Monday, August 31, 2009

Pre-Service Removal, Yet Again

We're running out of headlines for these posts: We've already used "Pre-Service Removals -- For The Umpteenth Time" and "Pre-Service Removals: They Keep On Coming."

What's a blogger to do?

Even if we've run out of ideas for creative headlines, we can at least do the non-creative piece of this blogging gig: Report on yet another case involving removal to federal court of an action filed in state court and naming a resident defendant of the forum state. The trick, as regular readers well know, is to remove the case before plaintiff serves the resident defendant, thus avoiding the prohibition on removing cases in which a resident defendant has been joined and served.

The new case is Bivins v. Novartis Pharmaceuticals Corp., No. 09-1087 (RBK/KMW), 2009 WL 2496518 (D.N.J. Aug. 10, 2009). There, Bivins ingested Elidel and claims to have suffered an injury. Bivins (a citizen of Texas) sued Novartis Pharmaceuticals (a Delaware corporation with its principal place of business in New Jersey), Novartis Pharma GmbH (a German corporation), and Novartis AG (a Swiss corporation) in New Jersey state court. Diversity thus existed (Texas plaintiff vs. DE, NJ, German, and Swiss defendants), but the presence of a resident defendant (NJ defendant in NJ state court case) could pose a problem. Under 28 U.S.C. Sec. 1441(b), an action is not removable if a party "joined and served" as a defendant is a "citizen of the State in which such action is brought."

Novartis thus removed the action before plaintiff had served the resident defendant with the complaint. Although courts have split on the question, Judge Kugler denied plaintiff's motion to remand.

"[T]he statutory language is clear. . . . Under the plain meaning of the statute, removal of this case was proper because NPC had not yet been served when it filed its notice of removal." Id. at *2.

Plaintiff asserted that this result was inconsistent with Congressional intent. But the court found there was no statement of Congressional intent in the legislative history that could undermine the express statutory language. "This Court . . . in the absence of 'an extraordinary showing of a contrary congressional intent in the legislative history' [cite omitted] is reluctant to ignore the plain meaning of 28 U.S.C. Sec. 1441(b)." Id.

Plaintiff also made "the policy argument that courts should not reward defendants who monitor electronic dockets and remove cases before plaintiffs have a chance to serve them." Id. Those arguments "'alone are insufficient to overcome the requirement that this Court give meaning to the plain language of the statute.'" Id. (with another cite omitted).

The court thus denied plaintiff's motion to remand, deepening an already wide divide in the district courts on this issue.

We'll continue to watch this issue develop. If you have any ideas for creative headlines for future posts on this topic, please leave 'em in the "comments" below or drop us an e-mail. We're all ears.

Friday, August 28, 2009

Hot Off The Presses - Statute of Repose Defense Win in Fen-Phen Appeal

This is a Bexis only post. Herrmann represents Wyeth and doesn't want to go on record on this.

We mentioned the Montgomery v. Wyeth case before, here. Well we're pleased to report that the Sixth Circuit today affirmed the defense summary judgment in Montgomery, slip op. here. The moral of Montgomery is - be on the lookout for statutes of repose, they can be your friends.

That goes double for you young associates out there, stuck with the boring task of answering all those complaints in MDLs. ALWAYS look for a statute of repose. They're state-specific, idiosyncratic, and usually not designed for prescription medical products. But where they apply, they can be a magic bullet - like this one was in Montgomery.

Tennessee has a general product liability statute of repose, requiring that an action “be brought within one year after the expiration of the anticipated life of the product.” Slip op. at 2. Well, the defendant sold the drug with an expiration date (three years). The plaintiff blew the statute.

To be fair, the plaintiff didn't get sick until eight years after taking the drug. But that's how statutes of repose are intended to work. They cut off liability absolutely, based upon a date other than the accrual of a cause of action. They are intended to bar litigation over injuries with long latency periods.

Trapped, the plaintiff threw the kitchen sink during the appeal. They argued that the law of the state where they took the drug (Georgia) should apply rather than the state in which they were injured (Tennessee). The Sixth Circuit, in a lengthy discussion rejected that argument. Slip op. at 5-12.

If you've got a case that, for any reason, you want the law of the injury state rather than the prescription state to apply, Montgomery is a case you want to read.

The plaintiff claimed that the statute was tolled by a fen-phen class action settlement. Sorry, but that class action specifically excluded the particular medical condition from its scope. There's no class action tolling for something the class action doesn't cover. Slip op. at 12-16.

The plaintiff claimed that the product had been repackaged somewhere along the line and didn't have an expiration date on it. Didn't matter. The statute specified the "expiration date placed on the product by the manufacturer." The defendant put a date on it's product. That someone later on in the chain of sale removed and substituted new packaging didn't deprive the manufacturer of its defense. The plaintiff need not know the expiration date. Slip op. at 16-18.

Finally, the plaintiff claimed waiver. Strike four. The defendant had pleaded the statute of repose and cited the statute in its answer. Slip op. at 18-19.

Again, a word to the wise. Check for statutes of repose when answering the complaint and filing dispositive motions.

Wordless As The Flight Of Birds

Our stock in trade is words, but images can be more powerful.

Oddly enough, political cartoons that contain no words (and are not even funny) can be among the most powerful of all.

We loved the 1960s image (was it by Herblock?) of students protesting the Vietnam War outside the Lincoln Memorial in Washington, D.C. Lincoln was sitting inside, his head buried in his hands.

We adored the image, after Magic Johnson was diagnosed with HIV in 1991, of Magic going one-on-one to the hoop -- with the Grim Reaper playing defense.

We're adding to the list this image, by Jeff Darcy in yesterday's Cleveland Plain Dealer, noting the passing of Senator Ted Kennedy.

(For those wondering about the title of today's post, here's the link explaining "wordless as the flight of birds.")

In pace requiescat.


[Addendum: We just hate to add an addendum to a post that ends like that. But a reader just alerted us that the cartoon we described with Lincoln's head in his hands did not involve the Vietnam War at all. The cartoon was drawn by Bill Maudlin after JFK's assassination. Here's the proof, in the form of a link.]

A Rat In The House . . . (Foolish Friday)

We know, we know: Lawyers ain't math majors.

But this requires only arithmetic, for heaven's sake:

Three men were on a business trip and had to stay in a hotel over night. The price of the room was $30.00, so the men decided to split one room, three ways. Each one paid $10.00. Well after they paid, the manager realized that he overcharged them on their room. The room only cost $25.00, so he gave the bellboy five one dollar bills to give to the three men. On his way up to the room the bell boy was trying to think of a way to split $5.00 three ways. After thinking about it awhile, he decided to keep $2.00 for himself and give each man $1.00 back. Now, if each man (who paid $10) gets $1 back that means they each paid $9.00 ($10 - $1 = $9 ). $9.00 multiplied by 3 (because there are three men) equals $27.00 plus the $2.00 the bell boy kept equals$29.00! What happened to the missing dollar?

Good luck! (And don't fritter away the whole day thinking about it.)

(H/T to Professor Steve Miller of Williams College.)

Thursday, August 27, 2009

Bausch & Lomb MoistureLoc MDL Daubert Ruling

We try not to wear out our welcome with our subscribers by publishing multiple posts in a single day, but there's more breaking news that we feel compelled to report today. It's in the Bausch & Lomb ReNu with MoistureLoc MDL. (Herrmann is writing this one up alone, since Bexis's firm is involved in the litigation.)

As we reported in May: After reports about a specific eye infection -- Fusarium keratitis -- Bausch & Lomb decided to voluntarily withdraw from the market its ReNu with MoistureLoc contact lens solution.

Bausch & Lomb conducted a massive study and concluded that, under certain conditions simulating consumer noncompliance with the package insert, MoistureLoc could allow the formation of a polymer film on a contact lens that permitted some strains of Fusarium to survive and thrive despite later disinfection with MoistureLoc.

Some MoistureLoc lawsuits were filed on behalf of people who actually suffered from Fusarium keratitis. But hundreds of lawsuits were filed on behalf of folks who suffered from a collection of other eye ailments, none of which were ever associated with the use of MoistureLoc.

Two judges -- one federal and one state -- sat together in June to conduct a joint Daubert (for the federal cases) - Frye (for the New York state cases) hearing to determine whether plaintiffs' proof of general causation linking MoistureLoc to non-Fusarium conditions rises to the level of admissible evidence.

The New York state court judge, Justice Shirley Werner Kornreich, granted Bausch & Lomb's motion last month, as we dutifully reported here.

Yesterday, the federal MDL judge, Judge David C. Norton, followed suit. Judge Norton granted Bausch & Lomb's motion to exclude the opinions of plaintiffs' expert as to the non-Fusarium infections. Here's a link to In re Bausch & Lomb, Inc. Contact Lens Solution Prods. Liab. Litig., Case No. 2:06-MN-77777-DCN, MDL No. 1785 (D.S.C. Aug. 26, 2009).

Here's the money quote from the 27-page decision: "Plaintiffs have not identified, or even suggested, a threshold level of microbes necessary to actually cause an onset of non-Fusarium infection. While such a level is important in the abstract, it is critical in this litigation, since a very small minority of contact lens wearers get infection in light of the sizable majority of contact lens cases that are contaminated at any given time. Plaintiffs' theory assumes, without evidence, that any increase in microbial load causes infection. In the absence of a reliable evidentiary basis to connect any loss of efficacy/increase in the microbial load with causation in humans, plaintiffs' expert opinions amount to speculation . . . ." Id. at 20.

We are (or at least Herrmann is) pretty far removed from this action. But word on the street is that Bausch & Lomb has now resolved most of the Fusarium cases, and the two Daubert rulings resolve the "junk" cases. That leaves only clean-up work (and resolution of the economic damage claims) to put this one to bed.

Rule 11 Discovery Allowed In Digitek MDL

This just in:

(Actually, it came in late yesterday, but we were first busy and then tired. Sorry.)

In April 2008, the FDA recalled all lots of the drug Digitek (distributed by Mylan and UDL Laboratories), because the tablets may have contained too much of the drug's active ingredient, exposing certain patients to risk.

First the recall, then the MDL.

The defendants served requests for admission aimed at determining whether plaintiffs' counsel had conducted an adequate prefiling investigation before filing certain complaints. The defendants asked plaintiffs in 39 individual cases to admit that they did not possess the plaintiff's medical records either when they filed the respective complaints or served defendants with the plaintiff's responses to the MDL-authorized plaintiff fact sheeet. In In re Digitek Prod. Liab. Litig., Pretrial Order #39, MDL No. 1968 (S.D.W.Va. Aug. 26, 2009) (link here), Magistrate Judge Mary Stanley held that this discovery was permissible.

