Friday, July 31, 2009

Compounding, Repackaging, or Manufacturing?

We don't deal with FDA regulatory matters that often, and with the criminal side even less, but the recent decision out of Colorado in U.S. v. Bader, slip opinion here, was too juicy to ignore.

It points out a serious flaw in the FDA's regulatory scheme that we think needs a formal regulatory fix - and soon.

The issue in Bader is the limits on pharmacy compounding.

In Bader a pharmacist purchased bulk human growth hormone ("HGH") - although it could just as easily been some other type of drug (maybe steroids, often used for similar purposes?) - a drug that's subject to severe restrictions when distributed as a drug in the USA.

Anyway, the defendant bought HGH in bulk form and from our point of view, didn't appear to do much to it. As stated in the opinion, he:
inspected the bulk HGH powder he had received for quality and potency, measured out the proper amount of bulk HGH powder into a single-dose container, separately packaged an appropriate quantity of saline for the consumer to mix with the powder, labeled and packaged the HGH dosage and the saline together, and supplied the two items to the customer. (The customer was responsible for actually mixing the saline and HGH before administering the drug.)
Slip op. at 4.

After that the defendant pharmacist was open for business, able to fill prescriptions in avoidance of otherwise strict regulations, because "the FDA rigorously regulates the importation and distribution of finished drugs that areready for distribution to consumers, but exercises relatively little regulatory oversight over the importation of drug ingredients to be used by pharmacists to create 'compounded' drugs." Slip op. at 3.

So the FDA busted this pharmacist, claiming that what he was doing wasn't "compounding," but merely "repackaging" of a drug that was effectively in consumer-usable form. Id,

Problem is, after all these years, the FDA still doesn't have any formal definition of "compounding" in its regulations. So it had a hard time distinguishing "compounding" from "repackaging."

Here's why. Over the years the FDA has deferred to state definitions of "compounding." Slip op. at 6 (referring to "the FDA’s traditional deference to state regulation of the practice of compounding"). Well, it just so happens that, in Colorado anyway, the state has defined "compounding" to include repackaging. Slip op. at 5.

Oops. The FDA's failure to have its house in order on defining "compounding" comes back to bite it (you decide where) in a big way.

Time to change gears. The Agency next attempts to fit pharmacy compounding (at least in this one instance) into the definition of "manufacturing". Slip op. at 8. Its basis: compounding technically falls into the definition of a "new drug" - subjecting its maker to regulation as a manufacturer - even though the FDA hasn't enforced the Act in this fashion for half a century:
[P]racticality aside, the FDCA contains no exception to the definition of a new drug for one that is compounded. Thus,on its face, the FDCA is susceptible to an interpretation that would require all compounded drugs to go through the NDA process. For half a century, practicality prevailed – the FDA simply declined to exercise any authority it might have exerted over compounded drugs, electing to defer to the state regulation of pharmacists who engaged in the practice of compounding.


Congress mucked things up further by adding pharmacy compounding provisions to the FDC Act in 1997 in something called FDAMA. Those provisions exempted compounded drugs from the Act's new drug requirements if:
  • compounded by a licensed pharmacist pursuant to a valid prescription issued to an individual patient (or is prepared in limited quantities in anticipation of receiving a prescription based on prior business history)
  • the pharmacist complies with industry standards set forth in the U.S. Pharmacopeia or other sources (such as state law)
  • the compounded drug is not one that appears on an FDA list of specific drugs deemed to be unsafe (maybe steroids are on this list)
  • the pharmacist doesn't churn out “inordinate amounts” of a copy of a commercially available drug
  • the drug is not one that the FDA has specifically designated as being unsuitable for compounding (maybe steroids are on this list)
  • the pharmacy is not producing “inordinate amounts of compounded drug products” generally, and
  • the pharmacy doesn't advertise or promote the compounding of any particular drug or class of drugs.
Slip op. at 8-9, citing various parts of 21 U.S.C. §353a.

The last bullet point - prohibiting all advertising, truthful or otherwise, was the kicker. It got this part of FDAMA declared unconstitutional in Thompson v. Western StatesMedical Center, 535 U.S. 357 (2002), on First Amendment grounds. We've discussed these First Amendment issues here, in the context of off-label use. So Congress, trying to clarify, just made things worse.

Bader, of course, has nothing to do with the First Amendment. Trouble is, the Ninth Circuit, in a part of its ruling that the Supreme Court didn't touch in Thompson, declared the whole kit and caboodle of FDAMA's compounding provisions not just unconstitutional, but unseverable - which means all of it fell together. Western States Medical Center v. Shalala, 238 F.3d 1090, 1096-98 (9th Cir. 2001). This is all discussed, slip op. at 9.

After Thompson, the FDA rejiggered its informal guidance concerning compounding, but although it initiated some administrative action on the First Amendment in response to Thompson, but never followed through on that. The Agency did state, in 2002, "that it intended to proceed as if FDAMA was void in its entirety." Slip op. at 14-15 (quoting FDA guidance).

So the FDA's administrative sloth in not wanting to confront the First Amendment implications of Thompson comes back to haunt the Agency in Bader. It's stuck with the Ninth Circuit's unconstitutionality ruling, and only an informal guidance - not having force of law - that addresses what constitutes compounding. And what's worse, that guidance "emphasizes that the FDA will continue defer to state regulation of the traditional practice of compounding." Slip op. at 11.

It gets screwier. There's a second decision, Medical Center Pharmacy v. Mukasey, 536 F.3d 383, 394 (5th Cir. 2008), that according to the Bader court: (1) disagreed with the Ninth Circuit's severability ruling, and (2) construed the statute/regulations to mean that compounded drugs that complied with the provisions of the now-severable FDAMA, were not subject to the NDA process at all. Slip op. at 13.

Colorado, of course, isn't in either the Ninth or the Fifth Circuits, but rather is in the Tenth.

So what is the status of a severely restricted drug, imported as a bulk ingredient, and then reduced to individual-sized units, without really changing its composition, in a way that avoids those legal restrictions?

There were three possible positions: (1) that FDAMA was unconstitutional, so there was no exemption and compounded drugs were "new drugs," thus requiring compounders to be regulated as "manufacturers" (the FDA's position); (2) that FDAMA was unconstitutional, so compounding was relegated to the FDA's prior position for half a century of deferring to the states (the defendant's position); and (3) FDAMA was severable, and the unconstitutional parts created an exemption, provided certain criteria were met. That's the Fifth Circuit's view, but not advocated by either party in Bader. Slip op. at 13-14.

The court chose option (3), slip op. at 17, even though that effectively meant the government can renege on its 2002 public statement that it considers the compounding aspects of FDAMA void in their entirety.

After all that, what's the definition of "compounding"?

Good question.

The FDA started out arguing that what the defendant did was mere "repackaging." But the upshot of the court's ruling on the vampire-like status of FDAMA (rising from the dead) means that what the defendant pharmacy made could be considered a "new drug" and the defendant would be regulated as a manufacturer.

But there's still the uncomfortable fact that nowhere - not in the pre-1997 FDCA, not in FDAMA, and not in the FDA's guidances - is any attempt made to define "compounding." Slip op. at 19-20. In the absence of any definition provided by Congress or formally embodied in an FDA regulation, the court wasn't about to let the Agency gin something up ad hoc on the basis of warning letters and other informal actions. Slip op. at 20.

In default of any federal definition, the states had their own, varying definitions. Slip op. at 20-21.

So the court decides that the Colorado definition of "compounding" - which includes simple "repackaging" - applies. Slip op. at 21-22.


The FDA can superimpose its FDAMA definition of what's a "new drug" on top of this patchwork of state regulations. Thus it can regulate some compounding pharmacies as "manufacturers." Slip op. at 22-23.

That means, in the circumstances of the Bader case that the defendant first has to meet the Colorado definition of "compounding" that includes "repackaging" (which even the court thinks he can do, slip op. at 24), but then must also meet the previously bullet pointed FDAMA requirements - except for the last one, which was declared unconstitutional in Western States. Slip op. at 24-25.

So what do we think?

First, it's a morass. The FDA should undertake formal rulemaking to define "compounding" in a way that's not unconstitutional under Western States. The state standards are designed for other purposes and potentially allow not only HGH but other highly restricted drugs to be prescribed freely through "compounding" in a way that nullifies the otherwise applicable restrictions, which presumably are imposed for weighty public health reasons.

Second, can compounding possibly be considered "manufacturing" - especially in the Bader case? As non-regulatory lawyers, that seems completely counterintuitive, since "manufacturing" connotes whipping the stuff up from scratch - the opposite of what happened here. The defendant pharmacist did nothing to the HGH except transfer it from bulk form to patient-ready doses. It makes more sense to consider it "repackaging" and regulate it as such.

Third, we have serious doubts whether the court's analysis in Bader, regardless of the correctness of its lengthy discussion of the administrative antecedents, can fly in a criminal prosecution. The upshot is that the the government, as prosecutor, gets to apply a different definition to the defendant's conduct after the fact than it had enunciated at the time. That sounds like ex post facto to us - although, again, we're not criminal lawyers, and maybe there's some nuance or exception that we don't know about.

Thus, it all comes back to number one. The FDA needs to clarify the law applicable to compounding so that it can enforce it in something other than the Rube-Goldberg manner that's going on in Bader.

Thursday, July 30, 2009

Riegel At 1 1/2 : What Do We Know Now About Parallel Violation Claims?

Our last preemption-related post was more than three weeks ago, on July 2. Can you believe it? What ever happened to “all preemption, all the time,” as we used to be called?

The Supreme Court decided all of its pending cases, that’s what. Device preemption is pretty much settled, unless Congress upsets the applecart. Drug preemption is in a bit of a hiatus as appellate courts digest Levine and have yet to rule in pending cases. There just aren’t that many fraud-on-the-FDA preemption cases around.

Be that as it may, we’ll try to make up for our appalling oversight today. We’re turning to our post-Riegel device preemption scorecard as we examine a year and a half’s worth of cases to see what conclusions we can draw about the scope of the “parallel violation claim” exception to preemption in cases involving PMA approved medical devices. Even before Riegel, we predicted that a preemption ruling would prompt the other side to rely heavily on this type of claim.

We use “scope” a bit advisedly. When Riegel was first decided, we weren’t sure that there was even a “parallel violation” exception worthy of the name, since the Supreme Court did not really decide the issue, due to a plaintiff-side waiver. See Riegel v. Medtronic, Inc., 128 S. Ct. 999, 1011 (2008). However, the Court also stated that preemption “does not prevent a State from providing a damages remedy for claims premised on a violation of FDA regulations; the state duties in such a case “parallel,” rather than add to, federal requirements.” Id. Since Riegel, the lower courts have pretty much all taken that statement as a recognition of the exception, so we’ll assume (not without a fair degree of grumbling) that such an exception exists.

Looking at the cases, we think we can distill three basic principles that establish some general parameters for what can be, and what isn’t, an unpreempted “parallel violation claim” (this is the last time we’ll be bothered with the quotation marks). These are:

  • There must be evidence of an actual violation of an actual FDA requirement.
  • The claim must have a common-law basis in addition to being a violation of an FDA requirement.
  • The violation claim must bear a plausible causal relationship to the plaintiff’s injuries.

We’ll discuss each of these in turn.

Actual Violation

The most basic element of any violation claim is that there must be a violation. That element was cogently summed up in Riley v. Cordis Corp.:

[T]he conduct that is alleged to give the plaintiff a right to recover under state law must be conduct that is forbidden by the FDCA. Thus, to determine whether [plaintiff’s] claims are preempted, it is first necessary to identify precisely what conduct by [defendant] is alleged to give rise to a claim under state law. If that conduct is not prohibited by the FDCA, then [plaintiff’s] claim, if successful, would have the effect of imposing on [defendant] a requirement that is different from or in addition to the requirements imposed by the FDCA-and, for that reason, [plaintiff’s] claim would be expressly preempted.
___ F. Supp.2d ___, 2009 WL 1606650, at *3 (D. Minn. June 5, 2009).

