought about that before.
But we'll think about it now:
First of all, we object to the very concept of "ex parte" blogging. That term connotes one side making some sort of sneaky, secret contact with a court, without the knowledge of the other side. Sorry, but that ain't blogging. Everybody in the world can read what we say. Anybody can respond to what we say. On the spectrum of legally-related things to do, blogging has to be just about the least secretive activity imaginable. So right from the beginning, the Note puts the rabbit in the hat by slapping a pejorative label on what legal bloggers do.
As for the merits, on the one hand, Ms. Lee's concern is plainly too narrow. If it should be unethical to blog between argument and decision about cases pending in the Supreme Court, then surely it should also be unethical to blog between argument and decision about cases pending in state supreme courts, or in the federal trial and appellate courts - any court, for that matter. After all, why would the Supreme Court (with all the resources at its command) be more susceptible to influence from a lowly blawg like ours, compared to some other, less exaulted, judicial body.
So the thesis of this student note doesn't address the entire problem, if indeed there's a problem at all.
(N.B.: The thesis of the Note, as written, doesn't relate to anything that we've ever done on this blog. Neither of us has appeared in the Supreme Court on behalf of a party or an amicus curiae and then published a blog post about the case between the time of argument and decision.)
If the thesis of the Note is correct, however, then it should be broader. It should apply to publishing blog posts between argument and decision for all cases pending in all courts nationally.
That rule, of course, would put us out of business.
(We heard that! Stop cheering.)
It would put out of business all legal blogs by lawyers who represent clients in any court. Law professors could still blog, but the rest of us ink-stained (electron-zapped?) wretches would have to close up shop.
Between the two of us, we've had preemption motions pending somewhere -- in a state or federal trial or appellate court -- on every day since we started publishing this blog 2 1/2 years ago. We've had Daubert motions pending on many days, and learned intermediary motions pending on many days.
We've never tried to influence the result in any particular case that one of us was defending, but we're surely trying to influence generally the public debate about the issues that we discuss: That's one of the reasons for publishing this blog. And we like to think that we're improving the public discourse by sharing our ideas.
Another reason we blog is to ensure that everybody on the defense side has access to new and cutting edge arguments (and decisions) that might help win cases. That's why we devote a lot of time to what's being argued in Supreme Court briefs. Given the influence of precedent under the rule of stare decisis, the more the defense wins - wherever those wins occur and whoever wins them - the better off all our clients will be in the long run.
Maybe it's an oversight, but the two of us have never actually sat down and discussed what "ethical" rules we would apply to our blog posts, but we try to be reasonable about it. More or less unconsciously, we've sort of fallen into these rules:
(1) We've never hidden our bias. We represent drug and device companies for a living. We like what we do. If you're looking for pro-plaintiff blog posts, you've come to the wrong place.
(2) We generally steer clear of cases that we're working on. But sometimes Bexis will recuse himself from writing about a particular case that he's working on, and Herrmann alone will publish a post about the case, or vice versa. We do that both out of a sense of fairness and to avoid inadvertently offending the clients for whom we work. We're not sure it makes much difference in terms of the substance of a post, anyway, since we pretty much think in lockstep about the defense of these cases. But unless there's a good reason not to, we generally steer clear of cases that we're working on.
(3) If we do post about a case that we're working on (because, for example, it creates an important precedent that our readers should be aware of), we disclose that we're working on the case.
But all of that is driven by our sense of what's right, not by any code of ethics that is (or, to our eye, should be) imposed on us.
The Stanford Note worries that sophisticated litigants have a better sense of how to influence the Supreme Court and so might benefit disproportionately from just-in-time blogging, if the rules of ethics don't prohibit it. We don't mean to be crass here, but, if that's a problem, it's the gnat on the elephant's rear.
The rich, sophisticated litigant retains specialized, expensive Supreme Court counsel, gives that counsel an unlimited budget to write a brief and prepare for argument, runs counsel through a series of mock arguments, and then has a known and respected advocate appear before the Court.
The poor litigant retains Joe Sixlawyer who dictates and files a piece of garbage and then embarrasses himself at argument.
And we're gonna worry about blog posts?
Forgive us for not being overly concerned -- at least about the blog post part.
Throughout the note, there's an undercurrent that, when one side (particularly someone already "advantaged") comes up with something that might give it an "extra" benefit, that side should be penalized and silenced. Is there something in the water out there? We saw the same mindset in Kasky v. Nike, where the California Supreme Court gave the green light to suits against companies under the states consumer protection statute where the company had the audacity to defend itself against politically oriented attacks.
We beg to differ. We think the answer is more, not less, speech. If, say, the Stanford Law Review is concerned that blawgs disproportionately disadvantage particular groups, let them start their own counter-blog. On their blog, they could advocate for the positions of death-row inmates, criminal sex offenders, evicted tenants, drug addicts, would-be beauty queens, or GOP moderates - anybody and everybody from society's poor and downtrodden classes. Thus they can pursue blogging equality affirmatively, rather than by tearing down the other side.
On the other hand, maybe some bar association or state supreme court somewhere could adopt the thesis suggested by the Note and apply it not just to the Supreme Court, but to all pending cases.
It's true that that would put this blog out of business.
But at least we could get a decent night's sleep.
Friday, May 15, 2009
Update on NY Learned Intermediary Bill
We've already commented on what a bad idea the pending NY bill to abolish the learned intermediary rule is. Of course every defense lawyer who frequents this site already knows that, but if anybody out there needs persuading, here's some more information.
Or you can just go read the package insert for just about any prescription drug out there (just Google "package insert"), and think about what the average joe who needs a prescription drug is going to think if s/he tries to read that.
The excuse for the bill is that the drug manufacturer engaged in DTC (that's "direct-to-consumer" now, or "direct to court" if the bill passes) advertising - which is supposed to be bad. See "Justification." (go here and type in "S3157").
But what's abolishing the learned intermediary rule supposed to accomplish?
All it would do is increase DTC advertising - the supposed evil - since companies will henceforth be forced to deal directly with patients in each and every case, even where the patient never saw the ad.
Also the "justification" suggests that DTC information isn't all that reliable - but abolishing the learned intermediary rule would only take the most knowledgeable person, the doctor, out of the equation altogether. Again, what's proposed as a "cure" would only aggravate the supposed symptoms of the hypothetical disease.
In short, the "justifications" are incoherent, and in all likelihood they only serve as a fig leaf for what's really just a hand out to the plaintiffs' bar.
Remember that pledge to cut the costs of healthcare that the President extracted earlier this week? Those savings will never exist if legislation like this passes. There's no such thing as a free lunch - or free liability. It just gets passed along as a cost of doing business. If folks want what amounts to national health insurance, they can do a whole lot better than tort litigation with its 33%+ contingent fee administrative costs.
Anyway, we've been told by a source we consider unimpeachable that this monstrosity is up for a vote before the Consumer Protection Committee of the NY State Senate on Monday. If you know one the committee members, give him/her an earful before now and then.
Or you can just go read the package insert for just about any prescription drug out there (just Google "package insert"), and think about what the average joe who needs a prescription drug is going to think if s/he tries to read that.
The excuse for the bill is that the drug manufacturer engaged in DTC (that's "direct-to-consumer" now, or "direct to court" if the bill passes) advertising - which is supposed to be bad. See "Justification." (go here and type in "S3157").
But what's abolishing the learned intermediary rule supposed to accomplish?
All it would do is increase DTC advertising - the supposed evil - since companies will henceforth be forced to deal directly with patients in each and every case, even where the patient never saw the ad.
Also the "justification" suggests that DTC information isn't all that reliable - but abolishing the learned intermediary rule would only take the most knowledgeable person, the doctor, out of the equation altogether. Again, what's proposed as a "cure" would only aggravate the supposed symptoms of the hypothetical disease.
In short, the "justifications" are incoherent, and in all likelihood they only serve as a fig leaf for what's really just a hand out to the plaintiffs' bar.
Remember that pledge to cut the costs of healthcare that the President extracted earlier this week? Those savings will never exist if legislation like this passes. There's no such thing as a free lunch - or free liability. It just gets passed along as a cost of doing business. If folks want what amounts to national health insurance, they can do a whole lot better than tort litigation with its 33%+ contingent fee administrative costs.
Anyway, we've been told by a source we consider unimpeachable that this monstrosity is up for a vote before the Consumer Protection Committee of the NY State Senate on Monday. If you know one the committee members, give him/her an earful before now and then.
Neurontin Class Certification Denied - Again
Supposedly, Einstein said that, "insanity is doing the same thing over and over again and expecting different results.”
If that's the case, then these marketing-based class actions seeking refunds of the purchase price (or some fraction of it) for prescription drugs are at the Einsteinian extreme. As we've mentioned before, class certification in these sorts of cases has been denied again, and again, and again. We could add a lot more "agains" - but you get the drift. Just click on the "class action" label in the right hand margin for all our posts on the subject (warning: there are a bunch).
And the other day it happened again - for the second time - in the Neurontin off-label use litigation.
There's a lot of preliminaries, about commonality, numerosity, and typicality, that involves some complicated subclassing. But these cases always come down to one insurmountable barrier - predominance - and one irreducable fact - that when you've got learned intermediary physicians making prescription decisions, the basis for those decisions will always be individualized. Call it "reliance," or call it "causation" in cases involving information about prescription drugs, the result will be the same. Doctors apply their knowledge and experience to engage in patient-specific analyses of drug risks and benefits when prescribing drugs. That's their job. Prescription decisions aren't "caused" by anything on a classwide basis. And that goes double for off-label use, where by definition doctors have to rely on information sources other than drug labeling.
And, in the end, that's what the Neurontin court held. No "shortcuts" are possible. Slip op. at 43.
Slip op. at 43-44. Predominance did it again.
So why did the plaintiffs even try a second time in Neurontin? Maybe it's Einsteinian insanity, but we have to think that it's because the court left the door slightly ajar the first time around by allowing that a class might be permissible if only a "de minimus" amount of off-label use existed before the defendant's supposed misrepresentations, and such use increased several orders of magnitude (or something like that) afterwards. In re Neurontin Marketing & Sale Practices
Litigation, 244 F.R.D. 89 , 113-14 (D. Mass. 2007).
But the Neurontin court recognized that four decisions handed down in the interim closed the door on this "de minimus" exception. First, in International Union of Operating Engineers Local No. 68 Welfare Fund v. Merck & Co., Inc., 929 A.2d 1076, 1085-86 (N.J. 2007), the court both took the NJ consumer fraud act off the table by broadly rejecting fraud-on-the-market type theories of proving causation. Second, McLaughlin v. American Tobacco Co., 522 F.3d 215, 223-25 (2d Cir. 2008), reversed the primary precedent cited the first time around in Neurontin, and equally broadly rejected fraud-on-the-market causation proof. Third, in In re St. Jude Medical Inc. Silzone Heart Valve Products Litigation, 522 F.3d 836, 840 (8th Cir. 2008), the court recognized that, even where a consumer fraud statute does not require affirmative proof of "reliance," a defendant's individualized evidence of non-reliance as a defense to causation precludes class certification. Fourth, another judge in the same district as Neurontin - In re TJX Cos. Retail Security Breach Litigation, 246 F.R.D. 389, 395 (D. Mass. 2008), broadly rejected presumptions of reliance outside of federal securities actions.
Slip op. at 24-29.
The Neurontin court also rejected the plaintiff's stab at "statistical" proof. "Plaintiffs’ theory is nothing if not novel; they ask the Court to permit a statistical analysis to function as common proof of causation for millions of disparate and varied human interactions that resulted in off-label prescriptions for Neurontin." Slip op. at 33. That model failed utterly to distinguish between mere off-label marketing and "fraudulent" marketing. Rather, the expert put the rabbit in the hat - "assum[ing] on instruction of counsel that all detailing during the class period was both off-label and fraudulent." Slip op. at 39.
Why are we not surprised? If you uniformly assume what you're supposed to be trying to prove, then you're likely to be able to show that it can generally be proven. A classic case of "lies, damn lies, and statistics" - or "garbage in, garbage out." The court thought so too - even to the point of using its own cliche:
Slip op. at 39. Try as they might, it's impossible for plaintiffs to reduce individualized physician prescription decisions to a classwide statistical model:
Slip op. at 40-41.
And the third-party payor class failed as well - for the reasons stated by the New Jersey Supreme Court in Operating Engineers - because "TPPs exhibit a great degree of heterogeneity." Slip op. at 46. Tautological statistics assuming what plaintiffs purported to prove failed again, and plaintiffs could "not present[] the court with an acceptable form of common proof. Slip op. at 50.
Thus, even where plaintiffs had pleaded "blatantly illegal off-label promotion activities for which [defendants] have been criminally sanctioned," slip op. at 50, individual litigation, and not class actions, were the means for prosecuting any legitimate claims that might be out there.
It doesn't take an Einstein to conclude where further pursuit of this sort of class action is headed.
If that's the case, then these marketing-based class actions seeking refunds of the purchase price (or some fraction of it) for prescription drugs are at the Einsteinian extreme. As we've mentioned before, class certification in these sorts of cases has been denied again, and again, and again. We could add a lot more "agains" - but you get the drift. Just click on the "class action" label in the right hand margin for all our posts on the subject (warning: there are a bunch).
And the other day it happened again - for the second time - in the Neurontin off-label use litigation.
There's a lot of preliminaries, about commonality, numerosity, and typicality, that involves some complicated subclassing. But these cases always come down to one insurmountable barrier - predominance - and one irreducable fact - that when you've got learned intermediary physicians making prescription decisions, the basis for those decisions will always be individualized. Call it "reliance," or call it "causation" in cases involving information about prescription drugs, the result will be the same. Doctors apply their knowledge and experience to engage in patient-specific analyses of drug risks and benefits when prescribing drugs. That's their job. Prescription decisions aren't "caused" by anything on a classwide basis. And that goes double for off-label use, where by definition doctors have to rely on information sources other than drug labeling.
And, in the end, that's what the Neurontin court held. No "shortcuts" are possible. Slip op. at 43.
Given the limitations in [statistical] analysis, [the expert's] report does not suffice to defeat the predominance challenge. As is discussed above, without this statistical proof to support a presumption of causation, plaintiffs cannot meet Rule 23(b)(3)’s predominance requirement.
Slip op. at 43-44. Predominance did it again.
So why did the plaintiffs even try a second time in Neurontin? Maybe it's Einsteinian insanity, but we have to think that it's because the court left the door slightly ajar the first time around by allowing that a class might be permissible if only a "de minimus" amount of off-label use existed before the defendant's supposed misrepresentations, and such use increased several orders of magnitude (or something like that) afterwards. In re Neurontin Marketing & Sale Practices
Litigation, 244 F.R.D. 89 , 113-14 (D. Mass. 2007).
But the Neurontin court recognized that four decisions handed down in the interim closed the door on this "de minimus" exception. First, in International Union of Operating Engineers Local No. 68 Welfare Fund v. Merck & Co., Inc., 929 A.2d 1076, 1085-86 (N.J. 2007), the court both took the NJ consumer fraud act off the table by broadly rejecting fraud-on-the-market type theories of proving causation. Second, McLaughlin v. American Tobacco Co., 522 F.3d 215, 223-25 (2d Cir. 2008), reversed the primary precedent cited the first time around in Neurontin, and equally broadly rejected fraud-on-the-market causation proof. Third, in In re St. Jude Medical Inc. Silzone Heart Valve Products Litigation, 522 F.3d 836, 840 (8th Cir. 2008), the court recognized that, even where a consumer fraud statute does not require affirmative proof of "reliance," a defendant's individualized evidence of non-reliance as a defense to causation precludes class certification. Fourth, another judge in the same district as Neurontin - In re TJX Cos. Retail Security Breach Litigation, 246 F.R.D. 389, 395 (D. Mass. 2008), broadly rejected presumptions of reliance outside of federal securities actions.
Slip op. at 24-29.
The Neurontin court also rejected the plaintiff's stab at "statistical" proof. "Plaintiffs’ theory is nothing if not novel; they ask the Court to permit a statistical analysis to function as common proof of causation for millions of disparate and varied human interactions that resulted in off-label prescriptions for Neurontin." Slip op. at 33. That model failed utterly to distinguish between mere off-label marketing and "fraudulent" marketing. Rather, the expert put the rabbit in the hat - "assum[ing] on instruction of counsel that all detailing during the class period was both off-label and fraudulent." Slip op. at 39.
Why are we not surprised? If you uniformly assume what you're supposed to be trying to prove, then you're likely to be able to show that it can generally be proven. A classic case of "lies, damn lies, and statistics" - or "garbage in, garbage out." The court thought so too - even to the point of using its own cliche:
The core assumption in the [expert's] model is that off-label prescriptions caused by detailing expenditures were necessarily caused by a fraud, that is, that off-label promotion was the same as fraudulent promotion. As Madison Avenue would have predicted, [the expert] finds a strong correlation between expenditures on Neurontin promotion and the number of prescriptions written for the drug.
Slip op. at 39. Try as they might, it's impossible for plaintiffs to reduce individualized physician prescription decisions to a classwide statistical model:
[T]he record in this case demonstrates why the use of spending on fraudulent off-label detailing as a means to ascertain the number of prescriptions subject to the fraud is flawed. Significantly, the testimony of the prescribing physicians for the . . . subclass representatives indicates that only one of them . . . was ever detailed by defendants about Neurontin. . . . Even if this hurdle could be overcome, [the expert's] analysis does not take into account any other factors that may have led doctors’ to prescribe Neurontin for off-label indications. The deposition testimony of the doctors for the . . . class representatives shows that their decisions to prescribe Neurontin resulted from a wide variety of influences unrelated to the three components of defendants’ alleged fraud.
Slip op. at 40-41.
And the third-party payor class failed as well - for the reasons stated by the New Jersey Supreme Court in Operating Engineers - because "TPPs exhibit a great degree of heterogeneity." Slip op. at 46. Tautological statistics assuming what plaintiffs purported to prove failed again, and plaintiffs could "not present[] the court with an acceptable form of common proof. Slip op. at 50.