Judge Stanley wrestled with four issues.

First, she had to decide whether earlier pretrial orders entered in the Digitek MDL barred defendants from serving discovery requests in individual cases before those cases had been assigned to trial groups. Id. at 4-5. That plainly matters to the parties in the Digitek litigation, but it's not a recurring issue. The court held that defendants were permitted to serve the requests for admission. Id. at 7.

Second, plaintiffs asserted that the discovery was irrelevant, because "considerations factoring into the decision to file suit do not relate to issues of liability and damages." Id. at 8. The court rejected this argument, holding that Mylan and UDL "would be able to use the information gathered from the requests to support a defense that the claims lack an evidentiary basis." Id.

Third, plaintiffs asserted that the requested information was protected by the attorney-client privilege or the work product doctrine. Id. at 8. The court noted that Rule 11 discovery "may raise potential privilege and conflict issues," but held that courts should be careful of gutting Rule 11 by barring parties "from discovering facts to support motions for sanctions." Id. Moreover, plaintiffs hadn't carried their burden of showing that the requested information was privileged, because plaintiffs had "failed to produce . . . a privilege log" or to "proffer any reason as to why the privileges might apply." Id. at 9.

[We don't usually offer advice to plaintiffs' counsel on this blog, but here we just can't resist: If you're going to assert a claim of privilege, make sure you give a "reason why the privilege[] might apply." That'll improve your chance of winning. Good luck, guys.]

Finally, the most interesting part of this decision: "The Court must determine the extent to which discovery on Rule 11 issues is proper." Id.

Rule 11 plainly require lawyers to conduct a reasonable investigation before filing a complaint. "To be reasonable, the prefiling investigation must uncover some information to support the allegations in the complaint." Id. at 10-11. But "[w]hether a court may allow discovery on Rule 11 matters is an area of the law without much precedent." Id. at 11.

Judge Stanley thus surveyed the relevant authorities. The Fourth and Seventh Circuits have expressed concern that "discovery on Rule 11 issues may invite protracted satellite litigation" (that is, discovery into the question of sanctions, rather than who should actually win the pending lawsuit). Id. at 12. That concern has generally arisen where the defendant tried to use Rule 11 to assert an independent cause of action in a counterclaim [why bother?] or where "the parties attempt to engage in discovery evaluating attorneys' fees." Id.

The Advisory Committe Notes to Rule 11 and several district courts have suggested that "discovery on a Rule 11 sanctions request is appropriate only upon a showing of extraordinary circumstances." Id. Judge Stanley seems to have adopted this standard in her opinion, because she goes on to explain why "extraordinary circumstances" existed in the Digitek MDL: "First, the defendants have voiced serious concerns about whether certain counsel had sufficient evidentiary support to justify initiating suit." Id. at 12-13. [Although Judge Stanley doesn't say this, we assume that "voicing serious concerns" means something like "proved in a bunch of cases, based on later-collected medical records, that the plaintiff never took the defendants' drug." Merely "voicing concerns" -- in the sense of "complaining loudly" -- wouldn't limit Rule 11 discovery in later cases, since defendants could always "voice concerns" in that sense; it's easy to complain.]

Judge Stanley went on to note that "Rule 11 applies to the same extent in mass tort and multidistrict litigation as it does in more conventional disputes." Id. at 13 (collecting cases). "Indeed, the Court has an interest in ensuring the effective operation of the pleading regime through Rule 11, particularly in the MDL context." Id. Judge Stanley concluded that "limited discovery of the nature proposed by the defendants is necessary because the current record does not contain any information as to whether sanctionable conduct took place." Id. at 14.

This is surely a welcome development. One of our main concerns with the judicial system -- particularly in the context of mass torts -- is its inability to separate the wheat from the chaff, to dismiss the bogus cases and ensure that any dollars paid in judgments or settlements go only to deserving plaintiffs. In the mass tort context, plaintiffs often seek to overwhelm defendants (and the judicial system) by filing an unmanageable number of cases in an attempt to extort a settlement. Many of the cases filed in this environment are completely frivolous. By putting counsel at risk that they may be held personally responsible for failing to conduct a reasonable prefiling inquiry, courts take a small first step in controlling the filing of frivolous complaints in the context of mass torts.

Nice work, Magistrate Judge Mary Stanley!

From Zyprexa To Aredia – Summary Judgment And Case Selection

We’ve been following with interest the recent activities in the Zyprexa litigation, since it looks like the plaintiffs in this batch of cases are dropping like flies. We admit, though, that we haven’t been particularly complete about those developments, since our prior posts describe only five summary judgment grants.

We’re not sure whether the Zyprexa summary judgments are drawn from some pre-selected pool of plaintiffs or whether it’s just open season for the defense to move against any cases they want (the opinions aren’t clear). In either event, there sure has been a bunch of summary judgment action lately. Looking at the Zyprexa results with a fresh eye, by our count the good guys are up something like 13-1:
  • In re Zyprexa Products Liability Litigation (Head), ___ F. Supp.2d ___, 2009 WL 2425983 (E.D.N.Y. July 31, 2009) – summary judgment granted because a different warning wouldn’t have changed the prescriber’s conduct under Arizona law.
  • In re Zyprexa Products Liability Litigation (Fuller), 2009 WL 2485829 (E.D.N.Y. July 31, 2009) – summary judgment granted under the California statute of limitations.
  • In re Zyprexa Products Liability Litigation (Carey), 2009 WL 2487305 (E.D.N.Y. July 27, 2009) – summary judgment granted because a different warning wouldn’t have changed the prescriber’s conduct under Virginia law.
  • In re Zyprexa Products Liability Litigation (Pruett), 2009 WL 2245068 (E.D.N.Y. July 22, 2009) – summary judgment denied without prejudice because the application of the Minnesota statute of limitations is uncertain, and there’s a potentially dispositive case pending in the Minnesota Supreme Court; summary judgment denied because a different warning could conceivably have changed the prescriber’s conduct under Alabama law.
  • In re Zyprexa Products Liability Litigation (Washington), 2009 WL 2163118 (E.D.N.Y. July 13, 2009) – summary judgment granted because a different warning wouldn’t have changed the prescriber’s conduct under Arizona law; summary judgment granted because plaintiff’s injuries predated use of the drug.
  • In re Zyprexa Products Liability Litigation (Dean), 2009 WL 2004540 (E.D.N.Y. July 1, 2009) – summary judgment granted because a different warning wouldn’t have changed the prescriber’s conduct under Florida law, and there was no evidence of causal overpromotion.
  • In re Zyprexa Products Liability Litigation (Misouria), 2009 WL 1851999 (E.D.N.Y. June 24, 2009) – summary judgment granted because a different warning wouldn’t have changed the prescriber’s conduct under California law.
  • In re Zyprexa Products Liability Litigation (Leggett), 2009 WL 1850970 (E.D.N.Y. June 22, 2009), reconsideration denied, 2009 WL 2160999 (E.D.N.Y. July 8, 2009) – summary judgment granted (1) under the California statute of limitations; and (2) because a different warning wouldn’t have changed the prescriber’s conduct under California law.
  • In re Zyprexa Products Liability Litigation (Morrison), 2009 WL 1851062 (E.D.N.Y. June 22, 2009) – summary judgment granted under the Missouri statute of limitations, and summary judgment granted because a different warning wouldn’t have changed the prescriber’s conduct under Missouri law.
  • In re Zyprexa Products Liability Litigation (Neal), 2009 WL 1852001 (E.D.N.Y. June 22, 2009) – summary judgment granted because a different warning wouldn’t have changed the prescriber’s conduct under California law.
  • In re Zyprexa Products Liability Litigation (Ortenzio), 2009 WL 1514628 (E.D.N.Y. June 1, 2009) – summary judgment granted because the plaintiff personally did not read any warnings, thus a different warning wouldn’t have changed his conduct under West Virginia (no learned intermediary rule) law.
  • In re Zyprexa Products Liability Litigation (Clark), 2009 WL 1514427 (E.D.N.Y. May 29, 2009) – summary judgment granted (1) because a different warning wouldn’t have changed the prescriber’s conduct under Pennsylvania law; and (2) because plaintiff’s injuries predated use of the drug.
  • In re Zyprexa Products Liability Litigation (Singer), 2009 WL 1404978 (E.D.N.Y. May 19, 2009) – summary judgment granted because (1) a different warning wouldn’t have changed the prescriber’s conduct under Pennsylvania law; and (2) because no expert testimony linked plaintiff’s injuries to use of the drug that stopped three years earlier.
  • In re Zyprexa Products Liability Litigation (Smith), 257 F.R.D. 370 (E.D.N.Y. May 21, 2009), reconsideration granted and result reaffirmed, ___ F.R.D. ___, 2009 WL 2230802 (E.D.N.Y. July 21, 2009) – summary judgment granted because a different warning wouldn’t have changed the prescriber’s conduct under Arkansas law.
Fourteen summary judgment wins and only one loss (to date, anyway) is what we’d call good case selection. - the defense chose its best cases and made only strong arguments. This record is particularly notable, since Judge Weinstein, who decided all of these cases, isn’t a judge known for cutting our side any breaks.