The violation must also in fact be parallel to the relevant FDA requirements. True parallel claims “do not add to or differ from federal requirements.” In re Medtronic, Inc. Sprint Fidelis Leads Products Liability Litigation, 592 F. Supp.2d 1147, 1152 (D. Minn. 2009). Simply as a matter of common sense, a claim based upon the falsity of FDA approved language cannot be a parallel claim. Bencomo v. Guidant Corp., 2009 WL 1951821, at *6 (E.D. La. June 30, 2009). Likewise, “[i]n order to be considered parallel to federal regulations, the state requirements must be ‘genuinely equivalent’ to the federal requirements.” Link v. Zimmer Holdings, Inc., 604 F. Supp.2d 1174, 1179 (N.D. Ill. 2008); see Bausch v. Stryker Corp., 2008 WL 5157940. at *6 (N.D. Ill. Dec. 9, 2008) (claim is not parallel when “not based on a duty that is ‘substantially identical’ to the duty that is imposed. . .by FDA regulations”). Thus a claim that would require “fine detail” not included in “inherently flexible” and “generic” FDA manufacturing regulations was not a parallel claim that could escape preemption. Sprint Fidelis, 592 F. Supp.2d at 1157-58; see Clark v. Medtronic, Inc., 572 F. Supp.2d 1090, 1095 (D. Minn. 2008) (“[b]ecause plaintiff's claims are not based on a breach of the MDA as enforced by the FDA, the claims are not grounded in state laws that ‘parallel’ federal requirements”).

Likewise, a warning defect/violation claim having the effect of converting a voluntary option into a mandatory obligation is not a parallel claim:

[T]he FDA regulations cited by Plaintiffs permit a device manufacturer to give certain warnings, but Plaintiffs’ failure-to-warn theory necessarily requires a showing that [defendant] was required to give those warnings. And, Plaintiffs have not identified in the Complaint any federal regulation, rule, or other source of obligation that would require such a warning to be given.

Sprint Fidelis, 592 F. Supp.2d at 1160.

But there’s more to it than simply pleading a violation. In the post-Twombly/Iqbal world, a plaintiff can’t just allege that “the defendant violated FDA regulations” and leave it at that. “Plaintiffs cannot simply incant the magic words “[defendant] violated FDA regulations” in order to avoid preemption.” Sprint Fidelis, 592 F. Supp.2d at 1158.

[I]n a multidistrict litigation like this one, involving hundreds of cases, thousands of plaintiffs, and millions of dollars – the cost of the discovery on the horizon is substantial and the potential for abuse is great. For this reason, courts have repeatedly held that the price of entry, even to discovery, is for the plaintiff to allege a factual predicate concrete enough to warrant further proceedings, which may be costly and burdensome.
In re Medtronic, Inc. Sprint Fidelis Leads Products Liability Litigation, 2009 WL 294353, at *2 (D. Minn. Feb. 5, 2009) (citation and quotation marks omitted).

Thus, “[m]ost courts have instead held that a plaintiff must allege the particular federal requirement that was violated, and how.” Prudhel v. Endologix Inc., 2009 WL 2045559, at *9 (E.D. Cal. July 9, 2009). The complaint must “plausibly” state what the violated requirement was and what the defendant did that constituted the violation. See Riley, 2009 WL 1606650, at *10-11 (plaintiff must plead what off-label uses allegedly illegally promoted); Delaney v. Stryker Orthopaedics, 2009 WL 564243, at *6 (D.N.J. March 5, 2009) (“bald” manufacturing violation claim dismissed); Parker v. Stryker Corp., 584 F. Supp.2d 1298, 1301-02 (D. Colo. 2008) (alleged “direct violation of the Code of Federal Regulations” too general to state violation), Heisner v. Genzyme Corp., 2008 WL 2940811, at *5 (N.D. Ill. July 25, 2008) (a “vague suggestion that Defendant violated these reporting requirements does not help Plaintiff avoid dismissal of his claims”); Colombini v. Westchester County Health Care Corp., 2009 WL 2170230, at *4 (N.Y. Sup. July 6, 2009) (claim dismissed where “plaintiffs cite[d] to no document from the FDA which specifically mandates” the feature at issue); but see Hofts v. Howmedica Osteonics Corp., 597 F. Supp.2d 830, 838 (S.D. Ind. 2009) (to dismiss a claim alleging “an impurity, imperfection, and/or another product defect” caused by a “deviation” from “design and quality manufacturing standards for the [device] approved by the FDA” would be “an unusually stringent application of Twombly”).

Common-Law Basis for Liability

We’ve always advocated the position (see here, and here) that, given what the Court had to say in Buckman Co. v. Plaintiffs’ Legal Committee, 531 U.S. 341, 352 (2001), about the FDA’s exclusive enforcement authority, that a bare violation claim that didn’t parallel some pre-existing common-law state tort duty was preempted.

Note that the issue of exclusive FDA enforcement authority isn’t solely a preemption argument. The same result can be reached as a matter of lack of a private plaintiff’s standing to assert the alleged violation. See In re Epogen & Aranesp Off-Label Marketing & Sales Practices Litigation, 2009 WL 1703285, at *7 (C.D. Cal. June 17, 2009). But that’s a subject for another post.

Courts have begun to agree with us that the bare violation “is not the end of the inquiry.” Riley, 2009 WL 1606650, at *3. If there’s only a bare allegation of a violation, without any common-law basis for a claim, the claim can be impliedly preempted under Buckman even if not expressly preempted under Riegel. Riley, 2009 WL 1606650, at *3 (“even if a claim is not expressly preempted. . ., it may be impliedly preempted under Buckman”). Under Buckman:

[A] private litigant cannot sue a defendant for violating the FDCA. Similarly, a private litigant cannot bring a state-law claim against a defendant when the state-law claim is in substance (even if not in form) a claim for violating the FDCA-that is, when the state claim would not exist if the FDCA did not exist.
Riley, 2009 WL 1606650, at *3; accord Sprint Fidelis, 592 F. Supp.2d at 1161 (“claims alleging violations. . .are not preempted [by] §360k(a)” but “such claims are impliedly preempted by 21 U.S.C. §337(a), which states that all proceedings for the enforcement or to restrain violations of the FDCA ‘shall be by and in the name of the United States’”).

This means that the plaintiff, in addition to alleging a violation, must allege the violation in the context of some sort of recognized state-law claim.

[T]he conduct on which the claim is premised must be the type of conduct that would traditionally give rise to liability under state law-and that would give rise to liability under state law even if the FDCA had never been enacted. If the defendant’s conduct is not of this type, then the plaintiff is effectively suing for a violation of the FDCA (no matter how the plaintiff labels the claim), and the plaintiff's claim is thus impliedly preempted under Buckman.

Riley, 2009 WL 1606650, at *4; see id. (“[f]or a state-law claim to survive, then, the claim must be premised on conduct that both (1) violates the FDCA and (2) would give rise to a recovery under state law even in the absence of the FDCA”). See also Sprint Fidelis, 592 F. Supp.2d at 1160-61 (claim based exclusively on alleged violations of reporting requirements preempted as a private enforcement claim); Prudhel, 2009 WL 2045559, at *8 (“a state law claim that requires more than mere noncompliance with federal requirements – for example, that the violation of federal requirements [was also] reckless or unreasonable” would escape preemption”); Parker, 584 F. Supp.2d at 1301 (“claims [that] are merely derivative. . .are not saved merely by being recast as violations of the federal adulteration and misbranding statutes”).

Thus, the parallel violation exception, while “narrow,” can be viable under an appropriate set of facts. Riley, 2009 WL 1606650, at *4 (“[t]his does not mean. . .that a plaintiff can never bring a state-law claim based on conduct that violates the FDCA”). Presumably, depending on the particular FDCA violation being alleged, that claim could take the form of a manufacturing, design, or warning claim. To date, manufacturing defect/violation claims have been the most common. See Hofts, 597 F. Supp.2d at 835 (manufacturing claim avoids preemption where the “deviation from the FDA’s manufacturing requirements was [also] unreasonably dangerous” or negligent); Sprint Fidelis, 592 F. Supp.2d at 1161 n.17 (“an adequately pleaded claim that a specific device was not manufactured in accordance with its PMA specifications can survive preemption”); Prudhel, 2009 WL 2045559, at *8 (manufacturing defect/violation claim based on product recall escaped preemption); Riley, 2009 WL 1606650, at *15 (manufacturing/violation claims hypothetically possible but too vaguely pleaded); Rollins v. St. Jude Medical, 583 F. Supp.2d 790, 800-01 (W.D. La. 2008) (specifically pleaded claim about improper packing of devices survived preemption); Purcel v. Advanced Bionics Corp., 2008 WL 3874713, at *3-5 (N.D. Tex. Aug. 13, 2008) (manufacturing claim “predicated solely on violations of federal law” not preempted); Mitaro v. Medtronic, Inc., 2009 WL 1272398, at *3 (N.Y. Sup. April 9, 2009) (manufacturing claim focused on particular process survived preemption); but see Miller v. DePuy Spine, Inc., 2009 WL 1767555, *4 (D. Nev. May 1, 2009) (manufacturing defect/violation claim that survived pleadings dismissed on summary judgment where “no evidence” supported any relevant violation).

Conversely, it has proven difficult for plaintiffs to allege plausible warning or design-based violation claims. See Sprint Fidelis, 592 F. Supp.2d at 1162 (claim that device recall established defectiveness of prior design not parallel because prior design was FDA approved); Riley, 2009 WL 1606650, at *7-9, 12 (broad warning violation claim based on off-label uses held preempted; narrower claim based upon false statements made while promoting off-label use might survive); Rollins, 583 F. Supp.2d at 802 (claim of failure to train physicians preempted where nature of violation not stated); Bausch, 2008 WL 5157940, at *6 (“[t]here are no allegations in the complaint that might put Defendants on notice of a claim that is based entirely on a specific defect in the [device] that existed outside of the knowledge and regulations of the FDA”); Troutman v. Curtis, 185 P.3d 930, 935 (Kan. 2008) (“[p]laintiffs’ allegation that [defendant] had violated FDA requirements remained only that – an allegation”); Mitaro, 2009 WL 1272398, at *3 (that device was recalled does not establish that recalled design violated FDA requirements); Lake v. Kardjian, 874 N.Y.S.2d 751, 755 (N.Y. Sup. 2008) (warning claim alleging failure to report adverse events “would merely be an attempt to recast plaintiff's state law claims as violations of federal statutes”); Mattingly v. Hubbard, 2008 WL 3895381 (Ky. Cir. July 31, 2008) (no evidence of claimed unauthorized design change); O’Shea v. Cordis Corp., 2008 WL 3139428 (Fla. Cir. May 19, 2008) (“general” marketing claims preempted; claims specific to off-label promotion not preempted).

Conceivably, the state-law-based violation claim could be something like negligence per se, assuming: (1) that the claim is not mere private FDCA enforcement and (2) otherwise meets the state-law elements of such a claim. No cases have yet allowed such a claim, except in the abstract. See Hofts, 597 F. Supp.2d at 838 (suggesting that unspecified negligence per se claims survive preemption). A parallelism determination, however, is not based on the “abstract” nature of the claim, but on whether the particular allegations being asserted actually differ from FDA requirements. Purcel, 2008 WL 3874713, at *3. Negligence per se claims that merely restate non-parallel, and therefore preempted, claims remain preempted. Sprint Fidelis, 592 F. Supp.2d at 1163 (negligence per se “is not a magic transforming formula that automatically creates a private right of action”); Mitaro, 2009 WL 1272398, at *4 (negligence per se claim preempted under Buckman as private attempt to enforce the FDCA).