Thus, even where plaintiffs had pleaded "blatantly illegal off-label promotion activities for which [defendants] have been criminally sanctioned," slip op. at 50, individual litigation, and not class actions, were the means for prosecuting any legitimate claims that might be out there.
It doesn't take an Einstein to conclude where further pursuit of this sort of class action is headed.
Sprint Fidelis FOIA Spat
Here's a Freedom of Information Act (FOIA) tangent to the Sprint Fidelis Products Liability Litigation:
Plaintiffs requested information about Medtronic's Sprint Fidelis Leads from the FDA under FOIA.
The FDA produced documents, but redacted portions of the documents under an exemption to FOIA.
Plaintiffs sought "an order compelling Medtronic to consent to a production of its [unredacted] documents by the Federal Food and Drug Administration . . . and to amend the Protective Order in this case to specifically protect the confidentiality of these documents produced by the FDA." In re Medtronic, Inc., Sprint Fidelis Leads Prods. Liab. Litig., No. 08-1905 (RHK/JSM), slip op. (D. Minn. May 11, 2009) (link here).
In the boring part of the opinion, Magistrate Judge Janie Mayeron denied plaintiffs' motion because the presiding trial judge, Richard Kyle, had previously stayed discovery pending his ruling on a motion to dismiss. Id. at 10. The magistrate judge would not effectively reverse that decision.
In the interesting part of the decision, Magistrate Judge Mayeron also denied plaintiffs' motion because the court did not view itself as able to order "selective disclosure" under FOIA. That is, plaintiffs wanted the court to compel disclosure of the unredacted documents only to plaintiffs, and the protective order entered in the product liability litigation would then prevent further disclosure of the confidential information. But Magistrate Judge Mayeron did not believe this was possible; if the FDA produced the unredacted documents to plaintiffs under FOIA, the agency would also have to produce those documents to others who requested them:
"[P]roduction of unredacted documents by the FDA to a select few who need the documents in order to prosecute a legal action, while at the same time denying access to other requesting parties on the basis of a statutory exemption, is contrary to the notion that information produced under FOIA by agencies belongs to the public." Id. at 13.
"Indeed, disclosure of a document to one individual may serve as a waiver by an agency of an exemption when it attempts to assert it against another individual seeking the same document." Id. at 14. "'[W]hile information disclosed during discovery is limited to the parties and can be subject to protective orders against further disclosure, when a document must be disclosed under FOIA, it must be disclosed to the general public and the identity of the requester is irrelevant to whether disclosure is required.'" Id. at 15 (citation omitted).
For good measure, the court also noted that it lacked jurisdiction to enjoin the FDA from withholding documents because there was no FOIA complaint pending before the court. Id. at 16.
(Although we're drawing this case to your attention, we pass no judgment on the propriety of the court's decision. We suspect that we, or our colleagues, may in the future have clients that believe Magistrate Judge Mayeron decided this case wrongly. Maybe she did; maybe she didn't -- heck if we know. We're taking no position on whether the result was right or wrong. We're just passing on the news that this decision came down. At that point, use the precedent as you will. Good luck with it.)
Plaintiffs requested information about Medtronic's Sprint Fidelis Leads from the FDA under FOIA.
The FDA produced documents, but redacted portions of the documents under an exemption to FOIA.
Plaintiffs sought "an order compelling Medtronic to consent to a production of its [unredacted] documents by the Federal Food and Drug Administration . . . and to amend the Protective Order in this case to specifically protect the confidentiality of these documents produced by the FDA." In re Medtronic, Inc., Sprint Fidelis Leads Prods. Liab. Litig., No. 08-1905 (RHK/JSM), slip op. (D. Minn. May 11, 2009) (link here).
In the boring part of the opinion, Magistrate Judge Janie Mayeron denied plaintiffs' motion because the presiding trial judge, Richard Kyle, had previously stayed discovery pending his ruling on a motion to dismiss. Id. at 10. The magistrate judge would not effectively reverse that decision.
In the interesting part of the decision, Magistrate Judge Mayeron also denied plaintiffs' motion because the court did not view itself as able to order "selective disclosure" under FOIA. That is, plaintiffs wanted the court to compel disclosure of the unredacted documents only to plaintiffs, and the protective order entered in the product liability litigation would then prevent further disclosure of the confidential information. But Magistrate Judge Mayeron did not believe this was possible; if the FDA produced the unredacted documents to plaintiffs under FOIA, the agency would also have to produce those documents to others who requested them:
"[P]roduction of unredacted documents by the FDA to a select few who need the documents in order to prosecute a legal action, while at the same time denying access to other requesting parties on the basis of a statutory exemption, is contrary to the notion that information produced under FOIA by agencies belongs to the public." Id. at 13.
"Indeed, disclosure of a document to one individual may serve as a waiver by an agency of an exemption when it attempts to assert it against another individual seeking the same document." Id. at 14. "'[W]hile information disclosed during discovery is limited to the parties and can be subject to protective orders against further disclosure, when a document must be disclosed under FOIA, it must be disclosed to the general public and the identity of the requester is irrelevant to whether disclosure is required.'" Id. at 15 (citation omitted).
For good measure, the court also noted that it lacked jurisdiction to enjoin the FDA from withholding documents because there was no FOIA complaint pending before the court. Id. at 16.
(Although we're drawing this case to your attention, we pass no judgment on the propriety of the court's decision. We suspect that we, or our colleagues, may in the future have clients that believe Magistrate Judge Mayeron decided this case wrongly. Maybe she did; maybe she didn't -- heck if we know. We're taking no position on whether the result was right or wrong. We're just passing on the news that this decision came down. At that point, use the precedent as you will. Good luck with it.)
Thursday, May 14, 2009
A Device Preemption Quickie -- Heisner v. Genzyme
In Heisner v. Genzyme, No. 08-C-593, 2009 U.S. Dist. LEXIS 37322 (N.D. Ill. Apr. 30, 2009), Heisner allegedly died as a result of an allergic reaction to Seprafilm, an anti-adhesive surgical barrier implanted in her body during a surgery. Seprafilm is a Class III medical device approved by the FDA through the premarket approval process.
Heisner's surviving spouse and estate filed the usual product liability claims against Genzyme, which manufactured Seprafilm. The trial court granted Genzyme's motion to dismiss on the ground of federal preemption.
Two items merit quick note: First, plaintiff asserted that his claims were "parallel" to, rather than "different from or in addition to" the federal requirements applicable to Seprafilm, because Genzyme had allegedly failed to report to the FDA (1) the death of plaintiff's decedent, and (2) a clinical trial protocol and related warnings finalized after Heisner's death. The trial court didn't have to address the "parallel requirements" issue, because events that took place after Heisner's death could not possibly have proximately caused Heisner's injury. Id. at *5.
Second, plaintiff's express warranty claims were based on statements made by Genzyme in (1) the package inserts for Seprafilm, and (2) the PMA protocol for certain Seprafilm clinical trials -- both of which had been approved by the FDA. Because the alleged warranties were based on statements that had been approved by the FDA, the court found those allegations of breach of warranty to be preempted. Id. at *8.
We'll include this one in the ever-expanding (New) Medical Device Preemption Scorecard.
Heisner's surviving spouse and estate filed the usual product liability claims against Genzyme, which manufactured Seprafilm. The trial court granted Genzyme's motion to dismiss on the ground of federal preemption.
Two items merit quick note: First, plaintiff asserted that his claims were "parallel" to, rather than "different from or in addition to" the federal requirements applicable to Seprafilm, because Genzyme had allegedly failed to report to the FDA (1) the death of plaintiff's decedent, and (2) a clinical trial protocol and related warnings finalized after Heisner's death. The trial court didn't have to address the "parallel requirements" issue, because events that took place after Heisner's death could not possibly have proximately caused Heisner's injury. Id. at *5.
Second, plaintiff's express warranty claims were based on statements made by Genzyme in (1) the package inserts for Seprafilm, and (2) the PMA protocol for certain Seprafilm clinical trials -- both of which had been approved by the FDA. Because the alleged warranties were based on statements that had been approved by the FDA, the court found those allegations of breach of warranty to be preempted. Id. at *8.
We'll include this one in the ever-expanding (New) Medical Device Preemption Scorecard.
Wednesday, May 13, 2009
Weinstein Grants Daubert Motion in Zyprexa MDL
Judge Jack Weinstein is ordinarily pretty lenient when it comes to whether expert witnesses satisfy the Daubert standards for testifying.
Yesterday, however, he excluded an expert in the Zyprexa MDL on Daubert grounds.
(Don't get us wrong here. Judge Weinstein also denied motions to exclude two experts yesterday. But we're choosing to focus on the rarer bird -- the exclusion.)
In In re Zyprexa Prods. Liab. Litig., No. 04-MD-1596, slip op. (E.D.N.Y. May 12, 2009) (link here), plaintiffs offered Stephen J. Hamburger, M.D., to prove the specific causal relationship between the Zyprexa ingested by particular plaintiffs and the onsent or worsening of their diabetes. Hamburger had been deposed in 20 cases, and the court held an evidentiary hearing, so the evidentiary record was pretty extensive.
Judge Weinstein found that Dr. Hamburger met "the necessary educational and experiential qualifications warranting admiisibility of his expert testimony." Id. at 8. And Hamburger's opinion on general causation was sufficiently reliable. Id.
But his specific causation opinions were unscientific. Here's the money quote:
"He has been shockingly careless about the facts in the cases he proposes to opine about: whether weight gain preceded or followed use of Zyprexa, whether there was weight gain at all, the scientific basis for the claimed causal link between Zyprexa intake and medical injury, and the like. Faced under oath with consistent extensive factual discrepancies in his analyses, he merely shrugged them off or flippantly shifted to new theories and explanations to establish causal relationships. He repeatedly and impermissibly stretched the truth to support findings of causality.
"Dr. Hamburger's pattern of disregard of facts and theory mandate his rejection as an expert in all these cases. The court cannot permit a major pharmaceutical litigation to become the subject of the kind of 'rubber-stamp' expert opinions that have so marred mass litigations such as those involving asbestos and breast implants."
Id. at 9.
Kudos to Andy Rogoff and his team at Pepper Hamilton for the win.
Yesterday, however, he excluded an expert in the Zyprexa MDL on Daubert grounds.
(Don't get us wrong here. Judge Weinstein also denied motions to exclude two experts yesterday. But we're choosing to focus on the rarer bird -- the exclusion.)
In In re Zyprexa Prods. Liab. Litig., No. 04-MD-1596, slip op. (E.D.N.Y. May 12, 2009) (link here), plaintiffs offered Stephen J. Hamburger, M.D., to prove the specific causal relationship between the Zyprexa ingested by particular plaintiffs and the onsent or worsening of their diabetes. Hamburger had been deposed in 20 cases, and the court held an evidentiary hearing, so the evidentiary record was pretty extensive.
Judge Weinstein found that Dr. Hamburger met "the necessary educational and experiential qualifications warranting admiisibility of his expert testimony." Id. at 8. And Hamburger's opinion on general causation was sufficiently reliable. Id.
But his specific causation opinions were unscientific. Here's the money quote:
"He has been shockingly careless about the facts in the cases he proposes to opine about: whether weight gain preceded or followed use of Zyprexa, whether there was weight gain at all, the scientific basis for the claimed causal link between Zyprexa intake and medical injury, and the like. Faced under oath with consistent extensive factual discrepancies in his analyses, he merely shrugged them off or flippantly shifted to new theories and explanations to establish causal relationships. He repeatedly and impermissibly stretched the truth to support findings of causality.
"Dr. Hamburger's pattern of disregard of facts and theory mandate his rejection as an expert in all these cases. The court cannot permit a major pharmaceutical litigation to become the subject of the kind of 'rubber-stamp' expert opinions that have so marred mass litigations such as those involving asbestos and breast implants."
Id. at 9.
Kudos to Andy Rogoff and his team at Pepper Hamilton for the win.
Hearings on the Medical Device Safety Act of 2009
For those who are following the Medical Device Safety Act of 2009 -- the bill that would reverse the Supreme Court's pro-preemption decision in Riegel v. Medtronic, here are two links:
First, a short list of the names and affiliations of the witnesses who testified yesterday before the House Energy and Commerce Subcommittee.
Second, the testimony given at the hearing.
Enjoy!
First, a short list of the names and affiliations of the witnesses who testified yesterday before the House Energy and Commerce Subcommittee.
Second, the testimony given at the hearing.
Enjoy!
Tuesday, May 12, 2009
Finalizing ALI’s Principles Of The Law Of Aggregate Litigation
As members of the American Law Institute (“ALI”) we’ve been closely following the evolution of the Institute’s Principles project on Aggregate Litigation (“PLAL”) – read: class actions – ever since we joined. In prior posts we’ve found plenty about which we were critical. See here, here, here, and here. But for our part we've never given up. We've kept attending meetings, asking questions, and corresponding with the Reporters (those are the law school professors actually responsible for writing the thing) on ways to improve things. And more importantly, we’ve also seen the Reporters make significant efforts to respond to back seat drivers like us. Thus, we’ve acknowledged that the drafts have gotten progressively better and now more closely reflect sensible class action practice in a lot more ways.
That’s true as well with the April 1, 2009 “Proposed Final Draft.”
Aside: This is where we normally link to the place on the ALI’s website where interested persons can purchase a copy of the latest draft – but we’ve looked all around and we don’t see this latest version listed. We don't know why, but the "Final Draft" isn't for sale - at least not yet. [Update: 5/13/09 - the ALI has informed us that the Final Draft is now available for purchase ($45 a pop) at the link we've provided; it was an oversight]
The Final Draft is to be voted on by the ALI’s membership at the Institute’s annual meeting in Washington DC on May 20, 2009. Here’s the meeting agenda. We encourage everyone who’s an ALI member to study the latest draft carefully and to come to the meeting, participate in the debate, and vote.
The world is run by those who show up, folks.
There are a lot of improvements in the Final Draft, but for us the most notable is the elimination of the prior drafts’ attempts (in what was then §2.06) to reduce constitutional constraints upon class actions under the Seventh Amendment. That’s been deleted in the most recent draft, and the Seventh Amendment is acknowledged as a constraint on what courts can do:
Final Draft §2.03, comment b. That’s good enough for us. Scratch one major, longstanding objection off the list.
There’s also a more detailed discussion of why class actions are almost always inappropriate in personal injury actions. Such actions “involv[e] high variability and high variation.” Final Draft §2.02, comment b. Even where individual “common issues” might be identified, this variability should preclude class action treatment:
On the other hand, we admit we’re not perfect either. The blatant fraud that’s recently been uncovered in the Nicaraguan banana worker litigation – bogus claims by recruited overseas plaintiffs who used violence and a corrupt “banana republic” court system to conceal their fraud, transcript here (tip of the cap to CalBizLit) – is only the latest in a number of litigation atrocities that American companies have faced while sued for mass torts in foreign courts. Thus, we’ve reconsidered our opposition to PLAL §2.10. That section would make a “consent” procedure available to aggregate litigation by foreign plaintiffs against American companies in American courts. We might even like to see §2.10 strengthened to force foreign plaintiff fraudsters to litigate here if they sue American companies.
But there’s still room for improvement.
On the ALI’s website, there are three amendments that have been offered to PLAL that will be voted upon in the May 20, 2009 session. They concern: (1) single issue classes and preserving the predominance prerequisite to class certification. This amendment was prepared by class action defense guru John Beisner, whose thoughtful comments on the PLAL we’ve previously featured. (2) reducing the emphasis on controversial medical monitoring claims. Bexis put together this amendment. (3) fixing some lingering problems in the choice of law section (§2.05) including the longstanding issue of whether there's a principal-place-of-business rule that would allow plaintiffs all over the country to sue under the law of a single state. This amendment is offered by Vic Schwartz. Note: there are also a couple of other comments posted by the ALI that don't purport to be formal formal amendments. We agree with most of the Morrison comments (which are technical) and reserve judgment on the Weiss comment.
We recommend a “yes” vote on all three amendments, and here’s why.
Proposed Amendment Number 1: Single issue class actions aren’t that frequent and should stay that way. This amendment to PLAL §§2.02 and 2.03 recognizes, first of all, that progress has been made in toning down the earlier drafts’ endorsement of single-issue class actions in all sorts of actions. Compared to what we once thought would be required, these amendments are concise and surgical. For example, there’s no longer anything in the black letter that requires going to the mat. There's no longer anything in §2.02 that overtly champions single-issue class actions. The remaining problems are in the Comments and Reporters’ notes.
Some of this proposed amendment pertains to §2.02 and some to §2.03. We’ll go over the §2.02 aspects first.
The first part of the amendment is, to us, the most important one of all. It adds a simple sentence to §2.02, comment a that recognizes predominance – which is an element of class certification specified in both Fed. R. Civ. P. 23(b)(3) and in the analogous class action rules of virtually every state. This amendment provides that “this Section should not be construed to suggest that the predominance concept does not apply fully to such classes.” The “such” reference is to single issue classes. That's all that's really necessary. Leave predominance alone - precedent demonstrates that it's quite capable of defending itself in court.
Our greatest concern, over the course of all of the prior drafts, has been that the PLAL has sought to weaken the predominance requirement for class certification – which is one element of class certification to which courts have historically given the most “teeth.” Without predominance, courts wouldn’t care nearly as much about things such as reliance in fraud, causation in personal injury cases, exposure in medical monitoring and choice of law generally. Without predominance we’d essentially have drive-by class certification, and that’s not how the law is or how we think it should be. The PLAL's initial outright hostility towards predominance has abated to the point that the Reporters have publicly disavowed any intent to de-emphasize predominance. Thus, we would hope this amendment is not controversial.
The single-issue class amendment includes several corresponding changes (we're not even sure they're technically "amendments") to the reporter’s notes to §2.02. The first, while recognizing that courts have divided on how to treat predominance in single-issue (so-called “(c)(4)”) classes, does not go on to label them “confused,” as the current draft does. We don't think that the split of authority reflects confusion, but rather a genuine difference in approach - whether predominance applies to both the litigation as a whole and to the single issue class, or to just the latter, more narrow, selected issue.
