Friday, March 01, 2013

Five Uneasy Theses


We’ve been pondering what to do with the latest 70+ page whopper from the Philadelphia Court of Common Pleas for a couple of weeks.  All the while Maya v. Benefit Risk Management, 2012 Phila. Ct. Com. Pl. Lexis 449 (Pa. C.P. Philadelphia Co. Dec. 31, 2012) (also at 2013 WL 663158 – but essentially useless due to lack of internal pagination), has been sitting around, begging for us to take it on.

What would it take to make Maya better?

Well, just about everything would have to be substituted.  If that happened the $10 million plaintiff’s verdict in Maya would be toast….  Which reminds of the classic substitution scene from the movie Five Easy Pieces (hence the title of the post).  That was pretty brutal, but so is the opinion in Maya.  We’ll try to be less brutal in our analysis than Jack Nicholson was before he became a Lakers fan.  But without any substitutions – well, ATRA might want to think again before letting the Philadelphia court system off the hook.

A lot of things could be said about the Maya decision – since it touches on so many issues.  But we’ll limit ourselves to five – the five theses in Maya that are just plain wrong.

Waiver for Preserving Too Many Issues

Maya was another high-stakes SJS/TENS case.  This medical condition is terrible, but it is an example of what used to be called an “idiosyncratic reaction.”  Most doctors – at least those not serving as plaintiffs’ experts – admit that they don’t know what triggers the disease.  It’s been blamed on just about every drug (prescription or non-prescription) imaginable, but it could just as well be a reaction to something else in the environment, something that's ordinarily non-bioreactive, such as plastic.  But plastic manufacturers don’t have to keep records of adverse reactions.  Drug companies do, and those reactions duly get listed on product labeling – whether there’s causation or not.

The plaintiffs in SJS/TENS cases are invariably sympathetic, as they are almost always horribly injured.  And drug companies are deep pockets, so these cases provide one instance after another (Bartlett was another SJS/TENS case) of courts leaning over backwards to justify liability.  Defendants, well aware of these propensities, seek to preserve whatever they can for appeal – leading (as in Bartlett) to long opinions and lots of issues on the trial court level.

That’s the first uneasy thesis in Maya.  Using “only in Philadelphia” reasoning, Maya accepts the argument that the defendant should be punished with blanket waiver for preserving too many issues.  Maya, 2012 Phila. Ct. Com. Pl. Lexis 449, at *31-37.  Yup, the argument essentially is, if the judge gets enough things wrong, s/he can go one step further and sock the wronged party with waiver for preserving and pursuing objections to all that error.  Yeah, we know, that kind of waiver only rewards and encourages more error ... but we are talking Philadelphia here.
 
This waiver argument was supported by a few Superior Court (that’s Pennsylvania’s intermediate appellate court) cases from between 2004 and 2007 (Tucker v. R.M. Tours, 939 A.2d 343, 346 (Pa. Super. 2007); Arnoldy v. Forklift, L.P., 927 A.2d 257, 261 (Pa. Super. 2007); Kanter v. Epstein, 866 A.2d 394, 401 (Pa. Super. 2004)).  It asserts that a Pennsylvania appellate rule (Pa. R.A.P. 1925(b)) is violated by the losing side’s “preserv[ation of] every unfavorable ruling and contested issue.”  2012 Phila. Ct. Com. Pl. Lexis 449, at *35.  In Maya, (a trial described elsewhere in the opinion as involving “length and complexity,” and lasting “longer than anyone anticipated,”  id. at *107, *111), this preservation resulted in a Rule 1925 statement of “11 pages outlining 23 numbered paragraphs/issues, several of these paragraphs contain numerous sub-issues.”  Id. at *35.  Relying on the “concise” language found in Rule 1925 and the aforementioned cases Maya held:

Defendant. . .’s Pa. R.A.P. 1925(b) statement  of errors is clearly a violation of the rules of appellate procedure and a waiver of all issues.  It is respectfully recommended that the appeal be quashed since the statement of errors is anything but concise.

