NJ Court Affirms Role of Learned Intermediary Doctrine

A New Jersey court overseeing the centralized litigation regarding the human tissue product AlloDerm has issued a noteworthy ruling in a bellwether case on the duty to warn. See Simineri, et al. v. LifeCell Corp., No. L-5972-11 (Super. Ct. N.J.).

Plaintiffs moved for partial summary judgment on the issue of the learned intermediary doctrine under the New Jersey Products Liability Act. The FDA regulates AlloDerm as a banked human tissue product, not as a drug or medical device, so the motion raised the issue whether the doctrine applied to this type of product. 

Under the Act, N.J.S.A. Sect. 2A:58C-4, an adequate warning must be given to the persons by whom the product is intended to be used, or in the case of prescription drugs and devices, taking into account the characteristics of, and the ordinary knowledge common to, the prescribing physician. Under New Jersey law, a pharmaceutical manufacturer discharges its duty to warn the ultimate user of prescription drugs by supplying physicians with information about the drug’s dangerous propensities. To the extent that the pharmaceutical manufacturer is relived of the duty to warn the ultimate user, the treating physician as the learned intermediary assumes the responsibility to warn the patient of the risks involved in using the prescription product.

The court here noted that the NJ Supreme Court has established several rationales for favoring application of the learned intermediary doctrine, including: 1) the desire to avoid intrusion into the doctor-patient relationship; 2) the superior position of doctors to communicate important information about risks to their patients; 3) the inability of drug makers to communicate effectively and directly with patients; and 4) the nearly impossible task of translating complex medical information and risk factors into terms understandable to the average consumer.

Plaintiffs argued that the LID was inapplicable to AlloDerm because it was not regulated by the FDA as a prescription drug or medical device and that it was supposedly “well-established” that the LID somehow only applies to FDA-approved drugs and devices. Plaintiffs cited a variety of cases, but, said the court, none of the cases relied on actually based their application of the LID on the FDA’s classification of medical products as drugs or devices. Rather, the cases cited by plaintiffs focused on the traditional rationales underpinning the LID: that where the product is available only through the intervention of a licensed physician, any duty to warn is owed to the physician and not the patient. The cases instead stood for the proposition that prescribing physicians act as learned intermediaries between the manufacturer and consumer, and those doctors stand in the best position to evaluate the patient’s needs and assess the risks and benefits of a particular treatment. What was sufficient, and what plaintiffs seemed to ignore, was the fact that AlloDerm is regulated by the FDA. Plaintiffs were unable to explain how the particular FDA classification had any real bearing on the application of the doctrine.

The court next disagreed with plaintiff’s argument that applying the LID to the product would somehow be an expansion of the doctrine. The court believed it was simply considering the well-established rationales underlying the LID and applying them to the product.  It was significant that the product was not marketed or sold directly to patients. It can only be obtained through a licensed healthcare professional. Indeed it must be implanted into the patient by the physician. The patient is necessarily relying upon the doctor’s knowledge, skill, and services, weighing the risks and benefits before the implantation of the product.

Under these circumstances, to require the defendant “to communicate would unnecessarily intrude on the doctor-patient relationship. In a surgical context…the doctor has even more prominent role in evaluating and selecting the most appropriate course of treatment.” The surgeon, rather than the manufacturer, concluded the court, is best positioned to convey the appropriate information to the patient, who was unlikely ever to inspect the product.   A physician choosing to implant this product must consider a number of factors such as the patient’s medical history and co-morbidities, as well as the specific surgical techniques employed. The physician is in the best position with regard to this product to take into account the susceptibilities of the patient, and to give an individualized warning to the ultimate user.

Plaintiff's motion denied.  

Memorial Day

No legal post. Today is Memorial Day on which we commemorate the valiant men and women who died while serving in the American military, in defense of our nation.

Originally known as Decoration Day, Memorial Day was officially proclaimed in May, 1868 by General John Logan, national commander of the Grand Army of the Republic. Flowers were placed on the graves of Union and Confederate soldiers at Arlington National Cemetery. And at final resting places all around the country.