The news hasn’t been as good, unfortunately, out of the Aredia-Zometa litigation. On August 13, the judge presiding over that MDL issued a slew of rulings on defense summary judgment motions. We’ve already commented on one aspect of one of those rulings. But there was a lot more going on than just that:
  • In re Aredia & Zometa Products Liability Litigation (Fussman), 2009 WL 2496843 (M.D. Tenn. Aug. 13, 2009) – summary judgment denied (1) on grounds of general and specific medical causation under Daubert; and (2) under North Carolina law because a different warning might have made a difference (prescriber “testified that his treatment of and advice for [plaintiff] would have been different if he had his current knowledge”). Summary judgment granted on express warranty due to lack of reliance.
  • In re Aredia & Zometa Products Liability Litigation (Forman), 2009 WL 2496843 (M.D. Tenn. Aug. 13, 2009) – summary judgment denied (1) on grounds of general and specific medical causation under Daubert; and (2) under New York law because a different warning might have made a difference (prescriber would have consulted a specialist and specialist “tends” not to prescribe the drug in plaintiff’s situation anymore). Summary judgment granted on express warranty due to lack of reliance.
  • In re Aredia & Zometa Products Liability Litigation (Deutsch), 2009 WL 2496891 (M.D. Tenn. Aug. 13, 2009) – summary judgment denied (1) on grounds of general and specific medical causation under Daubert; and (2) under New York law because a different warning might have made a difference (prescriber “stopped [plaintiff’s] prescription” and “changed his prescribing habits” after learning additional information). Summary judgment granted on express warranty due to lack of reliance.
  • In re Aredia & Zometa Products Liability Litigation (Anderson), 2009 WL 2496932 (M.D. Tenn. Aug. 13, 2009) – summary judgment denied on grounds of general medical causation under Daubert. Summary judgment granted (1) on grounds of specific medical causation under Daubert; and (2) because a different warning wouldn’t have changed the prescriber’s conduct under Minnesota law.
  • In re Aredia & Zometa Products Liability Litigation (Melau), 2009 WL 2496939 (M.D. Tenn. Aug. 13, 2009) – summary judgment denied on grounds of general medical causation under Daubert. Summary judgment granted on grounds of specific medical causation under Daubert.
  • In re Aredia & Zometa Products Liability Litigation (Emerson), 2009 WL 2497229 (M.D. Tenn. Aug. 13, 2009) – summary judgment granted because defendant is entitled to a presumption of adequacy from FDA labeling approval under Florida law, and plaintiff did not rebut the presumption.
  • In re Aredia & Zometa Products Liability Litigation (Thomas), 2009 WL 2497286 (M.D. Tenn. Aug. 13, 2009) – summary judgment denied on ground of general medical causation under Daubert. Summary judgment granted on ground of specific medical causation under Daubert.
  • In re Aredia & Zometa Products Liability Litigation (Brodie), 2009 WL 2497661 (M.D. Tenn. Aug. 13, 2009) – summary judgment denied (1) on grounds of general and specific medical causation under Daubert; (2) under Missouri law because a different warning might have made a difference (prescriber “stopped” using the drug and “would not have reconsidered” this decision after learning additional information); and (3) on design defect under comment k. Uncontested summary judgment granted on express warranty.
  • In re Aredia & Zometa Products Liability Litigation (White), 2009 WL 2497692 (M.D. Tenn. Aug. 13, 2009) – summary judgment denied (1) on grounds of general and specific medical causation under Daubert; (2) under California law because a different warning might have made a difference (prescriber “would still prescribe [the drug], but with a change in how he prepares the patient” after learning new information); and (3) on negligent design claim. Summary judgment granted on express warranty because plaintiff could not establish the terms.
  • In re Aredia & Zometa Products Liability Litigation (Hogan), 2009 WL 2513555 (M.D. Tenn. Aug. 13, 2009) – summary judgment denied (1) on grounds of general and specific medical causation under Daubert; (2) under Rhode Island law because a different warning might have made a difference (unspecified issues of fact on what the prescriber and treaters might have done differently); and on negligent design claim under comment k. Summary judgment granted on express warranty due to lack of reliance.
So the overall score in Aredia-Zometa is only a mediocre 4-6. It’s pretty clear that after the defendant lost the bulk of its Daubert motions, it didn't have a lot to fall back on. We’d never second guess the Daubert strategy because – well, those things happen. Everybody’s lost Daubert motions. Not every plaintiff’s expert is a junk scientist (just the ones we happen to face in any given case).

And again, we don’t know how these cases were selected. Maybe the defense had no choice on what cases to move against.

But the defense can always pick the grounds for its motions.

Half of the defense wins in Aredia-Zometa were on specific causation, and another win came about solely due to a peculiar Florida regulatory compliance statute.

What that means is that, on learned intermediary rule/warning causation arguments, the defense went 1-6. That’s not very good, no matter what the standard. In five of the six losses (all but Hogan), we’re not sure what the point of raising warning causation was. In those five losses, the nature of the prescriber/treater testimony (at least as described in the opinions) was such that we can’t honestly say the defense deserved to win on warning causation. If the doctor stops or radically alters treatment after learning new information, then that doesn’t have the look of a winning motion.

We feel about learned intermediary motions the same way that we felt about preemption motions before the Supreme Court’s trilogy. As long as our judicial system runs on stare decisis, we need to take care to bring motions only on grounds that have a decent shot at winning. Leaving a bunch of adverse decisions on the books, as happened in Aredia-Zometa, doesn’t help either the defendant in that particular case, nor nor does it help the defense cause generally.

Basically, defense lawyers have to pick their spots and bring motions that develop the law as favorably to our clients as humanly possible. That means, as they say in Chicago, "don't back no losers." The proof is in the precedent. Right now we’d have to say that the defense is doing a good job of this in Zyprexa and not so good a job in Aredia-Zometa.

Wednesday, August 26, 2009

Health Care (And Tort) Reform

We may not have a sense of humor, but we can borrow Dana Summers'.

(H/T to Point of Law.)

Reaction To "The Life Expectancy Of A Legal Blog"

As often happens when we blog about blogging, we became suddenly popular on Monday:


We're purists? Who knew? (Maryland Injury Lawyer Blog)

Experiment with a dark blog for a month before announcing your blog publicly. (Legal Blog Watch)

My blogolater can beat up your blogolater. (Simple Justice)

A new blog: Blogolator! (Likelihood of Confusion; scroll down)

Non sequiturs. (Above the Law)

Tuesday, August 25, 2009

Treating Physicians As Experts

There are subjects we just can't touch on this blog.

First, politics: We'd annoy each other, along with half our readers.

Second, religion: Ditto.

Third, when treating physicians must be disclosed as expert witnesses or can give expert testimony at trial: If we ever touched on that subject, we wouldn't just annoy each other; we'd trap ourselves.

Depending on the circumstances of a particular case, sometimes we want treating physicians to be permitted to testify broadly (without having provided expert reports), and sometimes we want their testimony to be more confined (or restricted to the contents of reports).

So we're offering today, without commentary, a recent decision on that subject.

In re Aredia and Zometa Prods. Liab. Litig., No. 3:08-0068, 2009 WL 2496833 (M.D. Tenn. Aug. 13, 2009), tells us nothing about the particular case. We'll guess that the plaintiff, Mrs. Fussman, ingested Aredia (or maybe Zometa) and allegedly suffered an injury. The "defendant" -- we'll guess that it's Novartis -- moved under Daubert to exclude testimony offered by Mrs. Fussman's treating physicians about the cause of her injury. The court ultimately held that Mrs. Fussman's retained expert provided the testimony needed for purposes of summary judgment, so the motion to exclude the treaters' testimony was moot.

(We oughta just stop typing here, leaving you to wonder why the heck we chose to publish a post about that result.)

Before deciding that the issue was moot, the trial court collected and discussed applicable precedent dealing with the permissible scope of a treating physician's testimony when the treater has not been retained as an expert. (We must say, though, that the opinion reads a bit like one of those Am. Jur. chapters that says, "The law is 'black.' [Footnote.] The law is 'white.' [Footnote.]" and makes no effort to rationalize the conflicting statements.)

The court noted that a treating physician can generally "provide expert testimony regarding a patient's illness, the appropriate diagnosis for that illness, and the cause of the illness." Id. at *1. But that testimony is subject to the Daubert requirements that any opinion must be reasonably based in the expert's knowledge of his or her discipline. Id. When the doctor strays from his or her discipline, the testimony should be excluded.

Thus, a physician can diagnose and treat exposure to pesticides, but cannot testify to the exact chemical to which the plaintiff was exposed. Id. On the other hand, "determining causation may . . . be an integral part of 'treating' a patient." Id. at *2. If it is, then the physician can testify to an opinion he formed on that subject in the course of treating the patient (as opposed to an opinion developed after the fact, for purposes of litigation).

"[W]hen the nature and scope of the treating physician's testimony strays from the core of the physician's treatment, Rule 26 requires the filing of an expert report from the physician." Id. "A treating physician for whom no expert report is supplied is not permitted to go beyond the information acquired or the opinion reached as a result of the treating relationship to opine as to the causation of an injury or give an opinion regarding the view of an expert called by the defendant." Id.

"When the doctor's opinion testimony extends beyond the facts disclosed during care and treatment of the patient and the doctor is specially retained to develop opinion testimony, he or she is subject to the provisions of Rule 26(a)(2)(B)." Id. at *3.

Got that?

We should stick to politics and religion.

(On that score, Bexis says Herrmann is a heathen and a libertarian; Herrmann says Bexis uses words that are too big.)

Monday, August 24, 2009

A RECAP Recap

We told you last week about RECAP, a computer program that, over time, will cause all documents available on PACER (for a fee) to become publicly available free of charge. (Here's where we originally learned about RECAP.)

The courts have noticed. The District of Nebraska just sent out this announcement:

"A new software application or 'plug-in' called RECAP was designed by a group from Princeton University to enable the sharing of court documents on the Internet. Once a user loads RECAP, documents that he or she subsequently accesses via PACER are automatically sent to a public Internet repository. Other RECAP/PACER users are then able to see whether documents are available from the Internet repository. RECAP captures District and Bankruptcy Court documents, but has not yet incorporated Appellate Court functionality.

"At this time, RECAP does not appear to provide users with access to restricted or sealed documents. Please be aware that RECAP is 'open-source' software, which can be freely obtained by anyone with Internet access and modified for benign or malicious purposes, such as facilitating unauthorized access to restricted or sealed documents. Accordingly, CM/ECF filers are reminded to be diligent about their computer security practices to ensure that documents are not inadvertently shared or compromised.

"The Administrative Office of the U.S. Courts (AO) and this court will continue to analyze the implications of RECAP or related-software and advise you of any ongoing or further concerns."

The Life Expectancy Of A Legal Blog

Whenever we start thinking about blogging, rather than about drug and device law, Bexis gets spooked.

So this post was written by Herrmann alone, ruminating about the life expectancy of a newborn legal blog.

What prompted the rumination?

The professors who previously manned the Product Liability Prof Blog and the Civil Procedure Prof Blog have apparently given up the ships. As of last week, the Law Profs Blog Network was soliciting new professors (here and here) to take over the reins of those two blogs.

Even the academics can't do it! The professors can't feed their blogs; it's too much work.

And those guys spend their lives wearing tweed jackets, smoking pipes, and thinking great thoughts!

So today's question was this: How long does the average practitioner-blogger last?

We don't have a clue.

But that won't stop us. To answer our question, we thought about two things:

First, we reflected on our neck of the woods. A while back, we thought that the Medical Devices: Law, Trends, and Oddities Blog was okay. We weren't hanging on every word that was published there, but we thought it was worth watching. So how long did it last?

We welcomed that entry into the blogosphere in December 2007, and the last post we could find reported on Warner-Lambert v. Kent in March 2008. Four months and out.

More recently, we thought Russell Jackson did a spectacularly nice job at his Consumer Class Actions and Mass Torts Blog. He picked his topics intelligently, wrote them up with flair, and contributed to worthwhile discussions on the web. And this was a guy who had written a column for the National Law Journal for a while, so he knows how to crank out the words.

