Friday, February 15, 2013

The Latest On Aredia/Zometa


With both sides lobbing us cases (yes the PR war over Aredia/Zometa has heated up to the point that even plaintiffs send us stuff) in the ongoing Aredia/Zometa (hereafter "A/Z" - for obvious reasons) product liability struggle, we know of four new decisions.  Here’s what’s happening (in chronological order). 

On February 8, the Fourth Circuit, in a (thankfully) unpublished and thus non-precedential opinion, affirmed the plaintiff’s verdict in Fussmann.  See Fussman v. Novartis Pharmaceuticals Corp., ___ Fed. Appx. ___, 2013 WL 474330 (4th Cir. Feb. 8, 2013).  This is the case where an obviously runaway jury awarded over $12 million in punitive damages.  Well, after that punitive damages award was reduced by over 93% (to $861,000), the Fourth Circuit affirmed it, stating that there was “sufficient foundation” to find “willful” conduct.  Id. at *8.  It’s hard to comment, because the opinion doesn’t state what this conduct evidence was, but any time a punitive award is affirmed (a fortunately rare occurrence), we’re not happy.

What struck us about this aspect of Fussman is the lack of any discussion about the magnitude of the alleged increased risk posed by A/Z.  Our biggest problem with punitive damages in prescription medical product cases is that the absolute risks of harm are generally small – on the order of 1% or less (often much less).  In such cases, even if the product doubled or trebled a pre-existing risk, we’re still talking about a small percentage likelihood that any particular person gets hurt.  The Restatement, on the other hand, uses a “substantial certainty” of harm standard for an inference of intent in the punitive damages context.  See Restatement (Second) of Torts §§8A, 500 (1965).  Lots of cases address this point – here’s a representative example: 

This approach is consistent with the view expressed by American Law Institute in distinguishing recklessness − where a defendant knows there is a high risk of physical harm to another, but “deliberately proceeds to act, or fails to act, in conscious disregard of ... that risk” − from simple negligence, characterized as “mere inadvertence, incompetence, unskillfulness, or a failure to take precautions.”  Restatement (Second) of Torts § 500 cmts. a & g (1965).  The latter, lacking malice, cannot support punitive damages, while the conscious disregard of a known and sufficiently serious risk of harm is the equal of malice.  [Courts] regularly emphasize[e] the awareness of risk necessary to justify an award of punitive damages: only in those instances where an “actor has intentionally done an act of an unreasonable character in disregard of a known or obvious risk that was so great as to make it highly probable that harm would follow, and which thus is usually accompanied by a conscious indifference to the consequences”. . . . 
Accordingly, we hold that the culpability necessary for an award of punitive damages based on reckless or wanton misconduct requires evidence that the defendant acted, or failed to act, in conscious and deliberate disregard of a known, substantial and intolerable risk of harm to the plaintiff, with the knowledge that the acts or omissions were substantially certain to result in the threatened harm.

Fly Fish Vermont, Inc. v. Chapin Hill Estates, Inc., 996 A.2d 1167, 1176 (Vt. 2010) (numerous citations omitted) (emphasis added).  Accord, e.g., Strenke v. Hogner, 694 N.W.2d 296, 304-05 (Wis. 2005).  There are lots more examples - perhaps enough for a separate post.

So what happened in Fussman?  Blame the North Carolina legislature.  They passed a punitive damages statute that, in this respect, made things worse.  The statute specifies “willful or wanton conduct” as an “aggravating factor” that permits punitive damages.  N.C. Gen. Stat. §1D-15(a).  But then, instead of requiring a high degree of risk, the statute demoted this common-law requirement to merely one of a bunch of factors that a jury may consider.  See N.C. Gen. Stat. §1D-35(2) (listing “[t]he likelihood, at the relevant time, of serious harm” as one of nine factors that “the trier of fact . . . may consider”).  So in North Carolina, it appears a plaintiff can recover punitive damages for conduct that, even if “willful and wanton,” posed only a minuscule actual increased risk of serious harm.

The rest of Fussman consisted chiefly of abuse of discretion-standard review of evidentiary decisions that are specific to the A/Z litigation.  The only one of these with much broader implications concerns the trial court’s introduction of a post-injury label change.  2013 WL 474330, at *5.  That we don’t like, because subsequent label changes are subsequent remedial measures.  It turns out, though, that the Fourth Circuit doesn’t disagree – it just found any error to be harmless.  Id. (“To the extent that the district court erred in admitting evidence of the 2007 label revision, such error did not prejudice [defendant]”).  In our experience, letting a jury see that the label changed in some relevant way after the plaintiff used the drug is not so harmless, especially in a case with punitive damages on the line.  That’s why, ever since the Federal Rules of Evidence were adopted in back in 1975, there’s been a specific rule (Rule 407) explicitly barring this type of evidence – a prohibition that’s only been made stronger over time.

Things did get better in A/Z land, however.