Obviously, causation is an element of a parallel violation claim, just as it is for any other tort. Causation can mean a number of things. “[A] plaintiff must demonstrate a cognizable link between the defendant's federal violations and plaintiff’s injury.” Horowitz v. Stryker Corp., 613 F. Supp.2d 271, 282 (E.D.N.Y. 2009). The violation must involve the actual device that was implanted in the plaintiff, and not other similar devices that the defendant manufactured. Id. (“recalls [that] did not include the [device] or any of its components” could not defeat preemption; same holding with respect to violations noted in inspection where inspected plant was not alleged to have made the device).

Timing can also be an issue. Claims that a defendant was obligated to conduct a recall before so ordered by the FDA have been held preempted. Sprint Fidelis, 592 F. Supp.2d at 1159. If the alleged violation post-dated the manufacture of the device that was implanted, there’s no claim either. Horowitz, 613 F. Supp.2d at 282 (implant occurred two years before FDA inspections that allegedly found violations); Riley, 2009 WL 1606650, at *15 (claims based upon FDA findings “well after” plaintiff’s surgery dismissed); Heisner v. Genzyme Corp., 2009 WL 1210633, at *2 (N.D. Ill. April 30, 2009) (alleged violations that took place after plaintiff’s death from claimed defect “could not have proximately caused her injury”); Parker, 584 F. Supp.2d at 1301 (dictum noting “potential problems of causation posed by attempting to link letters issued in 2007 with plaintiff's injury in 2004”).

Finally, the alleged violation must relate to some condition of the device that could have caused the particular type of injury that the plaintiff alleges. Horowitz, 613 F. Supp.2d at 282 (“nor does [plaintiff] provide a necessary link between the federal violations and her specific injury); Riley, 2009 WL 1606650, at *11 (must plead that specific off-label use plaintiff underwent was illegally promoted); Parker, 584 F. Supp.2d at 1301-02 (warning letters must be tied to plaintiff’s claim; plaintiff “fails to give the court reason to believe that this plaintiff has a reasonable likelihood of mustering factual support for these claims”) (citation and quotation marks omitted) (emphasis original); Rollins, 583 F. Supp.2d at 803-04 (“neither [plaintiff’s] amended complaint nor her opposition memorandum contains any allegation as to how this alleged failure, standing alone, caused her injuries”).

That’s what we’ve learned from litigation violation claims for a little less than a year and a half since Riegel. We expect we’ll learn at least as much in the next year and a half.

Does Neurontin Make You Scratch Your Head?

Plaintiffs say that Pfizer's anti-epileptic drug, Neurontin, causes people to commit suicide.

We say that it makes you scratch your head.

The first Neurontin-suicide case went to trial earlier this week. It sounded like a tough case for plaintiff: The decedent, who had taken Neurontin and then committed suicide, had a history of mental health disorders and abusing drugs, including cocaine. (Here's a link to a Bloomberg story before the trial started.)

Yesterday, plaintiff -- the decedent's daughter -- voluntarily dismissed the case, supposedly because an anonymous plaintiff's lawyer had agreed to pay her $50,000. (Here's the Wall Street Journal Law Blog reporting on that development.)


We're scratching our heads about two questions:

First, if an anonymous donor decided to give you $50,000, wouldn't you take the $50,000 and still pursue the case against Pfizer? I mean, $50,000 is nice, but $50,000 plus a plaintiff's verdict would be even nicer, wouldn't it? Why drop the lawsuit?

Second, who would decide, out of the blue, to give $50,000 to the decedent's daughter? Is it really just some random lawyer whose heartstrings were touched by this particular plaintiff's case? Or perhaps it was a plaintiff's lawyer with another upcoming Neurontin trial who feared that a defense verdict in the first case out of the blocks would hurt the settlement value of his case? Or maybe something else is going on here?

We don't have a clue, but we figured we'd share our puzzlement with you.

Tuesday, July 28, 2009

Beck and Herrmann: Settlement Gurus!

We've figured out how to settle a pending case!

And we'll share our solution at the end of this post!

Read on for the details.

In Hunt v. DePuy Orthopaedics, No. 03-900 (RWR), 2009 U.S. Dist. LEXIS 61644 (D.D.C. July 20, 2009), Martha Hunt, a citizen of Maryland, underwent hip replacement surgery with a DePuy product in the District of Columbia in January 1994. In 1999, Hunt underwent a repair surgery during which the original hip implant was removed. After the 1999 surgery, a DePuy representative requested, and received permission to take, the original, explanted device. Four years later, Hunt asked DePuy to return the explanted hip.

In 2003, Hunt sued DePuy in federal court in the District of Columbia for breach of express warranty (that the hip would last "25 years to life"), breach of implied warranties, and replevin.

DePuy moved for summary judgment.

Hunt abandoned her express warranty claim, so the court dismissed it. Id. at *3 n.1.

The federal court quickly decided that D.C. substantive law on the statute of limitations applied to the implied warranty and replevin claims.

The four-year statute of limitations for breach of implied warranty began running on the date of the original surgery -- January 10, 1994 -- and expired in 1998, so Hunt's 2003 lawsuit appeared to be time-barred. Hunt pursued two avenues to resurrect the seemingly time-barred claim.

First, Hunt tried to proceed under an exception to the statute of limitations for warranties that "extend to future performance." Id. at *7-*8. The court found, however, that the complaint did not plead warranties that were "explicitly extended to future performance." Id. at *7.

Second, Hunt said that, under the "discovery rule," the statute of limitations should not have begun to run until Hunt learned about the product's defect after it was removed. Id. at *9. The court found, however, that the discovery rule "'does not apply to determine when the statute of limitations begins to run for breach of warranty product liability claims. Rather, under [Sec. 28:2-725], the statute of limitations accrues when tender of delivery of the warrantied product is made.'" Id. at *10 (citation omitted). "Even though Hunt was unaware of the product's defect until 1999, . . . the statute of limitations started when the prothesis was delivered to her in 1994 and expired in 1998." Id.

Finally, replevin: Hunt wanted DePuy to return to her the explanted hip.

DePuy raised as a defense the three-year statute of limitations applicable to replevin claims in D.C. DePuy had taken the hip (with Hunt's consent) back in 1999, so the limitations period seemingly expired in 2002. But Hunt asserted -- and the court agreed -- that there was nothing "wrongful" about DePuy's original taking of the hip in 1999. The "wrongful withholding," which is needed to state a replevin claim, didn't start until Hunt demanded the return of the hip in 2003. The replevin claim was thus not time-barred. Id. at *12.

We didn't realize until we read this case that we had a natural aptitude for resolving cases.

But we've figured out how to settle this one.

Hey, DePuy! Give the lady back her explanted hip!

(You don't want it that badly, anyway.)

If you don't have the hip -- which the court suggests in footnote 4 -- then we still know how to settle this case!

Tell Ms. Hunt that you don't have her hip! Maybe even tell her where it is!

There! We've done something socially useful at this blog. We've figured out how to resolve a pending case.

Maybe we should give up this litigation gig and go into the mediation business.

We're naturals!

Monday, July 27, 2009

Removal Based On Misjoinder Of A Treating Physician

We've published a couple of posts recently (here and here) about removal in the tough context -- where the medical malpractice and product liability claims arise out of the same medical treatment. In that situation, the removing product manufacturer must convince the federal court to sever (and remand) the malpractice claims, and to retain jurisdiction over the product liability claims, even though evidence introduced at the malpractice and products trials would overlap.

Today, we're doing removal in the easier context -- where the medical malpractice and product liability claims arise out of separate events.

We're thinking about Stone v. Zimmer, No. 09-80252-CIV-HURLEY, 2009 U.S. Dist. LEXIS 59125 (S.D. Fla. 2009). In June 2006, Richard Stone had a hip replacement with a Zimmer implant at a hospital in New York. The implant allegedly broke in two. A year later, in August 2007, Stone sought treatment for pain from a doctor at a pain clinic in Florida. That doctor allegedly failed to identify the broken implant and instead treated Stone for six months with assorted injections. In April 2008, Stone saw another orthopedic surgeon who promptly ordered an x-ray, discovered the fracture in the hip implant, and recommended immediate replacement surgery.

Stone filed a complaint in Florida state court pleading product liability claims against Zimmer (a citizen of Indiana) and medical malpractice claims against the Florida pain doctor and the clinic at which he worked.

Zimmer removed the case to federal court; plaintiffs moved to remand.

Judge Daniel Hurley relied on the doctrine of "procedural misjoinder" (which he called a type of "fraudulent joinder") to sever the med mal claims from the product claims, remand the med mal claims, and retain jurisdiction over the product claims.

Zimmer argued that the product liability claims against it were legally distinct from the malpractice claims brought against the pain doctor. The alleged malpractice occurred a year after Stone's initial implant surgery, and no facts needed to prove the alleged malpractice would overlap with facts needed to prove the product claims. The claims against Zimmer did not arise out of the same transaction or occurrence as the claims against the physician, and there would be no basis for pleading joint and several liability against Zimmer and the Florida health care providers. Id. at *8.

Judge Hurley agreed. Zimmer and the Florida health care providers "are properly viewed as successive, rather than joint tortfeasors," id. at *11, and any "liability that may be found against Zimmer or [the pain doctor] would not be a basis for liability as to the other, and separate liablity as to each could be found." Id. at *12.

This is not a run-of-the-mill factual situation. Typically, a plaintiff names the implant manufacturer and the implanting surgeon in a single complaint, and the proof offered in connection with the product claim would overlap with the proof offer for the med mal claim.

And this is not a legal issue as to which the law is uniform nationally. Courts have struggled with the doctrine of "procedural misjoinder;" check applicable local precedent before assuming that your court follows the lead of the Eleventh Circuit on this doctrine.

But the fact that Stone involved an unusual situation doesn't make the precedent any less helpful. If you're facing a complaint that misjoins the product defendant and the med mal defendant, consider removing and arguing procedural misjoinder to obtain the forum that your client prefers.

Saturday, July 25, 2009

Rimbert - What Goes Around, Comes Around

A while ago we reported on what we saw as a violation of Erie v. Tompkins principles in Rimbert v. Eli Lilly, where a federal district court, ignoring three state intermediate court cases, predicted that New Mexico would expand tort liability by not following the learned intermediary rule.

Well, that judge recused himself for unstated reasons, and another judge got the case. Slip. op. at 6. What a difference a change in judges can make.

Well, the learned intermediary rule issue is probably moot now - although we'd love to see it asserted as an alternative ground for affirmance on appeal - since last week the case (a Prozac suicide claim) was thrown out on Daubert grounds. This is the case about the guy (who had all kinds of problems: served with divorce papers, relationships with at least one child, compulsive gambling and associated financial problems, obesity, diabetes, impotence, two packs per day smoking, financial woes), who not only shot himself and his wife of 42 years - but also shot his dog. All these facts are on pages 3-4 of the opinion.

His surviving children blamed Prozac, which the decedent had been taking for 7 to 8 weeks for a diagnosed case of "moderate depression." They hired Grace E. Jackson, M.D., as their causation expert. She offered this opinion:
I believe it would be incorrect to suggest that Prozac was the necessary and sufficient cause of the deaths of [the decedents], and their pet dog (Ivy). However, in the context of the [murderer's] pre-existing risk factors for suicide and homicide, and in the context of his diminished capacity to resist them, it is more likely than not true that Prozac converted a case of probable dysthymia into a case of agitated depression with obsessive and psychotic features. In this sense, Prozac was the definitive, contributive cause of the Rimbert tragedy.