2012 Phila. Ct. Com. Pl. Lexis 449, at *36-37.

This is the first place where we just have to say “no.”  In a more recent decision, the Pennsylvania Supreme Court ditched that line of Superior Court reasoning.  Amazingly, that case, Eiser v. Brown & Williamson Tobacco Corp., 938 A.2d 417 (Pa. 2007) (3-2 decision with two concurrences in the result), was not even cited in Maya.  Eisner involved another long and complex product liability trial in Philadelphia in which the trial court asserted the same sort of waiver (under the same Superior Court line of precedent).  In Eisner the defendant preserved fifty-something issues, which the trial judge considered to be “outrageous.”  Id. at 423.  The Supreme Court reversed, holding:

Litigants who come to the courts of this Commonwealth, and attorneys who practice before these courts, must be able to preserve issues for appeal and move forward with the appellate process without fear of waiver.  Therefore, we instruct lower courts to address, on the merits, all issues raised in good faith.  With today's holding, this Court intends to clarify the confusion and quell the consternation related to waiver under Rule 1925(b) and the number of issues raised.  This standard provides, where necessary, a familiar tool to assess the basis for the issues raised in a given Rule 1925(b) statement.  In some cases, a lack of good faith will provide a basis upon which to find waiver.

Id. at 420-21.  “[W]e encourage the lower courts to recognize that on rare occasions [in “complicated multi-count lawsuit with numerous defendants resulting in many trial court rulings”] a party may, in good faith, believe that a large number of issues are worthy of pursuing on appeal.”  Id. at 427.  Thus, without an express finding of bad faith, there isn’t any waiver under Rule 1925 simply because the losing side, in a long and complex proceeding, preserves issues that the trial court deems excessive.  See also Dunson v. McNeil-PPC, Inc., 2009 WL 1178651, at *3-4 (Pa. Super. April 24, 2009) (reversing another Philadelphia C.P. blanket waiver finding in almost identical case under Eiser) (unpublished).

Maya is the epitome of the "complicated" case example in Eiser. Moreover, there is no finding of bad faith in Maya – only a rather snide comment that “[h]ow Defendant . . . intends to condense its current statement of errors into two pages to conform to [appellate rules] . . . will be a feat of its own.”  2012 Phila. Ct. Com. Pl. Lexis 449, at *36.  Thus, the Maya decision is simply wrong under the controlling Eiser case, which the opinion notably fails to cite.  That’s no mean feat either, given that Eiser discussed Kanter at great length, which even minimal Shepardization would have picked up.

Choice of Law

The second uneasy thesis in Maya is the application of Pennsylvania law to liability and compensatory damages.  Maya is an all-too-familiar litigation tourism situation.  “Tennessee is where [minor plaintiff] resided at the time of her injuries, where the [drug] was purchased, and where [her] injuries and initial treatment occurred.”  2012 Phila. Ct. Com. Pl. Lexis 449, at *64.  Yet due to Philadelphia’s pro-plaintiff reputation (which Maya only reinforces) plaintiff brought suit in the City of Brotherly Love, because the target defendant was unfortunate enough to be headquartered there.

Nonetheless, Maya applied Pennsylvania law to liability for compensatory damages.  “Pennsylvania is where [drug] was manufactured, where the decisions surrounding the language of warnings on the label were made, where the research on the product was conducted, and  where the principal personnel [listing 11 individuals]involved either resided or worked.”  2012 Phila. Ct. Com. Pl. Lexis 449, at *65-66.

What precedent does Maya cite for overriding the law of the place of residence/injury as to liability for compensatory damages?

Nothing.

Maya offers not a single case where any non-resident, injured by a product that the non-resident purchased where s/he lived, has avoided application of home state law.  By contrast, there are plenty of cases rejecting application of Pennsylvania law in these circumstances.  Most on point – and we’d say a fortiori – is Giovanetti v. Johns–Manville Corp., 539 A.2d 871 (1988), where the defendants were asbestos manufacturers headquartered in Pennsylvania and the plaintiff was a New Jersey resident injured, mostly, in New Jersey (but also a little in Pennsylvania).  Giovanetti held that New Jersey law, the law of the plaintiff’s residence, was properly applied:

In weighing the relative interests of Pennsylvania and New Jersey in this particular litigation, we conclude that New Jersey law is more appropriately applied.  Because six of the appellee corporations are Pennsylvania-based, Pennsylvania can certainly be viewed as possessing a legitimate interest in ensuring that Pennsylvania companies do not manufacture or distribute hazardous products which cause injury. That interest, however, is clearly eclipsed by the numerous contacts between New Jersey and the present cause of action. Giovanetti, a resident of New Jersey, spent twenty-seven of his working years in New Jersey, as opposed to only two years working in Pennsylvania. Any relationship he had with the manufacturers and distributors of the asbestos products was centered in New Jersey.