This amendment goes on to equalize the space devoted to both approaches. We think that's still quite generous to the single-issue advocates, since the majority rule (discussed at length in the amendment's rationale section) does not view single-issue classes as an exception to predominance.
The next amendment to the reporters’ notes deals mostly with Canadian law. If' you're wondering what relevance Canadian law has to a principles project devoted to procedure in US courts, join the club (we'd support an amendment striking Canadian law altogether, but there isn't one). The single-issue class amendment moderately contents itself with adding more recent Canadian appellate precedent that disagrees with the Canadian trial decision that’s discussed in the current draft. Thus it recognizes that a similar split of authority exists in Canadian courts as to issue cases (and that's with a Canadian rule that doesn't even contain the US predominance requirement). We agree that, if Canadian precedent is to be used at all, the discussion should be current and complete. That's what this aspect of the amendment does.
The final amendment to the Reporters’ notes for §2.02 recognizes what just about everyone, no matter what position s/he advocates, recognizes is true – single issue classes are not very common. Historically, most courts have denied certification, when plaintiffs have proposed single issue classes. But the current draft PLAL professes to find an “emerging convergence” – based on two Seventh Circuit cases from 2003-04 – supporting single issue classes. That is deleted by this amendment, since any “convergence” (emerging, harmonic, or otherwise) has since remained submerged for another five years. In place of the "convergence" language this amendment includes a selection of cases representing the majority rule limiting single-issue classes, discusses the most frequently proposed separate issue (“general causation”), and points out a fact: that “in most instances” single-issue classes have not succeeded. We agree with that.
The “justification” for this amendment – under good ALI practice substantive amendments must be accompanied by a persuasive legal justification – contains a much more exhaustive treatment of relevant precedent, demonstrating that single-issue classes are often requested but seldom allowed. In addition to Castano (cited in the current draft), the amendment demonstrates that district courts continue to reject single-issue cases (“gerrymandering” one court called it) in a wide variety of contexts. The justification also examines the two Seventh Circuit cases (Mejdrech v. Met-Coil Systems Corp., 319 F.3d 910 (7th Cir. 2003) and Allen v. International Truck & Engine Corp., 358 F.3d 469 (7th Cir. 2004)), and argues that they do not support the broad propositions for which they are cited by the Reporters notes, particularly Allen, which was not a (b)(3) class and thus did not even involve predominance.
The single-issue class amendment lastly jumps to §2.03, and makes one revision to the “Effect on current law” section. The amendment more succinctly states that no rules changes are necessary, and acknowledged the undeniable fact that, at least in product liability and personal injury, most courts reject single-issue classes. Again, this is a significant improvement.
There’s another aspect to the amendment’s justification – practicality. The paucity of single-issue classes over the forty-plus years that Rule 23 has permitted them is equally due to the fact that they just don’t work very well. General causation, for example, doesn’t really prove anything. Almost everything has a dose-response relationship, so the individualized issue of exposure makes this sort of general question essentially meaningless. And almost all diseases have multiple possible causes or vectors, so the “general” question is further confounded by individualized alternative causation issues. Because of this doubly individualized lens through which “general causation” must be focused in any given case, the potential for unconstitutional re-examination of evidence (the Seventh Amendment point) is particularly acute.
From day one, our biggest overall concern about the PLAL as a whole has been its hostility to the predominance requirement and its receptivity to single-issue classes – particularly in areas where such classes have not been allowed by the courts. This simple amendment to the single-issue class discussion goes straight to the heart of that issue and we think goes a long way towards keeping the single-issue-class genie in the bottle.
Now, if we were kings of the class action world, we’d probably do something more drastic – like limit single issue classes to injunctive relief only (á la Allen) – but we’re not, so we view this amendment as a workable compromise.
Proposed Amendment Number 2: Reduce the emphasis on medical monitoring – since its existence is controversial – and recognize that lots of courts view lots of monitoring schemes as both individualized and divisible.
We reiterate: Bexis drafted and submitted this amendment. We don’t claim to be objective about this (as if we ever do) – we just think it’s right, even considering the source. But we also think it's a good idea to be entirely up front whenever we advocate something here that we're also advocating somewhere else.
Again, this amendment does not affect the black letter law of §2.04. At that level of abstraction, we have no major, amendment-worthy objections. It’s the illustrations that concern us.
As we’ve stated in our prior posts about PLAL, we have two major problems with the medical monitoring discussion contained in the “indivisible” remedies section (now §2.04; formerly §2.05). First, there’s altogether too much attention given to a controversial cause of action that only a minority of the states have adopted and that the ALI itself has never recognized. Not even well-recognized theories warrant eight separate illustrations. Second, the discussion, and especially the order of the illustrations, gives the impression that medical monitoring claims are routinely certifiable as mandatory-non-opt out class actions. That’s just not so. Most medical monitoring claims are not certifiable at all, given individualized exposure and risk issues. And even if they are, a lot of courts don’t consider a lot of proposed medical monitoring to be “indivisible.” Rather plenty of courts view medical monitoring claims as seeking money damages – plus a fig leaf or two.
At the outset, we apologize to the Reporters if they're feeling a little “damned if you do; damned if you don’t.” That is not the intent. We recognize that several of the current illustrations were added to address objections previously made to the questionable substantive status of medical monitoring – such as that a lot of states don't recognize the claim at all (at least not in the absence of present injury).
Those illustrations make valid points, but they aggravated the other problem, that of excessive attention. As a result, we’ve come to the conclusion that the points they make simply shouldn’t be made through illustrations. Rather, illustrations in §2.04 should be used in the same way as illustrations are throughout the PLAL, to illustrate procedural issues concerning aggregation.
So the medical monitoring amendment boils the eight current medical monitoring illustrations down to three. It deletes current Illustration 3, which is when medical monitoring isn’t recognized by substantive law at all, as well as current Illustrations 4, 6, and 9, which address medical monitoring claims where the evidence does not satisfy various substantive elements of a medical monitoring cause of action (testing needs different from the general public, testing not diagnostic, and present injury, respectively). We see those four illustrations as all matters of substantive law, not aggregation.
To replace the current plethora of medical monitoring illustrations, the amendment adds a paragraph stating that medical monitoring is controversial, that the ALI has never voted on whether to recognize it, and that PLAL takes no position on substantive law.
The justification for the amendment contains the most thorough state-by-state breakdown on medical monitoring that we've seen anywhere. The scorecard, as we see it: 11 states, DC and Guam have precedent recognizing medical monitoring; 20 states, federal common law, and the Virgin Islands have precedent rejecting medical monitoring; four states have divergent precedent; and the remaining jurisdictions have no precedent. We thought the 50-state survey was independently valuable, as an overview of medical monitoring, so we’ve already posted it, here.
But now you know that it was actually put together for the ALI. And that’s why we think it’s useful. The ALI commands the best, and we think this is.
The remaining illustrations have been reorganized, and revised reporters notes have been added. As the first illustration, the amendment places what we consider to be the most common result when class certification is sought in a medical monitoring case. That is a denial of certification due to individualized issues such as length/dose of exposure, pre-existing medical risks, contributory fault, etc. The accompanying justification lists literally dozens of cases representative of this illustration. The cases demonstrate that there is no trend away from denial of class certification in medical monitoring cases. Twenty of the cited cases are certification denials from 2003 or later.
We agree that the first illustration involving medical monitorint should reflect the certification decision that is most commonly reached by the courts in that type of case. The amendment does.
The second illustration in the amendment is representative of those cases in which class certification has been granted as to medical monitoring and similar claims. Most of the time, if a medical monitoring class is certified at all, the certification has been under Rule 23(b)(2) – which the PLAL equates with “indivisible” relief. The second illustration in the amendment (which is "Illustration 3"; Illustration 1 is not subject to any amendment and is intact) corresponds to Illustration 2 in the current final draft.
In accordance with the ALI’s tradition of putting client interests at the door (the opposite of how we write this blog), the medical monitoring amendment proposes a fully-researched Reporter’s note to accompany newly rewritten Illustration 2. That note collects more cases than are in the current draft, which have certified non-opt out medical monitoring cases.
In our defense-oriented blog, however, we can’t resist pointing out that those cases tend to be older (only 5 from 2003 or later) and tend to describe things that probably wouldn’t qualify any longer as “medical monitoring.” Even in states that recognize the remedy, medical monitoring is limited to the costs of necessary medical testing. That’s it. Such things as independent studies, data compilation, publication of notices, and the like may or may not be good things – but they aren’t recoverable as medical monitoring. Even where recognized, it's a limited remedy, a snack, not a smorgasbord.
The amendment's third illustration ("Illustration 4") recognizes that resort to a non-opt out class for medical monitoring is, in and of itself, controversial. Demands for medical monitoring have varied quite a bit, and many courts have viewed these demands as thinly disguised damages remedies. The third illustration describes a situation where the court concludes that a proposed remedy masquerading as "medical monitoring" is not, in fact, “indivisible” in terms of the PLAL. The amendment makes clear that this sort of decision is discretionary with the court – involving its evaluation of the wide variety of monitoring requests that can be made.
The accompanying Reporter’s note/justification (both repeat essentially the same thing) collect the cases that have viewed medical monitoring demands as not involving a form of “injunctive” (in terms of the case law) or “indivisible” (in terms of PLAL) relief. There are a lot of them. Thus we agree that this is the third – arguably the second, but the amendment tries to be even-handed – proper illustration concerning class action treatment of medical monitoring claims.
Thus we also support the second, medical monitoring amendment to the PLAL. Of course we do, Bexis wrote it. But no matter who was the author, we would agree that it represents an acceptable fix for the medical monitoring problems that the PLAL has exhibited since the earliest drafts we ever saw.
Proposed Amendment Number 3: Ordinary choice-of-law rules apply in aggregate litigation. This amendment (really a set of amendments, like the first) makes explicit a point that has never been in dispute – that the same choice of law rules should apply in aggregated litigation as in a single case of the same type. That’s a corollary to the principle of the Rules Enabling Act and similar state-law provisions, which is that the creation of procedural rules does not alter any party’s substantive rights. The amendment correctly states that cases purporting to apply different choice-of-law rules in aggregated litigation are contrary to the newly specified point, and it calls out a coupld of those cases.
One aspect of the principle added by the choice-of-law amendment is another ground for rejecting case-law that would apply a defendant’s principal place of business to any and all claims. Cases adopting this rule in aggregated litigation have mostly done so in situations where an individual claim making the same allegations would be subject to a different analysis – usually a First Restatement residence of the injured party/location of the accident rule or a Second Restatement balancing of multiple factors.
We have been critical of prior PLAL drafts because they treat the principal-place-of-business approach to choice of law as if it were on par with other choice-of-law principles. It’s not. Rather that approach has been considered and affirmatively rejected in many cases. We mentioned a few of them here, but there are lots more. It might be a good blog post some day to collect them all, but not today.
Finally, the third aspect of the choice-of-law amendment addresses the all-too-common situation where a court confronts a novel cause of action in aggregated litigation. Usually, well more than half of the implicated jurisdictions haven’t considered the issue at all. The amendment makes clear that resort to the old saw that one “assumes similarity to the forum ‘s law” isn’t enough – particularly in light of constitutional limitations upon applying forum law to out-of-state claims.
An example that strikes home on this blog is the direct-to-consumer advertising exception to the learned intermediary rule, adopted only by New Jersey. Every non-New Jersey case to consider that exception has rejected it, but at best that’s only another ten states. A New Jersey court should not simply assume from the absence of any law that the other 40 or so states would adopt the DTC exception. The opposite assumption is surely closer to the truth.
Similar, albeit less extreme, examples would be medical monitoring (where we’ve already shown that fifteen states haven’t spoken to the issue), public nuisance in product liability, and market share liability. In each of these instances, a novel cause of action has received at best mixed acceptance by the courts. We don’t think that a court in one of the states that has adopted such a theory should be able to take advantage of aggregated litigation to predict that every state yet to speak would do the same.
The more novel the claim, the worse the problem gets – and novel claims have been a hallmark of aggregated litigation.
For these reasons, we’re going to be voting for the third amendment as well.
Finally, we could use the help of all the defense lawyers out there who regularly read our blog. If you're members of ALI, we’d appreciate your considering what we have to say, reviewing the three amendments and the rationale for each, and then coming to the ALI meeting and voting. We know that times are tough and travel budgets lean – but this stuff is important.
Beyond that, whether or not you’re personally an ALI member, if there are ALI members in your firm, could you pass this post (whether you read it online or get it via email) on to them? We’d encourage them to do the same thing: listen to us, study the amendments and their reasoning, and then attend the ALI and vote.
The world is run - and law might be made - by those who show up.
At the beginning of this process, we didn't think it would be possible to improve the PLAL sufficiently that we’d actually consider voting for it. But the Reporters have recently shown more willingness to listen, and we’ve seen a lot of favorable changes. If these three amendments are adopted, we’ll have to reevaluate our position.
That’s true as well with the April 1, 2009 “Proposed Final Draft.”
Aside: This is where we normally link to the place on the ALI’s website where interested persons can purchase a copy of the latest draft – but we’ve looked all around and we don’t see this latest version listed. We don't know why, but the "Final Draft" isn't for sale - at least not yet. [Update: 5/13/09 - the ALI has informed us that the Final Draft is now available for purchase ($45 a pop) at the link we've provided; it was an oversight]
The Final Draft is to be voted on by the ALI’s membership at the Institute’s annual meeting in Washington DC on May 20, 2009. Here’s the meeting agenda. We encourage everyone who’s an ALI member to study the latest draft carefully and to come to the meeting, participate in the debate, and vote.
The world is run by those who show up, folks.
There are a lot of improvements in the Final Draft, but for us the most notable is the elimination of the prior drafts’ attempts (in what was then §2.06) to reduce constitutional constraints upon class actions under the Seventh Amendment. That’s been deleted in the most recent draft, and the Seventh Amendment is acknowledged as a constraint on what courts can do:
In addition, in litigation to which the Seventh Amendment right to jury trial applies, the reconsideration of evidence across the aggregate proceeding and subsequent proceedings must respect the limitations of the Reexamination Clause, which provides that “no fact tried by a jury, shall be otherwise reexamined in any court of the United States, than according to the rules of the common law.”
Final Draft §2.03, comment b. That’s good enough for us. Scratch one major, longstanding objection off the list.
There’s also a more detailed discussion of why class actions are almost always inappropriate in personal injury actions. Such actions “involv[e] high variability and high variation.” Final Draft §2.02, comment b. Even where individual “common issues” might be identified, this variability should preclude class action treatment:
- “[A]ggregate treatment confined to such a common issue carries a significant risk of an acontextual determination of that issue in isolation from other, related issues.”
- “[I]ndividual trials additionally would avoid the practical need for evidence on the common issue in an aggregate proceeding to be substantially reconsidered in proceedings on the remaining issues.”
- “[I]ndividual trials would avoid placing both claimants and respondents at risk of an all-or-nothing determination of the common isssue on the merits in the aggregate.”
- [T]he predominance-of-the-evidence standard for civil judgments may properly result in some claimants winning and others losing in the early stages of similar claims arising from mass harms."
- “Multiple individual trials – proceedings that might reach different results – might reflect more accurately the degree of uncertainty associated with a given common issue.”
On the other hand, we admit we’re not perfect either. The blatant fraud that’s recently been uncovered in the Nicaraguan banana worker litigation – bogus claims by recruited overseas plaintiffs who used violence and a corrupt “banana republic” court system to conceal their fraud, transcript here (tip of the cap to CalBizLit) – is only the latest in a number of litigation atrocities that American companies have faced while sued for mass torts in foreign courts. Thus, we’ve reconsidered our opposition to PLAL §2.10. That section would make a “consent” procedure available to aggregate litigation by foreign plaintiffs against American companies in American courts. We might even like to see §2.10 strengthened to force foreign plaintiff fraudsters to litigate here if they sue American companies.
But there’s still room for improvement.
On the ALI’s website, there are three amendments that have been offered to PLAL that will be voted upon in the May 20, 2009 session. They concern: (1) single issue classes and preserving the predominance prerequisite to class certification. This amendment was prepared by class action defense guru John Beisner, whose thoughtful comments on the PLAL we’ve previously featured. (2) reducing the emphasis on controversial medical monitoring claims. Bexis put together this amendment. (3) fixing some lingering problems in the choice of law section (§2.05) including the longstanding issue of whether there's a principal-place-of-business rule that would allow plaintiffs all over the country to sue under the law of a single state. This amendment is offered by Vic Schwartz. Note: there are also a couple of other comments posted by the ALI that don't purport to be formal formal amendments. We agree with most of the Morrison comments (which are technical) and reserve judgment on the Weiss comment.
We recommend a “yes” vote on all three amendments, and here’s why.
Proposed Amendment Number 1: Single issue class actions aren’t that frequent and should stay that way. This amendment to PLAL §§2.02 and 2.03 recognizes, first of all, that progress has been made in toning down the earlier drafts’ endorsement of single-issue class actions in all sorts of actions. Compared to what we once thought would be required, these amendments are concise and surgical. For example, there’s no longer anything in the black letter that requires going to the mat. There's no longer anything in §2.02 that overtly champions single-issue class actions. The remaining problems are in the Comments and Reporters’ notes.
Some of this proposed amendment pertains to §2.02 and some to §2.03. We’ll go over the §2.02 aspects first.
The first part of the amendment is, to us, the most important one of all. It adds a simple sentence to §2.02, comment a that recognizes predominance – which is an element of class certification specified in both Fed. R. Civ. P. 23(b)(3) and in the analogous class action rules of virtually every state. This amendment provides that “this Section should not be construed to suggest that the predominance concept does not apply fully to such classes.” The “such” reference is to single issue classes. That's all that's really necessary. Leave predominance alone - precedent demonstrates that it's quite capable of defending itself in court.