How long did he last?

He started his blog in January 2009 and hung up his cleats in April 2009. Four months.

That's our neck of the woods.

In addition to thinking about the drug and device space, we tried to think about legal blogs more generally.

We can just barely spell "empirics." We don't have a clue how to analyze empirically the lifespan of an average newborn legal blog (although that would be a fascinating project for the right person).

But we're masters of down-and-dirty research.

So, instead of hard information that you can count on, we'll give you a tiny little, unscientific survey.

We went over to "Real Lawyers Have Blogs," which is manned by Kevin O'Keefe, who both sells a legal blogging platform and (perhaps not surprisingly) thinks that legal blogs are God's gift to lawyers. We went to Kevin's blogroll on August 18, and we looked at the last six blogs on the first page of listings. Those links were titled: Arizona Injury and Insurance Lawyer, Arizona Family Law Lawyer, Arizona Eminent Domain Lawyer, Arizona DUI Lawyer, Antitrust Lawyers, and Angiosarcoma Lawyer. (Now you see why we weren't going all the way to "Z.")

We checked to see whether those six, randomly selected, blogs were still active.

Half of them were.

As of late August 2009, the Arizona Injury Lawyer had last posted on October 13, 2008. That blog's dead.

The Arizona Divorce and Family Law Blog had last posted on June 19, 2009. That's a mighty long summer vacation; we're calling it dead.

The Arizona Eminent Domain Lawyer had last posted on March 31, 2009. That's Spring Break stretching into Summer Vacation. Nice lifestyle, if you can pull it off, but the blog is toast.

The Arizona DUI Lawyer had last posted on July 30, 2009. That's a fairly long gap between posts, but the blog may still be active.

And the Antitrust Law Blog and Angiosarcoma Lawyer had both posted within the last week, so they're still breathing.

What's our conclusion?

Legal blogs are like small businesses: Half of 'em fail in the first year, and 90 percent of 'em fail in the next five.

Maybe that's a little precise, given that we didn't actually do any empirical analysis. But you get our drift. Legal blogs don't last.

They require a ton of work; they gather readership only slowly over time; and they're not the gold mine of new business that blogolaters say they are.

(Can you claim a copyright interest in a word? If so, we want blogolater. We just invented it, and we kind of like it. Can it be ours?)

In fact, as we slog toward the third -- Egad! It hurts even to type those words! -- anniversary of the Drug and Device Law Blog, we're thinking of trading blogging for lexicography.

It would surely be easier. It would probably be more rewarding.

And, Lord knows, the two of us are harmless drudges.

Friday, August 21, 2009

Viagra Causation Goes Limp

Imagine this: The only published article in the medical literature reaching a statistically significant result concerning a drug and an outcome turns out not to have been what it seems. Rather, over a third of the subjects in the relevant category turn out to be misclassified. When properly reclassified, the statistical significance between the drug and the outcome goes away.

If that study had been sponsored by the drug company, and involved the benefit of the drug, imagine how the plaintiffs would have reacted. Would they demand that the drug be removed from the market? Would they seek punitive damages? Sanctions? A criminal investigation?

Of course they would. We see this kind of response just for results unearthed by new studies or supposed e-discovery violations -- let alone the publication of a ground-breaking, but false, study.

But what if the study happens to be published by a plaintiff's expert?

Hardly a peep. In fact, expect a belated attempt to make excuses for misstated data.

That's what just happened in the Viagra MDL. The last plaintiff's causation expert standing turns out to have published a study based upon data that was, at best, misclassified.

Kudos to the defendant for persistence in the face of a published, supposedly peer-reviewed article.

It's results like this that demonstrate why it may be worthwhile to seek discovery of the data that underlie even published studies.

So what exactly happened?

The study was suspicious anyway, since it consisted solely of telephone interviews with Viagra users who had been diagnosed with non-arteritic anterior ischemicoptic neuropathy (“NAION”) and a case-matched control group of the same size. Slip op. at 2.

The defendant subpoenaed the underlying data, but the expert, at the direction of the plaintiff's counsel, didn't produce anything. Slip op. at 4. That's one way to confirm suspicions. The defendant deposed the guy anyway, and after that the expert had to write the scientific journal and tell it about the deficiencies in the article. Slip op. at 4-5.

The biggest problem was that a significant portion of the patient data had been seriously miscoded. Specifically, eleven subjects were erroneously listed as "exposed" to Viagra when their telephone interviews indicated that they began taking Viagra after being diagnosed with NAION. As the court explained:
There are eleven instances where the date of first use on the original telephone survey forms is later than the date of NAION diagnosis on the same form. However, each of those individuals was still coded as exposed in Dr. McGwin’s [the expert's] electronic dataset. Dr. McGwin acknowledged that the statistics in the McGwin Study would have been different had those individuals (11 of 27 patients who reported Viagra or Cialis use) been coded as unexposed rather than as exposed.

Slip op. at 7.

Eleven of 27 is a pretty high error rate for anything. And every one of those errors just happened to occur in such a way that would bias the study in favor of a supposed association that otherwise has not been proven to exist.

One would think plaintiffs would be content simply to avoid the sanctions that they surely would have sought had the shoe been on the other foot. But they had chutzpah. They tried to explain away these "discrepencies" by arguing that (1) their own expert's survey forms were hearsay, and (2) some phantom researcher (never identified) supposedly went back and recontacted these persons and got differing information from what was recorded on the forms. Slip op. at 7-8.

The court was having none of it. It considered the forms to be admissible business records. Slip op. at 8. As for the supposed recontacting of the survey participants, plaintiffs eventually had to concede that they were pushing a fantasy -- there was not a scrap of evidence to prove that any recontacting had ever happened:
Plaintiffs have failed to produce any competent witness or documentary evidence to verify that such a step [recontacting survey participants] was actually taken. Indeed, as Plaintiffs concede, “Dr. McGwin [their expert] was unable to authenticate any of the underlying documents. . . . Plaintiffs have not cited to any other admissible testimony from [anyone] who is able to verify that patients were recontacted.

Slip op. at 10. With admirable understatement, the court concluded "discrepancies between the dates of first use on the original survey forms and in the electronic dataset raise serious concerns about the reliability of the McGwin Study as originally published." Id.

But wait, there's more.

More than misclassifying more than a third of study participants in a way that biases the results in favor of the conclusion that the expert is paid to reach? More than making up cock-and-bull excuses about phantom recontacting?

Yes.

The published study also misrepresented the type of statistical analysis that had been conducted. "The McGwin Study said that it used a paired t-test; Dr. McGwin admitted that
he in fact used a two sample t-test instead, which he conceded was 'not the most
appropriate.'” Slip op. at 10-11. Beyond that, "the code that Dr. McGwin wrote to produce the numbers in the McGwin Study contained errors that would affect the odds ratios and confidence intervals." Id. at 11.

Once again, with notable restraint, the court concluded, "the fact that the methodologies described in the study were not the actual methodologies used undermines the reliability of the McGwin Study as published." Slip op. at 11.

But wait, there's more!

More than misrepresenting how the study's numbers were crunched?

Yes.

One of the study's "main findings" was "mischaracterized." The study claimed that Viagra users with "personal histories" of heart attack were at significantly greater risk of NAION. But in fact there was no "personal history" data collected. As the court summed up the evidence:
The patients were actually asked whether they had a family history of myocardial infarction; no one was asked about personal history. Dr. McGwin conceded that he mistakenly assumed that the variable “MI” in his electronic dataset referred to a personal history of myocardial infarction.

Slip op. at 11 (emphasis original). This was, as the court held, "yet another layer of unreliability." Id. at 12.

Adding all this together, the published study competely failed Daubert analysis, notwithstanding that it appeared in a scientific journal:

Taken together, the miscodings and errors described above effectively undermine the reliability of the McGwin Study as published. As Plaintiffs concede, there are
“acknowledged inaccuracies in the published study” that need to be corrected. In light of those acknowledged inaccuracies, the Court finds good reason to vacate its original Daubert Order permitting Dr. McGwin to testify as a general causation expert based on the McGwin Study as published. Almost every indicia of reliability the Court relied on in its previous Daubert Order regarding the McGwin Study has been shown now to be unreliable.

Slip op. at 12.

Unfortunately, neither plaintiffs nor their expert knew to quit when they're behind. The expert ginned up an unpublished "reanalysis" - submitted after the fact - that he claimed salvaged the result of the published study, and thus his causation opinion.

Didn't help.

First, the unpublished reanalysis wasn't peer-reviewed. Second, the letter wasn't published. Third, the letter was created "post-litigation." Not only that, upon receipt of the letter, the journal in question "referred the Letter to the Committee on Publication Ethics." Slip op. at 14. In other words, the expert is being investigated for academic fraud.

The moral of this story (if not of certain of the participants) is clear - defendants can't give up the Daubert ship just because the other side comes up with a published, supposedly peer reviewed article. As here, a full investigation may reveal that the peer-reviewer was asleep at the switch, or that the article subverted the entire peer-review process by stating things that were simply false.

In short, there may be a reason beyond statistics why an outlier study is an outlier.

We can only hope that the Committee on Publication Ethics does the right thing.

Thursday, August 20, 2009

Reconsidering The Master Complaint

Earlier this week, we posted about how the MDL court in the Nuvaring litigation denied outright a defense motion to dismiss on the entirely procedural ground that the master complaint was an “administrative tool” and not intended for motion practice under Fed. R. Civ. P. 12. In re Nuvaring Products Liability Litigation, 2009 WL 2425391, at *1 (E.D. Mo. Aug. 6, 2009). Needless to say, we were unhappy with that result. We commented on how we thought the Nuvaring decision had improvidently relied on some loose language in In re Trasylol Products Liability Litigation, 2009 WL 577726 (S.D. Fla. Mar. 5, 2009), to impose what amounted to a mass waiver of Rule 12 motion practice on the defendant.

The court in Nuvaring seemed to be under the mistaken impression that master complaints in multi-district litigation should not be subject to Rule 12 motions, or the requirements of Fed. R. Civ. P. 8 – because Trasylol decided not to expose fraud claims in that master complaint to the otherwise applicable standards of Fed. R. Civ. P. 9(b). Where did that come from? Haven’t master complaints always been subject to motions to dismiss?

If not, then why have master complaints at all?

We’re getting ahead of ourselves a bit.

