Mass Tort Defense : Mass Tort Defense Lawyer & Attorney : Sean P. Wajert : Shook, Hardy & Bacon LLP : Products Liability, Class Actions, Pharmaceutical Litigation

Earlier this month, the Federal Courts' Committee on Rules of Practice and Procedure approved for publication a package of proposals that would, if enacted, impact the scope of discovery under the Federal Rules of Civil Procedure.

The agenda for the committee's June, 2013 meeting is here. The various proposals would appear to narrow discovery and try to curb some of the abuses that have occurred in recent years.  Many of these ideas came out of the 2010 Duke Conference as methods for reducing cost and delay in civil litigation.

Some highlights: New Rule 4(m) would be revised to shorten the time to serve the summons and complaint from 120 days to 60 days. The desired effect will be to get the action moving in half the time. The amendment responds to the commonly expressed view that four months to serve the summons and complaint is too long.

Rule 16(b)(2) now provides that the judge must issue a scheduling order within the earlier of 120 days after any defendant has been served or 90 days after any defendant has appeared. The recommended
revision, however, cuts the times to 90 days after any defendant is served or 60 days after any defendant appears. 

Another proposal  would add a new Rule 16(b)(3)(v), permitting a scheduling order to "direct that before moving for an order relating to discovery the movant must request a conference with the court." Many courts now have local rules similar to this proposal. Experience with these rules shows that an informal pre-motion conference with the court often resolves a discovery dispute without the need for a motion, briefing, and order. The practice has proved highly effective in reducing cost and delay.

Currently, Rules 30 and 31 establish a presumptive limit of 10 depositions by the plaintiffs, or by the defendants, or by third-party defendants, and a time limit. Rule 33(a)(1) sets a presumptive limit of "no more than 25 written interrogatories, including all discrete subparts." There are no presumptive numerical limits for Rule 36 requests to admit. The new proposals reduce the limit on interrogatories to 15. They add to Rule 36, for the first time, presumptive numerical limits of 25 RFA (other than genuineness of documents). The proposals would reduce the presumptive limit on the number of depositions from 10 to 5, and would reduce the presumptive duration to 1 day of 6 hours. Rules 30 and 31 would continue to provide that the court must grant leave to take more depositions "to the extent consistent with Rule 26(b)(1) and (2)." 

The proposed rule changes would re-emphasize the notion of proportionality in Rule 26: discovery must be proportional to the needs of the case considering the amount in controversy, the importance of the issues at stake in the action, the parties’s resources, the importance of the discovery in resolving the issues, and whether the burden or expense of the proposed discovery outweighs its likely benefit. This newly added proportionality language stems from the committee’s finding that the current rule’s “reasonably calculated” approach to the proper scope of discovery is too broadly interpreted.

Also, new proposed Rule 37(e) would provide certain protections against sanctions for the failure to produce any type of evidence (whether electronic or other evidence).  A party seeking sanctions would have to show both substantial prejudice and willful or bad faith conduct; or that the conduct irreparably denied a party any meaningful opportunity to present or defend against a claim. The amendments also seek to address the issue of parties who might otherwise be inclined to engage in burdensome and expensive “over-preservation.” 

Next step is a comment period that will extend into early 2014. It will important to keep an eye on the progress of these amendments.

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We have posted before about the disturbing trend of plaintiffs parsing food labels to find something to complain about -- not that the product is unhealthy or harmful or doesn't taste good -- but a "gotcha" game raised to the level of a consumer fraud act violation or a breach of warranty class action.  So we like to note when common sense prevails in this arena.  A federal court recently held that a food manufacturer cannot be in breach of an express warranty for using the term "natural" on its label when that same label discloses the identity and presence of any ingredients the plaintiffs claim were not "natural."   See Chin v. General Mills Inc., No. 12-02150 (D.Minn. 6/3/13).

General Mills produces, markets, and sells a line of Nature Valley products, including “Protein Chewy Bars,” “Chewy Trail Mix Granola Bars,” “Yogurt Chewy Granola Bars,” “Sweet & Salty Nut Granola Bars,” and “Granola Thins.” By all accounts these are excellent products that taste great and offer nutritious ingredients. Plaintiffs were consumers who allegedly purchased one or more of the Nature Valley products. The plaintiffs alleged the products were deceptively labeled as “100 percent Natural” because they contained fructose corn syrup and high maltose corn syrup.  Plaintiffs alleged they relied on the representations, and would not have purchased the products or paid as much if they had known of the actual ingredients. Plaintiffs sought a national class, and sub-classes for New York and New Jersey.