Our greatest concern, over the course of all of the prior drafts, has been that the PLAL has sought to weaken the predominance requirement for class certification – which is one element of class certification to which courts have historically given the most “teeth.” Without predominance, courts wouldn’t care nearly as much about things such as reliance in fraud, causation in personal injury cases, exposure in medical monitoring and choice of law generally. Without predominance we’d essentially have drive-by class certification, and that’s not how the law is or how we think it should be. The PLAL's initial outright hostility towards predominance has abated to the point that the Reporters have publicly disavowed any intent to de-emphasize predominance. Thus, we would hope this amendment is not controversial.
The single-issue class amendment includes several corresponding changes (we're not even sure they're technically "amendments") to the reporter’s notes to §2.02. The first, while recognizing that courts have divided on how to treat predominance in single-issue (so-called “(c)(4)”) classes, does not go on to label them “confused,” as the current draft does. We don't think that the split of authority reflects confusion, but rather a genuine difference in approach - whether predominance applies to both the litigation as a whole and to the single issue class, or to just the latter, more narrow, selected issue.
This amendment goes on to equalize the space devoted to both approaches. We think that's still quite generous to the single-issue advocates, since the majority rule (discussed at length in the amendment's rationale section) does not view single-issue classes as an exception to predominance.
The next amendment to the reporters’ notes deals mostly with Canadian law. If' you're wondering what relevance Canadian law has to a principles project devoted to procedure in US courts, join the club (we'd support an amendment striking Canadian law altogether, but there isn't one). The single-issue class amendment moderately contents itself with adding more recent Canadian appellate precedent that disagrees with the Canadian trial decision that’s discussed in the current draft. Thus it recognizes that a similar split of authority exists in Canadian courts as to issue cases (and that's with a Canadian rule that doesn't even contain the US predominance requirement). We agree that, if Canadian precedent is to be used at all, the discussion should be current and complete. That's what this aspect of the amendment does.
The final amendment to the Reporters’ notes for §2.02 recognizes what just about everyone, no matter what position s/he advocates, recognizes is true – single issue classes are not very common. Historically, most courts have denied certification, when plaintiffs have proposed single issue classes. But the current draft PLAL professes to find an “emerging convergence” – based on two Seventh Circuit cases from 2003-04 – supporting single issue classes. That is deleted by this amendment, since any “convergence” (emerging, harmonic, or otherwise) has since remained submerged for another five years. In place of the "convergence" language this amendment includes a selection of cases representing the majority rule limiting single-issue classes, discusses the most frequently proposed separate issue (“general causation”), and points out a fact: that “in most instances” single-issue classes have not succeeded. We agree with that.
The “justification” for this amendment – under good ALI practice substantive amendments must be accompanied by a persuasive legal justification – contains a much more exhaustive treatment of relevant precedent, demonstrating that single-issue classes are often requested but seldom allowed. In addition to Castano (cited in the current draft), the amendment demonstrates that district courts continue to reject single-issue cases (“gerrymandering” one court called it) in a wide variety of contexts. The justification also examines the two Seventh Circuit cases (Mejdrech v. Met-Coil Systems Corp., 319 F.3d 910 (7th Cir. 2003) and Allen v. International Truck & Engine Corp., 358 F.3d 469 (7th Cir. 2004)), and argues that they do not support the broad propositions for which they are cited by the Reporters notes, particularly Allen, which was not a (b)(3) class and thus did not even involve predominance.
The single-issue class amendment lastly jumps to §2.03, and makes one revision to the “Effect on current law” section. The amendment more succinctly states that no rules changes are necessary, and acknowledged the undeniable fact that, at least in product liability and personal injury, most courts reject single-issue classes. Again, this is a significant improvement.
There’s another aspect to the amendment’s justification – practicality. The paucity of single-issue classes over the forty-plus years that Rule 23 has permitted them is equally due to the fact that they just don’t work very well. General causation, for example, doesn’t really prove anything. Almost everything has a dose-response relationship, so the individualized issue of exposure makes this sort of general question essentially meaningless. And almost all diseases have multiple possible causes or vectors, so the “general” question is further confounded by individualized alternative causation issues. Because of this doubly individualized lens through which “general causation” must be focused in any given case, the potential for unconstitutional re-examination of evidence (the Seventh Amendment point) is particularly acute.
From day one, our biggest overall concern about the PLAL as a whole has been its hostility to the predominance requirement and its receptivity to single-issue classes – particularly in areas where such classes have not been allowed by the courts. This simple amendment to the single-issue class discussion goes straight to the heart of that issue and we think goes a long way towards keeping the single-issue-class genie in the bottle.
Now, if we were kings of the class action world, we’d probably do something more drastic – like limit single issue classes to injunctive relief only (á la Allen) – but we’re not, so we view this amendment as a workable compromise.
Proposed Amendment Number 2: Reduce the emphasis on medical monitoring – since its existence is controversial – and recognize that lots of courts view lots of monitoring schemes as both individualized and divisible.
We reiterate: Bexis drafted and submitted this amendment. We don’t claim to be objective about this (as if we ever do) – we just think it’s right, even considering the source. But we also think it's a good idea to be entirely up front whenever we advocate something here that we're also advocating somewhere else.
Again, this amendment does not affect the black letter law of §2.04. At that level of abstraction, we have no major, amendment-worthy objections. It’s the illustrations that concern us.
As we’ve stated in our prior posts about PLAL, we have two major problems with the medical monitoring discussion contained in the “indivisible” remedies section (now §2.04; formerly §2.05). First, there’s altogether too much attention given to a controversial cause of action that only a minority of the states have adopted and that the ALI itself has never recognized. Not even well-recognized theories warrant eight separate illustrations. Second, the discussion, and especially the order of the illustrations, gives the impression that medical monitoring claims are routinely certifiable as mandatory-non-opt out class actions. That’s just not so. Most medical monitoring claims are not certifiable at all, given individualized exposure and risk issues. And even if they are, a lot of courts don’t consider a lot of proposed medical monitoring to be “indivisible.” Rather plenty of courts view medical monitoring claims as seeking money damages – plus a fig leaf or two.
At the outset, we apologize to the Reporters if they're feeling a little “damned if you do; damned if you don’t.” That is not the intent. We recognize that several of the current illustrations were added to address objections previously made to the questionable substantive status of medical monitoring – such as that a lot of states don't recognize the claim at all (at least not in the absence of present injury).
Those illustrations make valid points, but they aggravated the other problem, that of excessive attention. As a result, we’ve come to the conclusion that the points they make simply shouldn’t be made through illustrations. Rather, illustrations in §2.04 should be used in the same way as illustrations are throughout the PLAL, to illustrate procedural issues concerning aggregation.
So the medical monitoring amendment boils the eight current medical monitoring illustrations down to three. It deletes current Illustration 3, which is when medical monitoring isn’t recognized by substantive law at all, as well as current Illustrations 4, 6, and 9, which address medical monitoring claims where the evidence does not satisfy various substantive elements of a medical monitoring cause of action (testing needs different from the general public, testing not diagnostic, and present injury, respectively). We see those four illustrations as all matters of substantive law, not aggregation.
To replace the current plethora of medical monitoring illustrations, the amendment adds a paragraph stating that medical monitoring is controversial, that the ALI has never voted on whether to recognize it, and that PLAL takes no position on substantive law.
The justification for the amendment contains the most thorough state-by-state breakdown on medical monitoring that we've seen anywhere. The scorecard, as we see it: 11 states, DC and Guam have precedent recognizing medical monitoring; 20 states, federal common law, and the Virgin Islands have precedent rejecting medical monitoring; four states have divergent precedent; and the remaining jurisdictions have no precedent. We thought the 50-state survey was independently valuable, as an overview of medical monitoring, so we’ve already posted it, here.
But now you know that it was actually put together for the ALI. And that’s why we think it’s useful. The ALI commands the best, and we think this is.
The remaining illustrations have been reorganized, and revised reporters notes have been added. As the first illustration, the amendment places what we consider to be the most common result when class certification is sought in a medical monitoring case. That is a denial of certification due to individualized issues such as length/dose of exposure, pre-existing medical risks, contributory fault, etc. The accompanying justification lists literally dozens of cases representative of this illustration. The cases demonstrate that there is no trend away from denial of class certification in medical monitoring cases. Twenty of the cited cases are certification denials from 2003 or later.
We agree that the first illustration involving medical monitorint should reflect the certification decision that is most commonly reached by the courts in that type of case. The amendment does.
The second illustration in the amendment is representative of those cases in which class certification has been granted as to medical monitoring and similar claims. Most of the time, if a medical monitoring class is certified at all, the certification has been under Rule 23(b)(2) – which the PLAL equates with “indivisible” relief. The second illustration in the amendment (which is "Illustration 3"; Illustration 1 is not subject to any amendment and is intact) corresponds to Illustration 2 in the current final draft.
In accordance with the ALI’s tradition of putting client interests at the door (the opposite of how we write this blog), the medical monitoring amendment proposes a fully-researched Reporter’s note to accompany newly rewritten Illustration 2. That note collects more cases than are in the current draft, which have certified non-opt out medical monitoring cases.
In our defense-oriented blog, however, we can’t resist pointing out that those cases tend to be older (only 5 from 2003 or later) and tend to describe things that probably wouldn’t qualify any longer as “medical monitoring.” Even in states that recognize the remedy, medical monitoring is limited to the costs of necessary medical testing. That’s it. Such things as independent studies, data compilation, publication of notices, and the like may or may not be good things – but they aren’t recoverable as medical monitoring. Even where recognized, it's a limited remedy, a snack, not a smorgasbord.
The amendment's third illustration ("Illustration 4") recognizes that resort to a non-opt out class for medical monitoring is, in and of itself, controversial. Demands for medical monitoring have varied quite a bit, and many courts have viewed these demands as thinly disguised damages remedies. The third illustration describes a situation where the court concludes that a proposed remedy masquerading as "medical monitoring" is not, in fact, “indivisible” in terms of the PLAL. The amendment makes clear that this sort of decision is discretionary with the court – involving its evaluation of the wide variety of monitoring requests that can be made.
The accompanying Reporter’s note/justification (both repeat essentially the same thing) collect the cases that have viewed medical monitoring demands as not involving a form of “injunctive” (in terms of the case law) or “indivisible” (in terms of PLAL) relief. There are a lot of them. Thus we agree that this is the third – arguably the second, but the amendment tries to be even-handed – proper illustration concerning class action treatment of medical monitoring claims.
Thus we also support the second, medical monitoring amendment to the PLAL. Of course we do, Bexis wrote it. But no matter who was the author, we would agree that it represents an acceptable fix for the medical monitoring problems that the PLAL has exhibited since the earliest drafts we ever saw.
Proposed Amendment Number 3: Ordinary choice-of-law rules apply in aggregate litigation. This amendment (really a set of amendments, like the first) makes explicit a point that has never been in dispute – that the same choice of law rules should apply in aggregated litigation as in a single case of the same type. That’s a corollary to the principle of the Rules Enabling Act and similar state-law provisions, which is that the creation of procedural rules does not alter any party’s substantive rights. The amendment correctly states that cases purporting to apply different choice-of-law rules in aggregated litigation are contrary to the newly specified point, and it calls out a coupld of those cases.
One aspect of the principle added by the choice-of-law amendment is another ground for rejecting case-law that would apply a defendant’s principal place of business to any and all claims. Cases adopting this rule in aggregated litigation have mostly done so in situations where an individual claim making the same allegations would be subject to a different analysis – usually a First Restatement residence of the injured party/location of the accident rule or a Second Restatement balancing of multiple factors.
We have been critical of prior PLAL drafts because they treat the principal-place-of-business approach to choice of law as if it were on par with other choice-of-law principles. It’s not. Rather that approach has been considered and affirmatively rejected in many cases. We mentioned a few of them here, but there are lots more. It might be a good blog post some day to collect them all, but not today.
Finally, the third aspect of the choice-of-law amendment addresses the all-too-common situation where a court confronts a novel cause of action in aggregated litigation. Usually, well more than half of the implicated jurisdictions haven’t considered the issue at all. The amendment makes clear that resort to the old saw that one “assumes similarity to the forum ‘s law” isn’t enough – particularly in light of constitutional limitations upon applying forum law to out-of-state claims.
An example that strikes home on this blog is the direct-to-consumer advertising exception to the learned intermediary rule, adopted only by New Jersey. Every non-New Jersey case to consider that exception has rejected it, but at best that’s only another ten states. A New Jersey court should not simply assume from the absence of any law that the other 40 or so states would adopt the DTC exception. The opposite assumption is surely closer to the truth.
Similar, albeit less extreme, examples would be medical monitoring (where we’ve already shown that fifteen states haven’t spoken to the issue), public nuisance in product liability, and market share liability. In each of these instances, a novel cause of action has received at best mixed acceptance by the courts. We don’t think that a court in one of the states that has adopted such a theory should be able to take advantage of aggregated litigation to predict that every state yet to speak would do the same.
The more novel the claim, the worse the problem gets – and novel claims have been a hallmark of aggregated litigation.
For these reasons, we’re going to be voting for the third amendment as well.
Finally, we could use the help of all the defense lawyers out there who regularly read our blog. If you're members of ALI, we’d appreciate your considering what we have to say, reviewing the three amendments and the rationale for each, and then coming to the ALI meeting and voting. We know that times are tough and travel budgets lean – but this stuff is important.
Beyond that, whether or not you’re personally an ALI member, if there are ALI members in your firm, could you pass this post (whether you read it online or get it via email) on to them? We’d encourage them to do the same thing: listen to us, study the amendments and their reasoning, and then attend the ALI and vote.
The world is run - and law might be made - by those who show up.
At the beginning of this process, we didn't think it would be possible to improve the PLAL sufficiently that we’d actually consider voting for it. But the Reporters have recently shown more willingness to listen, and we’ve seen a lot of favorable changes. If these three amendments are adopted, we’ll have to reevaluate our position.
Monday, May 11, 2009
Pre-Service Removals: They Keep On Coming
At this point, we feel as though we're obligated to track this issue: When a plaintiff files a complaint in state court that names both residents and non-residents of the forum state as defendants, can the non-resident defendant remove before the resident defendant is served?
When we last posted on this subject, we noted that we were raising this issue for the "umpteenth" time. This post is . . . whatever comes after the umpteenth.
In Copley v. Wyeth, No. 09-722, 2009 WL 1089663 (E.D. Pa. Apr. 22, 2009), Suzanne Copley filed a complaint against Wyeth, Inc.; Wyeth Pharmaceuticals, Inc.; Schwarz Pharma, Inc.; Actavis, Inc.; and Actavis Elizabeth LLC in Pennsylvania state court for injuries she allegedly suffered from the long-term ingestion of Reglan (or metoclopramide) as prescribed by her physician.
Copley was a citizen of Tennessee, which made her citizenship diverse from that of all of the defendants. Copley filed the complaint on February 13, 2009. She served Schwarz Pharma, a citizen of Delaware, on February 17, and Schwarz removed the case to federal court on February 19.
Wyeth Pharmaceuticals, Inc., is a citizen of Pennsylvania, the state in which the lawsuit was filed. If Wyeth had been properly "joined and served" as a defendant before February 19, then the case would not have been removable. 28 U.S.C. Sec. 1441(b). But Schwarz removed the action before Copley had served Wyeth with the complaint.
Copley moved to remand.
The trial court first quoted the language of Section 1441(b), which authorizes removal of diversity cases so long as "none of the parties in interest properly joined and served as defendants is a citizen of the State in which such action is brought." Id. Strictly construing that language, the court upheld the removal, denying plaintiff's motion to remand.
The court discussed the situation where there's only one defendant -- a resident of the forum state -- named in the complaint, and that defendant removes before it is served. The court saw a difference between "removal by an as-yet-unserved forum defendant and removal by a properly served non-forum defendant." Copley, 2009 WL 1089663, at *2. The court wasn't presented with that situation, and so didn't have to decide the propriety of removal on those facts. The court held only that Schwarz's removal (by a non-resident defendant) before service had been effected on Wyeth (a resident defendant) was permissible.
We've said it before, and we'll say it again: We'll continue to see this issue percolating in the trial courts until appellate courts finally provide some guidance.
And that guidance won't come for a while -- because orders remanding cases are ordinarily not reviewable on appeal (28 U.S.C. Sec. 1447) and orders denying motions to remand aren't reviewable until a judgment is entered, which may not happen for years, if ever.
In the meantime, litigants will continue to spend time and money litigating, and judicial resources will be spent deciding, this preliminary procedural issue.
When we last posted on this subject, we noted that we were raising this issue for the "umpteenth" time. This post is . . . whatever comes after the umpteenth.
In Copley v. Wyeth, No. 09-722, 2009 WL 1089663 (E.D. Pa. Apr. 22, 2009), Suzanne Copley filed a complaint against Wyeth, Inc.; Wyeth Pharmaceuticals, Inc.; Schwarz Pharma, Inc.; Actavis, Inc.; and Actavis Elizabeth LLC in Pennsylvania state court for injuries she allegedly suffered from the long-term ingestion of Reglan (or metoclopramide) as prescribed by her physician.
Copley was a citizen of Tennessee, which made her citizenship diverse from that of all of the defendants. Copley filed the complaint on February 13, 2009. She served Schwarz Pharma, a citizen of Delaware, on February 17, and Schwarz removed the case to federal court on February 19.
Wyeth Pharmaceuticals, Inc., is a citizen of Pennsylvania, the state in which the lawsuit was filed. If Wyeth had been properly "joined and served" as a defendant before February 19, then the case would not have been removable. 28 U.S.C. Sec. 1441(b). But Schwarz removed the action before Copley had served Wyeth with the complaint.
Copley moved to remand.
The trial court first quoted the language of Section 1441(b), which authorizes removal of diversity cases so long as "none of the parties in interest properly joined and served as defendants is a citizen of the State in which such action is brought." Id. Strictly construing that language, the court upheld the removal, denying plaintiff's motion to remand.