Back to the first question. The answer there is pretty definitely “yes.” Courts have used master complaints for pleading-related motion practice under Rule 12 for ... well, since there have been master complaints, it appears. See In re Katrina Canal Breaches Litigation, 309 Fed. Appx. 836, 838 (5th Cir. 2009) (proper to move to dismiss master complaint; it subsumed individual complaints); King v. Cessna Aircraft Co., 505 F.3d 1160, 1163 (11th Cir. 2007) (reversing dismissal of master complaint on merits, no objection to procedure); In re FEMA Trailer Formaldehyde Products Liability Litigation, 2008 WL 5217594 (E.D. La. Dec. 12, 2008) (granting in part and denying in part motion to dismiss master complaint); In re FEMA Trailer Formaldehyde Products Liability Litigation, 570 F. Supp.2d 851 (E.D. La. 2008) (granting motion to dismiss master complaint); Barasich v. Shell Pipeline Co., LP, 2008 WL 6468611 (E.D. La. June 19, 2008) (granting motion to dismiss master complaint); In re ConAgra Peanut Butter Products Liability Litigation, 2008 WL 2132233 (N.D. Ga. May 21, 2008) (granting in part and denying in part motion to dismiss master complaint); In re World Trade Center Disaster Site Litigation, 2008 WL 1927265 (S.D.N.Y. May 1, 2008) (granting motion to dismiss master complaint); In re Katrina Canal Breaches Consolidated Litigation, 533 F. Supp.2d 615 (E.D. La. 2008) (granting motion to dismiss parts of master complaint); In re Ford Motor Co. Speed Control Deactivation Switch Products Liability Litigation, 2007 WL 2421480 (E.D. Mich. Aug. 24, 2007) (granting motion to dismiss several counts of master complaint); In re Bextra & Celebrex Marketing, Sales Practices & Product Liability Litigation, 2007 WL 2028408 (N.D. Cal. July 10, 2007) (granting in part and denying in part motion to dismiss master complaint); In re Educational Testing Service Praxis Principles of Learning & Teaching, Grades 7-12 Litigation, 517 F. Supp.2d 832 (E.D. La. 2007) (granting in part and denying in part motion to dismiss master complaint); In re Guidant Corp. Implantable Defibrillators Products Liability Litigation, 484 F. Supp.2d 973 (D. Minn. 2007) (granting motion to dismiss several counts of master complaint); Gray v. Derderian, 464 F. Supp.2d 105 (D.R.I. 2006) (granting motion to dismiss several defendants from master complaint); Gray v. Derderian, 371 F. Supp.2d 98 (D.R.I. 2005) (granting motion to dismiss several counts of master complaint); In re September 11 Litigation, 280 F. Supp.2d 279 (S.D.N.Y. 2003) (granting and denying various motions to dismiss parts of master complaint); In re Bridgestone/Firestone, Inc. Products Liability Litigation, 2001 WL 34136021 (S.D. Ind. Sept. 6, 2001) (granting in part and denying in part motion to dismiss master complaint); In re Methyl Tertiary Butyl Ether ("MTBE") Products Liability Litigation, 175 F. Supp.2d 593 (S.D.N.Y. 2001) (granting in part and denying in part motion to dismiss master complaint); In re Bridgestone/Firestone, Inc. Tires Products Liability Litigation, 153 F. Supp.2d 935 (S.D. Ind. 2001) (granting motion to dismiss particular counts of master complaint); In re Bridgestone/Firestone, Inc. Tires Products Liability Litigation, 155 F. Supp.2d 1069 (S.D. Ind. 2001) (granting in part and denying in part motion to dismiss master complaint); In re Grain Land Co-op, 978 F. Supp. 1267 (D. Minn. 1997) (granting motion to dismiss several counts of master complaint); In re Orthopedic Bone Screw Products Liability Litigation, 1997 WL 305257 (E.D. Pa. March 28, 1997) (granting motion to dismiss parts of master complaint), reversed, 159 F.3d 817 (3d Cir. 1998), reversed sub nom. Buckman Co. v. Plaintiffs’ Legal Committee, 531 U.S. 341 (2001) (reinstating dismissal); In re Ford Motor Co. Vehicle Paint Litigation, 1996 WL 426548 (E.D. La. July 30, 1996) (granting in part and denying in part motion to dismiss master complaint and parallel individual complaints); Air Master Sales Co. v. Northbridge Park Co-op, Inc., 1989 WL 149967 (E.D. Pa. Dec. 7, 1989) (granting motion to dismiss master complaint).

Nor is there anything in the Manual for Complex Litigation suggesting that ordinary rules of pleading don’t apply to master complaints. It observes only that filing of a “master complaint. . .may serve as the vehicle for determination of common issues.” Manual for Complex Litigation (4th) §22.36, at p. 373. We agree that master complaints do have such uses – but there’s nothing in the manual supportive of fudging the Rules of Civil Procedure. See “Ten Steps to Better Case Management: A Guide for Multidistrict Litigation Transferee Judges” (which we featured here), likewise containing no implication that the rules are different for master complaints.

So now – after decades of routine use of Rule 12 against master complaints in any number of situations – all of a sudden in 2009 we’re faced with: (1) a decision in Nuvaring that the master complaints are virtually immune from Rule 12 motions (if there’s nothing in the record suggesting otherwise); (2) dictum in Trasylol that “strict application of Rule 9(b)” is somehow not the rule “in an MDL product liability claim,” 2009 WL 577726, at *6; and (3) additional dictum about the administrative nature of master complaints in In re Digitek Products Liability Litigation, 2009 WL 2433468, at *8 (S.D.W. Va. Aug. 3, 2009), although it’s unclear whether that actually affected the outcome of the motion to dismiss (which was granted in part and denied in part) in any way.

These three cases rely on statements about the “administrative” nature of master complaints in other MDLs – but those statements all occurred in the choice of law context. See In re Propulsid Products Liability Litigation, 208 F.R.D. 133, 141-42 (E.D. La. 2002), In re Vioxx Products Liability Litigation, 239 F.R.D. 450, 454 (E.D. La. 2006), In re Mercedes-Benz Tele Aid Contract Litigation, 257 F.R.D. 46, 56 (D.N.J. 2009); In re Guidant Corp. Implantable Defibrillators Products Liability Litigation, 489 F.Supp.2d 932, 935-36 (D. Minn. 2007). None of these cases considered any sort of Rule 12 motion.

In a nutshell, when a “master” complaint is filed, should the choice of law rules of the forum where that master complaint is filed (almost always the situs of the MDL) govern? Alternatively, should the relevant choice of law rules be those of the forum where the particular complaint at issue was filed? This kind of conundrum often arises in the class action context, as choice of law is an important constraint on class certification (see our posts, here and here on that subject). That’s exactly what Vioxx, Propulsid, and Mercedes Benz were all about – did the filing of a master complaint change the choice-of-law calculus for class certification, when the class action complaint at issue was originally filed elsewhere? In all those cases, the court said no. Guidant, on the other hand, involved a straight-forward motion for the application of a particular state’s law.

Not one of them involved a motion to dismiss, Rule 12, Rule 8 or Rule 9.

What’s going on?

We see this as another aspect of the changes that the tightening of pleading rules in Twombly/Iqbal are having on litigation in federal court. With the demise of anything goes pleading, Rule 12 looms a lot larger than it used to. In a learned intermediary rule case, for example, the plaintiff is actually going to have to allege enough facts (contact with the prescriber at the right time; some sort of prescriber response) to make a “plausible” case that the allegedly inadequate warning actually caused the injury. Consumer fraud and regular fraud claims have to allege causation and (sometimes) reliance as well.

Alleging plaintiff-specific facts is anathema to the other side’s mass tort practice – which is what MDLs are. that practice is all about using word processors and multi-plaintiff joinder to file as many suits as possible as quickly and cheaply as possible. They can't be bothered with whether there's actually a viable claim.

Thus, MDL plaintiffs don’t want Twombly/Iqbal to upset their applecart. One result is the new-found reliance on “administrative” master complaints as a basis for immunizing themselves from Rule 12 dismissals.

MDL defendants, naturally, want the exact opposite. Rule 12 motions, after all, precede discovery. And discovery is where most of the huge litigation expenses – expenses that drive settlement decisions – are incurred. If defendants can eliminate or significantly prune back MDL litigation before plaintiffs can make them spend these sums on, say, electronic discovery, then defendants are obviously better off.

MDL plaintiffs have responded, and the Nuvaring line of cases is the result. Defendants need to respond as well. What to do?

Without giving away all our litigation ideas, we can suggest a few things.

First, what good is a master complaint if it, in effect, waives Rule 12 in a post-Twombly/Iqbal world? Do defendants want one at all? We loved them in Bone Screw, where a motion to dismiss fraud on the FDA claims from a set of “master” allegations (if more than one complaint) turned into Buckman Co. v. Plaintiffs’ Legal Committee, 531 U.S. 341 (2001).

But times, and tactics, change.

So maybe master complaints aren't what we need anymore, at least if Nuvaring is the consequence. We’re coming around to the view that we want each plaintiff required to allege some fact to establish how, say, some supposedly improper or illegal product promotion actually affected that plaintiff’s prescribing physician. That’s information in each plaintiff’s control, since plaintiffs can more freely talk to their own doctors than our side can.

So while we don’t mind standardization of allegations across large numbers of complaints, we may be better off putting plaintiffs to their pleadings individually. If Rule 12 requires a plaintiff at least to plead in good faith one fact affirmatively indicating that the defendant’s promotion affected his or her prescriber, then that requires more than a cookie-cutter complaint churned out by a mindless word processor. So defendants should consider whether master complaints do them any good after Twombly/Iqbal .

Second, in Nuvaring the court held that the defendant “had already filed answers in the individual lawsuits which precluded any 12(b) motion practice.” 2009 WL 2425391, at *2. If plaintiffs are going to argue, and courts are going to agree, that answering individual complaints in an MDL/mass tort setting precludes any Rule 12 challenge to a later filed master complaint, defendants really ought to be reconsidering whether to answer all those underlying complaints. It’ll be a little more work to file Rule 12 motions rather than answers to hundreds of complaints, but not all that much more. Cookie-cutter complaints beget cookie-cutter motions, after all. With Rule 12 motions more likely to succeed after Twombly/Iqbal, MDL defendants should avoid anything that creates the sort of waiver arguments that the court credited in Nuvaring.

Third, MDL defendants shouldn’t agree to “administrative” pleadings of any sort – master complaints, consolidated class action complaints, etc. – without getting it in writing (usually in a case management order) that doing so is without prejudice to their rights to move under Rule 12 (or make other motions under other rules). The court stated in Nuvaring:

I too conclude that the filing of the master consolidated complaint in this action was simply meant to be an administrative tool to place in one document all of the claims at issue in this litigation. Neither Plaintiffs when they consented to filing a master complaint, nor I when I entered the order directing a master complaint to be filed, contemplated that Rule 12(b) motion practice would be pursued by [defendant] against the master complaint.