And, as General Patton later wrote, we should not just mourn those who died; rather, we should thank God that they lived and sacrificed for us all.

Happy Memorial Day to all our readers.

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Shook Honored in Chambers 2015

Chambers & Partners has released its 2015 edition of Chambers USA, recognizing Shook, Hardy & Bacon’s product liability, environmental, insurance, intellectual property, and labor and employment practices.  Our readers probably know that Chambers USA is published annually in May, with ranking tables and commentary.

Especially relevant for our readers, Chambers recognized the firm with a Band 1 national rating in the area of Products Liability & Mass Torts, noting Shook’s “deep bench of very experienced product liability lawyers”.

In Chambers this year, six Shook attorneys were recognized on a national level, including your humble blogger and colleagues:
• Harvey Kaplan (Product Liability & Mass Torts)
• Frank Kelly (Product Liability & Mass Torts)
• Marie Woodbury (Product Liability & Mass Torts)
• Patrick Oot (Litigation: E-Discovery)
• Kenneth Reilly (Product Liability & Mass Torts and Product Liability: Tobacco)

Of course we are proud of the recognition, which really really reflects the trust our clients place in us to help them with some of their most challenging product liability and mass tort matters.

 

Shook Again An ACC "Value Champion"

Recently, the Association of Corporate Counsel announced the 2015 winners of its annual Value Champions awards. I am proud to note that Shook – together with our client The Heico Companies – was recognized among the winners.

This is the third time your humble blogger's firm has been recognized as an ACC Value Champion  -- for three different kinds of innovations with three different clients. And I think it really does validate our efforts to to bring innovation, excellent value, and superior service to our clients. Shook becomes the first and only law firm to receive the Value Champion designation three times.

The ACC Value Champions is a component of the ACC Value Challenge, and is a unique recognition program that identifies, celebrates and publicizes successful value initiatives and collaborations between clients and their law firms and/or other legal service providers.

We of course are proud to partner with our clients to create the best possible outcomes; we appreciate the opportunity to serve The Heico Companies and all of our great clients.

 

 

State Court Affirms Striking Class Allegations Before Discovery

A New Jersey appeals court last week upheld the denial of class certification to plaintiffs with claims against automotive insurers relating to the diminished value of policyholders' vehicles. See Myska, et al. v. New Jersey Manufacturers Insurance Co., et al., No. A-4398-13T4 and A-0275-14T4 (Super. Ct. N.J.). 

Plaintiffs had been involved in separate accidents with uninsured or underinsured drivers, and were unhappy with the response of their insurance companies. What will be of interest to our readers is the class action legal issue.  We have extolled the importance and value of motions to strike class allegations and other procedural mechanisms for getting the class action issue resolved as early as possible, before expensive and wasteful discovery (even bifurcated class discovery). Here, prior to discovery, the Law Division judge concluded class certification was improper. And after review, the appeals court affirmed the denial of class certification, agreeing the controversy did not lend itself to a class action because the facts underpinning each plaintiff's claims were dependent upon the individual insurance policy provisions, the distinct vehicle damaged and the specific calculation of damages alleged, which require separate litigation of every action.

The court noted that no precise procedures are established for granting or denying class certification at the incipient stage of litigation. Rather, the NJ rules state "the court shall, at an
early practicable time, determine by order whether to certify the action." Rule 4:32-2(a).  The court rejected the view that would preclude dismissal, following the required analysis, when a court determines alleged claims do not properly lend themselves to class certification.  The certification test does not merely turn on the stage of the litigation. Rather, dismissal is dependent on the nature of the claims and the propriety of their presentation as a class action.  Thus, said the court, "we flatly reject plaintiffs' urging to impose a bright-line rule prohibiting examination of the propriety of class certification until discovery is undertaken."

Here, individualized facts and circumstances of the relationship between each insurer and its insured precluded a finding of predominance.  And the court also noted that the individual claims were not so small (approx. $15,000) as to make separate litigation impossible. 