The first problem was that plaintiffs sought relief for alleged representations made on bars that they never purchased; plaintiffs lacked Article III standing for these products and plaintiffs could not represent a class of consumers who purchased products that the named plaintiffs did not purchase. The named plaintiffs in a class action may not rely on injuries that the putative class may have suffered, but instead, said the court, must allege that they personally have been injured. Lewis v. Casey, 518 U.S. 343, 357 (1996); Thunander v. Uponor, Inc., 887 F. Supp. 2d 850, 863 (D. Minn. 2012).

The express warranty claim failed because the term “100% Natural” on a label cannot be viewed in isolation and must be read in the context of the entire package, including the ingredient panel. The specific terms included in the ingredient list must inform the more general term “Natural.” The specific terms determine the scope of the express warranty that was allegedly made to the plaintiffs. And here, a defendant cannot be in breach of an express warranty by including in the product an ingredient that it expressly informed consumers was included.  It is typical of plaintiffs in these cases to elevate one word or phrase in a label, while ignoring all the other information provided the consumer.

Finally, the fraud based claims were dismissed for failure to satisfy the heightened pleading requirements of Rule 9(b). Plaintiffs failed to plead how they were deceived by the “100% Natural” statement. Plaintiffs did not allege with any specificity what they believed “100% Natural” to mean.

Motion to dismiss granted.

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Readers know that too often the necessary administrative procedures set in place in a mass tort are enforced on a one-way basis, costing defendants money and resources without requiring plaintiffs to comply with necessary discovery in a timely fashion.  The Third Circuit recently affirmed a lower court decision to exclude from an MDL workers allegedly exposed to asbestos at work when these plaintiffs failed to provide full asbestos exposure histories. See In Re: Asbestos Products Liability Litigation (NO. VI), numbers 12-2061-12-2072 (3d Cir. 2013).  

MDL 875 once included more than 150,000 plaintiffs and more than eight million claims. By the time Judge Robreno inherited the MDL in 2009, thousands of cases had been settled or otherwise resolved. Judge Robreno has been overseeing the progress and resolution of the remaining cases since then.  In the asbestos MDL No. 875, the court had issued Administrative Order 12, which required plaintiffs to submit medical diagnoses or expert opinions based on certain data, interpreted to include exposure history. The order was issued in 2007 and was intended to accelerate the handling of the significant numbers of cases in this MDL by screening out cases in which causation cannot be demonstrated, and to avoid unnecessary burdens on defendants by requiring plaintiffs to provide certain medical and exposure information at the outset of the case.

The district court dismissed several cases in 2012, holding that the plaintiffs' submissions regarding their alleged medical conditions did not meet Administrative Order 12.  Specifically, Judge Robreno determined that the Plaintiffs' submissions were fatally flawed in that they failed to include specific histories of Plaintiffs' exposure to asbestos. Plaintiffs' counsel disputed that interpretation of the order as requiring a complete occupational history of asbestos exposure, and offered simply a diagnosis of an asbestos-related disease. At no point did Plaintiffs offer supplemental AO 12 submissions with more complete exposure histories. 

The Third Circuit agreed that the language of AO 12 is broad, but saw no reason not to defer to the District Court's interpretation of AO 12 that requires plaintiffs' submissions to include asbestos exposure history. Based on the language in AO 12 that requires plaintiffs to submit medical diagnoses or opinions based on objective and subjective data, as well as based on statements from reputable medical organizations that emphasize the importance of exposure history, the District Court interpreted AO 12 submissions to include exposure history. And it was not an abuse of discretion – especially given the District Court's experience overseeing the MDL proceedings – to require a complete occupational and environmental exposure history. 

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The U.S. Supreme Court granted cert last week to address whether a state attorney general's parens patriae antitrust action is removable as a mass action under the Class Action Fairness Act of 2005.  See Mississippi v. AU Optronics Corp., No. 12-1036 (U.S., certiorari granted 05/28/13).

As noted in the respondents' papers, CAFA expands federal diversity jurisdiction for both “class actions” and “mass actions.” A “mass action” is defined as any civil action in which monetary relief claims of 100 or more persons are proposed to be tried jointly.  The definitions of “class actions” and “mass actions” are connected, as a mass action is deemed to be a class action removable to federal court if it otherwise meets the provisions of a “class action,” including CAFA’s unique minimal diversity.