Slip op. at 5 (emphasis original). And, since plaintiffs' experts always seem to submit last-minute "amendments" to their reports in Daubert situations (whether they're permitted to or not), Dr. Jackson gave classic "straw that broke the camel's back" (without using that phrase) testimony, calling Prozac "the linchpin" and "the clincher" (both rather non-medical terms) "against a complex backdrop of personal and familiar circumstances." Slip op. at 11.

These conclusions were quite questionable. Dr. Jackson basically made up risk factors for increased retention of Prozac - blaming a genetic predisposition she couldn't say the deceased murderer had, that the murderer might have been taking other synergistic drugs that there was no evidence he took, and that other medications the murderer was taking might have had some sort of synergistic effect that was unknown to science, and that the murderer's pre-existing medical conditions might have somehow increased the risk - although how something like diabetes could encourage violence was never really explained. Slip op. at 15-16.

And all this was doubly speculative anyway, since post-mortem blood tests didn't show any increased levels of Prozac or its metabolites in the deceased murderer's blood in the first place. Slip op. at 16. Of course, Dr. Jackson had speculative ("could have") excuses for this too. Id.

That Dr. Jackson would do this isn't very surprising because she "worked exclusively for Plaintiff's counsel's law firm" and (probably as a consequence) came to her conclusions "prior to doing any research or even knowing the facts of the case." Slip op. at 18. The latter was demonstrated by an email exchange showing that, on no evidence at all, she told her employer that it was an "excellent case." Slip op. at 18-19.

That's a pretty good racket - hire your own experts as "full-time employee[s]." Slip op. at 18. Too bad that wasn't before the Supreme Court in Levine. A showing of what really goes on in drug litigation may have made some of the justices more inclined to look favorably on preemption. But we digress.

The court chose to consider Dr. Jackson's employee status and her backward reasoning as "credibility issues" for the jury. Slip op. at 19. There's even more interesting credibility material if you've got Dr. Jackson in your case, see slip op. at 18-19 n.13, but we want to get to the meat of the opinion.

General Causation

Dr. Jackson got booted for her methodological flaws with respect to general causation. The specific grounds:

(1) The studies Dr. Jackson relied upon had no controls, making it impossible to factor out Prozac as compared to the natural course of depression. That's important because suicide is a huge risk of depression itself - one reason people take drugs like Prozac in the first place. Slip op. at 20-21.

(2) Animal studies don't prove anything about humans - especially since animals don't commit suicide (our comment). Some of the studies didn't even involve Prozac, but other drugs - something Dr. Jackson misrepresented in her report. Others had results contrary to the point for which Dr. Jackson relied on them. The dosages were up to 100 times higher per weight in the studies than the dosage the murderer took in the case. Imagine a patient eating Prozac by the plateful. And in no case was there any evidence that the animals studied were comparable to people - especially important since we're talking about brain-related effects here. The animal studies produced nothing more than an "untested hypothesis." Slip op. at 22-25.

(3) Epidemiology - ain't none in Dr. Jackson's report. Slip op. at 26. That's a problem, because there's a whole bunch of ("myriad") epidemiological evidence that Prozac doesn't cause homocide, suicide, etc. Dr. Jackson (faithful employee that she was) ignored all of it. Slip op. at 26-27. And it gets worse - the FDA concluded that Prozac decreases suicide in persons over 65 (the murderer was 68). Slip op. at 27 & n.18. "As the best evidence of general causation, [epidemiology] must be addressed. Slip op. at 28. "To ignore completely [a] vast body of contradictory evidence. . .strikes at the heart of a proffered expert's reliability. Slip op. at 28-29.

In other words, go away, Dr. Jackson.

(4) Cooking the books ("departure from standard methodology") - Dr. Jackson, although purporting to embrace the Bradford Hill criteria (pp. 375-78), she "inexplicably did not apply" them. Slip op. at 29.

(5) "Chain-of-events causation." That's a fancy disguise for the old post hoc ergo propter hoc ("after this, therefore because of this") fallacy. This breaks down events that follow one another into smaller units of alleged cause and effect. Anyway, "this type of indirect, chain-of-events causation [i]s not a generally accepted scientific methodology." Slip op. at 31. That's especially since Dr. Jackson "never attempted to publish the methodology she employed. . .in any peer reviewed journal." Slip op. at 32. It was just something ginned up for litigation. Id. We' have to add that this is hardly surprising, since Dr. Jackson was employed full-time by plaintiff's counsel.

The court goes on to criticize the plaintiff's response to the motion. That response:
  • "[R]idiculed Defendant for" bringing the motion in the first place. Slip op. at 33.
  • Relied on "other experts using other methodologies in other cases." Id.
  • Cited to "studies not relied upon by Dr. Jackson" after she had testified at her deposition that her report contained everything she relied upon. Slip op. at 33-34.
  • "[C]hose not to call Dr. Jackson to testify" at the Daubert hearing. Slip op. at 33.
Specific Causation
Dr. Jackson also got booted on specific causation, although the court spends a lot less time on this point. What analysis did Dr. Jackson claim she used to establish specific causation? No surprise there.
With apologies to Samuel Johnson, the real last refuge of a scoundrel is "differential diagnosis." The court held:
[N]ot only did [Dr. Jackson] fail to provide objective reasons for eliminating this alternative explanation [the murderer's "depression and myriad life stressors"] as highly improbable, but she also failed to demonstrate that the cause she identified (Prozac) was highly probable. Ultimately, almost everything in Dr. Jackson's specific causation opinion is hypothetical and speculative, except for her conclusion.
Slip op. at 37. That was our impression at the beginning of this post when we first encountered these supposed explanations. See Slip op. at 15-16.
Well, the court thought so, too. Slip op. at 37-38. To that the court added Dr. Jackson's "apparent failure to take into consideration seemingly relevant facts" and her failure "to explain the basis for her refusal to consider them." Slip op. at 38. Those include things like, well, already having the supposed symptoms before ever taking the drug. Slip op. at 38-39 (discussing "restlessness").
"A methodology that inexplicably ignores material facts and relies only on selective evidence does not lead to a reliable opinion." Slip op. at 40.
That's where it ends. We think the court was kind in limiting its order to excluding Dr. Jackson's opinions.

Friday, July 24, 2009

Friday Frivolity - Are We All Excommunicated?

It's our blog - we're entitled.

Being lawyers, we're also fans of the Magna Carta. That's where the concept of "due process of law" comes from, among lots of other things. There was an interesting article in the "Legal Lore" section of the Spring, 2009 issue of Litigation (the journal of the Litigation Section of of the ABA) about the Magna Carta entitled "Magna Carta" (who says lawyers aren't creative), describing the history of the document.

What interested us is what happened after the Magna Carta was signed at Runnymede on June 15, 1215. Apparently, the event came to the attention of Pope Innocent III, whom the article describes as "a lawyer and global visionary." Pope Innocent III "had already excommunicated John in 1209 but restored him to a mere vassal in 1213." Litigation at 59.

What apparently happened after Pope Innocent III received word of Magna Carta surprised us. Seems he didn't take too kindly to the English Barons forcing rights out of his vassal, John, at sword's point. Pope Innocent III issued a papal bull declaring Magna Carta null and void and threatening that anyone who sought to enforce it would be excommunicated:

We refuse to overlook such shameless presumption which dishonours the Apostolic See, injures the king's right, shames the English nation, and endangers the crusade. . . . Almighty God, Father, Son and Holy Ghost, and by the authority of Saints Peter and Paul His apostles, [we] utterly reject and condemn this settlement. Under threat of excommunication we order that the king should not dare to observe and the barons and their associates should not insist on it being observed. The charter with all its undertakings and guarantees we declare to be null and void of all validity forever.

That's a quote from a translation of the original 1215 bull (which was in Latin) from a book, T.B. Costain, Conquering Family: A History of the Plantagenets (1962). It's found on page 60 of the article. It's a real book, listed on Amazon and everything.

The article goes on to describe a great deal of the history of the Magna Carta - when various English kings confirmed the document, when it was codified, how the concept of "due process of law" evolved from Magna Carta, Coke's commentaries, etc.

But the article didn't mention when, or if, the 1215 Papal Bull was ever rescinded or modified. We tried to contact the authors, but couldn't find an email address. We tried looking up the 1215 Papal Bull on an online compilation of Papal encyclicals, but it didn't go back that far.

We did some Googling, and found out some likely reasons why Pope Innocent III had been so exercised about the Magna Carta. Our best guess is that he considered himself to be the ruler of England and that John was only his vassal. As he likely saw it, the barons not only used threats of violence, but transgressed his (the pope's) authority by purporting to extract these rights from a mere vassal.

That's all well and good. But we didn't find anything that indicated, one way or another, whether the Papal Bull of 1215, quoted above, was ever rescinded.

Does that mean that the entire legal profession - in the USA as well as England - is under excommunication, because we indirectly "insist on" the Magna Carta being "observed" every time we invoke "due process of law"?

Neither of us are Catholic, so we don't see it as a religious problem. But there are some very serious Catholic lawyers and judges out there, from Justice Scalia on down, who would probably be very surprised to know that the Church denounced the Magna Carta, declared it null and void, and threatened excommunication of anyone who sought to enforce any part of it - such as the guarantee of due process of law.

That's if the Papal Bull of 1215 has never been rescinded.

We don't know the answer to that.

We're wondering if anyone out there does.

That's our non-products-liability question for the day. Does anyone know whether the Papal Bull of 1215, declaring Magna Carta null and void and threating excommunication to anyone seeking to enforce it, has ever been formally repudiated by the Church? After all, if Galileo can be rehabilitated, why can't the Magna Carta?

We'd like to think so. But even more, we'd like to know so.

Send us a cite and we'll give you full credit.

Thursday, July 23, 2009

Iqbal and Rule 8: Will Congress Turn Back The Clock?

It's a measure of the political clout that the other side has that, whenever the Supreme Court does something that the plaintiffs' bar doesn't like, a bill gets introduced to change it. We've just learned, courtesy of The Blog of Legal Times, that Sen. Arlen Specter (D/R Pa.) (whose son, Shanin, is a prominent plaintiff's lawyer) has introduced a bill that would overrule Twombly and Iqbal and dicate that the courts interpret Rule 8 in accordance with the 50-year old Conley v. Gibson standard.

We'll keep you posted.

Vague Pleading Barred Under Iqbal And/Or Twombly?

We saw yesterday on 360 (subscription required) that the Pennsylvania Employees third party payer action in the Seroquel litigation was dismissed. Here’s a copy of the opinion for those who are interested. This result is consistent with other recent dismissals in this kind of litigation, as we’ve discussed here, here, here, and here (guest post).

We can’t say much about the Seroquel order (with the somewhat unwieldy full caption, Pennsylvania Employees Benefit Trust Fund v. Astrazeneca Pharmaceuticals LP), because of Bexis’ firm’s involvement in the litigation (although not this aspect). But there's one aspect of the opinion having nothing whatever to do with anything related to Seroquel that caught our eye.

That’s the way that the court handled a common trick that pleaders use when trying to blur and fuzz up allegations. We're talking about the little phrase “and/or.” Heck, we’ve even done it ourselves on occasion. And the other side does it all the time in cases brought against our clients.

Judge Conway said “not so fast – not after Iqbal and Twombly.