 

Alabama Legislature Enacts Causation in Fact Requirement

There is likely no more fundamental notion in product liability law than the recognition that the defendant's product must cause the injury complained of, and thus a product maker or seller ought not be held liable for injuries caused by a product it actually didn't make or sell.  This is basic causation-in-fact, and the few courts that have tried to ignore this fundamental principle have needed to perform legal contortions and Olympic-level gymnastics to invent unworkable alternate rules.  "Market share liability" is an older, nearly extinct example, and a more modern excursion is the notion that the maker of a branded pharmaceutical product can somehow be held liable for injuries caused by the plaintiff's use of a generic version of the product, which defendant didn't make or sell.

Recently, the Alabama Legislature passed a bill to reverse their state supreme court's decision in Wyeth Inc. v. Weeks, which had allowed a patient allegedly injured by the generic drug to sue the maker of the name-brand product.  Gov. Bentley recently signed the bill, which had overwhelming bipartisan support in the Alabama House and was passed unanimously in the state Senate.

The vast majority of state and federal courts hold that a plaintiff must have used the defendant's actual product, and the law returns Alabama to this column.  SB80 requires that in any civil action for personal injury, death, or property damage caused by a product, regardless of the type of claims alleged or the theory of liability asserted, the plaintiff must prove, among the other traditional elements, that the defendant designed, manufactured, sold, or leased the particular product the use of which is alleged to have caused the injury on which the claim is based, and not just a similar or allegedly equivalent product.  Thus designers, manufacturers, sellers, or lessors of products not identified as having been used, ingested, or encountered by an allegedly injured party may not be held liable for any alleged injury.

The measure will take effect six months after becoming law. It appears to do away with not only so-called innovator liability, but also market share liability, alternative liability, conspiracy liability, and the other outlier industry-wide theories of liability in product cases. 

 

Recognition for Shook's Product Team

Who’s Who Legal: The International Who’s Who of Business Lawyers has named Shook, Hardy & Bacon as its 2015 International Product Liability Defense Law Firm of the Year.

Our Pharmaceutical and Medical Device Practice Chair Madeleine McDonough accepted the award during the recent Who’s Who Legal Awards dinner in Washington D.C.

I know our team is truly honored to be named Product Liability Defense Law Firm of the Year.  It really reflects the confidence our wonderful clients have in entrusting us with some of their most important and challenging product liability defense matters.

Class Action Reform Bill Introduced

House Judiciary Committee Chairman Bob Goodlatte (R-Va.) and Constitution and Civil Justice Subcommittee Chairman Trent Franks (R-Ariz.) recently introduced the Fairness in Class Action Litigation Act of 2015 (H.R. 1927) to modify federal class action rules.

The bill calls for reform to the current federal class action lawsuit framework by requiring classes to consist of members with the same type and extent of injury.  That is, under the bill, no federal court shall certify any proposed class unless the party seeking to maintain a class action affirmatively demonstrates through admissible evidentiary proof that each proposed class member suffered an injury of the same type and extent as the injury of the named class representative or representatives.

The Subcommittee on the Constitution and Civil Justice is scheduled to hold a legislative hearing on the bill on Wednesday, April 29, 2015, at which my partner Mark Behrens is set to testify.

The sponsors noted that the Fairness in Class Action Litigation Act is a simple, one-page bill, that furthers a common sense principle that should apply to class action lawsuits in the future. Only those people who share injuries of the same type and extent should be part of a class action lawsuit.  They view the bill as an answer to the glut of "no injury" class actions. In one sense, the bill might be seen as an enhancement of the typicality requirement.

Introduction of the bill followed a February hearing before the Constitution and Civil Justice Subcommittee on the state of class action law a decade after the enactment of the Class Action Fairness Act .

 

Shook Ranked as One of Top Firms for Woman Attorneys

Shook, Hardy & Bacon ranked 21st in Law360’s inaugural list of The 100 Best Law Firms for Female Attorneys.

For the first time ever, Law360 ranked the 100 best U.S. law firms for women, based on the firm's female representation at the partner and non-partner levels and its total number of female attorneys.