Determining whether the 100 person level is satisfied requires consideration of whose claims are actually being asserted, as the Court has held that diversity  jurisdiction must be based upon the citizenship of
real parties to the controversy. E.g.,  Navarro Sav. Ass’n v. Lee, 446 U.S. 458, 461 (1980).  Where the action filed by the State seeks monetary relief claims on behalf of more than 100 unnamed persons who are among the real parties in interest and any one of them is diverse from any defendant, CAFA applies.  This was the approach of the 5th Circuit here, 701 F.3d 796, 800 (5th Cir. 2012), under the so-called “claim-by-claim" approach.  In contrast other courts look to the "state’s complaint as a whole." E.g., AU Optronics Corp. v. South Carolina, 699 F.3d 385, 394 (4th Cir. 2012).

It will be interesting to see if the Court applies the notion from the unanimous CAFA decision in Standard Fire that treating a nonbinding stipulation (on damages) from the class rep before a class is even certified as if it were binding on the later class would “exalt form over substance, and run directly counter to CAFA's primary objective: ensuring federal court consideration of interstate cases of national importance.”

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 The U.S. Judicial Panel on Multidistrict Litigation recently released the data on requests for coordination and dispositions in 2012, and some interesting trends can be detected.

Specifically, the Panel has shown an increasingly strict view of MDL requests.  In the early years of the last decade, the Panel routinely granted most requests, and even as recently as 2007-09 the Panel was granting 4 out every 5 requests.  Since then, however, the panel has denied more than 40% of the MDL requests.

One theory for the change is the increase over time in the number of petitions made, but that trend has actually started to level off in recent years.  And the Panel has always maintained it has sufficient able federal judges to mange the MDL's.

Another theory has to do with the feedback received by the Panel from judges and practitioners in a 2010 survey of MDL practice.  Much of that feedback discussed the Panel's ostensible preference for centralization.  The Panel now may have a deeper appreciation for the costs and economics of creating an MDL.

A third theory is that CAFA and federal court scrutiny of class actions has pushed more cases into the MDL stream, and sooner, although it is hard to confirm any rampant prematurity phenomenon.

Another is a possible change in the mix of cases proposed for MDL status.  Recent cases may have smaller numbers of parties, more varied filing dates, differing defendants, and different subject matters -- fewer antitrust matters and more consumer fraud claims, for example.  

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Quick note for our readers who follow asbestos mass tort issues:  the House Judiciary Committee decided in a 17–14 party-line vote this week to reject  various proposed amendments to the Furthering Asbestos Claim Transparency Act of 2013 (H.R. 982).  The FACT Act would require the various asbestos settlement trusts to make public disclosures detailing the claims to the trust and to provide certain information about claims on request (but not confidential medical records).  The amendments were proposed by Democrats opposing the bill.

The Full Committee Markup of H.R. 982 is here.  Hearing information regarding the 3/13 hearing on the bill is here. 

Passage of the Fact Act would allow defendants to properly assess a plaintiff’s complete exposure history. As it stands, plaintiffs often hide behind trust confidentiality to make solvent defendants believe that their products were far more responsible for the plaintiff’s disease than the true picture.  As asbestos liabilities force more and more companies to file for bankruptcy, legislators need to preserve assets for appropriate claimants; the secrecy and abuse associated with the trusts undermines this as well.

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Two recent decisions continue the trend against plaintiffs in the climate change/public nuisance area. The U.S. Supreme Court earlier this week declined the request by an Alaskan fishing village to overturn a lower court ruling that the Clean Air Act preempts a federal common law claim of public nuisance attributed to so-called global warming and climate change.  See Native Village of Kivalina v. ExxonMobil Corp., No. 12—1072 (cert. denied 5/20/13).

We have posted on this case before.  The U.S. Court of Appeals for the Ninth Circuit held in 2012 that the Clean Air Act, and Environmental Protection Agency regulatory actions taken under the statute, displace the common law claim that various energy producing companies should be liable for the cost of relocating the village to avoid flooding and coastal erosion.  The Ninth Circuit ruling relied on the Supreme Court's prior decision in American Electric Power Co. Inc. v. Connecticut, 131 S.Ct 2527 (2011), dealing with the possibility of injunctive relief; plaintiffs here failed in their petition to the Supreme Court seeking a ruling that the federal statute does not displace common law claims for damages.