The court discussed the situation where there's only one defendant -- a resident of the forum state -- named in the complaint, and that defendant removes before it is served. The court saw a difference between "removal by an as-yet-unserved forum defendant and removal by a properly served non-forum defendant." Copley, 2009 WL 1089663, at *2. The court wasn't presented with that situation, and so didn't have to decide the propriety of removal on those facts. The court held only that Schwarz's removal (by a non-resident defendant) before service had been effected on Wyeth (a resident defendant) was permissible.
We've said it before, and we'll say it again: We'll continue to see this issue percolating in the trial courts until appellate courts finally provide some guidance.
And that guidance won't come for a while -- because orders remanding cases are ordinarily not reviewable on appeal (28 U.S.C. Sec. 1447) and orders denying motions to remand aren't reviewable until a judgment is entered, which may not happen for years, if ever.
In the meantime, litigants will continue to spend time and money litigating, and judicial resources will be spent deciding, this preliminary procedural issue.
Saturday, May 09, 2009
Vioxx Class Action Goes Down to Defeat In California
A lot of state courts are getting the message that the federal courts received over a decade ago. Class action litigation involving prescription drugs is a no go. Richard Goetz over at O'Melveny passes along the latest - a California Superior Court denial of class certification in a consumer fraud action over Vioxx.
What led to this result? The usual. The plaintiffs didn't allege either that Vioxx actually hurt anyone or that it was ineffective for its FDA-approved use as a painkiller in certain situations. Slip op. at 2. Also, the plaintiffs mixed in third party payors with individual class representatives. The latter cannot possibly be typical of the former. Slip op. at 5.
But, as usual, predominance is the killer:
Slip op. at 9 (citation and quotation marks omitted). Even under California's broad consumer fraud act, to obtain anything other than an injunction, reliance is an essential aspect of causation. Slip op. at 10. With physicians as learned intermediaries, this is an inherently individualized inquiry:
Slip op. at 10 (quotation marks omitted). We've posted before about how these failures of pleading are fatal to class certification where prescription decisions are controlled by physicians.
TPPs fared no better:
Slip op. at 11. Nor, given these facts, is any uniform inference of reliance possible. "Because materiality of the representation is not uniform, reliance on it cannot be inferred classwide." Id. at 12.
These findings are well within the majority ruld rejecting consumer fraud damages class actions in cases involving prescription drugs. We'll see how it fares on appeal, but we have to be optimistic.
What led to this result? The usual. The plaintiffs didn't allege either that Vioxx actually hurt anyone or that it was ineffective for its FDA-approved use as a painkiller in certain situations. Slip op. at 2. Also, the plaintiffs mixed in third party payors with individual class representatives. The latter cannot possibly be typical of the former. Slip op. at 5.
But, as usual, predominance is the killer:
Under all of plaintiffs' causes of action, a central issue will be whether defendant's alleged misrepresentations and nondisclosures were material to those who purchased [the drug]. A misrepresentation of fact is material if it induced the plaintiff to alter his position to his detriment. Stated in terms of reliance, materiality means that without the misrepresentation, the plaintiff would not have acted as he did. To recover, therefore, each class member must demonstrate, or it must be inferrable classwide, that the misrepresentation or nondisclosure influenced each class members prescription decisionmaking.
Slip op. at 9 (citation and quotation marks omitted). Even under California's broad consumer fraud act, to obtain anything other than an injunction, reliance is an essential aspect of causation. Slip op. at 10. With physicians as learned intermediaries, this is an inherently individualized inquiry:
The process by which a physician decides whether and what to prescribe for a pain patient requires an individualized approach that applies a physician's clinical judgment to each patient's unique situation. This decision requires a physican to assess a number of factors which vary from patient to patient, including, among others: a) The condition being treated, including the nature, location, and extent of the pain; b) The risks and benefits associated with the drug; c) The anticipated dose and duration of the prescription; d) The patient's medical history....; e) The potential for adverse interactions with a patient's other medications; f) The anticipated degree of patient compliance; g) The drug's cost and the patient's insurance coverage; and h) The patient's concerns regarding treatment and his or her perception of the severity of the pain.
Slip op. at 10 (quotation marks omitted). We've posted before about how these failures of pleading are fatal to class certification where prescription decisions are controlled by physicians.
TPPs fared no better:
[T]he court is well satisfied that TPP decisionmaking is almost as variegated as is individual physician/patient decisionmaking. Some TPPs used open formulary, basically deferring risk assessment to physicians. Others used closed formularies. Even those that used closed formularies sometimes include cardio-risk drugs.
Slip op. at 11. Nor, given these facts, is any uniform inference of reliance possible. "Because materiality of the representation is not uniform, reliance on it cannot be inferred classwide." Id. at 12.
These findings are well within the majority ruld rejecting consumer fraud damages class actions in cases involving prescription drugs. We'll see how it fares on appeal, but we have to be optimistic.
Friday, May 08, 2009
Product Liability-Related Medicare Secondary Payor Reporting Delayed
Last week we posted about the advent of onerous new reporting rules for product liability defendants with respect to Medicare Secondary Payor matters, courtesy of the Medicare, Medicaid and SCHIP Extension Act of 2007.
Apparently the government shares at least some of our apprehensions. We recently received a heads up from Alphie Nelson at Watten Discoe that implementation of the reporting requirements has been postponed by the government for several months. Here's the government's notice of the postponement.
This is only a stay of execution, not a pardon, folks, so use the time to make sure you're ready.
Apparently the government shares at least some of our apprehensions. We recently received a heads up from Alphie Nelson at Watten Discoe that implementation of the reporting requirements has been postponed by the government for several months. Here's the government's notice of the postponement.
This is only a stay of execution, not a pardon, folks, so use the time to make sure you're ready.
Strike Suit Strikes Out
We're pleased by the dismissal of Myers-Armstrong v. Actavis Totowa LLC, 2009 WL 1082026 (N.D. Cal. April 22, 2009). In M-A, the defendant was basically shut down by the FDA over Good Manufacturing Practices issues at its plant. The defendant recalled over 100 drugs (it was a generic manufacturer) at the wholesale, but not retail level. The plaintiff took one of these drugs, was not hurt by it, but sued over all 100+ drugs.
What a worthless lawsuit. Of course, it was a putative class action.
The court threw it out on the eminently sensible ground that a plaintiff who took a drug that was effective, and wasn't hurt by it, hasn't been injured just by the drug being "adulterated" under the FDCA because there were GMP violations at the plant were it was made. The court literally concluded that "life's too short" to allow this kind of 100% opportunistic litigation:
2009 WL 1082026, at *4 (citations and footnote omitted).
The case as to the 100+ drugs that the plaintiff never took was given the back of the court's hand. "As to the other 106 drugs, state law does not supply her with a damages remedy for the additional reason that she did not even purchase or ingest any of the other 106 drugs. Plaintiff cites no California decision that shows her extreme theory should go forward." Id. at *5. We hope the defendant gives serious consideration to Rule 11 sanctions.
This case will also be fondly listed in our no-injury scorecard.
The only discordant note in M-A was the court's rejection of a preemption argument based upon a perceived conflict with the FDA's decision not to recall the drugs on the retail level. Id. We think a better preemption argument - and one that wouldn't have flown in the face of Levine - would have been that the claims were disguised attempts at private enforcement of the GMP violations that brought about the recall, and thus barred by §337(a) and Buckman. As we've pointed out before, the exceptions allowing private FDCA enforcement in the food area don't apply to drugs.
What a worthless lawsuit. Of course, it was a putative class action.
The court threw it out on the eminently sensible ground that a plaintiff who took a drug that was effective, and wasn't hurt by it, hasn't been injured just by the drug being "adulterated" under the FDCA because there were GMP violations at the plant were it was made. The court literally concluded that "life's too short" to allow this kind of 100% opportunistic litigation:
As a concession to the shortness of life, California law does not allow a civil lawsuit to recover the purchase price for medicine consumed by the purchaser which performed as intended with no harm or fear of future harm merely because the consumer would not have purchased it had he or she known that the medicine came from a plant whose quality-control had been compromised. That the CDP was adulterated due to a lack of compliance with GMP requirements is not enough, without more, to state a claim. A plaintiff must allege an actual manifestation of a defect that results in some injury or rational fear of future injury in order to state cognizable claims. There must be at least some physical manifestation such as physical harm, or a failure of the drug to work as intended, or a rational fear of future harm, none of which are alleged.
If the pills had not been consumed, the consumer might possibly have a claim for a refund. But after consuming the pills and obtaining their beneficial effect with no downside, the consumer cannot get a refund on the theory that the pills came from a source of uncertain quality.... [T]he civil law should not be expanded to regulate every hypothetical ill in the absence of some real injury to the civil plaintiff.
2009 WL 1082026, at *4 (citations and footnote omitted).
The case as to the 100+ drugs that the plaintiff never took was given the back of the court's hand. "As to the other 106 drugs, state law does not supply her with a damages remedy for the additional reason that she did not even purchase or ingest any of the other 106 drugs. Plaintiff cites no California decision that shows her extreme theory should go forward." Id. at *5. We hope the defendant gives serious consideration to Rule 11 sanctions.
This case will also be fondly listed in our no-injury scorecard.
The only discordant note in M-A was the court's rejection of a preemption argument based upon a perceived conflict with the FDA's decision not to recall the drugs on the retail level. Id. We think a better preemption argument - and one that wouldn't have flown in the face of Levine - would have been that the claims were disguised attempts at private enforcement of the GMP violations that brought about the recall, and thus barred by §337(a) and Buckman. As we've pointed out before, the exceptions allowing private FDCA enforcement in the food area don't apply to drugs.
Thursday, May 07, 2009
Differential Diagnosis – Sometimes Best Isn’t So Good
Not one, but two, of our readers emailed us about a recent Sixth Circuit decision, Best v. Lowe's Home Centers Inc., 2009 WL 1010883 (6th Cir. April 16, 2009), when it came down. Unfortunately, we had other things going on – and Best wasn’t a drug/device case – so we didn’t get around to examining that decision until now. As the title of this post indicates, Best had to do with the validity of “differential diagnosis” under Daubert (for you non-lawyers, that's the name of the most important Supreme Court case on admissibility of expert testimony as trial evidence) as a diagnostic tool when the technique is employed by a plaintiff’s expert as a basis for a causation opinion. As the title also indicates, we’re not particularly pleased with the outcome.
Best involved chemical with the whopper of a name: “2-Propen-1-aminium, N, N-dimethyl-N-2-propenyl-chloride.” We can't tell you what any of that stuff means, but apparently, it’s used to treat water in swimming pools. Plaintiff claimed he was splashed in the face with this stuff by the negligent actions of the defendant’s employee. As a result of the exposure, plaintiff alleged he permanently lost his sense of smell (the technical term is “anosmia”). 2009 WL 1010883, at *1.
The Daubert issue arose when the plaintiff’s expert, who was board-certified in otolaryngology (and thus undisputedly qualified), used “differential diagnosis” to arrive at a causation opinion. Differential diagnosis has been defined as “A physician’s consideration of alternative diagnoses that may explain a patient’s condition.” Fed. Jud. Center, Reference Manual on Scientific Evidence (2d), “Reference Guide on Toxicology,” at 433. Or, at more length:
Id. “Reference Guide on Medical Testimony, at 443-44 (footnotes omitted). If anybody’s interested in following the distinction between “differential diagnosis” and “differential etiology” further, see McClain v. Metabolife International, Inc., 401 F.3d 1233, 1252 (11th Cir. 2005), otherwise, follow us.
In Best, there were no applicable epidemiological studies – not that helped the plaintiff, anyway – so the plaintiff’s expert (who was also the original treating physician, which helps) reached the conclusion he was paid to reach via differential diagnosis. There was pretty good temporal evidence, although not directly related to loss of smell: “immediately [after the exposure] he had suffered from irritation and burning of his skin, irritation to his nasal passages and mouth, dizziness, and shortness of breath. 2009 WL 1010883, at *2. Four months after the incident, plaintiff first saw the expert (as a treater), reporting “clear drainage from his nose following the spill and that he eventually lost his sense of smell completely.” Id.
Exposure data, on the other hand, was downright lousy – nobody ever quantified the exposure, and it was of a fleeting, as opposed to chronic, duration. Id. at *3. The expert was also unable to “to determine the threshold level of exposure that could cause harm.” Id.
The expert selected a number of alternative possible explanations for anosmia, including use of a almost a dozen prescription drugs, and proceeded to "rule out" all but one of them. Id. at *2.
The other half of differential diagnosis – “ruling in” the target chemical – was also rather weak. The substance was “ “irritating to the mucous membrane and upper respiratory tract” and “[m]ay be harmful if inhaled,” but its “acute inhalation toxicity” was “undetermined,” and there was no data linking it to anosmia. Id. The expert speculated that the chemical, which he called a “chlorine derivative,” caused some sort of chemical burn to the relevant nerve endings. Id. But he had failed to examine the allegedly affected area when he had the chance. Id. at *1.
The district court threw out as "speculative" the differential diagnosis under Daubert, because it was based on temporal association and lack of any other obvious alternative. 2009 WL 1010883, at *3. The Sixth Circuit reversed, finding the differential diagnosis sufficient.
The Sixth Circuit faulted the district court’s reliance upon Moore v. Ashland Chemical Inc., 151 F.3d 269 (5th Cir. 1998) (en banc), which it interpreted as “implicitly” rejecting differential diagnosis altogether as a basis for a causation opinion. 2009 WL 1010883, at *9. In the Sixth Circuit, a properly conducted differential diagnosis was proper “methodology” under Daubert. Best, 2009 WL 1010883, at *6. Because the trial court used the wrong standard, and “did not recognize that differential diagnosis is a valid technique,” the appellate court avoided the abuse of discretion standard that Daubert determinations usually receive on review. 2009 WL 1010883, at *6.
Instead, the court proceeded with “de novo” review – not only with respect to whether any differential diagnosis was OK, but also as to the validity of this expert’s specific opinion. Id. We think the Sixth Circuit went overboard there, and that error on whether differential diagnosis can ever be a proper Daubert technique (if error there was) does not justify also reducing the appellate deference to be given to the trial court’s evaluation of the employment of that technique in the particular case.
Evaluating the case-specific differential diagnosis on a step-by-step basis, Best first held that the expert determined, as well as anyone could, that the plaintiff was not lying about having lost his sense of smell. 2009 WL 1010883, at *7-8. We don’t have any real problem with that. The expert ran the necessary tests. Although the results were close to “malingering,” in the absence of incontrovertible physical proof, it’s a jury’s role to conclude that a plaintiff is fabricating an injury.
We have more problems with the “ruling in” aspect of the Sixth Circuit’s opinion. The court’s reliance upon the expert’s treatment of “a list of possible causes for the injury, including virus, accident, brain tumor, brain surgery, exposure to chemicals, medications, or an idiopathic (unknown) cause,” 2009 WL 1010883, at *8, isn’t really on point. That’s ruling out, not ruling in. The court admits that there’s no “published material” linking the chemical to anosmia. At best, the safety data for the chemical was inconclusive, with mention of “irritation” but nothing about loss of smell. The Sixth Circuit instead relied upon the expert’s experience with other patients who were exposed to other “chlorine derivatives” – not even the same chemical. Id.
We question any differential diagnosis that relies primarily upon analogies to some other purportedly similar chemical. As the court stated in McClain:
401 F.3d at 1246 (citations and quotation marks omitted). “[U]sing this ‘guilt by association’ inference in their methodology is of questionable scientific reliability.” Caraker v. Sandoz Pharmaceuticals Corp., 188 F. Supp.2d 1026 (S.D. Ill. 2001); accord, e.g., Rider v. Sandoz Pharmaceuticals Corp., 295 F.3d 1194, 1201 (11th Cir. 2002); Hollander v. Sandoz Pharmaceuticals Corp., 289 F.3d 1193, 1207 (10th Cir. 2002); Glastetter v. Novartis Pharmaceuticals Corp., 252 F.3d 986, 990 (8th Cir. 2001); Hans v. Matrixx Initiatives, Inc., 2006 WL 5229820, at *5-6 (W.D. Ky. Sep. 29, 2006) (rejecting chemical analogy in another anosmia case); Newton v. Roche Laboratories, Inc., 243 F.Supp.2d 672, 677 (W.D. Tex 2002).
The Sixth Circuit’s reliance (2009 WL 1010883, at *8) upon McCullock v. H.B. Fuller Co., 61 F.3d 1038 (2d Cir. 1995), is also shaky, because: (1) the expert in McCullock relied on published literature (“reference to various scientific and medical treatises,” 61 F.3d at 1044), and (2) McCullock affirmed admission of expert testimony under an abuse of discretion standard, id.).
Under Daubert, a valid differential diagnosis passes muster only if the expert first shows general toxicity in some reliable fashion:
Clausen v. M/V New Carissa, 339 F.3d 1049, 1057-58 (9th Cir. 2003) (citations and quotation marks omitted). Just tossing “differential diagnosis” around doesn’t cut it:
Black v. Food Lion, Inc., 171 F.3d 308, 314 (5th Cir. 1999). Given Black, we question the Sixth Circuit’s conclusion that Moore represented an across-the-board rejection of differential diagnosis as a technique by the Fifth Circuit.
Thus a plaintiff’s expert cannot assume what s/he is trying to prove in a differential diagnosis. McClain, 401 F.3d at 1253. “Where an expert employs differential diagnosis to ‘rule out’ other potential causes for the injury at issue, he must also ‘rule in’ the suspected cause, and do so using scientifically valid methodology.” Ruggiero v. Warner-Lambert Co., 424 F.3d 249, 254 (2d Cir. 2005). The first step is proof that the substance is capable of causing the injury at issue. “In the absence of such a foundation for a differential diagnosis analysis, a differential diagnosis generally may not serve as a reliable basis for an expert opinion on causation in a toxic tort case. McClain, 401 F.3d at 1253.
Looking just at the evidence discussed in the Sixth Circuit’s opinion, we don’t think there was enough “ruling in” in Best to justify reversing a trial court’s exclusion ruling. We don’t think the Sixth Circuit thought there was either – which explains the sleight-of-hand with the standard of review.