This follows on the note that Working Mother magazine and Flex-Time Lawyers named Shook among their 2014 “50 Best Law Firms for Women.” Fifty law firms were selected based on a lengthy survey of their family-friendly benefits and policies, flexibility, leadership, and compensation of women, among other factors.

 

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Chocolate Class Action Dismissed

A California federal court recently rejected a putative consumer class action alleging the defendant somehow misled customers about antioxidants in its chocolate and cocoa products.  See  Leon Khasin v. The Hershey Co., No. 5:12-cv-01862 (N.D. Calif. 3/31/15).

Plaintiff was a California consumer who, since 2008, allegedly purchased more than $25.00 of Defendant’s products, including Special Dark Chocolate, Milk Chocolate, Special Dark Kisses, Special Dark Cocoa, Natural Unsweetened Cocoa, and Sugar Free Coolmint IceBreaker Mints. Plaintiff originally made a host of claims about the marketing of these various products, but in motion practice the Court trimmed most of the claims in the suit, preserving only lead plaintiff's claim under California’s Unfair Competition Law that the statement “natural source of flavanol antioxidants” on some of the Hershey products was allegedly  "false and misleading."  

Hershey moved for summary judgment. First, Hershey argued that, to prevail on his UCL claim, plaintiff had to prove he was deceived by Hershey’s “natural source of flavanol antioxidants” statements. Second, Hershey contended that there was no evidence of class-wide deception because reasonable consumers would likely not have been misled by Hershey’s statements. Third, Hershey claimed that there was no evidence that plaintiff suffered injury as a result of being deceived by Hershey’s statements. The Court agreed there was insufficient evidence that the “natural source of flavanol antioxidants” statement on the challenged Hershey products was likely to mislead reasonable consumers and that the label statements were therefore unlawful on that basis. 

The Court noted as background that the FDA has yet to promulgate a regulation defining the word “natural” as it pertains to packaged food. See Food Labeling: Nutrient Content Claims, General Principles, Petitions, Definition of Terms; Definitions of Nutrient Content Claims for the Fat, Fatty Acid, and Cholesterol Content of Food (“FDA Policy Statement”), 58 Fed. Reg. 2303, 2407 (Jan. 6, 1993) (explaining that “FDA is not undertaking rulemaking to establish a definition for ‘natural’ at this time.”). Instead, the FDA opted to “maintain its current policy . . . not to restrict the use of the term ‘natural’ except for added color, synthetic substances, and flavors as provided in [21 C.F.R.] § 101.22.” Id. “Additionally,” the FDA stated that “the agency will maintain its policy regarding the use of ‘natural,’ as meaning that nothing artificial or synthetic (including all color additives regardless of source) has been included in, or has been added to, a food that would not normally be expected to be in the food.” Id. 

Against that regulatory backdrop, plaintiff argued that the labels on the challenged Hershey products were (1) unlawful and (2) misleading. The Court noted that the UCL claim was governed by the “reasonable consumer standard,” which requires evidence that “members of the public are likely to be deceived” by the business practice or advertising at issue. Williams v. Gerber Prods. Co., 552 F.3d 934, 938 (9th Cir. 2008). Thus, to survive summary judgment, a plaintiff “must produce evidence showing ‘a likelihood of confounding an appreciable number of reasonably prudent purchasers exercising ordinary care.’ ” Clemens v. DaimlerChrysler Corp., 534 F.3d 1017, 1026 (9th Cir. 2008) (quoting Brockey v. Moore, 107 Cal. App. 4th 86, 99 (2003)). Put differently, plaintiff had to show “it is probable that a significant portion of the general consuming public or of targeted consumers, acting reasonably in the circumstances, could be misled.” Lavie v. Procter & Gamble Co., 105 Cal. App. 4th 496, 507 (2003).  Although surveys and expert testimony regarding consumer expectations are not required, “a few isolated examples of actual deception are insufficient” in the Ninth Circuit. Clemens, 534 F.3d at 1026. Moreover, under California law, a plaintiff cannot “obtain relief by arguing how consumers could react; [he] must show how consumers actually do react.” Zeltiq Aesthetics, Inc. v. BTL Indus., Inc., 13-cv-05473-JCS, 2014 U.S. Dist. LEXIS 40402, at *33 (N.D. Cal. Mar. 25, 2014).