Here’s what happened. The legal issue in Pennsylvania Employees was whether certain statements became part of the “benefit of the bargain” for purposes of express warranty. In a nutshell, except in really unusual situations, a plaintiff has to be aware of the claimed express warranty at the time of sale in order to claim benefit from it. The allegation that the plaintiffs claimed established this element was: “[t]hrough its labeling, as well as its sales and marketing practices and documents given or shown to physicians treating [plaintiff’s] participants and/or [plaintiff] itself.” Slip op. at 5.

The court begged to differ. The allegations “of direct contact with Defendant are vaguely stated.” Id.

Plaintiff indicates that AstraZeneca’s marketing materials and Seroquel labeling were “given or shown to physicians treating [plaintiff’s] participants and/or [plaintiff] itself.” Such equivocal allegations suggest that [plaintiff] itself is unsure whether it received any direct marketing information from [defendant] regarding uses of [the drug] that were unapproved by the FDA.

Slip op. at 5-6 (emphasis original). Because of plaintiffs' weasly use of “and/or,” “the Court need not credit Plaintiff’s bald allegations of any direct communication of express warranties from Defendant for purposes of the motion to dismiss.” Slip op. at 6.

Is Iqbal/Twombly the beginning of the end for the venerable “and/or”? We hadn’t considered this particular twist before, so we decided to take a look. It seems that on Westlaw as of this moment there are 168 cases where the term “and/or” appears in the same paragraph as the names of one or the other of the two leading Supreme Court cases (we’re thankful they’re not named something like Smith v. Jones). That would appear to be a good – although not foolproof – place to look. It’s a large enough sample that, if something’s up with “and/or,” we should find it.

Initially, we note that “and/or” shows up in both the Twombly and Iqbal decisions themselves. The discussions in those cases, however, don’t focus specifically on deficiencies of “and/or” the way the Seroquel opinion does. So we have to look to the lower courts.

The first place we look, of course, is in drug/device product liability litigation. That's what we're most interested in.

We think that, although less explicit than the Pennsylvania Employees opinion, use of “and/or” contributed at least partially to the Twombly-based dismissal of RICO claims brought by TPPs in In re Actimmune Marketing Litigation, 614 F. Supp.2d 1037 (N.D. Cal. 2009). The operative allegation was that “tens of thousands of consumers and/or [TPPs] paid for [drug] prescriptions needlessly.” Id. at 1051. While not focusing as explicitly on “and/or,” the court in Actimmune found that allegation insufficient because it did not distinguish between the various persons (which is what the “and/or” smudged up) who allegedly paid too much:

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, misleading or otherwise fraudulent. 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.

Id. at 1052. We wouldn’t base a motion solely on Actimmune, but with Pennsylvania Employees as the lead case, Actimmune is useful supporting precedent.

Another candidate for best supporting actor in this area is In re Schering-Plough Corp. Intron/Temodar Consumer Class Action Litigation, 2009 WL 2043604 (D.N.J. July 10, 2009), which we’ve already generally discussed, here. The “and/or” aspect of Intron is at *12-13, where the statements that certain drugs were “not FDA-approved and/or effective” or alternatively were “off-label and/or not effective” fell under Iqbal/Twombly as insufficient averments specifically that the drugs in question were “ineffective”:

Plaintiffs’ allegations of insufficient evidence and lack of FDA approval are not adequate to plead RICO injury because they fail to assert that the Subject Drugs were ineffective, unsafe, or somehow worth less than what Plaintiffs paid for the drugs. Instead, Plaintiffs have merely alleged that the Subject Drugs were not FDA approved for certain conditions or that the relative effectiveness of the Subject Drugs had not been proven through conclusive evidence.

Id. at *13. As in Actimmune, the “and/or” allegations in Intron directly contributed to the pleading deficit that resulted in dismissal.

There is more outside the drug/device area. In Gregory v. Dillard’s, Inc., 565 F.3d 464 (8th Cir. 2009) (en banc), the court says this just before getting into why the complaint is insufficiently pleaded under Iqbal/Twombly:

Because this section refers to all plaintiffs and uses the “and/or” formulation, it does not connect any particular plaintiff to any particular allegation. A section of the complaint asserting “class action allegations” similarly uses “and/or” within a series of allegations and refers to “one or more” actions taken by [defendant] without specifying which action or actions allegedly apply to which plaintiff or plaintiffs.

Id. at 473 n.9 (emphasis added). That first part is a very useful quote for challenging an “and/or” pleading under Iqbal/Twombly. And that the decision is by a court of appeals sitting en banc doesn't hurt either.

A couple of district courts have done essentially the same thing. In J & J Sports Productions, Inc. v. Torres, 2009 WL 1774268, at *3 (M.D. Fla. June 22, 2009), the court found an Iqbal violation “due to three uses of 'and/or' in one sentence,” which made violative conduct “only one of several possibilities.” Another specific condemnation of “and/or” is in Graco, Inc. v. PMC Global, Inc., 2009 WL 904010, *29 n.25 (D.N.J. March 31, 2009), where use of the phrase to list alleged participating defendants “fail[ed] to allege with specificity that any other conspirator was involved.”

On the other hand, Landavazo v. Toro Co., 301 Fed. Appx. 333, 335 (5th Cir. 2008), labels a sentence containing two “and/ors” “merely a legal conclusion. . .not enough to raise his right to relief above the speculative level,” but we’re not 100% sure that the use of “and/or” was the specific culprit. The same is true of Willey v. J.P. Morgan Chase, N.A., 2009 WL 1938987, at *4 (S.D.N.Y. July 7, 2009), describing the phrase “deliberately and/or recklessly” as a mere “formulaic recitation.” In both cases we can’t be sure whether the courts focused on the adjectives or the connector.

But there are other cases that, from their context, probably include the use of “and/or” as a basis for Rule 12 dismissals under Iqbal/Twombly: Anyone seeking to challenge “and/or” allegations under Rule 12 should look closely at: Bergdoll v. City of York, 2009 WL 25093, at *4 (M.D. Pa. Jan. 5, 2009); Novae Corporate Underwriting Ltd. v. Atlantic Mutual Insurance Co., 556 F. Supp.2d 489, 497 (E.D. Pa. 2008); In re MIPS Technologies, Inc., Derivative Litigation, 2008 WL 3823726, at *6 (N.D. Cal. August 13, 2008); and West v. Ortiz, 2008 WL 544735, at *11 (D. Colo. Feb. 26, 2008). In each of these cases the vagueness dismissals appear to include the uncertainty introduced by the use of “and/or” in the relevant pleadings.

So it may well be – at least in federal court – that “and/or” is on the verge of ending a rather long run of making pleadings difficult or impossible to understand.

It’s about time.

Tuesday, July 21, 2009

New York Times On Iqbal

Last month, we told you that the Wall Street Journal had published an article recognizing the importance of the recent Supreme Court case of Ashcroft v. Iqbal.

Today, The New York Times joined the crowd.

The Times article is noteworthy for two reasons: First, it shows that the popular press has now recognized the importance of Iqbal. Second -- and more important to us, but less important to you -- the article quotes one of your humble scribes.

(For readers tracking the benefits of blogging, that's the second time we've been quoted by the Times as a result of our labors here. The first time (here) was in the wake of the Riegel v. Medtronic decision a year and a half ago. We're not sure that quite compensates for the effort that we put into this labor of love, but it's certainly nice to be recognized.)

A Trot Through Some Recent Scholarship

We're kicking back today and letting others do the work for us.

Generally, practitioners don't read the law reviews. So we're skimming the tables of contents for you.

Today's post simply describes four recent scholarly articles -- two on preemption, one on post-sale duties to warn, and one theorizing about how tort law should be coordinated with non-tort regulatory standards -- that may tickle your fancy.

If none of those topics grabs you, come back tomorrow; we'll understand.

First, Professor Robert Rabin, of Stanford, offers "Territorial Claims in the Domain of Accident Law: Conflicting Conceptions of Tort Preemption," slated for publication in the Brooklyn Law Review. Here's the abstract:

"Beginning in 1992, with the landmark decision in Cipollone v. Liggett Group, Inc., the U.S. Supreme Court has decided a burgeoning number of preemption cases, squarely challenging the continuing vitality of tort in many domains of accident law. Cipollone addressed the preemption question in an atypical context. The case did not involve competing claims to territorial authority between a regulatory regime and state tort law. Rather, Cipollone involved a challenge to the continuing viability of tort in the face of statutory directives mandating explicit industry conduct; more specifically, the explicit warnings required in the 1969 version of the cigarette labeling act.

"In this article, I begin by revisiting Cipollone to reassess what it has to offer as a foundation for setting the boundaries of regulatory containment of the tort system. Next, I discuss three leading cases from the series of efforts by the Supreme Court to grapple with express preemption clauses in a variety of regulatory schemes. Against this backdrop, I then explore the circumstances under which it might be justified to imply preemption despite the absence of an express provision, with particular reference to the recent Supreme Court decision in Wyeth v. Levine, addressing preemption in the context of FDA regulation of prescription drugs. A concluding note ties the strands together."

Next, Douglas G. Smith, of Kirkland & Ellis, on a subject dear to our hearts: "Preemption after Wyeth v. Levine" -- slated for publication in the Ohio State Law Journal:

"This Article addresses the Supreme Court’s recent preemption decision in Wyeth v. Levine. In Wyeth, the Court held that the Food and Drug Act did not preempt a state law tort suit alleging that the labeling for an anti-nausea medication, Phenergan, failed to adequately warn about the risks associated with IV-push administration of the drug. Already, Wyeth has been interpreted by some as sounding the death knell for the preemption doctrine in the context of pharmaceutical products. However, a careful analysis of the Court’s decision indicates that this is far from the case. The majority underscored that its decision was a 'narrow' one based largely on the facts and circumstances before it. In particular, the Court made a point of noting that the record was devoid of evidence that the particular risks at issue had actually been considered by the FDA and that the defendant had thus failed to show that there was an actual conflict between FDA regulation and the state law tort suit. The majority’s analysis therefore suggests that state law tort suits based on an alleged failure to warn are preempted in cases in which the FDA has specifically considered the particular risks at issue and has determined that the pharmaceutical product’s labeling adequately warns of those risks. I argue that the ruling thus construed has significant benefits. As the Court has repeatedly recognized, there is an inherent tension between the congressional establishment of a federal regulatory regime for the labeling of pharmaceuticals and medical devices by experts at the FDA and allowing a jury of ordinary citizens with no specialized expertise to render their own judgment regarding, and in effect overrule, such expert determinations. As several members of the Court have noted, there is a potential danger in allowing these expert decisions to be undermined by state court juries. Moreover, such an outcome may have undesirable indirect effects, such as raising the prices of pharmaceutical products to satisfy state court judgments that are not warranted based on the best available scientific evidence and the potential confusion and inconsistency that may result with juries in fifty-two separate jurisdictions imposing different standards concerning what constitutes appropriate labeling. The Court’s decision properly balances these competing considerations."

Third, Kenneth Ross and J. David Prince, of both academia and the Products Liability Prof Blog, who link through to a pre-publication copy of "Post-Sale Duties: The Most Expansive Theory in Products Liability." There's no abstract, but the introduction tells us:

"This Article provides an overview of the Restatement (Third)’s
post-sale duty sections. In addition, it discusses relevant case law and the
impact of the Restatement (Third) on developing case law. Part II
provides a background of the post-sale duty sections of the Restatement
Parts III-IX look back to case law prior to the Restatement
and analyze how courts at that time dealt with post-sale duty
issues including negligence standards, post-sale knowledge, defect
timing questions, identification of product users, the duty to inform of
safety improvements, and the duty to recall. Part X examines case law
decisions that post-date the Restatement (Third)’s drafting, divided
according to whether the court accepted, rejected, or adopted some
variation of the Restatement sections. And lastly, Part XI provides a brief
discussion of regulatory post-sale duties."