2009 WL 2425391, at *2. Obviously, the role of the master complaint was one can that shouldn’t have been kicked down the road. Likewise, in Trasylol, the court decided that it would dispense with strict compliance with Rule 9(b). 2009 WL 577726, at *6. Defendants need to make the record clear that they’re not agreeing to “federal rules lite” for adminstrative convenience. A court’s outright refusal to apply the Federal Rules of Civil Procedure could even be grounds for seeking mandamus.

With Rule 12 no longer defanged, MDL defendants cannot afford to allow such misunderstandings to exist – or to be manufactured by the other side. MDL defendants need to evaluate their litigation strategies ahead of time and decide exactly how they want motion practice to play out. Those decisions need to be put on the record in negotiations for case management orders. Doing so may result in mean fewer agreements to file master complaints, since plaintiffs don’t have to agree to anything our side wants. But as we’ve discussed already, after Twombly/Iqbal, fewer master complaints and more Rule 12 motions may well be in the best interests of the defense in any event.

MDL practice is like three-dimensional chess. Any significant change in the law, like Twombly/Iqbal, is going to affect the entire process in new and subtle ways. The stakes are too high for it to be otherwise. In this fluid situation, MDL defendants need to take care that they aren’t caught flat-footed doing what they’ve always done.

Off-Label Promotion Criminal Trial Begins

A year and a half ago, we raised an eyebrow when the government chose to indict the CEO of a drug company (InterMune) for allegedly illegal off-label promotion of the company's drug. (We discussed the follow-on class action by purchasers of the drug here.)

The main event started in San Francisco on Tuesday. For coverage of the opening statements in the criminal trial against the former CEO, Scott Harkonen, see the AmLaw Daily here and The Recorder here (subscription required).

Wednesday, August 19, 2009

"Litigation Hold" Blog

Who'd a thunk it?

There's now a blog devoted entirely to the subject of "litigation holds" -- efforts to preserve documents and e-documents when litigation is threatened or filed. (That's a very general description of the issue, and purists would quibble with our precise language. But we're blogging, not briefing, here, so we don't feel guilty about our phraseology.)

We haven't yet looked sufficiently closely at the blog to comment on its contents, but we welcome "Legal Holds and Trigger Events" to the blogosphere.

Tuesday, August 18, 2009

Another Scholarship Round-Up

Oy! Don't bother!

We're scouring the web for stuff in the scholarly literature that might interest practitioners in our field, and we're coming up awfully close to empty.

We're posting below portions of the abstracts -- do we save you time, or what? -- of the most interesting three recent articles we found. And you might still be better off clicking away right now.

First, Jason Miller posted at SSRN his student note, "When and How To Defer to the FDA: Learning From Michigan's Regulatory Compliance Defense." Michigan, of course, has an absolute statutory bar to liability for drugs that the FDA approved. Miller's take on how to improve that system is to maintain the bar on private tort actions, but authorize state attorneys general to pursue certain claims. In the words of part of the abstract:

"This Note examines the question of FDA approval in state tort actions, discusses Michigan's answer to that question, and offers a proposal that would block most private actions against FDA-approved drugs (as Michigan has done), but would allow a state attorney general to bring suits in certain circumstances. The state attorney general model detailed in this Note stakes out a middle ground in the debate over the significance of FDA approval. The proposal recognizes the primacy of the FDA, but also recognizes the need for a back-up that can provide deterrence and compensation in the few cases that slip through the FDA's regulatory cracks."

We'd love to see the legislative battle in Michigan when someone offers up that statutory revision. Nice thought, Jason, but it's hard for practitioners to get too worked up about this.

Next up is Elizabeth Chamblee Burch (of Florida State) with a reaction to Judge Weinstein's recent article about managing mass torts. (You can read our reaction to Judge Weinstein's piece here.) We take it that Professor Burch has a longer article in the Alabama Law Review that discusses how to bring mass tort plaintiffs together to pursue their group interests more effectively, and her short piece in Cardozo Law Review's de novo rehashes [I bet she won't like that word] the Alabama ditty. But it does. "A New Way Forward: A Response to Judge Weinstein"

"provides a condensed version of my earlier article, Litigating Groups, which analyzes group dynamics within nonclass aggregation. By drawing on the literature of moral and political philosophy as well as social psychology, I contend that, in the face of hard cases, of instability and disunity, plaintiffs who have made promises and assurances to one another can invoke social norms of promise-keeping, social agglomeration, compatibility, and the desire for means-end coherence to achieve consensus, mitigate client-client conflicts, and re-tether their attorney to their needs. Thus, using groups to overcome the problems in nonclass aggregation not only makes sense from a group responsibility perspective, it may also harmonize with wealth maximization and individual autonomy goals."

Maybe society'll get there, but not during our litigating lives.

Next!

You'll just love "Responsibility and the Negligence Standard" by Joseph Raz. Here's the entire abstract. (It's awfully short, and we don't really understand what it means anyway, so we can't condense it further.)

"The paper has dual aim: to analyse the structure of negligence, and to use it to offer an explanation of responsibility (for actions, omissions, consequences) in terms of the relations which must exist between the action (omission, etc.) and the agents powers of rational agency if the agent is responsible for the action. The discussion involves reflections on the relations between the law and the morality of negligence, the difference between negligence and strict liability, the role of excuses and the grounds of duties to pay damages."

(That's all his spelling and syntax. We just cut and pasted those words from SSRN, so don't blame us.)

Our occasional forays into academia don't give us much hope.

We're probably damning ourselves with faint praise here, but we'll do it anyway: Compared to the average practitioner, we're relatively academically curious guys.

But despite our [marginal] interest in the world of scholarship, we still can't get worked up about most of the stuff we find there.

We'll keep plugging along, so at least our readers have a sense of what the academy is producing.

We hope you're enjoying these posts; that would make one of us.

Monday, August 17, 2009

PACER Has Been Hacked

We just saw this morning that folks at Princeton, Harvard, and the Internet Archive have created and released a new computer program that hacks PACER, the system for retrieving federal court opinions.

Apparently, this new program has a database with many opinions pre-loaded into it, and others will be added as folks download more decisions from PACER. When a user searches PACER, the program automatically provides a free copy of the decision (if the program has it available in its database), instead of the copy from PACER, and thus saves the user PACER's fee. Eventually, virtually everything in the PACER system will be available for free in RECAP.

In the words of the blog, the "solution" to the problem of paying for opinions is

"RECAP, a Firefox-only plugin, that rides along as one usually uses PACER — but it automatically checks if the document you want is already in its own database. The plug-in’s tagline, ‘Turning PACER around,’ alludes to the fact that its name comes from spelling PACER backwards. RECAP’s database is being seeded with millions of bankruptcy and Federal District Court documents, which have been donated, bought or gotten for free by open-government advocate Carl Malamud and fellow travelers such as Justia."

Here's a link to Threat Level, which posted this news on Friday.

Moving To Dismiss MDL Master Complaints

Suppose you have a product liability MDL.

Individual lawsuits are arriving by the mailbagful.

You need a system to sort out which claims can proceed and which should be dismissed as a matter of law. What's a judge to do?

On the one hand, you could order defendants to file motions to dismiss each of the hundreds of separate complaints and then start ruling on those motions one by one.

On the other hand, you could adopt a different, and typical, way of organizing the morass: Order plaintiffs to file a master complaint that pleads all of the claims plaintiffs want to pursue.

Order defendants to move to dismiss the master complaint.

And then decide the legal issues just once, for all of the cases.

(This system may not work for all claims and all legal defenses, since some defenses may depend on state law, which may vary by jurisdiction. But, at a minimum, motion practice directed at a master complaint can permit a court efficiently to decide some of the issues that cut across all cases.)

We just stumbled across In re NuvaRing Prods. Liab. Litig., slip op., No. 4:08MD1964 RWS (E.D. Mo. Aug. 6, 2009) (link here), which left us scratching our heads. There, the MDL Panel created a coordinated proceeding to administer the 150 individual lawsuits pleading personal injuries allegedly caused by using Organon's contraceptive NuvaRing. The MDL transferee court granted (by consent) Organon's motion requiring plaintiffs to file a master consolidated complaint. Organon moved to dismiss that master complaint.

So far, so good.

And then, the surprise: Judge Sippel concluded "that the filing of the master consolidated complaint in this action was simply meant to be an administrative tool to place in one document all of the claims at issue in this litigation. Neither Plaintiffs when they consented to filing a master complaint, nor I when I entered the order directing a master complaint to be filed, contemplated that Rule 12(b) motion practice would be pursued by Organon against the master complaint." Id. at 3.

Really? Then why bother having plaintiffs file the thing? Isn't that its primary use?

As support for this result, Judge Sippel cited In re Trasylol Prods. Liab. Litig., No. 08-MD-1928, 2009 WL 577726 (S.D. Fla. Mar. 5, 2009). We were curious, so we took a look.

(If Trasylol had sent us back to yet another case to figure this out, we would not have taken a further look. There are limits even to our curiosity. But Trasylol gave us the answer.)

The Trasylol MDL collected before one judge all of the cases pleading personal injury or death allegedly arising out of the use of the prescription drug Trasylol in certain heart surgeries. Plaintiffs (1) filed a master consolidated complaint to gather in one document all of the causes of action and also (2) filed "abbreviated short form Complaints for the individual cases." Id. at *1. Defendants moved to dismiss the master complaint.

Unlike the NuvaRing court, the Trasylol court did in fact rule on that motion. But it used some loose language along the way that the NuvaRing court loosened even further.

The Trasylol court denied defendants' motion to dismiss for failure to plead with particularity the fraud and constructive fraud counts of the master complaint. The court plainly thought that Rule 9(b) motions showed be viewed skeptically in the context of MDLs, because the defendants have been sued so many times for their conduct that, the court thought, they surely have a pretty good sense of what they're alleged to have done wrong:

"The reality of this case is thus. There are well in excess of four hundred separate cases that have either been filed in, or transferred into, this district. Many of those cases are filed on behalf of more than one individual. . . . [T]he complaints go into detail about the dates of certain investigations, publications and/or inquiries wherein the Defendants had control over the transmission of crucial information to Plaintiffs or their healthcare providers. . . .At this stage of the litigation I prefer to assess the sufficiency of plaintiffs' claims with substantial leniency, especially when the information that may or may not support Plaintiffs' claims is largely within the control of the Defendants."

Id. at *8.

We don't like that result.

We think Rule 9(b) says what it says, and courts should apply it.