Id. at 873 (emphasis added).  Like Eiser on waiver, Giovanetti is controlling law on choice of law issues, and is not cited in Maya.  Cf. Van Doren v. Coe Press Equipment Corp., 592 F. Supp.2d 776, 785-86 (E.D. Pa. 2008) (applying same principle on converse facts – Pennsylvania law applies where Pennsylvanian injured by product made by out-of-state corporation).

The same choice-of-law result, application of the law of residence/injury, has been reached over and over again in drug product liability cases where the defendants are headquartered in Pennsylvania:

[T]he court must determine whether Pennsylvania has a greater interest in the application of its law over the interests of the states in which class members were prescribed and ingested the [drugs].  The ingestion and prescription of these [drugs] occurred on a nationwide basis.  Most of the proposed class members have no ties whatsoever with Pennsylvania.  Although [defendant] has its principal offices in . . . Pennsylvania and many of [its] activities regarding the drugs at issue occurred in Pennsylvania, [it] conducted its FDA contacts and various marketing efforts in other jurisdictions as well.  In light of all the circumstances, the court finds that the jurisdictions in which each class member was prescribed and ingested the [drugs] have a strong interest in applying their applicable law to the sale, prescription and ingestion of pharmaceuticals within its borders, which is the conduct which gave rise to the class members’ claims.

In re Diet Drugs Products Liability Litigation, 1999 WL 673066, at *15 (E.D. Pa. Aug. 26, 1999); accord, e.g., Lewis v. Bayer AG, 70 Pa. D. & C.4th 52, 78 (Pa. C.P Philadelphia Co. 2004) (“Pennsylvania's only contact is the fact that the company does business in Pennsylvania. The contacts of the states where the putative class resides are more substantial and have a stronger interest in applying their applicable law to the sale, prescription and ingestion of pharmaceuticals within its borders”); AFSCME v. Cephalon, Inc., 790 F. Supp.2d 313, 321-22 (E.D. Pa. 2011) (same, in consumer fraud case); Knipe v. SmithKline Beecham, 583 F. Supp.2d 602, 616 (E.D. Pa. 2008) (“jurisdiction in which the drug was prescribed and ingested clearly maintains the strongest interest in applying its applicable law to regulate the sale, prescription and ingestion of pharmaceuticals within its borders”; Pennsylvania principal place of business not as significant); Blain v. Smithkline Beecham Corp., 240 F.R.D. 179, 193 (E.D. Pa. 2007) (“[a]lthough [defendant] is a Pennsylvania corporation headquartered here. . . , the state having the most significant contacts and relationship to the liability issue is each class member's home state”); Bearden v. Wyeth, 482 F. Supp.2d 614, 622 (E.D. Pa. 2006) “in similar cases where the plaintiff was injured in his home state, both Pennsylvania state courts and federal courts applying Pennsylvania choice of law principles have refused to apply Pennsylvania substantive law”).

The only instance in which we’ve seen principal place of business trump residence/injury is on the issue of punitive damages – where some courts (in analysis we have mixed feelings about, depending on whom we represent) have held that because punitives focus is on corporate behavior, the law of the corporation’s PPB controls.  E.g., Daniel v. Wyeth Pharmaceuticals, Inc., 15 A.3d 909, 935 n.17 (Pa. Super.), appeal pending, 32 A.3d 1260 (Pa. 2011); contra, Wolfe v. McNeil-PPC, Inc., 703 F. Supp.2d 487, 493-94 (E.D. Pa. 2010).  But that’s punitive damages, and while the defendant in Maya was undoubtedly prejudiced at trial by the presence of punitive damages evidence and arguments, the jury did not award any punitive damages.  Otherwise, the legal landscape is quite stark.  Neither Daniel, nor any Pennsylvania court as far as we know has ever applied corporate home state law to compensatory damage claims brought by plaintiffs injured in other states.  Certainly, nothing is cited.