On February 7 two orders were entered in an A/Z case called Chiles.  In Chiles v. Novartis Pharmaceuticals Corp., ___ F. Supp.2d ___, 2013 WL 539891 (M.D. Fla. Feb. 7, 2013), plaintiffs and the defendant had another knock-down, drag-out battle over choice of law on punitive damages.  The plaintiff, a Florida resident, sought to apply Florida law, while the defendant, a New Jersey corporation, urged New Jersey law.  That’s because New Jersey law does not allow punitive damages where a drug complies with FDA labeling requirements (and the statute’s fraud on the FDA exception is preempted).  The defense won:

Defendant contends that the fact that the injury occurred in Florida is unimportant because Plaintiffs presence in the state was fortuitous; it marketed [the drug] nationwide. . . .  Plaintiffs have failed to rebut Defendant’s argument that the decisions at issue that potentially give rise to punitive damages were made from Defendant's New Jersey headquarters.
Defendant is correct that New Jersey has a more significant relationship to the issue of punitive damages than Plaintiff's home state in light of [defendant’s] contacts with New Jersey and the Restatement’s §6 principles.  Because the relevant conduct at issue took place primarily in New Jersey, that state’s law on punitive damages is applicable under the Florida choice of law analysis.  Thus, Defendant’s motion to apply New Jersey law to the issue of punitive damages is granted.

Chiles, 2013 WL 539891, at *2-3 (citations omitted).  While we view this choice of law issue from a “where you stand depends on where you sit” perspective – sometimes one side of this argument helps any given client; sometimes the other – it’s certainly an important issue in A/Z (just compare New Jersey to North Carolina, for example), and the good guys prevailed in Chiles.

Chiles also involved the admissibility of the ubiquitous Dr. Suzanne Parisian.  The court let her in, id. at 3 (which we don’t like), but not before her wings were significantly clipped by the excision of many of the most objectionable aspects of her testimony, those being:  “medical causation, corporate state of mind, industry standards, monitoring of the clinical trials and ‘ghostwriting’.”  Id.  Heck, that’s most of her shtick.

The win-some/lose-some nature of Chiles continues in the second order, which concerns Daubert motions not involving Dr. Parisian and summary judgment.  Most of the opinion is a repeat (at least the court thinks so) of motions already decided in the A/Z multi-district litigation context, which the court declined to revisit.  Slip op. at 5-8.  As for new motions, one treating doctor was found incompetent to testify to medical causation, another was allowed, and the third was reserved until trial.  Id. at 12-13.  As for summary judgment, once the experts were admitted, denial of most of it was foreordained.  On the remainder, the plaintiff just squeaked by on warning causation, as one of his three treaters (but not the others) offered testimony that the court found sufficient to conclude that a different warning would make a difference (in light of the plaintiff’s inevitable, self-serving testimony that he would not have taken the drug − prescribed to fight cancer, for crying out loud − had he only been told about its risks).  Id. at 19.  The other part of the summary judgment motion was granted.  In Florida, implied warranty requires privity.  Id. at 20.

Finally, on February 4, in McGuinnes v. Novartis Pharmaceuticals Corp., ___ F. Supp.2d ___, 2013 WL 425331 (M.D. Fla. Feb. 4, 2013), the court blew out another A-Z case, this time because the plaintiff died − not uncommon, given that A-Z is used in the treatment of metastatic cancer − and the plaintiff’s counsel failed to make a proper substitution.  (For you non-lawyers, dead people cannot sue, only executors of their estates can).

In McGuinnes the defendant did what it was supposed to when it found out that the plaintiff died, that being filing and serving a paper called a “suggestion of death.”  Id. at *1.  The rules provide 90 days after that for the substitution of a proper representative to continue the litigation, but nothing happened.  This inaction impeded the defendant’s ability to conduct basic discovery – getting medical records – because there was nobody to sign the necessary consents to release of this information.  Id.

Frustrated, after the 90 days elapsed, the defendant moved to dismiss.  That finally produced a response, but the response was not only procedurally improper but failed to include letters of administration to establish that the right person was being substituted.  Id.  Finding nothing that would constitute “excusable neglect,” the court dismissed the following excuses:

  • Ignorance − Counsel “is well aware of Rule 25 and its implications” because he “previously missed the same Rule 25(a) deadline last fall in a similar case.”  McGuinnes, 2013 WL 425331, at *3.
  • Too much work – “the ability of Plaintiff's counsel to manage his caseload is not a sufficient reason to disregard the Federal Rules of Civil Procedure.”  Id.
  • Lack of communication with plaintiff – Plaintiff had given a “durable power of attorney” to the person to be substituted.  Id.
  • Lack of communication with the person to be substituted – Prior filings were “internally inconsistent,” having “argue[d] that [this person] has been involved actively in this litigation,”  Id.
  • Lack of prejudice – belied by “delays in discovery, including an impediment to obtaining medical records.”  Id.

Anyway, that’s what we know has happened in A/Z litigation, at least during the first part of February 2013.  Obviously, it’s enough to keep a lot of lawyers busy.

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