The battle lines may now shift to state common law claims against various entities over greenhouse gas emissions.  Even in state court, plaintiffs will likely have difficulty showing that a defendant's actions caused any alleged climate changes, and that the changes somehow were the proximate cause of the damages alleged -- and then how to apportion damages in light of any others who might be similarly situated to named defendants.  Any such battle at the state level risks creation of a hodgepodge of decisions throughout the country about what constitutes a nuisance in this area and about what gas emission levels are or are not tortious.  All readers ought to have profound reservations about the notion, inherent in all private climate change litigation, that the tort system is capable of adjudicating rights and responsibilities on the subject of global warming.

In the other recent climate change suit, the Fifth Circuit affirmed earlier this month that the doctrine of res judicata barred a proposed class action claim for alleged global warming-related damage to property after Hurricane Katrina. See Comer v. Murphy Oil USA Inc., No. 12-60291 (5th Cir. 5/14/13). We had posted on this one before also.  Plaintiffs alleged that the defendants' emissions had contributed to global warming, which somehow raised the temperature of the ocean, which somehow made hurricanes more powerful, which caused Hurricane Katrina to be more destructive to plaintiffs' property. After exhausting various unsuccessful complex appeals, the plaintiffs filed a new case with many of the same allegations. The lower court had earlier held that plaintiffs lacked standing, which barred this case. The district court also noted issues (again) with the statute of limitations; the political question doctrine; and on the merits. The Fifth Circuit heard oral arguments on the appeal of the dismissal of the second case, and affirmed that the earlier decision was final for the purposes of res judicata.

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We have posted before about Henry Barabin, et al. v. AstenJohnson Inc. and Scapa Dryer Fabrics Inc., as a case to watch.  Interested readers should note that the 9th Circuit has now set the en banc oral argument in this case for June 25th.

You may recall that plaintiff sued alleging that his 2006 diagnosis of mesothelioma was caused by occupational exposure to asbestos during the more than 30 years he worked at the Crown-Zellerbach paper mill. The trial court originally excluded one of the plaintiffs’ expert witnesses, because of his “dubious credentials and his lack of expertise with regard to dryer felts and paper mills.” But the court later reversed that ruling, after the plaintiff supplemented the record on the expert's credentials, including that he had testified in other cases (in Frye jurisdictions though). The jury found in favor of plaintiffs.

On appeal, the Ninth Circuit panel determined that the lower court had not properly considered all the Daubert factors, and instead had allowed the plaintiff to submit the expert’s "unfiltered testimony" to the jury. “Once presented with the additional information in the Barabins’ response to the motion in limine, at a minimum the district court was required to assess the scientific reliability of the proffered expert testimony ... In failing to do so, the district court neglected to perform its gatekeeping role.”

Our guess is that in setting the case for rehearing, the court is thinking more about the fact that the panel remanded the case for a new trial in light of the court’s 2003 decision in Mukhtar v. California State University, 299 F.3d 1053 (9th Cir. 2002), amended by 319 F.3d 1073 (9th Cir. 2003).

(Note that my partner Mark Behrens was asked to submit an amicus brief on behalf of the Coalition For Litigation Justice, Inc., Chamber Of Commerce Of The United States Of America, NFIB Small Business Legal Center, American Insurance Association, Property Casualty Insurers Association Of America, American Chemistry Council,
And National Association Of Manufacturers.)

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Very excited to note for readers the arrival this week of a brand new partner in Shook Hardy's office in Philadelphia (your humble bloggers home base).

Debra S. Dunne, Esq. brings to SHB significant expertise in counseling companies regulated by the Food and Drug Administration.  Areas of expertise include everything from compliance and risk-management issues to labeling and marketing to clinical trials, due diligence, training programs, and product recalls. With experience addressing the intersection of unique litigation risks with government safety and regulatory oversight, Debra can provide exceptional strategic guidance and legal counsel to her drug, medical device, food, and cosmetics industry clients.

She has also defended complex product liability claims and has served as science counsel and coordinating counsel in mass tort litigation. Dunne has also written and spoken extensively on prescription-drug marketing and off-label issues, which is where I first met her as co-presenters at a CLE in 2007.

Welcome!

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