Here, plaintiff testified that he was misled by Hershey’s “natural source of flavanol antioxidants” label. According to Khasin, he believed at the time of purchase that flavanol antioxidants made them a “better choice” than other products. He produced evidence he said showed that flavanol antioxidants are not known to provide health benefits. Hershey maintained that its product labeling was not false and did not mislead consumers because its products in fact retain flavanol antioxidants that are naturally found in the cocoa bean. There was evidence that plaintiff also understood that Hershey’s products are candy, not health foods. 

Here, Khasin’s evidence was insufficient to create a genuine dispute of material fact.  While plaintiff argued that he was “mislead” by the label “natural source of flavanol antioxidants” and the “implicit representation[s]” that the FDA has established a Recommended Daily Intake (“RDI”) or Recommended Daily Value (“RDV”) for flavanol antioxidants, his solitary testimony, without more, was not enough to survive summary judgment. “[A] few isolated examples of actual deception are insufficient” to survive summary judgment.” Clemens, 534 F.3d at 1026; see also Ries v. Arizona Beverages USA, No. 10-CV-00139, 2013 WL 1287416, at *7 (N.D. Cal. Mar. 28, 2013) (granting summary judgment where defendants’ owner testified that some consumers of AriZona Iced Tea “were confused by the term a hundred percent natural” because such testimony, without more, “does not demonstrate that it is probable that a significant portion of the consuming public could be confused by the ‘all natural’ labeling of defendants’ products.”). Thus, absent additional evidence in addition to his own testimony, plaintiff did not meet his burden on the question of deception.

Moreover, even if the Court were to accept this testimony as evidence of deception, the facts in the record spoke to the contrary. Plaintiff in fact had testified in his deposition that Hershey’s products are candy, not health foods. And he didn't know what an RDI was.  In any event, plaintiff had to provide other extrinsic evidence in addition to his allegations to prove whether a reasonable consumer was likely to be misled. See Rice v. Fox Broad. Co., 330 F.3d 1170, 1181-2, n. 8 (9th Cir. 2003); but he produced no extrinsic evidence to suggest that a reasonable consumer would have expected or assumed that any particular level of flavanol antioxidants would be found in the alleged Hershey products. There was insufficient evidence presented such that the Court could find that a reasonable consumer would be misled by Hershey’s statements.

Further, “not every regulatory violation amounts to an act of consumer fraud.” See Mason v. Coca-Cola Co., 774 F. Supp. 2d 699, 705 n.4 (D.N.J. 2011).  Plaintiff''s showing of FDA letters regarding the characterizing level or amounts of nutrients was not relevant to showing that consumers are likely to be misled by Hershey’s statements.

Third, Khasin did not meet the burden of showing he suffered injury as a result of purchasing and relying on Hershey’s statements. Plaintiff was required to prove that he “lost money or property,” as a result of Hershey’s deceptive labeling to “demonstrate some form of economic injury.” Kwikset, 51 Cal. 4th at 322-23. Khasin proffered no evidence to show economic injury, but rather claimed that his purchases were “legally worthless” because they are inaccurate representations of what he thought he was purchasing. Alternately, he claimed that he paid a “price premium” because Hershey products with the statement, “natural source of flavanol antioxidants,” were objectively worth less than what he paid.  But the plaintiff's evidence did not include a model to determine how to calculate this presumed “price premium.”  Hershey produced historical sales data and a consumer survey indicating that there was no price change attributable to the labeling phrase, “natural source of flavanol antioxidants.” Therefore, plaintiff had not met his burden of showing that he suffered economic injury through loss of money or property, as a result of Hershey’s alleged deceptive labeling.


Therefore, the Court granted the defense motion.