The Best court also reviewed the expert’s “ruling out” methodology. 2009 WL 1010883, at *9. We don’t have much problem with the main rationale that the court used. The defendant argued that the expert only ruled out nine of ten possible drugs. Id. But as to the other one, the court stated that the defendant “presented no evidence that [the drug] might cause anosmia.” Id. Fair enough. Assuming that was the case, there's no protest from us. We tend to agree that, for an alternative cause to defeat a differential diagnosis, there must be at least some evidence that it in fact causes the injury at issue - that it is, in fact, a potential alternative cause.
Where we do have more problem is the Sixth Circuit’s one-line blow off of idiopathic causation. 2009 WL 1010883, at *9 (the expert “concluded, based on his own experience, that an idiopathic anosmia would not appear over such a short period of time”). Where did that “short period of time” excuse come from? If it’s an idiopathic condition, then by definition it's of unknown origin – and thus could have been in the offing throughout the plaintiff’s life – not just from the date of the incident. Maybe the defendant didn’t press the point, since there’s no discussion in Best as to the extent of idiopathic causes for anosmia. But we think it's important.
In considering idiopathic causes, it’s critical that, if there’s a large idiopathic component, that the defendant get evidence of that affirmatively into the record. See Bland v. Verizon Wireless LLC, 538 F.3d 893, 897 (8th Cir. 2008) (differential diagnosis invalid where causation of a disease is “is unknown” in “the majority of cases”); Redfoot v. B.F. Ascher & Co., 2007 WL 1593239, at *11 (N.D. Cal. June 1, 2007) (“differential diagnosis is faulty because [the expert] failed to consider. . .that the cause of autism is not known today”); Doe v. Ortho-Clinical Diagnostics, Inc., 440 F. Supp.2d 465, 478 (M.D.N.C. 2006) (strong likelihood of unknown causes “serves to negate. . .use of the differential diagnosis technique”); Valentine v. PPG Industries, Inc., 821 N.E.2d 580, 599-600 (Ohio App. 2004) (“differential diagnosis is not a reliable technique for identifying causation” of a disease because “medical science does not enable physicians and other scientists to pinpoint a cause. . . . [T]he present state of scientific knowledge on the cause of [the disease] precludes reliability in this context”), aff’d, 850 N.E.2d 683 (Ohio 2006).
The court in Best relied heavily on the Third Circuit’s analysis of differential diagnosis in In re Paoli Railroad Yard PCB Litigation, 35 F.3d 717 (3d Cir. 1994), which it found “instructive.” 2009 WL 1010883, at *6-7. Paoli Yard makes quite clear, though, that differential diagnosis becomes unreliable where an expert witness fails to articulate a reason for ruling out alternative causes that appear in a plaintiff’s medical records, history, or examination. Thus, “a requirement that experts at least consider alternative causes” is “at the core of differential diagnosis.” 35 F.3d at 759 (3d Cir. 1994). For that reason:
Id. at 759 n.27. Cases following Paoli Yard agree. While a medical expert need not “rule out categorically all other possible causes” for an injury, “[o]bvious alternative causes need to be ruled out.” Heller v. Shaw Industries, Inc., 167 F.3d 146, 156 (3d Cir. 1999) (citation and quotation marks omitted). See, e.g., Kannankeril v. Terminix International, Inc., 128 F.3d 802, 808 (3d Cir. 1997) (“the defendant may point to a plausible cause of the plaintiff’s illness other than the defendant’s actions. It then becomes necessary for the plaintiff’s expert to offer a good explanation as to why his or her conclusion remains reliable”); Wicker v. Consolidated Rail Corp., 371 F. Supp. 2d 702, 715 (W.D. Pa. 2005) (an “expert applying differential diagnosis [must] explain why he did not find a specific alternative cause when challenged to do so by the opposing party; failure to reasonably explain why a conclusion of such alternative cause was not reached would therefore result in a finding of unreliability”); Bart v. Certainteed Products, Inc., 2005 WL 182711, at *3 (E.D. Pa. Jan. 27, 2005) (excluding differential diagnosis due to “the short shrift paid to possible alternative causes”); Soldo v. Sandoz Pharmaceuticals Corp., 244 F. Supp.2d 434, 567 (W.D. Pa. 2003) (excluding differential diagnosis that “does not reliably rule out reasonable alternative causes”).
So do non-Third Circuit courts. Differential diagnosis is viewed as “a diagnosis based upon ruling out all other causes.” Courtaulds Fibers, Inc. v. Long, 779 So.2d 198, 202 (Ala. 2000). The expert employing it must “attempt to consider all possible causes, or to exclude each potential cause until only one remained.” Turner v. Iowa Fire Equipment Co., 229 F.3d 1202, 1208 (8th Cir. 2000) (excluding opinion for failing to rule out alternative causes). The New Jersey Supreme Court – perhaps the most liberal court in the country on expert causation opinions – has held:
Creanga v. Jardal, 886 A.2d 633, 639-40 (N.J. 2005) (citations and quotation marks omitted). Thus, “if the expert completely fails to consider a cause that could explain the patient’s symptoms, the differential diagnosis is not reliable.” Carlson v. Okerstrom, 675 N.W.2d 89, 105 (Neb. 2004). See also Christian v. Gray, 65 P.3d 591, 604-05 (Okla. 2003) (“[a] reliable differential diagnosis. . .generally is accomplished by determining the possible causes for the patient’s symptoms and then eliminating each of these potential causes until reaching one that cannot be ruled out”); Cooper v. Smith & Nephew, Inc., 259 F.3d 194, 202 (4th Cir. 2001) (“if an expert utterly fails to consider alternative causes. . .a district court is justified in excluding the expert’s testimony”); Cavallo v. Star Enterprise, 892 F. Supp. 756, 771 (E.D. Va. 1995) (where “other possible causes of an injury cannot be ruled out, or at least the probability of their contribution minimized, then the ‘more likely than not’ threshold for proving causation may not be met”), aff’d in pertinent part, rev’d on other grounds, 100 F.3d 1150 (4th Cir. 1996).
Finally, there’s a most revealing aside at the very end of Best:
Best, 2009 WL 1010883, at *11 (emphasis added). This more or less confirms what we thought about the opinion all along – given the temporal relationship between the purported injuries and the exposure, nothing else really mattered to the court.
If that's true, then it puts the Sixth Circuit at odds with a great deal of Daubert law holding that timing isn’t everything. “[T]emporal connection between exposure to chemicals and an onset of symptoms, standing alone, is entitled to little weight in determining causation.” Bland, 538 F.3d at 898-99 (quoting Moore, 151 F.3d at 278); Ervin v. Johnson & Johnson, Inc., 492 F.3d 901, 904-05 (7th Cir. 2007) (“mere existence of a temporal relationship between taking a medication and the onset of symptoms does not show a sufficient causal relationship”); McClain, 401 F.3d at 1243 (“[t]he post hoc ergo propter hoc fallacy assumes causality from temporal sequence”); Meister v. Medical Engineering Corp., 267 F.3d 1123, 1129 (D.C. Cir. 2001) (the expert “failed to show any nexus between [plaintiff’s] symptoms and [the product]; the mere simultaneous existence of the two clearly is not an appropriate methodology”); Glastettner, 252 F.3d at 990 (plaintiff “demonstrate[d] a temporal association” but “that association is not scientifically valid proof of causation”); Terran v. Secretary HHS, 195 F.3d 1302, 1317 (Fed. Cir. 1999) (plaintiff “points to the temporal association. . ., which has been held to be insufficient proof of causation”); Allison v. McGhan Medical Corp., 184 F.3d 1300, 1321 (11th Cir. 1999) (“mere coincidence of temporality” held a “questionable” basis for an expert opinion); Kennedy v. Collagen Corp., 161 F.3d 1226, 1227 (9th Cir. 1997) (admissible causation opinion must be based upon “other factors in addition to the temporal relationship”); Hodges v. Secretary HHS, 9 F.3d 958, 960 (Fed. Cir. 1993) (“a proximate temporal association alone does not suffice to show a causal link between the vaccination and the injury”); Sakaria v. Trans World Airlines, 8 F.3d 164, 172 (4th Cir. 1993) (“temporal sequence of the two events” without medical causation testimony is insufficient to suggest probability of causation). And these are just the appellate decisions in the federal courts - we finally got tired of researching.
In sum, while we agree with the Sixth Circuit in Best that, when done right, differential diagnosis can be a grounds for a causation opinion under Daubert, we think that the district court was within its discretion to conclude that this particular differential diagnosis was inadequate – both on “rule in” and “rule out” grounds. The key to Best is the standard of review. We don’t think the Sixth Circuit should have employed de novo review to reverse what was a decision that the Supreme Court has held is within the discretionary power of the District Court. Kumho Tire Co. v. Carmichael, 526 U.S. 137, 152 (1999) (adopting abuse of discretion review in Daubert cases).
Best involved chemical with the whopper of a name: “2-Propen-1-aminium, N, N-dimethyl-N-2-propenyl-chloride.” We can't tell you what any of that stuff means, but apparently, it’s used to treat water in swimming pools. Plaintiff claimed he was splashed in the face with this stuff by the negligent actions of the defendant’s employee. As a result of the exposure, plaintiff alleged he permanently lost his sense of smell (the technical term is “anosmia”). 2009 WL 1010883, at *1.
The Daubert issue arose when the plaintiff’s expert, who was board-certified in otolaryngology (and thus undisputedly qualified), used “differential diagnosis” to arrive at a causation opinion. Differential diagnosis has been defined as “A physician’s consideration of alternative diagnoses that may explain a patient’s condition.” Fed. Jud. Center, Reference Manual on Scientific Evidence (2d), “Reference Guide on Toxicology,” at 433. Or, at more length:
Expert witnesses and courts, however, frequently use the term “differential diagnosis” to describe the process by which causes of the patient’s condition are identified, particularly causes external to the patient. Additionally, courts sometimes characterize causal reasoning as “differential etiology,” a term not used in medical practice, but one that more closely suggests the determination of cause. For the sake of clarity and consistency, this reference guide uses the term “differential diagnosis” in its traditional medical sense, that is, referring to the diagnosis of disease, and refers to the process of identifying external causes of diseases and conditions as “determining cause,” “determining external cause,” or some similar phrase, as the circumstances warrant.
Id. “Reference Guide on Medical Testimony, at 443-44 (footnotes omitted). If anybody’s interested in following the distinction between “differential diagnosis” and “differential etiology” further, see McClain v. Metabolife International, Inc., 401 F.3d 1233, 1252 (11th Cir. 2005), otherwise, follow us.
In Best, there were no applicable epidemiological studies – not that helped the plaintiff, anyway – so the plaintiff’s expert (who was also the original treating physician, which helps) reached the conclusion he was paid to reach via differential diagnosis. There was pretty good temporal evidence, although not directly related to loss of smell: “immediately [after the exposure] he had suffered from irritation and burning of his skin, irritation to his nasal passages and mouth, dizziness, and shortness of breath. 2009 WL 1010883, at *2. Four months after the incident, plaintiff first saw the expert (as a treater), reporting “clear drainage from his nose following the spill and that he eventually lost his sense of smell completely.” Id.
Exposure data, on the other hand, was downright lousy – nobody ever quantified the exposure, and it was of a fleeting, as opposed to chronic, duration. Id. at *3. The expert was also unable to “to determine the threshold level of exposure that could cause harm.” Id.
The expert selected a number of alternative possible explanations for anosmia, including use of a almost a dozen prescription drugs, and proceeded to "rule out" all but one of them. Id. at *2.
The other half of differential diagnosis – “ruling in” the target chemical – was also rather weak. The substance was “ “irritating to the mucous membrane and upper respiratory tract” and “[m]ay be harmful if inhaled,” but its “acute inhalation toxicity” was “undetermined,” and there was no data linking it to anosmia. Id. The expert speculated that the chemical, which he called a “chlorine derivative,” caused some sort of chemical burn to the relevant nerve endings. Id. But he had failed to examine the allegedly affected area when he had the chance. Id. at *1.
The district court threw out as "speculative" the differential diagnosis under Daubert, because it was based on temporal association and lack of any other obvious alternative. 2009 WL 1010883, at *3. The Sixth Circuit reversed, finding the differential diagnosis sufficient.
The Sixth Circuit faulted the district court’s reliance upon Moore v. Ashland Chemical Inc., 151 F.3d 269 (5th Cir. 1998) (en banc), which it interpreted as “implicitly” rejecting differential diagnosis altogether as a basis for a causation opinion. 2009 WL 1010883, at *9. In the Sixth Circuit, a properly conducted differential diagnosis was proper “methodology” under Daubert. Best, 2009 WL 1010883, at *6. Because the trial court used the wrong standard, and “did not recognize that differential diagnosis is a valid technique,” the appellate court avoided the abuse of discretion standard that Daubert determinations usually receive on review. 2009 WL 1010883, at *6.
Instead, the court proceeded with “de novo” review – not only with respect to whether any differential diagnosis was OK, but also as to the validity of this expert’s specific opinion. Id. We think the Sixth Circuit went overboard there, and that error on whether differential diagnosis can ever be a proper Daubert technique (if error there was) does not justify also reducing the appellate deference to be given to the trial court’s evaluation of the employment of that technique in the particular case.
Evaluating the case-specific differential diagnosis on a step-by-step basis, Best first held that the expert determined, as well as anyone could, that the plaintiff was not lying about having lost his sense of smell. 2009 WL 1010883, at *7-8. We don’t have any real problem with that. The expert ran the necessary tests. Although the results were close to “malingering,” in the absence of incontrovertible physical proof, it’s a jury’s role to conclude that a plaintiff is fabricating an injury.
We have more problems with the “ruling in” aspect of the Sixth Circuit’s opinion. The court’s reliance upon the expert’s treatment of “a list of possible causes for the injury, including virus, accident, brain tumor, brain surgery, exposure to chemicals, medications, or an idiopathic (unknown) cause,” 2009 WL 1010883, at *8, isn’t really on point. That’s ruling out, not ruling in. The court admits that there’s no “published material” linking the chemical to anosmia. At best, the safety data for the chemical was inconclusive, with mention of “irritation” but nothing about loss of smell. The Sixth Circuit instead relied upon the expert’s experience with other patients who were exposed to other “chlorine derivatives” – not even the same chemical. Id.
We question any differential diagnosis that relies primarily upon analogies to some other purportedly similar chemical. As the court stated in McClain:
[A]nother methodological problem undermines [the expert’s] analogical approach. . . . [E]ven minor deviations in chemical structure can radically change a particular substance’s properties and propensities. [The expert] failed to show that the [] analogy is valid or that the differences in chemical structure between [the two chemicals] make no difference. He simply assumes its validity without offering any scientific evidence. As he said, one presumes the same effect by drugs in the same class until proven otherwise. Such presumptions do not make for reliable opinions in toxic tort cases.
401 F.3d at 1246 (citations and quotation marks omitted). “[U]sing this ‘guilt by association’ inference in their methodology is of questionable scientific reliability.” Caraker v. Sandoz Pharmaceuticals Corp., 188 F. Supp.2d 1026 (S.D. Ill. 2001); accord, e.g., Rider v. Sandoz Pharmaceuticals Corp., 295 F.3d 1194, 1201 (11th Cir. 2002); Hollander v. Sandoz Pharmaceuticals Corp., 289 F.3d 1193, 1207 (10th Cir. 2002); Glastetter v. Novartis Pharmaceuticals Corp., 252 F.3d 986, 990 (8th Cir. 2001); Hans v. Matrixx Initiatives, Inc., 2006 WL 5229820, at *5-6 (W.D. Ky. Sep. 29, 2006) (rejecting chemical analogy in another anosmia case); Newton v. Roche Laboratories, Inc., 243 F.Supp.2d 672, 677 (W.D. Tex 2002).
The Sixth Circuit’s reliance (2009 WL 1010883, at *8) upon McCullock v. H.B. Fuller Co., 61 F.3d 1038 (2d Cir. 1995), is also shaky, because: (1) the expert in McCullock relied on published literature (“reference to various scientific and medical treatises,” 61 F.3d at 1044), and (2) McCullock affirmed admission of expert testimony under an abuse of discretion standard, id.).
Under Daubert, a valid differential diagnosis passes muster only if the expert first shows general toxicity in some reliable fashion:
The first step in the diagnostic process is to compile a comprehensive list of hypotheses that might explain the set of salient clinical findings under consideration. . . . The issue at this point in the process is which of the competing causes are generally capable of causing the patient's symptoms or mortality. Expert testimony that rules in a potential cause that is not so capable is unreliable. . . . It is important to realize that a fundamental assumption underlying differential diagnosis is that the final, suspected “cause” must actually be capable of causing the injury.
Clausen v. M/V New Carissa, 339 F.3d 1049, 1057-58 (9th Cir. 2003) (citations and quotation marks omitted). Just tossing “differential diagnosis” around doesn’t cut it:
No one doubts the utility of medical histories in general or the process by which doctors rule out some known causes of disease in order to finalize a diagnosis. But such general rules must . . . be applied fact-specifically in each case. The underlying predicates of any cause-and-effect medical testimony are that medical science understands the physiological process by which a particular disease or syndrome develops and knows what factors cause the process to occur. Based on such predicate knowledge, it may then be possible to fasten legal liability for a person's disease or injury.
Black v. Food Lion, Inc., 171 F.3d 308, 314 (5th Cir. 1999). Given Black, we question the Sixth Circuit’s conclusion that Moore represented an across-the-board rejection of differential diagnosis as a technique by the Fifth Circuit.
Thus a plaintiff’s expert cannot assume what s/he is trying to prove in a differential diagnosis. McClain, 401 F.3d at 1253. “Where an expert employs differential diagnosis to ‘rule out’ other potential causes for the injury at issue, he must also ‘rule in’ the suspected cause, and do so using scientifically valid methodology.” Ruggiero v. Warner-Lambert Co., 424 F.3d 249, 254 (2d Cir. 2005). The first step is proof that the substance is capable of causing the injury at issue. “In the absence of such a foundation for a differential diagnosis analysis, a differential diagnosis generally may not serve as a reliable basis for an expert opinion on causation in a toxic tort case. McClain, 401 F.3d at 1253.