And we particularly don't like courts inventing new rules for particular kinds of litigation. (This happened once before in the New York statewide Oxycontin proceeding, and we criticized the result there, too.) We understand that the court thinks it's being practical: "Sheesh. I've got 400 lawsuits here. This isn't just one complaint where the defendant doesn't know what it's being sued for. No reason to bother with the requirements of Rule 9(b) here."

But the minute you write those words into a decision, you've changed the law. Now, any time plaintiffs prefer not to comply with Rule 9(b), they just have to gin up 400 cases and cite the newly-invented legal rule.

Don't do this, judges! We understand your good intentions, but we don't like the road that you're accidentally paving.

But we digress.

The truth is that Judge Sippel then went on in the Trasylol MDL to dismiss the constructive fraud count of the master complaint on a different ground: "The Plaintiffs have presented no, and the Court is unaware of any, case establishing that simply producing drugs which will inevitably be ingested by an end-consumer patient, absent anything further, creates a fiduciary relationship and duty between a manufacturer and a patient. . . . Count VI is due to be dismissed." Id. at *13.

So Trasylol doesn't say that courts should refuse to rule on motions to dismiss master complaints in MDL proceedings. To the contrary: The court did rule on a motion to dismiss -- granting it in part -- in that very context.

Rather, the Trasylol decision shows (incorrectly, we think) some exasperation with the notion of a Rule 9(b) motion in the context of an MDL. But the court then (correctly) rules on the motion to dismiss and thus eliminates -- efficiently, and once and for all -- the claims for constructive fraud in all of the individual complaints.

Unless there was something going on in NuvaRing that isn't explained in the opinion, we think the court should have ruled on the motion to dismiss that master complaint, too.

Friday, August 14, 2009

FDA's CDER Handbook - Undergoing Revision

One of us (Bexis) was updating a book chapter on "What Litigators Need to Know About the FDA," and wanted to cite to the CDER (Center for Drug Evaluation and Research) Handbook concerning its definition of "untitled letter." But the link to the CDER Handbook wasn't active on the FDA's website. Well, that prompted an email to CDER's Ombudsman. The response was that the CDER handbook is under revision and the link would be down until that revision was finished. The Ombudsman was helpful, however, and provided a copy of the old - under revision - version of the CDER Handbook.

We thought (since we couldn't easily find it elsewhere online) that there may be others who would want access to the CDER Handbook pending revision so here's a link to the copy we received. Again -- we caution (for the fourth time) that this copy does not completely reflect current FDA policy, since it's under revision.

Twombly/Iqbal Requires Identifying Allegedly Violated Statute

Although even the academic critics of Twombly/Iqbal have agreed with us that vague "you violated the FDCA" pleadings should not survive a motion to dismiss, apparently there are still lawyers on the other side who think they should be able to get away with violation claims that do not identify what statute/rule/regulation was supposedly violated.

Thus, in Chappey v. Ineos USA LLC, 2009 WL 790194 (N.D. Ind. March 23, 2009), the court granted a motion do dismiss where the complaint failed to allege the supposed violation that was the basis for a "negligence per se" claim in an environmental contamination case. Here's what the court had to say:

[Plaintiff] alleges that Defendants “violated various statutes, ordinances or regulations without justification or excuse.” Defendants believe the negligence per se claim should be dismissed because no statute or regulation was identified, thus the count adds nothing to the already pled negligence count, and does not give Defendants fair notice of the basis of Plaintiff's claim. In her reply, [plaintiff] argues that she has complied by filing a short plain statement, and that Bell Atlantic [v. Twombly] does not require that a negligence per se claim reference a specific statute. . . .

Notice pleading requirements suggest that Plaintiff must plead the specific statute on which she bases her claim for negligence per se. See Bell Atlantic, 127 S.Ct. at 1964-65 (holding the complaint must describe a claim in sufficient detail to give defendant fair notice of what the claim is and the grounds upon which it rests). Here, where [plaintiff] is bringing a claim based upon specific statutes, regulations, or ordinances, it logically follows that she must plead the statute(s) upon which the claim is based. [A] . . . generic complaint that defendant violated unspecified local, state and federal statutes, guidelines and regulations does not provide fair notice of [plaintiff's] claim. Similarly, because [plaintiff] has failed to identify a specific statute, regulation, or ordinance to support her claim of negligence per se, Defendants do not have fair notice of the claim, and it should be dismissed pursuant to Federal Rule of Civil Procedure 12(b)(6).


2009 WL 790194, at *2-3 (various citations and quotation marks omitted).

Defense counsel: Chappey means you've got something to cite besides plain common sense to argue the violation claims must specifically plead what it is that the defendant allegedly violated.

Critics of Twombly/Iqbal: Chappey is an excellent example of just how much plaintiff's counsel thought they could get away with before Twombly. Don't tell us anymore that a tightening up of pleading standards wasn't long overdue.

Jersey Barrier Still Stands

New Jersey Vioxx plaintiffs weren't going to let a little thing like losing in the New Jersey Supreme Court keep them from trying to certify their nationwide consumer fraud class action. But yesterday, Judge Higbee, the trial judge assigned the Vioxx mass tort in New Jersey, saw it differently. She denied class certification for a second time. Here's the opinion.

Highlights:

(1) Don't simply repeat yourself on a motion for reconsideration - it won't work. Slip op. at 2-3.

(2) Causation is different from reliance. Just because the statute doesn't require reliance, doesn't mean that causation can somehow be an individualized issue. Slip op. at 4-5. And by the way . . . plaintiffs did lose that issue in the N.J. Supreme Court. Slip op. at 6.

(3) Just because the N.J. consumer fraud statute is "strong" doesn't give the courts license to ignore the statutory elements in the guise of following legislative "intent." Slip op. at 6-7.

(4) Since the class representative would likely lose her case due to the prescriber's "I would have prescribed anyway," there was no typicality. Slip op. at 7.

(5) Profit disgorgement under the guise of "unjust enrichment" is in the nature of punitive relief, since it is not recovery of any plaintiff's actual damages. Such a claim is not permitted in New Jersey. Slip op. at 7-8.

(6) The existence of inconsistent Vioxx verdicts "demonstrate[s] that a class action would not be an appropriate method of proceeding." Slip op. at 8.

Thursday, August 13, 2009

Defense Briefs Filed In Pennsylvania Contingency Prosecution Case

Back in January, we put up a short post noting the filing of a petition for extraordinary (“King’s Bench”) review in the case of Commonwealth v. Janssen Pharmaceutica, Inc., No 0108002818 (Pa. C.P. Phila. Co.). It’s a case involving alleged off-label promotion of Risperdal, a widely prescribed “atypical” anti-psychotic medication. We posted a copy of the petition challenging the state’s decision to farm out the case on a contingent fee basis to Texas attorney and citing public records suggesting that the attorney was a major contributor to the political campaigns of Pennsylvania’s governor.


Government by contingent fee is something we’ve consistently criticized on this blog. See our posts, here, here, and here.


Well, we’ve been remiss in keeping our readers informed of the progress of the Pennsylvania action. That changes today.


The big news we didn’t mention was that the Pennsylvania Supreme Court, by a 5-2 vote, issued the extraordinary writ, and agreed to hear the following issues:



A. Whether 71 P.S. § 732-103 dictates that Petitioner lacks standing to seek disqualification of Bailey Perrin Bailey, LLP on the basis of alleged violations of constitutional law.

B. Whether the Attorneys Act, 71 P.S. § 732-101 et seq. , authorizes the Office of General Counsel's contingent fee arrangement with Bailey Perrin Bailey, LLP.

C. Whether Bailey Perrin Bailey, LLP, should be disqualified because the General Assembly did not authorize the contingent fee arrangement between the Office of General Counsel and the law firm, such that the agreement violates Article III, § 24 and the separation of powers mandate of the Pennsylvania Constitution.

D. Whether Bailey Perrin Bailey, LLP should be disqualified because the due process guarantees of the United States and Pennsylvania Constitutions prohibit the Commonwealth from delegating the exercise of its sovereign powers to private counsel with a direct contingent financial interest in the outcome of the litigation.


Commonwealth v. Janssen Pharmaceutical, Inc., ___ A.2d ___, 2009 WL 1857395 (Pa. June 30, 2009). The Court’s online calendar has scheduled oral argument for October 21, 2009.


And if oral argument’s been scheduled, that means there’s got to be briefing, right?


Absolutely, and that’s what this post is about. Defense side briefing (Janssen is considered an “appellant” since it filed the petition for extraordinary relief) was due on August 11, 2009. One of us (Bexis) worked on one of the amicus briefs and was able to get a complete set of the briefing. Because whether state executive officers can, without legislative appropriation or approval, hire contingent fee counsel to sue drug and device (and lots of other) manufacturers is an important cutting edge issue, we’re posting the briefs and describing what they say. We hope they’ll be a resource to others on our side of the “v.” faced with similarly dodgy “prosecutions.”


We’ll start with the brief filed by the petitioner, Janssen. It has the most information about the case, which is ostensibly filed on behalf of Pennsylvania’s Medicaid and Pharmaceutical Assistance for the Elderly (“PACE”) funds. The complaint alleges that the defendant promoted Risperdal for off-label uses (also called “not medically necessary” uses), that the Commonwealth paid for such uses, and that, as a consequence the defendant should have to pay back every cent Pennsylvania ever paid for the drug (in essence giving it to the state for free). The state sues in its “sovereign” and “parens patriae” powers. Janssen br. at 9-10.


Janssen alleges, regarding the history of this suit, that:


  • This suit was the brainchild of a prominent Texas plaintiff’s firm, Bailey Perrin, and one of its founding partners, F. Kenneth Bailey.

  • Bailey unsuccessfully pitched the suit to Pennsylvania’s Attorney General in 2005.

  • Starting in February, 2006, Bailey reportedly gave the first of what would eventually be more than $91,000 in political contributions to the re-election campaign of Pennsylvania's Governor – and another $25,000 to the Democratic Governors Ass’n, of which the Governor was an officer.

  • The Governor’s Office of General Counsel (“OGC”) decided to bring the suit that the Attorney General had declined to bring.

  • In May, 2006, the OGC prevailed on the Attorney General to delegate the case to it.

  • In August, 2006, the OGC signed a contingent fee agreement with Bailey Perrin for the Risperdal action.

  • There was no competitive bidding for this contingent fee agreement.

  • The contingent fee agreement gives Bailey Perrin the right to as much as 15% of everything that Pennsylvania might recover – allegedly many millions of dollars.

  • In the contingent fee agreement, Pennsylvania gave up its right to settle, except on terms that assure Bailey Perrin is “reasonably” compensated.

  • In the contingent fee agreement, contrary to usual practice, Pennsylvania waived Bailey Perrin’s conflicts of interest in simultaneously bringing the same suits against the same defendant on behalf of several other states (at least Louisiana, South Carolina, Arkansas, Mississippi, and New Mexico).