Thus, on choice of law, as well, we have to conclude that Maya is just plain wrong.  There’s no support for the proposition that principal place of business law ever controls over residence/injury law in product liability cases on compensatory damages issues.  There is plenty  of law, including controlling law, to the contrary.  Perhaps sensing error, Maya dredges up another waiver issue – that an old statute 42 Pa. C.S. §5327 required “notice in [the party’s] pleadings or other reasonable written notice” be given of intent to rely on out-of-state law.  2012 Phila. Ct. Com. Pl. Lexis 449, at *69.

Huh?  A defendant must give formal notice to a litigation tourist of intent to rely on that interloping plaintiff’s home state's law?

That’s what Maya holds, so first, dear readers, take this as a warning.  Don’t fall into a Philadelphia trap for the unwary.  This part of Maya is archetypical [ATRA descriptive adjective] jurisdiction behavior.  Even though it’s facially ridiculous, it can’t hurt to plead something like “Defendant intends to rely upon the law of the plaintiff’s state of residence, to the extent that it applies.” in every answer in a Philadelphia case.  Better safe than sorry.

But what of §5327?  Maya cites one case, Commonwealth v. Manley, 985 A.2d 256 (Pa. Super. 2009), a criminal case, in support of its waiver argument.  2012 Phila. Ct. Com. Pl. Lexis 449, at *69.  That a criminal case could raise such issues struck us as rather odd, so we took a look.  What was waived in Manley was a surprise attempt to rely on federal sentencing guidelines in a Pennsylvania case.  Specifically, “a guilty plea agreement that [the defendant] had with the federal government in an unrelated case.  985 A.2d at 271.  Manley was classic sandbagging, a bolt from the blue surprise.  That’s about as far from relying on a plaintiff’s home-state law as you can get.

Not only did the defendant in Maya mention “Tennessee” law – albeit obliquely – in its pleading, 2012 Phila. Ct. Com. Pl. Lexis 449, at *69, but the statute specifically provides that any “reasonable written notice,” not just the pleadings, is enough.  We have a hard time believing that, over the course of this lengthy, complex litigation, the defendant never once raised any issue of Tennessee law.  That’s enough under §5327.  E.g., Minnick v. Scheffy, 65 Pa. D. & C. 1, 10 (Pa. C.P. Northampton Co. 1949) (“[i]n the case at bar we do not have the type of specific notice . . ., but we do have notice at the very inception of the proceedings through plaintiffs' complaint, that the accident occurred in [in the other state]”).  If the complaint in Maya did not specify that the plaintiff was a resident of Tennessee, it would be subject to preliminary objection.  Likewise, the litigation could not have proceeded very far without some written document specifying that the plaintiff's injury occurred in Tennessee.  The only remotely comparable precedent holds that nothing more is needed.  Requiring anything more, and certainly the “gotcha” waiver claim in Maya, is just playing games that exalt form over substance.

Strict Liability Versus Negligence

The third uneasy thesis in Maya has to do with the opinion’s inability to keep negligence and strict liability straight.  Given that Maya is in state, not federal, court, this failure to separate the two is erroneous under Pennsylvania's Azzarello super-strict liability regime.

Maya makes a hash out of the law.  The drug in question is OTC, not a prescription drug.  E.g., 2012 Phila. Ct. Com. Pl. Lexis 449, at *1.  Nonetheless Maya goes on to apply Hahn v. Richter, 673 A.2d 888 (Pa. 1996), which bars strict liability in prescription drug cases.  2012 Phila. Ct. Com. Pl. Lexis 449, at *58 (“pursuant to Hahn, supra, the failure to warn claim will be analyzed and adjudicated in accordance with the negligence standard”).  We don’t disagree with that – although it’s by no means settled.  Having decided to apply Hahn, and therefore negligence standards, Maya then messes things up by importing strict liability:

Pennsylvania, on the other hand, does not permit negligence concepts in a strict liability defective design claim pursuant to the Restatement (Second) of Torts, Section 402A.  A product need be made safe only for its intended user.  The court explicitly stated that a manufacturer will not be held strictly liable for failing to design a product that was safe for use by any reasonably foreseeable user as such a standard would improperly import negligence concepts into strict liability law.

Id. at *62-63.