Looking just at the evidence discussed in the Sixth Circuit’s opinion, we don’t think there was enough “ruling in” in Best to justify reversing a trial court’s exclusion ruling. We don’t think the Sixth Circuit thought there was either – which explains the sleight-of-hand with the standard of review.
The Best court also reviewed the expert’s “ruling out” methodology. 2009 WL 1010883, at *9. We don’t have much problem with the main rationale that the court used. The defendant argued that the expert only ruled out nine of ten possible drugs. Id. But as to the other one, the court stated that the defendant “presented no evidence that [the drug] might cause anosmia.” Id. Fair enough. Assuming that was the case, there's no protest from us. We tend to agree that, for an alternative cause to defeat a differential diagnosis, there must be at least some evidence that it in fact causes the injury at issue - that it is, in fact, a potential alternative cause.
Where we do have more problem is the Sixth Circuit’s one-line blow off of idiopathic causation. 2009 WL 1010883, at *9 (the expert “concluded, based on his own experience, that an idiopathic anosmia would not appear over such a short period of time”). Where did that “short period of time” excuse come from? If it’s an idiopathic condition, then by definition it's of unknown origin – and thus could have been in the offing throughout the plaintiff’s life – not just from the date of the incident. Maybe the defendant didn’t press the point, since there’s no discussion in Best as to the extent of idiopathic causes for anosmia. But we think it's important.
In considering idiopathic causes, it’s critical that, if there’s a large idiopathic component, that the defendant get evidence of that affirmatively into the record. See Bland v. Verizon Wireless LLC, 538 F.3d 893, 897 (8th Cir. 2008) (differential diagnosis invalid where causation of a disease is “is unknown” in “the majority of cases”); Redfoot v. B.F. Ascher & Co., 2007 WL 1593239, at *11 (N.D. Cal. June 1, 2007) (“differential diagnosis is faulty because [the expert] failed to consider. . .that the cause of autism is not known today”); Doe v. Ortho-Clinical Diagnostics, Inc., 440 F. Supp.2d 465, 478 (M.D.N.C. 2006) (strong likelihood of unknown causes “serves to negate. . .use of the differential diagnosis technique”); Valentine v. PPG Industries, Inc., 821 N.E.2d 580, 599-600 (Ohio App. 2004) (“differential diagnosis is not a reliable technique for identifying causation” of a disease because “medical science does not enable physicians and other scientists to pinpoint a cause. . . . [T]he present state of scientific knowledge on the cause of [the disease] precludes reliability in this context”), aff’d, 850 N.E.2d 683 (Ohio 2006).
The court in Best relied heavily on the Third Circuit’s analysis of differential diagnosis in In re Paoli Railroad Yard PCB Litigation, 35 F.3d 717 (3d Cir. 1994), which it found “instructive.” 2009 WL 1010883, at *6-7. Paoli Yard makes quite clear, though, that differential diagnosis becomes unreliable where an expert witness fails to articulate a reason for ruling out alternative causes that appear in a plaintiff’s medical records, history, or examination. Thus, “a requirement that experts at least consider alternative causes” is “at the core of differential diagnosis.” 35 F.3d at 759 (3d Cir. 1994). For that reason:
[P]art of differential diagnosis is using these standard techniques to rule out alternative causes – thus, where a defendant points to a plausible alternative cause and the doctor offers no explanation for why he or she has concluded that was not the sole cause, that doctor’s methodology is unreliable.
Id. at 759 n.27. Cases following Paoli Yard agree. While a medical expert need not “rule out categorically all other possible causes” for an injury, “[o]bvious alternative causes need to be ruled out.” Heller v. Shaw Industries, Inc., 167 F.3d 146, 156 (3d Cir. 1999) (citation and quotation marks omitted). See, e.g., Kannankeril v. Terminix International, Inc., 128 F.3d 802, 808 (3d Cir. 1997) (“the defendant may point to a plausible cause of the plaintiff’s illness other than the defendant’s actions. It then becomes necessary for the plaintiff’s expert to offer a good explanation as to why his or her conclusion remains reliable”); Wicker v. Consolidated Rail Corp., 371 F. Supp. 2d 702, 715 (W.D. Pa. 2005) (an “expert applying differential diagnosis [must] explain why he did not find a specific alternative cause when challenged to do so by the opposing party; failure to reasonably explain why a conclusion of such alternative cause was not reached would therefore result in a finding of unreliability”); Bart v. Certainteed Products, Inc., 2005 WL 182711, at *3 (E.D. Pa. Jan. 27, 2005) (excluding differential diagnosis due to “the short shrift paid to possible alternative causes”); Soldo v. Sandoz Pharmaceuticals Corp., 244 F. Supp.2d 434, 567 (W.D. Pa. 2003) (excluding differential diagnosis that “does not reliably rule out reasonable alternative causes”).
So do non-Third Circuit courts. Differential diagnosis is viewed as “a diagnosis based upon ruling out all other causes.” Courtaulds Fibers, Inc. v. Long, 779 So.2d 198, 202 (Ala. 2000). The expert employing it must “attempt to consider all possible causes, or to exclude each potential cause until only one remained.” Turner v. Iowa Fire Equipment Co., 229 F.3d 1202, 1208 (8th Cir. 2000) (excluding opinion for failing to rule out alternative causes). The New Jersey Supreme Court – perhaps the most liberal court in the country on expert causation opinions – has held:
[A]fter the expert rules in plausible causes, the expert then must rule out those causes that did not produce the patient’s condition by engaging in a process of elimination, eliminating hypotheses on the basis of a continuing examination of the evidence so as to reach a conclusion as to the most likely cause of the findings in that particular case . . . . In rejecting the alternative hypotheses, the expert must use scientific methods and procedures and justify an elimination on more than subjective beliefs or unsupported speculation.
Creanga v. Jardal, 886 A.2d 633, 639-40 (N.J. 2005) (citations and quotation marks omitted). Thus, “if the expert completely fails to consider a cause that could explain the patient’s symptoms, the differential diagnosis is not reliable.” Carlson v. Okerstrom, 675 N.W.2d 89, 105 (Neb. 2004). See also Christian v. Gray, 65 P.3d 591, 604-05 (Okla. 2003) (“[a] reliable differential diagnosis. . .generally is accomplished by determining the possible causes for the patient’s symptoms and then eliminating each of these potential causes until reaching one that cannot be ruled out”); Cooper v. Smith & Nephew, Inc., 259 F.3d 194, 202 (4th Cir. 2001) (“if an expert utterly fails to consider alternative causes. . .a district court is justified in excluding the expert’s testimony”); Cavallo v. Star Enterprise, 892 F. Supp. 756, 771 (E.D. Va. 1995) (where “other possible causes of an injury cannot be ruled out, or at least the probability of their contribution minimized, then the ‘more likely than not’ threshold for proving causation may not be met”), aff’d in pertinent part, rev’d on other grounds, 100 F.3d 1150 (4th Cir. 1996).
Finally, there’s a most revealing aside at the very end of Best:
We further note that, even without [the expert’s] testimony, summary judgment might be inappropriate in this case in light of this court’s recent decision in Gass v. Marriott Hotel Services, 558 F.3d 419, 434 (6th Cir. 2009) (holding that expert testimony was not required to prove the causation element of a negligence case where the plaintiffs were allegedly exposed to pesticides and immediately developed respiratory injuries). Because we conclude that [the] opinion is admissible, however, we have no need to decide whether the holding in Gass is applicable to the present case.
Best, 2009 WL 1010883, at *11 (emphasis added). This more or less confirms what we thought about the opinion all along – given the temporal relationship between the purported injuries and the exposure, nothing else really mattered to the court.
If that's true, then it puts the Sixth Circuit at odds with a great deal of Daubert law holding that timing isn’t everything. “[T]emporal connection between exposure to chemicals and an onset of symptoms, standing alone, is entitled to little weight in determining causation.” Bland, 538 F.3d at 898-99 (quoting Moore, 151 F.3d at 278); Ervin v. Johnson & Johnson, Inc., 492 F.3d 901, 904-05 (7th Cir. 2007) (“mere existence of a temporal relationship between taking a medication and the onset of symptoms does not show a sufficient causal relationship”); McClain, 401 F.3d at 1243 (“[t]he post hoc ergo propter hoc fallacy assumes causality from temporal sequence”); Meister v. Medical Engineering Corp., 267 F.3d 1123, 1129 (D.C. Cir. 2001) (the expert “failed to show any nexus between [plaintiff’s] symptoms and [the product]; the mere simultaneous existence of the two clearly is not an appropriate methodology”); Glastettner, 252 F.3d at 990 (plaintiff “demonstrate[d] a temporal association” but “that association is not scientifically valid proof of causation”); Terran v. Secretary HHS, 195 F.3d 1302, 1317 (Fed. Cir. 1999) (plaintiff “points to the temporal association. . ., which has been held to be insufficient proof of causation”); Allison v. McGhan Medical Corp., 184 F.3d 1300, 1321 (11th Cir. 1999) (“mere coincidence of temporality” held a “questionable” basis for an expert opinion); Kennedy v. Collagen Corp., 161 F.3d 1226, 1227 (9th Cir. 1997) (admissible causation opinion must be based upon “other factors in addition to the temporal relationship”); Hodges v. Secretary HHS, 9 F.3d 958, 960 (Fed. Cir. 1993) (“a proximate temporal association alone does not suffice to show a causal link between the vaccination and the injury”); Sakaria v. Trans World Airlines, 8 F.3d 164, 172 (4th Cir. 1993) (“temporal sequence of the two events” without medical causation testimony is insufficient to suggest probability of causation). And these are just the appellate decisions in the federal courts - we finally got tired of researching.
In sum, while we agree with the Sixth Circuit in Best that, when done right, differential diagnosis can be a grounds for a causation opinion under Daubert, we think that the district court was within its discretion to conclude that this particular differential diagnosis was inadequate – both on “rule in” and “rule out” grounds. The key to Best is the standard of review. We don’t think the Sixth Circuit should have employed de novo review to reverse what was a decision that the Supreme Court has held is within the discretionary power of the District Court. Kumho Tire Co. v. Carmichael, 526 U.S. 137, 152 (1999) (adopting abuse of discretion review in Daubert cases).
Device Preemption Win In Connecticut
A tip of the cybercap to Harley Ratliff of Shook Hardy for sending us word of a device preemption win on appeal in Connecticut. Mullin v. Guidant Corp., AC29829, slip op. (Conn. App. May 12, 2009). We'd blogged about the trial court decision in Mullins - back when it was the first post-Riegel state court preemption decision.
The original Mullin opinion was always a little unusual, since it held that preemption divested the court of subject matter jurisdiction. Trial Slip op. at 3. On appeal, the court fixed that, slip op. at part I, but held, properly, that the defendant - a manufacturer of a PMA-approved implantable defibrillator - was entitled to summary judgment.
Finally, as a policy matter we think that defibrillators are a product as to which preemption is peculiarly appropriate. They are implanted, as occurred in Mullin in seriously ill people who are at risk of sudden death through heart failure. Preemption is necessary to prevent the companies who make these lifesaving medical devices from being turned into insurers against heart attacks in a population already predisposed to heart attacks.
The Mullin complaint:
Mullin appellate slip op. (sorry, no page numbers). The appellate court held that all these claims were preempted. That product liability in Connecticut was a statutory rather than common-law cause of action was a "distinction without a difference." Slip op. at part II(B). All the claims - including manufacturing defect and express/implied warranty - would have imposed requirements that differed from the specifications approved by the FDA. Id. Nothing in Levine affected express preemption in the medical device area. Id. n.6. The plaitiffs raised "parallel" claims on appeal, but had not pleaded anything that could be interpreted as such. Id. Part II(C).
Finally, as a policy matter, we think that defibrillators are particularly deserving of preemption (and any other) defense. These devices are implanted in people who are already at serious risk of sudden death from heart attacks. Because these devices save so many lives, we're loathe to see their manufacturers turned into de facto insurers for every heart attack that a defibrillator patient might happen to suffer. That's what modern product liability law does.
Don't believe us? That's exactly what's been happening to the the makers of SSRI anti-depressants. Suicide is a risk of depression, but in case after case SSRI makers have been sued for suicides that all scientific evidence suggests would have happened anyway. It's no wonder that SSRIs have been at the core of preemption battles in the prescription drug area.
The original Mullin opinion was always a little unusual, since it held that preemption divested the court of subject matter jurisdiction. Trial Slip op. at 3. On appeal, the court fixed that, slip op. at part I, but held, properly, that the defendant - a manufacturer of a PMA-approved implantable defibrillator - was entitled to summary judgment.
Finally, as a policy matter we think that defibrillators are a product as to which preemption is peculiarly appropriate. They are implanted, as occurred in Mullin in seriously ill people who are at risk of sudden death through heart failure. Preemption is necessary to prevent the companies who make these lifesaving medical devices from being turned into insurers against heart attacks in a population already predisposed to heart attacks.
The Mullin complaint:
contained several allegations relating to the implant’s safety, design, manufacture and distribution, including breach of implied and expressed warranties, failure to evaluate the safety of the implant.
Mullin appellate slip op. (sorry, no page numbers). The appellate court held that all these claims were preempted. That product liability in Connecticut was a statutory rather than common-law cause of action was a "distinction without a difference." Slip op. at part II(B). All the claims - including manufacturing defect and express/implied warranty - would have imposed requirements that differed from the specifications approved by the FDA. Id. Nothing in Levine affected express preemption in the medical device area. Id. n.6. The plaitiffs raised "parallel" claims on appeal, but had not pleaded anything that could be interpreted as such. Id. Part II(C).
Finally, as a policy matter, we think that defibrillators are particularly deserving of preemption (and any other) defense. These devices are implanted in people who are already at serious risk of sudden death from heart attacks. Because these devices save so many lives, we're loathe to see their manufacturers turned into de facto insurers for every heart attack that a defibrillator patient might happen to suffer. That's what modern product liability law does.
Don't believe us? That's exactly what's been happening to the the makers of SSRI anti-depressants. Suicide is a risk of depression, but in case after case SSRI makers have been sued for suicides that all scientific evidence suggests would have happened anyway. It's no wonder that SSRIs have been at the core of preemption battles in the prescription drug area.
Tuesday, May 05, 2009
Pennsylvania Employee Benefit v. Zeneca Remanded to District Court
Following the same tack as in Colacicco, the Third Circuit today reversed and remanded Pennsylvania Employee Benefit Trust v. Zeneca, Inc., to the District of Delaware. The complete text of the order:
No: 05-5340, Minute Order (3d Cir. May 5, 2009)
On March 9, 2009, the Supreme Court of the United States granted the petition for writ of certiorari in the above captioned matter, vacated this Court’s judgment entered on August 17, 2007, and remanded this matter for further consideration in light of Wyeth v. Levine, 555 U.S. , 129 S. Ct. 1187 (Mar. 4, 2009). On April 10, 2009, the Supreme Court of the United States issued a certified copy of its judgment. Accordingly, consistent with the Supreme Court’s judgment, it is hereby ADJUDGED and DECREED that the judgment of the District Court entered on November 11, 2005, is REVERSED, and this matter is REMANDED for further proceedings consistent with Wyeth v. Levine. The mandate shall issue forthwith.
No: 05-5340, Minute Order (3d Cir. May 5, 2009)
Sole Proximate Cause Clarity
This guest post was written by David Booth Alden of Jones Day. We thank Dave for the contribution and remind you to credit (or blame) him, not us, for what follows:
Product liability plaintiffs generally prefer to try cases in which the evidence relates only to parties that are in court and from whom they can recover a judgment, preferably a big one. Product liability defendants generally prefer that large sums of their money not be awarded to plaintiffs and, thus, usually are happy to have responsibility allocated to anyone other than themselves. Where all potentially responsible parties – PRPs for short – are named as parties, both sides get their way. Juries generally are permitted to apportion fault between and among the plaintiff and all PRPs on a percentage basis.
But all PRPs often are not in court. And, for a variety of reasons, the jury may not be permitted to apportion fault to the absent PRPs. For example, the absent PRP may be immune from liability (e.g., employers), may have settled or gone bankrupt, or perhaps no longer exists. Or the plaintiff may have failed to name a PRP before a statute of limitations ran or elected not to name the PRP for strategic reasons.
When there are absent PRPs to whom the jury cannot allocate fault, plaintiffs and defendants want very different things. The plaintiff wants to preclude all reference to the absent PRPs because, notwithstanding their inability to apportion fault them, the jury may allocate some or all responsibility to the absent PRP, thereby absolving or reducing any judgment against the defendant. Because the absent PRP may, in reality, bear responsibility for the plaintiff’s injury, the defendant wants to explain that fact to the jury.
The defendant often may introduce at least some of this highly relevant evidence by invoking the “sole proximate cause” doctrine, which “advise[s] the jurors … that they do not have to place blame on a party to the suit if the evidence shows that … the conduct of some person not a party to the litigation caused” the injury. Dillard v. Texas Elec. Corp., 157 S.W.3d 429, 432 (Tex. 2005). When the defendant raises a “sole proximate cause” defense, evidence relating to absent PRPs’ culpability should be admissible.
But not in asbestos cases in Illinois, at least not until the Illinois Supreme Court’s recent decision in Nolan v. Weil-McLain, No. 103137, 2009 Ill. LEXIS 381 (Apr. 16, 2009). There, the plaintiff brought an action against Weil-McLain and eleven other defendants alleging that their products exposed her now-deceased husband, Clarence Nolan, to asbestos, which in turn caused his mesothelioma. Nolan had performed millwright work, plumbing, pipefitting and boiler installation and repair for 38 years beginning in 1952. Weil-McLain makes boilers and, before 1974, its boilers had some asbestos-containing parts. Nolan testified that he worked on Weil-McLain boilers 20-25 times during his 38-year career. Nolan had filed an earlier lawsuit in 1988 seeking recovery for his asbestosis and, in that action, did not name Weil-McLain.