Fianlly, Professor Kyle D. Logue of Michigan on "Coordinating Sanctions in Torts." Again, the abstract:

"This Article begins with the canonical law-and-economics account of tort law as a regulatory tool, that is, as a means of giving regulated parties the optimal ex ante incentives to minimize the costs of accidents. Building on this regulatory picture of tort law, the Article asks the question how tort law should coordinate with already existing non-tort systems of regulation. Thus, for example, if a particular activity is already subject to extensive agency-based regulation, regulation that already addresses the negative externalities or other market failures associated with the activity, what regulatory role remains for tort law? Should tort law in such cases be displaced or preempted? The answer is: It depends. Sometimes, even in the presence of overlapping non-tort regulation, there is a regulatory role that tort law can play, sometimes not.

"For one example, if the non-tort regulatory standard is already 'fully optimizing,' in the sense that the regulatory standard (a) sets both an efficient floor and an efficient ceiling of conduct and (b) is fully enforced by the regulatory authority, then tort law arguably should be fully displaced in the sense that no tort remedy should be available for harms caused by such an activity. If, however, the regulatory standard is only 'partially optimizing' (for example, it is only an efficient minimum or efficient floor or it is only partially enforced), then tort law continues to have an important regulatory role to play.

"This framework can be used to explain such tort doctrines as negligence per se and suggests circumstances in which there should be a corollary doctrine of non-negligence per se. It also helps to explain recent federal preemption cases involving overlapping tort and regulatory standards. Finally, the framework produces insights for how tort law might efficiently be adjusted to coordinate with overlapping social norms, which are also considered within the L&E tradition to be a form of regulation."


That's a pretty long post today, and we didn't do very much work at all.

We're thinking of this as a vacation day, and we'll be back with a more substantive post shortly.

Monday, July 20, 2009

Seroquel Expert Non-Causation Order

We can't say much about this, as Herrmann is on vacation and Bexis is involved in the Seroquel litigation. The MDL judge today ruled on the defendant's motion to exclude various "non-causation" opinions/testimony by the plaintiff's experts. Here is a brief summary of what Judge Conway excluded:
  • "[N]arrative history" of the defendant's "marketing and labeling practices." Slip op. at 7.
  • "[S]tate of mind, intent, motives, or ethics of [defendant] or any of its employees." Slip op. at 8.
  • "[F]oreign labeling regulations or foreign regulatory actions concerning [the drug]." Slip op. at 8.
  • "[T]hat [defendant] defrauded the FDA in connection with [the drug's] NDA." Slip op. at 10-11.
  • "[W]hether the format or contents of the NDA comply with FDA regulations." Slip op. at 11.
  • "[W]hether physicians generally read and comprehend drug labels, or whether doctors generally understand the contents of the [drug's] label." Slip op. at 13.
  • "[T]esti[mony] that, in general and without regard to any particular patient, [the drug] is unsafe or the drug's risks outweigh its benefits." Slip op. at 15.

Dr. Strangelove Redux

Remember "Dr. Strangelove"?

"Ripper: Have you ever heard of a thing called fluoridation. Fluoridation of water?

Mandrake: Uh? Yes, I-I have heard of that, Jack, yes. Yes.

Ripper: Well, do you know what it is?

Mandrake: No, no I don't know what it is, no.

Ripper: Do you realize that fluoridation is the most monstrously conceived and dangerous Communist plot we have ever had to face?"

We have a rule here at the Drug and Device Law Blog: We don't write about unpublished Tenth Circuit opinions unless they remind us of "Dr Strangelove."

You're in luck!

In Ronwin v. Bayer Corp., No. 08-8089, slip op. (10th Cir. June 17, 2009) (link here), Ronwin, age 77, ingested the statin Baycol for seven months. Two years later, Rowin was diagnosed with a torn rotator cuff, which he had surgically repaired. Naturally, he sued Bayer, claiming the statin caused the torn rotator cuff.

Ronwin proffered his own expert testimony and that of Dr. Raul Reyes in support of his claim. Reyes was a surgeon with over 50 years experience, but "he admitted in his deposition that he had never prescribed statin drugs and that he was unaware of any published medical literature linking statins, or Baycol in particular, to rotator cuff injuries." Slip op. at 6-7.

Ixnay on the expertsay.

Now Ronwin himself was a different story. He'd been a chemist and biochemist for nearly 20 years before going to law school and then practicing law for 20 years. And here was his theory -- and our "Dr. Strangelove" moment!

Ronwin said that Baycol's chemical structure "can give rise to flouride ion which can, in turn, cause injury to numerous body components . . . . In support of this theory, he cited a book and a number of scientific papers addressing the effects of flouridated drinking water on various parts of the human body." Id. at 8.

The Tenth Circuit gave Ronwin's contention more dignity than we have here -- what with our snitty comments about Dr. Strangelove and all that -- holding only that "Dr. Ronwin's relevant practical experience in biochemistry was too stale to qualify him to give an expert causation opinion in this case." Id. at 9.

The appellate court also trotted through a few other familiar issues to wrap things up. A plaintiff is required to offer existing scientific proof of causation and cannot rely on a hope that future studies will link the plaintiff's injury to the defendant's drug. Id. at 9-10. A treating physician must rule out all other possible causes of an injury if a differential diagnosis is to be trusted. Id. at 11. And, in addition to ruling out other causes, a physician must also "rule in" the defendant's drug as a possible cause of injury. Id.

So we're generally happy with this opinion, although we wouldn't have minded if the Tenth Circuit had chosen to publish it.

In fact, there's really only one other issue that's eating at us:

"We must be . . . increasingly on the alert to prevent them from taking over other mineshaft space, in order to breed more prodigiously than we do, thus, knocking us out in superior numbers when we emerge! Mr. President, we must not allow . . . a mine shaft gap!"

Friday, July 17, 2009

Going Our Way? Class Actions, Punitive Damages & Due Process

Since the Supreme Court handed down Philip Morris USA v. Williams, 549 U.S. 346 (2007), we’ve posted twice – here and here – that we think Williams’ reaffirmation, in the specific context of punitive damages, of defendants’ rights to maintain all available legal defenses sounds the death knell for punitive damages class actions.

And not just in the blogosphere. One of us took this constitutional argument for a test drive in Dukes v. Wal-Mart (not a drug/device case), with encouraging results, as we discussed in greater detail, here. Briefly, before being exposed to our constitutional argument, the Ninth Circuit was quite content to affirm certification of a punitive damages class. Dukes v. Wal-Mart, Inc., 474 F.3d 1214, 1241 (9th Cir. 2007). We got into Dukes at the reconsideration stage, and the Ninth Circuit's new opinion strained mightily to avoid the punitive damages question entirely. Dukes v. Wal-Mart, Inc., 509 F.3d 1168, 1191 (9th Cir. 2007). A dissent called the majority out for dodging a specifically appealed issue, id. at 1197, and then the Ninth Circuit took the relatively unusual step of granting en banc review. We may win, we may lose. And either way Dukes may be headed eventually to the Supreme Court.

Anyway, we're back on this schtick because earlier this week an anonymous commentator (too bad, s/he’d have gotten a shout out) to our “taking stock” post mentioned a new law review article, J. Underwood, “Road to Nowhere or Jurisprudential U-Turn? The Intersection of Punitive Damage Class Actions & the Due Process Clause,” 66 Wash. & Lee L.R. 763 (2009) (online, here), disagreeing with our reading of Williams. Underwood is an associate professor at Baylor University School of Law in Waco, Texas.

That's cool. We’re always flattered when issues we raise in the blog make their way into the academic literature. So naturally we took a look.

So what do you know? It’s hard to feel flattered when we’re supposedly “tainted.” 66 Wash. & Lee L.R. at 792 (“arguably tainted views”). What we did to earn this sort of put down – something more appropriate to a blog than a law review – we’re not exactly sure. We don't mind people saying we're full of it, we couldn't be litigators if we did, but that should be decided on the strength of our arguments, not on which side of the "v" we reside. We don't think plaintiffs' lawyers, or even law professors' positions are less deserving of consideration because of the source, even when we think they're wrong.

So what's going on? We can't be sure, but since that part of the article distinguishes our views from those of “legal scholars,” we wonder if there's something about our blog's unapologetic airing of pro-defense positions in tort cases that riles up pro-plaintiff academics. After all, it wasn’t too long ago that another law review article claimed that it was somehow unethical for defense lawyers even to blog about pending cases.

We thought that that earlier article was hokum.

And we don’t think this one's that much better – at least that’s our “tainted” impression. Now let's defend it. We do that with some trepidation, since we only have a few hours of our spare time to deconstruct an article that Professor Underwood apparently took an entire sabbatical to write. 66 Wash. & Lee L.R. at 763 n.*.

First things first, we’ll review our our position.

We count five times that the Supreme Court has held that Due Process limits either the amount of punitive damages or the procedures for assessing them. See Williams, 549 U.S. at 343, 356-57; State Farm Mutual Automobile Insurance Co. v. Campbell, 538 U.S. 408, 422-25 (2003); BMW v. Gore, 517 U.S. 559, 574-75 (1996); TXO Produce Corp. v. Alliance Resolution Corp., 509 U.S. 443, 461-63 (1993); Pacific Mutual Life Insurance Co. v. Haslip, 499 U.S. 1, 18-19 (1991). The three most recent cases (Williams, Campbell, and Gore) all actually found Due Process violations that required vacation of punitive awards.

That's five Supreme Court decisions. At least by the definition that Judge Sotomayor was using at her confirmation hearing the other day, the proposition that Due Process imposes limitations on litigation seeking punitive damages should be considered “settled law.”

KOHL: . . .As you know, Judge, the landmark case of Griswold v. Connecticut guarantees that there is a fundamental constitutional right to privacy as it applies to contraception. Do you agree with that? In your opinion, is that settled law?

SOTOMAYOR: That is the precedent of the court, so it is settled law.

KOHL: Is there a general constitutional right to privacy. . .?

SOTOMAYOR: There is a right of privacy. The court has found it in various places in the Constitution, has recognized rights under those various provisions of the Constitution. . . .

KOHL: All right. Judge, the court’s ruling about the right to privacy in Griswold laid the foundation for Roe v. Wade. In your opinion, is Roe settled law?

SOTOMAYOR: The court’s decision in Planned Parenthood v. Casey reaffirmed the court holding of Roe. That is the precedent of the court and settled, in terms of the holding of the court.
Sotomayor Hearing Tr. (7/14/09), at 16, available here.

We're litigators, not law professors. We get to the Supreme Court on something more than a certiorari petition maybe once a decade if we're lucky. Thus, we tend to take Supreme Court precedent as given. We do so here with respect to the Court's punitive damages/Due Process jurisprudence.

That means we can essentially ignore the Part II of the Underwood article, entitled “Judicial Tort Reform of Punitive Damages.” It’s pretty much a screed attacking the settled law that Due Process limits what courts and juries can do with punitive damages. There may be other times that we’ve seen this much reliance on dissents in what passes for an explication of the law, but we can't think of any off the tops or our heads. We certainly wouldn’t do that in any brief we file – because we’re trying to win our cases.

Accepting that the Supreme Court meant what it said in Williams and Campbell, and following stare decisis, we see the Supreme Court’s punitive damages/Due Process precedent this way:

We start with Campbell. There the Supreme Court found a violation of Due Process for a single plaintiff’s punitive damages case to be a dumping ground for every supposedly nasty thing that a defendant ever did anywhere in the country. Rather, the conduct underpinning a punitive damages award “must have a nexus to the specific harm suffered by the plaintiff,” which the scattershot trial in Campbell lacked. 538 U.S. at 422.