At this point we’re not sure what the heck’s going on.  To the extent that Maya is allowing a strict liability claim for design defect, that’s simply not permitted under Hahn.  In Lance v. Wyeth, 4 A.3d 160 (Pa. Super. 2010), appeal perpetually pending on other issues, 15 A.3d 429 (Pa. 2011), the court expressly rejected strict liability design defect:

[Plaintiff’s] proposed cause of action duplicates a design defect claim, seeking to impose strict liability on [defendant] because [the drug] was unreasonably dangerous.  With our Supreme Court’s adoption [in Hahn] of comment k, a design defect claim for strict liability is not cognizable under Pennsylvania law when it is asserted against a manufacturer of prescription drugs.  For purposes of strict liability and §402A, a drug cannot be deemed unreasonably dangerous, even if it is defectively designed, so long as the drug is manufactured properly and contains adequate warnings.

Id. at 165 (citations and footnote omitted) (emphasis added).  So, given that Maya is applying Hahn, the discussion of strict liability design defect is either inexplicable, or erroneous, or both.

That’s not all of the negligence-strict liability confusion.  It extends to warning claims as well, which were a more significant basis for liability in Maya.  In allowing liability for not warning of idiosyncratic reactions, Maya imports strict liability back into the warning claim, notwithstanding Hahn:

While a manufacturer does not have a duty to warn of every conceivable danger, the mere fact that a condition is idiosyncratic or rare does not end the analysis of whether there is a legal duty to warn.  A manufacturer of a product has a duty to provide those warnings or instructions necessary to make the product safe for its intended use.

2012 Phila. Ct. Com. Pl. Lexis 449, at *82 (emphasis added), citing Mackowick v. Westinghouse Electric Corp., 575 A.2d 100, 102 (Pa. 1990).  Mackowick, however, was entirely a strict liability case.  575 A.2d at 101 (“we conclude that as a matter of law appellant failed to state a cause of action in strict liability”).  The quoted language, about “mak[ing] the product safe for its intended use,” is solely a strict liability concept.  E.g. Pennsylvania Dep’t of General Services v. United States Mineral Products Co., 898 A.2d 590, 600 (Pa. 2006) (“the case was tried solely under a strict-liability theory. In such actions, this Court has held that a manufacturer can be deemed liable only for harm that occurs in connection with a product's intended use by an intended user”); see Azzarello v. Black Brothers Co., 480 Pa. 547, 391 A.2d 1020, 1027 (1978) (defining defect as when “the product left the supplier's control lacking any element necessary to make it safe for its intended use”).

The end result is that Maya was evidently tried in a manner that was neither fish nor fowl – something that might have been called “negligence” but obviously from the opinion was shot through with extraneous strict liability concepts (or the reverse, if one doesn’t apply Hahn).  However, in Pennsylvania state court, as opposed to federal court (as we’ve discussed several times including here and here), it’s a big no-no to mix negligence and strict liability concepts together.  Thus, Maya’s chimerical causes of action are yet another trangression against controlling law.
 
Reliance on Risks/Conditions the Plaintiff Did Not Suffer

SJS/TENS is bad enough, but Maya allowed plaintiffs to overreach and try the case in part on the basis of failure to warn about other risks, such as “gastrointestinal bleeds and liver failure” that the minor plaintiff indisputably never had.  Maya, 2012 Phila. Ct. Com. Pl. Lexis 449, at *139.  The excuse given was that these other risks were relevant to there being a safer alternative product (Tylenol, as opposed to Motrin), that the plaintiff otherwise might have bought and given to the minor plaintiff in preference to the drug at issue.

Whether there’s a duty to warn that some other product is allegedly “safer” is a controversial topic issue worthy of its own post.  However, we’ll be the first to admit that Pennsylvania law is not settled on that point.  Something being a bad idea that's been rejected elsewhere is not how we’re defining “uneasy theses” in this post, though.  Today, we’re deliberately limiting ourselves to issues where Maya is flatly inconsistent with controlling Pennsylvania law.  If there's no on-point appellate law, we're giving Maya a pass.