By the time of trial, eleven defendants had settled, which left Weil-McLain as the only defendant. Weil-McLain sought to offer Nolan’s deposition testimony that he had been exposed to “numerous asbestos-containing products neither made nor supplied by” Weil-McLain, “including instances … when asbestos dust ‘rained down’ on him from insulation and he ‘certainly’ inhaled it.” Id. at *6-7. The plaintiff, relying on a trio of intermediate Illinois appellate court decisions, objected that the “other exposure” evidence was irrelevant, confusing, and prejudicial. The trial court excluded the “other exposure” evidence, but gave a “sole proximate cause” instruction. The jury returned a $2.368 million verdict for the plaintiff, which was reduced by $1.22 million due to the other defendants’ settlements.
The intermediate appellate court affirmed. It found that (a) under Thacker v. UNR Industries, Inc., 151 Ill. 2d 343, 603 N.E.2d 449 (1992), once a plaintiff passed a threshold showing of regular exposure to the defendant’s product over a substantial period of time, there was a presumption of proximate causation that shifted the burden of proof to the defendant; and (b) once the Thacker presumption applied, a trio of intermediate appellate court decisions required excluding evidence of exposure to other manufacturers’ asbestos products as irrelevant.
The Illinois Supreme Court reversed. Initially, it found that Thacker set forth the standard for evaluating whether a plaintiff had introduced enough evidence to submit the causation question to the jury, but “create[d] no presumption on the issue of causation” and did not shift the burden of proof. Id. at 27. Then, it found that the exclusionary rule prohibiting asbestos defendants from showing exposure to non-defendants’ asbestos-containing products “‘effectively removed from asbestos defendants any opportunity to point to the negligence of another as the sole proximate cause of plaintiff’s injury.’” Id. at *33 (citation omitted). According to the court, “a defendant ‘has the right not only to rebut evidence tending to show that defendant’s acts are negligent and the proximate cause of claimed injuries,’ but also ‘has the right to endeavor to establish by competent evidence that the conduct of a third person, or some other causative factor, is the sole proximate cause of plaintiff’s injuries.’” Id. at *38 (citation omitted).
This is a drug and device law blog and some readers may simply write this off as a mildly interesting correction of one of many problems that have afflicted asbestos cases. But the fundamental tension about how to treat absent PRPs arises in prescription drug product liability actions, too. For example, in Ackermann v. Wyeth Pharmaceuticals, 456 F. Supp. 2d 809 (E.D. Tex. 2006) (Bush, M.J.) [Disclosure: My firm, and blogging co-host Herrmann, and I represented Wyeth], the plaintiff alleged that Wyeth’s antidepressant caused her decedent’s suicide. For several days before his suicide, however, the decedent had not taken Wyeth’s antidepressant; instead, he had taken an antidepressant manufactured by another manufacturer that the plaintiff chose not to sue. The plaintiff moved in limine to exclude all evidence relating her decedent’s use of the absent manufacturer’s drug unless Wyeth named that manufacturer as a PRP under Tex. Civ. Prac. & Rem. Code § 33.004, which would have permitted her to assert otherwise time-barred claims against that manufacturer. Although not expressed in terms of “sole proximate cause,” the court denied the motion on that basis, finding that evidence relating to the other manufacturer’s antidepressant could be relevant in assessing whether the other drug – and not Wyeth’s antidepressant – caused the suicide. Id. at 811.
Sole proximate cause can also arises in the context of defendants arguing that the plaintiff’s own conduct was the cause of an injury and that there is no need to have a jury assess comparative fault. E.g., Labzda v. Purdue Pharma, L.P., 292 F. Supp. 2d 1346, (S.D. Fla. 2003) (Snow, M.J.) (recommending entry of summary judgment dismissing product liability claims relating to Oxycontin user’s overdose death because user’s conduct was sole proximate cause), adopted, 292 F. Supp. 2d 1346 (S.D. Fla. 2003). Similarly, it may be a basis for summary judgment when a learned intermediary failed to read the manufacturer’s warnings. Harris v. McNeil Pharm., No. 3:98cv105, 2000 U.S. Dist. LEXIS 22972 (D.N.D. Sept. 5, 2000).
Accordingly, correcting the law relating to sole proximate cause, even in a somewhat different context, is a positive development.
Product liability plaintiffs generally prefer to try cases in which the evidence relates only to parties that are in court and from whom they can recover a judgment, preferably a big one. Product liability defendants generally prefer that large sums of their money not be awarded to plaintiffs and, thus, usually are happy to have responsibility allocated to anyone other than themselves. Where all potentially responsible parties – PRPs for short – are named as parties, both sides get their way. Juries generally are permitted to apportion fault between and among the plaintiff and all PRPs on a percentage basis.
But all PRPs often are not in court. And, for a variety of reasons, the jury may not be permitted to apportion fault to the absent PRPs. For example, the absent PRP may be immune from liability (e.g., employers), may have settled or gone bankrupt, or perhaps no longer exists. Or the plaintiff may have failed to name a PRP before a statute of limitations ran or elected not to name the PRP for strategic reasons.
When there are absent PRPs to whom the jury cannot allocate fault, plaintiffs and defendants want very different things. The plaintiff wants to preclude all reference to the absent PRPs because, notwithstanding their inability to apportion fault them, the jury may allocate some or all responsibility to the absent PRP, thereby absolving or reducing any judgment against the defendant. Because the absent PRP may, in reality, bear responsibility for the plaintiff’s injury, the defendant wants to explain that fact to the jury.
The defendant often may introduce at least some of this highly relevant evidence by invoking the “sole proximate cause” doctrine, which “advise[s] the jurors … that they do not have to place blame on a party to the suit if the evidence shows that … the conduct of some person not a party to the litigation caused” the injury. Dillard v. Texas Elec. Corp., 157 S.W.3d 429, 432 (Tex. 2005). When the defendant raises a “sole proximate cause” defense, evidence relating to absent PRPs’ culpability should be admissible.
But not in asbestos cases in Illinois, at least not until the Illinois Supreme Court’s recent decision in Nolan v. Weil-McLain, No. 103137, 2009 Ill. LEXIS 381 (Apr. 16, 2009). There, the plaintiff brought an action against Weil-McLain and eleven other defendants alleging that their products exposed her now-deceased husband, Clarence Nolan, to asbestos, which in turn caused his mesothelioma. Nolan had performed millwright work, plumbing, pipefitting and boiler installation and repair for 38 years beginning in 1952. Weil-McLain makes boilers and, before 1974, its boilers had some asbestos-containing parts. Nolan testified that he worked on Weil-McLain boilers 20-25 times during his 38-year career. Nolan had filed an earlier lawsuit in 1988 seeking recovery for his asbestosis and, in that action, did not name Weil-McLain.
By the time of trial, eleven defendants had settled, which left Weil-McLain as the only defendant. Weil-McLain sought to offer Nolan’s deposition testimony that he had been exposed to “numerous asbestos-containing products neither made nor supplied by” Weil-McLain, “including instances … when asbestos dust ‘rained down’ on him from insulation and he ‘certainly’ inhaled it.” Id. at *6-7. The plaintiff, relying on a trio of intermediate Illinois appellate court decisions, objected that the “other exposure” evidence was irrelevant, confusing, and prejudicial. The trial court excluded the “other exposure” evidence, but gave a “sole proximate cause” instruction. The jury returned a $2.368 million verdict for the plaintiff, which was reduced by $1.22 million due to the other defendants’ settlements.
The intermediate appellate court affirmed. It found that (a) under Thacker v. UNR Industries, Inc., 151 Ill. 2d 343, 603 N.E.2d 449 (1992), once a plaintiff passed a threshold showing of regular exposure to the defendant’s product over a substantial period of time, there was a presumption of proximate causation that shifted the burden of proof to the defendant; and (b) once the Thacker presumption applied, a trio of intermediate appellate court decisions required excluding evidence of exposure to other manufacturers’ asbestos products as irrelevant.
The Illinois Supreme Court reversed. Initially, it found that Thacker set forth the standard for evaluating whether a plaintiff had introduced enough evidence to submit the causation question to the jury, but “create[d] no presumption on the issue of causation” and did not shift the burden of proof. Id. at 27. Then, it found that the exclusionary rule prohibiting asbestos defendants from showing exposure to non-defendants’ asbestos-containing products “‘effectively removed from asbestos defendants any opportunity to point to the negligence of another as the sole proximate cause of plaintiff’s injury.’” Id. at *33 (citation omitted). According to the court, “a defendant ‘has the right not only to rebut evidence tending to show that defendant’s acts are negligent and the proximate cause of claimed injuries,’ but also ‘has the right to endeavor to establish by competent evidence that the conduct of a third person, or some other causative factor, is the sole proximate cause of plaintiff’s injuries.’” Id. at *38 (citation omitted).
This is a drug and device law blog and some readers may simply write this off as a mildly interesting correction of one of many problems that have afflicted asbestos cases. But the fundamental tension about how to treat absent PRPs arises in prescription drug product liability actions, too. For example, in Ackermann v. Wyeth Pharmaceuticals, 456 F. Supp. 2d 809 (E.D. Tex. 2006) (Bush, M.J.) [Disclosure: My firm, and blogging co-host Herrmann, and I represented Wyeth], the plaintiff alleged that Wyeth’s antidepressant caused her decedent’s suicide. For several days before his suicide, however, the decedent had not taken Wyeth’s antidepressant; instead, he had taken an antidepressant manufactured by another manufacturer that the plaintiff chose not to sue. The plaintiff moved in limine to exclude all evidence relating her decedent’s use of the absent manufacturer’s drug unless Wyeth named that manufacturer as a PRP under Tex. Civ. Prac. & Rem. Code § 33.004, which would have permitted her to assert otherwise time-barred claims against that manufacturer. Although not expressed in terms of “sole proximate cause,” the court denied the motion on that basis, finding that evidence relating to the other manufacturer’s antidepressant could be relevant in assessing whether the other drug – and not Wyeth’s antidepressant – caused the suicide. Id. at 811.
Sole proximate cause can also arises in the context of defendants arguing that the plaintiff’s own conduct was the cause of an injury and that there is no need to have a jury assess comparative fault. E.g., Labzda v. Purdue Pharma, L.P., 292 F. Supp. 2d 1346, (S.D. Fla. 2003) (Snow, M.J.) (recommending entry of summary judgment dismissing product liability claims relating to Oxycontin user’s overdose death because user’s conduct was sole proximate cause), adopted, 292 F. Supp. 2d 1346 (S.D. Fla. 2003). Similarly, it may be a basis for summary judgment when a learned intermediary failed to read the manufacturer’s warnings. Harris v. McNeil Pharm., No. 3:98cv105, 2000 U.S. Dist. LEXIS 22972 (D.N.D. Sept. 5, 2000).
Accordingly, correcting the law relating to sole proximate cause, even in a somewhat different context, is a positive development.
Monday, May 04, 2009
The Personal Genome
J.C. McElveen, of Jones Day, submitted the following guest post, for which we thank him. As is always true of guest posts, our guest gets all the credit for what follows:
Relatively few legal cases have discussed the newly emergent field of genomics, but there is no shortage of discussion on the subject. In the January 11, 2009, issue of The New York Times Magazine, Dr. Stephen Pinker, of Harvard, who had his genome sequenced, made a number of observations that are worth reflecting upon, as the science begins to merge with the law.
The first thing that jumped out, from Dr. Pinker’s observations, is that there are some things you just don’t want to know. For example, some people whose genomes are sequenced choose not to know whether they carry the gene for Huntington’s disease. (If you have it, you will develop Huntington’s disease.) Genetic privacy concerns have certainly been the subject of some litigation. The case of Havasupai Tribe of the Havasupai Reservation v. Arizona Board of Regents, 2008 WL 5047641 (Ariz. App. Div. 1), previously discussed here, is an example. There, certain members of the Indian tribe that lives on the floor of the Grand Canyon, the Havasupai, had given blood to Arizona State University researchers, so it could be tested for certain genetic traits, dealing with diabetes, with their consent, but they sued, among other reasons, because they alleged their blood had been used to look for other genetic information, without their consent.
The second interesting observation from the Pinker article was his comment that “individual genes are just not very informative.” The example he used was height, which, though affected to some extent by nutrition and health status, is primarily genetically determined. Dr. Pinker pointed out that there are more than a dozen genes that have some role in coding for height. However, “these genes collectively accounted for just 2 percent of the variation in height, and a person who had most of the genes was barely an inch taller, on average, than a person who had few of them.” Now, height is objectively measurable, but so is a disease endpoint like cancer, or lupus or a heart attack. If an environmental containment could be shown to have an adverse effect on one of [an assumed] dozen or more genes that had a role in the development of a particular cancer, and all of those genetic changes, collectively, accounted for no more than 3% or 4% of the cancers of that type, what would the legal significance of the adverse effect on that one gene be?
Third, one of the interesting observations Dr. Pinker made was some of the genetic predictions are just flat wrong. In Dr. Pinker’s case, though he has a full head of hair, his genetic profile predicts a high risk of baldness. As. Dr. Pinker said “something strange happens when you take a number representing the proportion of people in a sample [who have a particular trait] and apply it to a single individual . . . Some mathematicians say that “'the probability of a single event [in an individual]' is a meaningless concept.” So, for example, even in identical twins, one may develop a particular condition or have a certain trait, and the other one may not. As. Dr. Pinker said “[p]erhaps people are shaped by modifications in genes that take place after conception, or . . . by the wiring of the brain or by the expression of the genes themselves.”
Finally, Dr. Pinker made the observation that, “apart from carrier screening, personal genomics will be more recreational then diagnostic for some time to come.” It turns out, not surprisingly, that the currently available genotyping doesn’t actually sequence your entire genome, but, as Dr. Pinker put it “follows[s] the time-honored scientific practice of looking for one’s keys under the lamppost because that is where the light is best.” It turns out that what these services look for is single nucleotide polymorphisms (SNPs), or the half a million or so places on the genome where a single nucleotide is apt to vary, from individual to individual. This method does not ordinarily capture missing DNA, or DNA that is inserted, or duplicated, or has other abnormalities. These variations may have significant consequences, too. And often, as the case with height, multiple genes are going to have an impact on an endpoint.
So, though Dr. Pinker says “personal genomics is here to stay,” he also says “many of the dystopian fears raised by personal genomics. . . are simply out of touch with the complex and probabilistic nature of genes.” To that, another observation can be added: hopes for genomics as an individual causation problem solver in litigation “are simply out of touch with the complex and probabilistic nature of genes” – at least for the foreseeable future.
Relatively few legal cases have discussed the newly emergent field of genomics, but there is no shortage of discussion on the subject. In the January 11, 2009, issue of The New York Times Magazine, Dr. Stephen Pinker, of Harvard, who had his genome sequenced, made a number of observations that are worth reflecting upon, as the science begins to merge with the law.
The first thing that jumped out, from Dr. Pinker’s observations, is that there are some things you just don’t want to know. For example, some people whose genomes are sequenced choose not to know whether they carry the gene for Huntington’s disease. (If you have it, you will develop Huntington’s disease.) Genetic privacy concerns have certainly been the subject of some litigation. The case of Havasupai Tribe of the Havasupai Reservation v. Arizona Board of Regents, 2008 WL 5047641 (Ariz. App. Div. 1), previously discussed here, is an example. There, certain members of the Indian tribe that lives on the floor of the Grand Canyon, the Havasupai, had given blood to Arizona State University researchers, so it could be tested for certain genetic traits, dealing with diabetes, with their consent, but they sued, among other reasons, because they alleged their blood had been used to look for other genetic information, without their consent.
The second interesting observation from the Pinker article was his comment that “individual genes are just not very informative.” The example he used was height, which, though affected to some extent by nutrition and health status, is primarily genetically determined. Dr. Pinker pointed out that there are more than a dozen genes that have some role in coding for height. However, “these genes collectively accounted for just 2 percent of the variation in height, and a person who had most of the genes was barely an inch taller, on average, than a person who had few of them.” Now, height is objectively measurable, but so is a disease endpoint like cancer, or lupus or a heart attack. If an environmental containment could be shown to have an adverse effect on one of [an assumed] dozen or more genes that had a role in the development of a particular cancer, and all of those genetic changes, collectively, accounted for no more than 3% or 4% of the cancers of that type, what would the legal significance of the adverse effect on that one gene be?
Third, one of the interesting observations Dr. Pinker made was some of the genetic predictions are just flat wrong. In Dr. Pinker’s case, though he has a full head of hair, his genetic profile predicts a high risk of baldness. As. Dr. Pinker said “something strange happens when you take a number representing the proportion of people in a sample [who have a particular trait] and apply it to a single individual . . . Some mathematicians say that “'the probability of a single event [in an individual]' is a meaningless concept.” So, for example, even in identical twins, one may develop a particular condition or have a certain trait, and the other one may not. As. Dr. Pinker said “[p]erhaps people are shaped by modifications in genes that take place after conception, or . . . by the wiring of the brain or by the expression of the genes themselves.”
Finally, Dr. Pinker made the observation that, “apart from carrier screening, personal genomics will be more recreational then diagnostic for some time to come.” It turns out, not surprisingly, that the currently available genotyping doesn’t actually sequence your entire genome, but, as Dr. Pinker put it “follows[s] the time-honored scientific practice of looking for one’s keys under the lamppost because that is where the light is best.” It turns out that what these services look for is single nucleotide polymorphisms (SNPs), or the half a million or so places on the genome where a single nucleotide is apt to vary, from individual to individual. This method does not ordinarily capture missing DNA, or DNA that is inserted, or duplicated, or has other abnormalities. These variations may have significant consequences, too. And often, as the case with height, multiple genes are going to have an impact on an endpoint.
So, though Dr. Pinker says “personal genomics is here to stay,” he also says “many of the dystopian fears raised by personal genomics. . . are simply out of touch with the complex and probabilistic nature of genes.” To that, another observation can be added: hopes for genomics as an individual causation problem solver in litigation “are simply out of touch with the complex and probabilistic nature of genes” – at least for the foreseeable future.
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