[D]issimilar acts, independent from the acts upon which liability was premised, may not serve as the basis for punitive damages. A defendant should be punished for the conduct that harmed the plaintiff, not for being an unsavory individual or business. Due process does not permit courts, in the calculation of punitive damages, to adjudicate the merits of other parties’ hypothetical claims against a defendant under the guise of the reprehensibility analysis.

Id. at 422-23 (emphasis added). To us, that’s big, bold handwriting on the wall. The whole purpose of class actions is to aggregate the claims of a large number of plaintiffs. Thus, their inherent nature is to muddle the constitutionally-mandated “nexus” required by Campbell.

That’s only one piece of Campbell. The second prong of Campbell’s Due Process analysis (actually, more properly, Gore’s, since that’s where the test originated) is the ratio of compensatory to punitive damages. What’s a constitutionally permissible ratio isn’t fixed, but rather varies on a case-by-case basis depending on such things as if there’s “a particularly egregious act has resulted in only a small amount of economic damages,” or “the injury is hard to detect,” or “the monetary value of noneconomic harm might have been difficult to determine.” 538 U.S. at 425. This need for a case-by-case assessment of ratio is also fundamentally at odds with class action practice. Anything that “must be based upon the facts and circumstances of the defendant’s conduct and the harm to the plaintiff," as Campbell held is true of ratio analysis, id., can’t be decided on the proof-as-to-one-is-proof-as-to-all basis that is what class actions are all about. Class actions require "common" issues.

So that’s how we see Campbell. And we’re not alone. A bunch of courts also view Campbell as killing off punitive damages class actions: In re Simon II Litigation, 407 F.3d 125, 139 (2d Cir. 2005) (Campbell mandates decertification of punitive damages class); Johnson v. Ford Motor Co., 113 P.3d 82, 94-95 (Cal. 2005) (Campbell precludes something called “aggregate disgorgement,” which the court analogized to punitive damages); Engle v. Liggett Group, Inc., 945 So.2d 1246, 1265 (Fla. 2006) (Campbell requires decertification of punitive damages class and reversal of $145 billion verdict) (full disclosure – Bexis was on the defense team in Engle); Macedonia Church v. Lancaster Hotel Limited Partnership, 270 F.R.D. 107, 122 (D. Conn. 2010) (Campbell precludes punitive damages class action);  EEOC v. International Profit Associates, Inc., 2007 WL 3120069, at *10 (N.D. Ill. Oct. 23, 2007) (Campbell bars mass actions, in addition to class actions, for punitive damages); Williams v. Telespectrum, Inc., 2007 WL 6787411, at *6 (E.D. Va. June 1, 2007) (Campbell precludes punitive damages class action); Colindres v. QuitFlex Manufacturing, 235 F.R.D. 347, 378 (S.D. Tex. 2006) (same); O’Neal, v. Wackenhut Services, Inc., 2006 WL 1469348, at *22 (E.D. Tenn. May 25, 2006) (same); Carlson v. C.H. Robinson Worldwide, Inc., 2005 WL 758602, at *16 (D. Minn. March 31, 2005) (individualized inquiry for punitive damages mandated by Campbell renders proposed class unmanageable).

The courts weren’t unanimous, of course – when are they ever? For one thing, there was first the district court and then the Ninth Circuit (at least initially) in Dukes.

Now we get to Williams. The Due Process holding is considerably more direct in Williams because the Court wasn’t undertaking excessiveness review à la Campbell. Rather, Williams holds rather bluntly that punitive damages cannot be based on anything other than the defendant’s conduct towards the specific plaintiff litigating the case. “We did not previously hold explicitly that a jury may not punish for the harm caused others. But we do so hold now.” Williams, 549 U.S. at 356-57. It’s pretty hard to square this holding with a class-wide determination of thousands of punitive damages claims in one fell swoop. Rather, that appears to be precisely what Williams held that Due Process prohibits. We think the Court meant what it said when it held that punitive damages cannot constitutionally be awarded on a “represent[ative]” basis:

[T]he Constitution’s Due Process Clause forbids a State to use a punitive damages award to punish a defendant for injury that it inflicts upon nonparties or those whom they directly represent, i.e., injury that it inflicts upon those who are, essentially, strangers to the litigation.
Williams, 549 U.S. at 353 (emphasis added). Last time we looked, just a few minutes ago, class actions were the epitome of a “representative” action. E.g., Amchem Products, Inc. v. Windsor, 521 U.S. 591, 623 (1997) (Rule 23 “legitimizes representative action”); General Telephone Co. v. EEOC, 446 U.S. 318, 326 (1980) (distinguishing EEOC enforcement actions from “representative actions subject to Rule 23”).

Put that together with Campbell, and you've got a pretty persuasive motion to strike punitive damages class action allegations – but there’s a second, equally important, thread in Williams. The Court went on to explain why litigating punitive damages in a representative fashion violates Due Process. In a holding that we, as defense counsel, think is self-evident, the Court specifically stated that defendants faced with “punishment” have a constitutional right to defend themselves. “[T]he Due Process Clause prohibits a State from punishing an individual without first providing that individual with ‘an opportunity to present every available defense.’” Williams, 549 U.S. at 353 (quoting Lindsey v. Normet, 405 U.S. 56, 66 (1972)) (emphasis added by us).

Just what was the Court referring to when it referenced “every available defense”? Well, in Williams the defenses that the Court considered constitutionally protected were a plaintiff’s knowledge (“knew that smoking was dangerous”) and reliance (“did not rely upon. . .defendant[]”). Id. Those are precisely the types of individualized defenses that, time and again, defeat class certification under the “predominance” rubric of Rule 23(b)(3). In Lindsey, which likewise held that “[d]ue process requires that there be an opportunity to present every available defense,” 405 U.S. at 66, the Court was dealing with a state-law forcible entry and wrongful detainer action. We don’t know squat about that, but it's some sort of landlord-tenant action. The Lindsey Court mentioned the following defenses: failure to maintain the premises, mental incompetence, forfeiture of lease, reformation of lease, breach of dependent covenant. Id. at 66 & n.11. That would seem to cover the waterfront.

There are lots of defenses to punitive damages. A lot of jurisdictions require liability – that is, there can be no punitive damages unless the defendant is first liable on the underlying action. That’s where reliance and knowledge in Williams came in, as well as defenses such as the statute of limitations, assumption of the risk, warning causation, medical causation, and product misuse, to name a few. Most jurisdictions also incorporate some sort of proportionality requirement as a matter of state substantive law (as opposed to the Gore ratio element). That brings the amount of an individual plaintiff’s compensatory damages into play.

Since Williams, not only has the Dukes court backtracked, but more courts have declared that class actions for punitive damages run afoul of Due Process. In re Conagra Peanut Butter Products Liability Litigation, 251 F.R.D. 689, 701-02 (N.D. Ga. 2008); Nelson v. Wal-Mart Stores, Inc., 245 F.R.D. 358, 376 (E.D. Ark. 2007); see also EEOC v. International Profit Associates, Inc., 2007 WL 3120069, at *10-11 (N.D. Ill. Oct. 23, 2007) (requiring, in an EEOC mass action, that punitive damages be determined individually). Another court, State ex rel. Chemtall, Inc. v. Madden, 655 S.E.2d 161, 167 (W. Va. 2007), imitated the Dukes panel’s strategy of punting the issue down the road.

Thus, we don’t think that the requirements of the Due Process Clause - specifically as applied to punitive damages in Williams - can be squared with the “predominance” of “common issues” necessary to maintain a class action under Rule 23(b)(3).

And there’s still more. Williams is a gift that keeps on giving. It’s hard to see that classwide punitive awards encompassing absent class members who never appear in court can escape being held “standardless” and “speculative” in violation of Due Process. Williams held:

To permit punishment for injuring a nonparty victim would add a near standardless dimension to the punitive damages equation. How many such victims are there? How seriously were they injured? Under what circumstances did injury occur? . . .The jury will be left to speculate. And the fundamental due process concerns to which our punitive damages cases refer – risks of arbitrariness, uncertainty, and lack of notice – will be magnified.

549 U.S. at 354 (citations omitted). Thus, juries may not punish a defendant for harm to those who never set foot in the courtroom. Id. at 355 (“a jury may not go further. . .and use a punitive damages verdict to punish a defendant directly on account of harms it is alleged to have visited on nonparties”).

With respect to absent class members, juries do not – indeed, cannot – hear the answers to the questions the Court posed in Williams. Any attempt at class-wide adjudication of punitive damages necessarily “magnifies” the “fundamental due process concerns” that led to the unconstitutionality findings in Williams, Campbell, and Gore.

Anyway, that’s our position. Now we’ll look at the holes the Underwood article tries to punch in it, and maybe we'll punch a few holes ourselves.

The article certainly likes class actions a lot, describing them as “offer[ing] an unparalleled and unique joinder device that permits a multitude of claimants’ claims to be adjudicated.” 66 Wash. & Lee L.R. at 779-80. “[T]he primary motivating principle underlying this group litigation device was one of efficiency. Id. at 781 (emphasis original). Class actions are “the HOV lane of litigation traffic.” Id.

Okay, we might debate that point (given their size and expense, class actions could equally be called the SUVs of litigation traffic), but we don’t see the point of it. That class actions might be “efficient” is, in this context, a non sequitur. We don’t dispense with constitutional rights on grounds that they are inefficient. It would probably be most "efficient" not to allow defendants to put on a defense at all – but it’s not constitutional. Williams and other Supreme Court precedent hold that defendants cannot constitutionally be deprived of any defense to which the law entitles them. We're not going to play "what if" games with controlling Supreme Court precedent.

We trudge onward.

Next, the article discusses “limited fund” class actions. 66 Wash. & Lee L.R. at 783-86. This is another tangent. Ortiz v. Fibreboard Corp., 527 U.S. 815 (1999), essentially killed off mandatory limited fund classes in mass torts. The article cites two cases, In re Simon II Litigation, 211 F.R.D. 86 (E.D.N.Y. 2002), which was reversed by one of the cases we’ve cited, and In re Exxon Valdez, 270 F.3d 1215 (9th Cir. 2001). We know what happened in Exxon Valdez – the Supreme Court shaved an already reduced punitive damages award down to $507.5 million. Exxon Shipping Co. v. Baker, 128 S. Ct. 2605, 2634 (2008) (non-constitutional basis for reduction). Somehow, we don’t think that an award of that size could justify calling the largest oil company in the world a “limited fund.”

Anyway, limited fund class actions are not the point. Our Williams argument is concerned primarily with Rule 23(b)(3) class actions like Dukes, or we're confronted with in the mass tort world where we practice.

The Underwood article finally gets to Rule 23(b)(3), beginning on page 786. But it meanders. It doesn’t get to punitive damages class actions in the Campbell/Williams era until page 791.

That’s when it calls us “tainted.”

After 35 pages of prologue, the rubber finally meets the road beginning on page 796. Professor Underwood’s first proposition is that Campbell “reaffirms that the common focus in punitive damage adjudication remains on the defendant and also shows the advantages class treatment offers for punitive damages in scenarios involving multiple potential claimants.” 66 Wash. & Lee L.R. at 796-97. There are over 200 footnotes in this article, but this key proposition doesn’t have one. That’s because Campbell doesn’t deal with “common focuses” or “multiple claimants.” It’s a one-plaintiff case.

The Court in Campbell does quote Gore’s statement that “the most important indicium of the reasonableness of a punitive damages award is the degree of reprehensibility of the defendant’s conduct.” 538 U.S. at 419. Maybe that’s what's being referred to. But that’s in the context of Due Process analysis – it doesn’t say anything one way or another about the merits of punitive damages claims. That's where, among other things, our right to "every defense" comes in.