The fourth uneasy thesis, thus, is not the duty question, but rather the plaintiffs’ reliance upon irrelevant risks were never materialized in the case.  Basing a failure to warn action on inchoate risks never suffered by the plaintiff in question was barred in Cochran v. Wyeth, Inc., 3 A.3d 673 (Pa. Super. 2010), as non-causal as a matter of law:

[W]e are persuaded by the jurisdictions that have concluded a plaintiff cannot establish proximate causation where the non-disclosed risk never materialized into an injury. . . .  [T]he non-disclosed risk must manifest itself into actual injury in order for a plaintiff to establish proximate causation. . . .  [B]efore a plaintiff can prove that a non-disclosed risk would have altered the physician’s decision to prescribe a drug, the plaintiff must first demonstrate that he/she suffered from the precise injury that the manufacturer allegedly failed to disclose. Only if the plaintiff carries this initial burden, can he/she establish proximate causation with evidence that the physician would not have prescribed a drug had the physician known of the non-disclosed risk.

Id. at 679-81 (citations and footnote omitted) (emphasis added).

What the Superior Court disapproved in Cochran – using unmaterialized risks to support an argument that the drug would never have been used – was precisely what Maya allowed, only since Maya involved an OTC drug, the relevant actor who supposedly would have made the different choice was the purchaser rather than a doctor.  2012 Phila. Ct. Com. Pl. Lexis 449, at *140 (“[t]hese claimed warnings would have offered Plaintiff . . .  additional information on whether to purchase or not the medication”).  As a matter of law, under Cochrane the limitations of proximate cause preclude arguments that a failure to warn of risks that never occurred would have deterred the purchase/prescription of a drug.  Once again, an uneasy thesis in Maya is simply in error under controlling Pennsylvania law.

Application of the Frye Test

The fifth uneasy thesis in Maya is the unduly narrow scope given to the Frye “general acceptance” test for expert testimony under Pennsylvania law.  Maya states flatly:

The Frye principles only apply when a party seeks to introduce novel scientific evidence.  Contrary to Defendant. . .’s contentions, Frye does not apply every time science enters the courtroom.  Frye is an exclusionary rule of evidence and must be construed narrowly.

2012 Phila. Ct. Com. Pl. Lexis 449, at *156-57 (citations omitted).

This statement of Pennsylvania law is just as flatly wrong.

The cases Maya cites, chiefly, Trach v. Fellin, 817 A.2d 1102, 1108 (Pa. Super. 2003), are not good law anymore.  Once again, Maya ignores – and doesn’t even cite – a more recent by the Pennsylvania Supreme Court.  Specifically, in Betz v. Pneumo Abex LLC, 44 A.3d 27 (Pa. 2012), the court considered the same argument for a “narrow” reading of Frye’s applicability and explicitly rejected it:

[T]his Court has recognized the influential nature of expert testimony on complex subjects, and the potential that distortions have to mislead laypersons.  It would be na├»ve, in this regard, to assume that the possibility for distortion is limited to the very newest realms of science.  We therefore agree with [defendants] that a reasonably broad meaning should be ascribed to the term “novel.”  Furthermore, we conclude that a Frye hearing is warranted when a trial judge has articulable grounds to believe that an expert witness has not applied accepted scientific methodology in a conventional fashion in reaching his or her conclusions.   We believe a narrower approach would unduly constrain trial courts in the appropriate exercise of their discretion in determining the admissibility of evidence.

44 A.3d at 53 (citations omitted) (emphasis added).  Thus the Pennsylvania Supreme Court has rejected the “narrow” reading of Frye exemplified by the Superior Court’s Trach decision.  Once again Maya mistated controlling law, in this instance throwing into question its analysis of the defendant’s various challenges to the plaintiff’s numerous expert witnesses.  That's another uneasy thesis.

*          *          *          *

So we have five uneasy theses, issues where Maya got it wrong and ignored controlling Pennsylvania precedent from either the Supreme or Superior Court.  There are lots of other reasons to criticize Maya – failure to prove essential elements of various claims, the ins and outs of the plaintiffs’ experts, a variety of evidentiary rulings, permitting certain conduct by the plaintiffs’ counsel – but those other points are mostly case-specific and fact-sensitive (and reviewable only for abuse of discretion).  But on the five issues we’ve discussed, we don’t see any ifs, ands, or buts, Maya just got the law wrong.

2 comments:

Anonymous said...

"[T]he target defendant was unfortunate enough to be headquartered there." The implication is that the location of corporate headquarters is fortuitous, as if by happenstance. You know better than that. Otherwise, interesting post.

Bexis said...

The implication was not intended to be fortuity, but rather how all this litigation risks killing the goose that lays the golden eggs.

- Bexis