  • In the contingent fee agreement, contrary to usual practice, Pennsylvania gave up its usual “control” of litigation brought in its name, retaining only a right to be “consulted.”

  • Bailey’s last $25,000 contribution to the Governor's campaign came one week after the executed contingent fee agreement was mailed by the OGC.

  • The complaint, filed in February, 2007, wasn’t verified for truthfulness by any member of the state government, but only by a Bailey Perrin lawyer.

  • No OGC attorney has ever entered an appearance in the case.

Janssen br. at 5-9, 11.


The defendant first addressed a peculiar, and rather weak, argument by the Commonwealth that a targeted defendant lacks standing to seek disqualification of opposing state counsel. This was based on the Pennsylvania statute that originally created the Attorney General’s office when the state went to an elective system. The statute prohibits third-party challenges to the state's “authority” to appoint attorneys. The defendant took the eminently sensible position that no statute can immunize the government from constitutional challenges to its conduct. Janssen br. at 14-16.


Turning to the more interesting stuff, the defendant asserted several grounds on which the contingent fee agreement should be rejected and Bailey Perrin disqualified. The first argument is based entirely on Pennsylvania state constitutional grounds, but we have to believe that most states operate under broadly similar constitutional structures. In Pennsylvania, the legislature controls the purse strings. Thus the governor’s office cannot expend unappropriated funds – unknown future legal recoveries belonging to the Commonwealth – for any purpose whatsoever. In essence, the defendant asserts a rather fundamental separation of powers principle: that the executive branch cannot arrogate to itself the power of the purse. Janssen br. at 17-18, 20-23.



Given Pennsylvania's current budget crisis, we can certainly see why the Governor would want to do that - but he can't. Not constitutionally, anyway.



Further, any funds to be “recovered” by the Commonwealth belong to it, and are for the legislature, not the executive, to decide how to spend. Id. at 18-19, 24-25.


While this is a Pennsylvania-specific argument, the Commonwealth is not particularly unusual in how its government is structured. It seems to us that similar constitutional power of the purse limits, and similar cases and statutes not allowing the executive branch to unilaterally spend money it receives, are likely to exist in most, if not all, states. Apparently this argument has already won in Louisiana.


The second defense argument was also based upon Pennsylvania law, and seems to be more state specific. It turned on the statute creating the OGC not having any provisions authorizing contingent fees. Janssen br. at 25-27. Apparently a couple of other states have statutes allowing such retentions, id. at 26-27, so this is a useful basis for distinguishing those states.


The third argument was the biggie – constitutional due process. The basic propositions (all accompanied by supporting precedent) are these: (1) Due process requires that sovereign powers be wielded impartially, Janssen br. at 28-29; (2) Exercise of governmental powers under the influence of private pecuniary considerations violates due process, id. at 29-31; (3) government attorneys are, like judges, bound to exercise their powers to seek justice, and not to pursue personal gain, id. at 31-33; (4) contingency arrangements create the sort of pecuniary influence that due process forbids, id. at 34-36; and (5) public policy should not be made through litigation influenced by private pecuniary considerations. Id. at 36-38.


These public policy concerns were quite interesting in and of themselves. If the state seeks to avoid paying for the drugs that the program participants are prescribed, the participants won’t be getting those drugs any longer. The litigation was directly contrary to the actions of the Commonwealth’s own plan administrators, who continue to list Risperdal as a “preferred” drug. The action sought to penalize all off-label use, despite the legally and medically recognized status of this practice. Id.

The defendant followed the discussion of public policy with a couple of arguments that flow from the proposition that a contingent fee creates a private pecuniary interest. Janssen br. at 38-39. The first was that appearance of impropriety is enough – actual influence on state decision-making need not be proven (although just reading the complaint is proof enough for us). Id. at 39-40. The next was that it would be a clear ethical violation for a lawyer drawing a government salary to take on this sort of contingency, and the Commonwealth cannot do indirectly what it is otherwise prohibited from doing. Id. at 40-41.


The defendant’s next major argument was directed to who exercises actual “control” over the litigation. This became a critical issue in similar litigation in California, because of how that state’s prohibition on contingent fees in state litigation is phrased. Janssen br. at 42 n.24. Janssen contended that Pennsylvania precedents are not dependent upon control, id. at 41-44, and in any event the terms of the contingency agreement in this case and the manner in which it has been litigated demonstrated that the Commonwealth in fact has not exercised control (and isn't allowed to) over the legal positions that have been asserted in its name. Id. at 44-45.


Finally, the defense debunked any claim the Commonwealth might make that it “lacks resources” to proceed except on contingent fee. The defendant points out that the OGC alone employs 500 attorneys. Further, nothing, apart from reluctance to submit this politically motivated deal to legislative oversight, prevented the OGC from seeking an appropriation of some of the billions in tax revenue the Commonwealth receives every year for payment of hourly rates. Janssen br. at 45-47.


We’ll review the amicus brief filed by the Washington Legal Foundation (“WLF”) next. That’s because Bexis wrote most of it - and to that extent we will play favorites. The WLF brief first delves into how any “pay-to-play political culture, and the attendant appearance of impropriety, is at odds with several legal standards imposed by either the state’s constitution or by statute – most notably requirements concerning competitive bidding. WLF br. at 4-6. Presumably, most states have similar provisions.


WLF next examined the Pennsylvania campaign contribution reports for 2006 and describes that these public reports indicate that if 2006 contributions made by Bailey’s former firm (still apparently allowed to use his name) and law partners are added into the mix, the total amount of political contributions would actually top out at over $210,000. WLF br. at 7-8. WLF then provides to the Court the reaction of the press to the disclosure of the temporal proximity between all these contributions and the award of a non-bid contract to one of the contributors. Id. at 8-10. WLF recommended that the Court to “consider the source” of arguments that this deal actually benefits the Commonwealth, id. at 10, and urged the Court to exercise its supervisory power over attorneys practicing in the state’s courts to set this agreement aside. Id. at 10-11.


Next WLF made the due process argument, relying heavily on the Court’s prior cases requiring disqualification of financially interested prosecutors. WLF br. at 11-12. Again, it is likely that similar cases exist for this proposition in most states. WLF then shifted its focus to the disqualification of financially interested counsel representing the state in civil cases. This argument collected cases from around the country. Id. at 13-15. WLF finished its constitutional argument with a discussion of control and appearance of impropriety. Id. at 15-17.


WLF’s last argument emphasized the detrimental effects that extreme allegations motivated by a desire to maximize potential recovery at all costs has on public policy. WLF pointed out: (1) for good reason, off-label use is a widely accepted medical practice, br. at 18-19; (2) Risperdal remains a “preferred” drug on the Pennsylvania formulary, in accordance with medication guidelines adopted by the National Association of State Mental Health Program Directors, id. at 19-20; (3) contrary to the complaint’s allegations, off-label use is not medically unnecessary, id. at 21-22; (4) contrary to the complaint’s allegations, off-label use is not illegal, id. at 22-23; (5) contrary to the complaint’s allegations, off-label use was not “experimental,” id. at 23; (6) contrary to the complaint’s allegations, off-label use is not ineffective, id. at 24; (7) contrary to the complaint’s allegations, the cost of beneficial off-label uses has never been recoverable, id. at 24-25; and (8) contrary to the complaint’s allegations, off-label use does not make the product so used defective. Id. at 25-26. These policy arguments, which relied upon nationwide precedent, are WLF's unique contribution to the cause.


The Product Liability Advisory Council, Inc. (“PLAC”) also filed a brief. PLAC’s brief is uniquely useful because of the thoroughness with it laid out the nationwide criticism that government resort to contingency counsel to sue product manufacturers has received – both in the case law, PLAC br. at 12-18; and more specifically the adverse influence that such contracts have had upon the governmental officials issuing them, to the extent that several were prosecuted on corruption charges. Id. at 19-24. PLAC also detailed the proven record of exorbitant fees at state expense that has followed in the wake of state contingent fee litigation. Id. at 24-27. PLAC also made public policy and due process arguments, id. at 8-11, but it’s the nationwide scope of its critique of the contingency process that makes that brief useful to any other attorney considering a similar challenge.


There’s also an amicus brief from the Chamber of Commerce. The Chamber’s initial argument was that the state’s sovereign powers cannot be constitutionally delegated to private, financially interested parties. Id. at 3-5. It then analyzed the neutrality requirements attaching to litigation involving the state in its sovereign capacity. Id. at 5-7. The Chamber next linked the neutrality requirement to constitutional due process. Id. at 7-9. To us, the Chamber’s unique contribution is its survey of the scholarly literature on due process and financial conflicts of interests. Id. at 10-14. These are articles that others faced with the similar litigation should be familiar with. Another useful feature of the Chamber’s brief is its detailed description of other circumstances in which public policy prohibits contingency agreements. Id. at 15-16. These are lobbying, criminal prosecution, divorce, and expert witnesses. Id. There’s also a useful discussion of the attitudes of other state officers towards contingent fee arrangements. Id. at 18-19. The Chamber closed with the separation of powers argument, detailed above. Id. at 19-23.


Undoubtedly motivated by the effect of similar contingency arrangements used against their members in the long-running and largely unsuccessful lead pigment litigation, the National Paint & Coatings Ass’n (“NPCA”) also filed an amicus brief. It took on another issue – how contingent fees bias, not private contingency counsel (although they certainly do that), but also the state governmental officials who hire them. See NPCA br. at 4-6. This kind of bias is called “moral hazard” (something we’ve heard a lot about in terms of the financial industry lately). Id. at 6-7. The contingent fee holds out a prospect of “money for nothing” that leads the state to do things it otherwise would never think of doing. This includes the pursuit of litigation that costs far more than any benefit it could create. Id. at 11-12, 14-16. “Moral hazard” also includes the pursuit of dubious and far-fetched legal theories. Id. at 12. The pursuit of questionable litigation reduces the deterrent value of all state prosecutions, especially where the legal theories cast a net that extends far beyond objectively wrongful conduct. Id. at 12-13. And there is an inherent bias towards damages rather than injunctive remedies. Id. at 13, 16-20-24. NPCA discusses at some length a particularly egregious example of this final bias in New Mexico. Id. at 20-24.


As we’ve said before, there are far more of these government by contingent fee cases now than there used to be. The current recession only intensifies the pressure on states to look for sources of revenue beyond traditional taxes. And this case demonstrates that contingent fee lawyers care little, if at all, whether the programs they are purportedly representing get wrecked as a consequence of ill-conceived litigation. We hope these briefs can be a resource for fighting the good fight and stopping these egregious abuses of power.