The article then makes the true statement – for the Supreme Court anyway – that “the Court has never applied these due process constraints in the context of a class action.” 66 Wash. & Lee L.R. at 797. Okay, but a whole lot of lower courts since Campbell have done so, and found its Due Process analysis directly applicable to class actions. Why then, is that position “hyperbole”? Id. It’s hard to say, except that the author doesn’t like that result.

The article argues that equating unnamed class members with “strangers” to litigation is inapt because “class members are clearly bound by the result[].” Id. This claim hides the ball. We've already block quoted (with emphasis) that precise passage above. The evil the Supreme Court was addressing in Williams when it mentioned "strangers" to litigation was a defendant’s inability to present defenses specific to those strangers’ claims. 549 U.S. at 353. That same problem exists – is inherent in – class actions. Also, the article fails to mention that the Court refered to representative litigation in the same sentence. Add in what the article omits from this part of Williams and it's pretty clear that the case stands for exactly the opposite of what the article states.

Next proposition: “[O]ne must bear in mind that due process is flexible and calls for such procedural protections as the particular situation demands.” 66 Wash. & Lee L.R. at 797 (citation and quotation marks omitted). As a general proposition that's true, but Williams addressed what Due Process “demands” in the specific context of punitive damages – “an opportunity to present every available defense.” 549 U.S. at 353. So, where punitive damages are concerned the bounds of "flexibility" are delineated by Williams. As for finagling, well, the article doesn’t even try to describe a class action scenario that preserves “every available defense” against each class member's punitive damages claim. It can’t be done. That's why we've said class actions and punitive damages are unconstitutional together.

The article moves on to the purposes of punitive damages, stating (among a lot of other things) that “the Court has not retreated from the concept of states’ legitimate use of punitive damages for the purpose of providing general deterrence from abhorrent behavior.” 66 Wash. & Lee L.R. at 798.

This argument is a textbook example of raising a straw man. We don’t argue that the underlying purposes of punitive damages aren’t still punishment and deterrence. That’s not relevant because we’re not taking the position (at least not here) that punitive damages – in and of themselves – are unconstitutional. Due Process is about process. To illustrate, let’s take another form of punishment. The death penalty is constitutional, but that doesn’t justify stringing people up to the nearest tree, or burning them at the stake. Umm. . .maybe there has to be a Waco exception to that second example.

That punitive damages serve a legally valid purpose doesn’t change Williams' and Campbell's Due Process requirements, or any any Due Process requirements. Every legal proceeding, no matter how justified, must be conducted in accordance with Due Process in that particular context, and in the case of punitive damages that means Campbell and Williams. No amount of flag-waving for punitive damages can make Due Process go away.

We're not sure why, but the article next goes back to “limited fund” mandatory certification. 66 Wash. & Lee L.R. at 799-800. It offers a block quote from In re Simon II, 407 F.3d 125 (2d Cir. 2005). Sorry, that’s the wrong quote about the wrong subject. In Simon II the court specifically discussed both Campbell (Williams hadn’t been decided yet) and Due Process. There’s thus no need to infer anything. The court held:

[W]e have an additional concern that warrants some discussion. It seems that a punitive award under the circumstances articulated in the Certification Order is likely to run afoul of the Supreme Court’s admonitions in [Campbell], a decision handed down several months after the Certification Order issued. In certifying a class that seeks an assessment of punitive damages prior to an actual determination and award of compensatory damages, the district court's Certification Order would fail to ensure that a jury will be able to assess an award that, in the first instance, will bear a sufficient nexus to the actual and potential harm to the plaintiff class, and that will be reasonable and proportionate to those harms. . . .

Although the Court was considering an award in an individual, not a class, action, it noted that punishment on any basis that does not have a nexus to the specific harm suffered by the plaintiff “creates the possibility of multiple punitive damages awards for the same conduct; for in the usual case nonparties are not bound by the judgment some other plaintiff obtains.” [Campbell, 538 U.S.] at 423. In addressing the punitive award to the Campbells, the Court stated, “we have been reluctant to identify concrete constitutional limits on the ratio between harm, or potential harm, to the plaintiff and the punitive damages award. We decline again to impose a bright-line ratio which a punitive damages award cannot exceed.” Id. at 424-25 (citation omitted). Recognizing that “there are no rigid benchmarks,” the Court noted that greater ratios may be warranted “where a particularly egregious act has resulted in only a small amount of economic damages” or “where the injury is hard to detect or the monetary value of noneconomic harm might have been difficult to determine.” Id. at 425 (internal quotations omitted). “In sum,” the Court concluded, “courts must ensure that the measure of punishment is both reasonable and proportionate to the amount of harm to the plaintiff and to the general damages recovered.” Id. at 426.

Furthermore, with respect to the evidence to be considered at the punitive damages stage, [Campbell] indicates that a jury could not consider acts of as broad a scope as the district court in this case anticipated. . . . [Campbell] made clear that conduct
relevant to the reprehensibility analysis must have a nexus to the specific harm suffered by the plaintiff, and that it could not be independent of or dissimilar to the conduct that harms the plaintiff. 538 U.S. at 422-23. Harmful behavior that is not “correlatable” with class members and the harm or potential harm to them would be precluded under [Campbell].
Simon II, 407 F.2d at 138-39 (various citations and block quotes omitted).

Appellate Advocate’s Rule #1 – don’t cite cases that kill you.

The article’s next argument, once it gets back to Rule 23(b)(3) class actions, is that class certification of punitive damages is “superior” “when viewed through the prism of the multiple punishment concern.” 66 Wash. & Lee L.R. at 800. That is, class actions should be certified so that defendants aren’t saddled with “redundant punishment in multiple, distinct civil cases.” Id.

Talk about crocodile tears. Pul-eese, Professor Underwood, don’t try to do defendants any favors. This argument is either supremely cynical or astonishingly naïve (but not tainted). Earlier, when the article was criticizing the Court in Williams, it speculated, “one must wonder how much experience the Justices in the majority have had watching how jury trials are conducted.” 66 Wash. & Lee L.R. at 777.

We could say the same thing here. If the author really believes that defendants are better off facing punitive damages class actions than possible “redundant” punitive awards in separate litigation, we wonder how much practical experience he has with mass tort litigation – or any mass litigation. Every defendant we’ve ever represented has fought certification of punitive damages class actions tooth and nail. Why? Look at Engle (cited earlier), where the trial court did exactly what the article advocates. The result? A $145 billion punitive damages award that, had it not been declared an unconstitutional violation of Due Process, would have bankrupted the defendants. We know very few defendants willing to take that kind of a risk. Thus we think punitive damages class actions are a form of litigation terrorism.

After quoting a “commentator” – a law review article that no court anywhere has ever cited – the author claims that “[t]he American Law Institute similarly recognizes the significance of this redundant punishment danger." 66 Wash. & Lee L.R. at 801 (citing and quoting ALI, Reporters’ Study, Enterprise Responsibility For Personal Injury 260–61 n.5 (1991)).

That's not so. We can tell by the name of the source.

We're both members of ALI, so we've had to learn the Institute's nuances. A “Reporter’s Study” is just that – the views of the reporters, not the view of ALI itself. Only documents voted on by the ALI’s full membership – chiefly Restatements and Principles Projects – constitute the position of the Institute.

Regular readers of this blog know that just last May the ALI did take a position on class action issues, voting to approve the Principles of the Law of Aggregate Litigation. We discussed that here. At one point, a draft of the Principles advocated punitive damages class actions. We criticized that aspect of the draft, here, stating :

The draft continues to advocate deciding punitive damages on an aggregate, classwide basis. After Philip Morris USA v. Williams, 127 S. Ct. 1057 (2007), that has to come out, since Williams expressly recognized that defendants are constitutionally entitled to raise all individualized defenses prior to being hit with punitives.
Guess what? The offending discussion was removed from the Principles project. The final draft - the one ALI's membership approved - doesn’t reference punitive damages classes at all, except in the Reporters' Notes as an historical an example of a “limited fund.” And "reporters notes" are not the position of the ALI either. We'd link to that final draft, but as loyal ALI members we can't. You can buy it from the ALI.

In short, the ALI does not support punitive damages class actions.

Next argument please: That the “dictate” in Williams that a “jury may consider harm to third-parties only for purposes of reprehensibility but not for the purpose of punishing the tortfeasor defendant” somehow supports use of a class action. 66 Wash. & Lee L.R. at 801. In this way, the article asserts, Williams “creates a significant risk of future reversals of punitive damage verdicts based upon nit-picky review of jury instructions.” Id. at 802.

If one considers defendants’ constitutional rights “nit-picky,” then maybe the argument makes some sense.

“Group litigation,” according to the article, supposedly solves this problem “[b]y converting other victims of the tortfeasor’s misconduct from ‘strangers’ into class members.” We've already debunked this point - “strangers” isn't the only word the Court used; in the same position are “those whom [are] directly represent[ed]” in litigation. In either case, defendants must be given their constitutional right to assert “every defense” to which they are legally entitled. Williams, 549 U.S. 353. That includes the many individualized defenses to punitives that are incompatible with determining claims of thousands (or more) of people at the same time. See Appellate Advocate’s Rule #1, above.

Then what? The article quotes at length from a 23-year-old (that is, before any of the relevant Supreme Court precedent) ABA recommendation “that a defendant faced with multiple punitive damage claims be permitted to request class treatment in federal court.” 66 Wash. & Lee L.R. at 803. Since that source predates even Haslip by five years, the ABA's proposal obviously says nothing about Due Process and punitive damages. And it’s predicated on a defendant’s request. As we said before, don’t purport to do our side any favors. We can take care of ourselves – we’ve got Williams and Campbell now.

Then, how about this howler?
[F]or every court that has declared class treatment of punitive damages no longer constitutional, one can find another example of a court detecting no constitutional barriers to treating punitive damages as a common class issue.
66 Wash. & Lee L.R. at 803. At least there’s a footnote, so we can take a look at the supporting cites. There’s the first Dukes opinion. But not only was that opinion superseded on reargument, the reargued opinion was then withdrawn by the grant of en banc review. That's not a case we'd even think of citing in a brief. Then there’s Ellis v. Costco Wholesale Corp., 240 F.R.D. 627, 643 (N.D. Cal. 2007), which neither cites Campbell nor mentions Due Process. Ellis is thus cited for a “constitutional” proposition it didn’t even discuss. Then there are two pre-Campbell cases.

That’s it.

In this post, we’ve cited two state supreme court cases, one federal appellate decision, and eight federal district courts – all refusing to certify class actions explicitly for constitutional reasons since Campbell. At this point there is exactly one case going the other way – In re Tobacco Litigation, 624 S.E.2d 738 (W.Va. 2005). We could point out how “narrow” that court described its holding – limiting it to the reverse bifurcation question – but we won’t bother. We’ll give Professor Underwood West Virginia.

We do note that since the West Virginia Supreme Court’s 2005 decision refusing to grant extraordinary relief against a trial plan, the underlying cases apparently have yet to be tried – so the core Due Process issue of deprivation of defenses hasn’t been litigated, only the Red Queen (“Sentence first—verdict afterwards”) trial plan.

That’s essentially it. The article finishes by once again claiming that class action treatment of punitive damages does defendants a favor by sparing our clients the risk of “repeated, separate punitive damage verdicts. 66 Wash. & Lee L.R. at 806.

Once again, we expect that most defendants will continue to decline this offer of assistance.

Anyway, that’s our view of the Washington & Lee Law Review Article. We take the Supreme Court's precedent as a given, thus we’ve found nothing in the article that warrants us reconsidering the views on class actions and punitive damages that we’ve expressed in our prior blog posts – but we had some fun critiquing it.

We hope our readers have, too.