BPA Update

The U.S. Food and Drug Administration has released a draft report finding that the chemical bisphenol A does not pose a serious health risk. BPA is used in several products, including some plastic baby bottles, food containers, and water bottles. The chemical is added to make polycarbonate plastic bottles clear and shatterproof.

As MassTortDefense has noted before, and here, BPA has been much in the news. In May, 2008, FDA officials told a congressional panel that the agency had no reason to recommend that consumers stop using products containing BPA.  FDA has been examining the data on BPA in anticipation of a September meeting on the issues surrounding the potential toxicity of the chemical. The new draft document will be reviewed by the Bisphenol A Subcommittee of the FDA Science Board on Sept. 16th. Details on the science panel's meeting can be found here.

The new assessment was particularly focused on the concerns for developmental toxicity identified in recent assessments of BPA, including those of the National Toxicology Program and their expert panel, based on animal data. FDA concluded that this data was insufficient to merit a change in the exposure levels the agency currently allows for BPA. FDA concluded that an adequate margin of safety exists for BPA at current levels of exposure from food contact uses, for infants and adults. This assessment represents a full examination of data considered pivotal to the relevant exposure levels associated with food contact substances, the FDA said.

To avoid underestimating risk, FDA said it made the conservative assumption that an infant drank only formula from cans lined with a bisphenol A-based enamel coating and that the parents heated that formula in polycarbonate baby bottles. Based on such assumptions, FDA estimated that an infant might consume up to 2.42 micrograms bisphenol A per kilogram body weight. Based on animal studies, FDA estimated that the no observed adverse effect level (NOAEL) for bisphenol A would be 5 milligrams per kilogram body weight. That means the margin of exposure, or the difference between infants' exposure and the NOAEL, is about 2,000x. That is, FDA said, "an adequate margin of safety...."

FDA's draft conclusion is consistent with the European Food Safety Authority's July 23 statement that it considers current uses of bisphenol A to be safe. FDA's draft assessment called for more research, and said data from nonhuman primates would be helpful, along with measurements of bisphenol A in the U.S. population. 

In other BPA news, the California Assembly rejected a bill (S.B. 1713) that would have banned bisphenol A in children's products, specifically BPA at levels above 0.1 part per billion in baby bottles, cups, food containers, or any other container designed for children under the age of 3 years. By Jan. 1, 2012, S.B. 1713 would have barred the sale of any liquid, food, or beverage in any can or jar containing 0.5 ppb or more of bisphenol A. The American Chemistry Council and numerous experts have contended the products the bill would ban are safe.

JPML Denies MDL Status in Pain Pump Litigation

The U.S. Judicial Panel on Multidistrict Litigation has rejected requests for MDL status for litigation involving injuries allegedly caused by pain pumps that directly delivered anesthetics to joint tissue following surgery. See In re Shoulder Pain Pump--Chondrolysis Products Liability Litigation, MDL No. 1966 (8/11/08).

On the surface, the denial may have seemed surprising in that suits had been filed in eight different federal district courts, and the plaintiffs all claimed that the direct delivery systems caused the degeneration of joint tissue, leading to a condition called chondrolysis. The cases involve high volume pain pumps that deliver pain medication directly to afflicted areas through flexible plastic catheters. Physicians temporarily implant the catheters into patients following surgery to manage postoperative pain. A 2007 study published in the American Journal of Sports Medicine apparently spurred the litigation.

In denying the motion, the panel said it was not persuaded that centralization would serve the convenience of the parties and witnesses, or further the just and efficient conduct of this litigation at the present time. Although these personal injury actions seemed to have some commonality, a number of different pain pumps made by different manufacturers are at issue, as are different anesthetic drugs made by different pharmaceutical companies. Moreover, not all of the thirteen constituent actions involve pharmaceutical company defendants, and many defendants are sued only in a minority of those actions.

Because of this, the proponents of centralization could not convince the panel that the efficiencies that might be gained by centralization would not be overwhelmed by the multiple individualized issues (including ones of liability and causation) that these actions present.

MassTortDefense notes that whether the JPML grants or denies a motion to centralize cases can have a significant effect on product liability litigation. The vast majority of motions in products cases are granted. But it is not unheard of for the panel to deny MDL status when the underlying actions raise primarily individual, not common, issues, as exemplified by many defendants, diverse plaintiffs, or different kinds of exposure to the relevant product. Here, the panel pointed out, for example, that five pharmaceutical defendants were each named in only one of the underlying actions. And the panel noted that that none of the underlying actions was a class action, implying the presence of numerous individual issues.

More Amicus Briefing in Wyeth v. Levine

A number of entities have continued to weigh in as amici in the Wyeth v. Levine preemption case pending before the Supreme Court. In an amicus brief filed earlier this summer, BIO and PhRMA argued from a policy perspective that state law tort suits challenging the adequacy of FDA approved prescription drug labeling pose significant risks to public health. (BIO is the world's largest biotechnology organization, providing advocacy, business development and communications services for more than 1,150 members worldwide.) Those suits imperil FDA's ability to accomplish its mission because they allow state court juries to second guess FDA's balancing of the risks and benefits of a prescription medicine. State court verdicts inconsistent with FDA guidance will simply encourage manufacturers to warn physicians and patients about risks that are speculative and scientifically unsupported; this ultimately dilutes the impact of scientifically valid warnings and can discourage physicians from prescribing and patients from using beneficial drugs.

On the legal side, these amici argued that the Vermont Supreme Court's decision now on appeal was at odds with a core premise of the Supremacy Clause: that state law cannot require what federal law prohibits. Absent new scientific information, federal regulations prohibit a manufacturer from changing prescription drug labeling without prior FDA approval. In this case, FDA knew of and considered the relevant risk over a long period of time, and approved carefully crafted warnings and instructions designed to minimize those risks while still encouraging beneficial drug use.

The Latest

Last week, in what appears to be a first, the editors of the New England Journal of Medicine  weighed in on the preemption legal battle -- on the side of the plaintiff below, Levine. While the brief attacks the track record of the FDA, arguing that the agency lacks the resources to do its job, it does not answer the next question: whether experts at the FDA, even with allegedly inadequate funding, are more or less likely to decide difficult scientific questions correctly than are juries of lay people “educated” by trial lawyers. The NEJM spouts the rhetoric of juries "policing" the industry.  But a dramatic gulf separates the competence of the FDA from that of state jurors who, absent preemption, are called on to assess the safety of prescription drugs and second-guess federal regulators. Laypersons applying state law cannot substitute for the FDA, the expert agency congressionally delegated the role of meticulously balancing nuanced and sometimes competing nationwide goals. The FDA’s regulation of prescription drugs is governed by a sweeping network of federal law individually applied to each drug. A lay jury lacks the expertise and the broader perspective of the FDA, and thus cannot adequately adjudicate individual plaintiff/patient risks in the context of population benefits – quintessentially the kind of issue that the FDA must confront every day. Without preemption, however, state juries are asked to do just that.

Similarly, the NEJM brief bemoans the fact that FDA is reliant upon information gathered and produced by the drug company, but the fact is that no entity other than the drug company has any incentive or ability to study a not-yet-approved drug. And permitting after the fact tort suits to second-guess the FDA won’t change that. Moreover, how is the situation any different in a tort suit? If a new study comes out about the risks or benefits of a drug or device after a tort suit has been concluded, we don’t go back and start the case again. Would the NEJM advise unwinding the results in Bendectin litigation? Breast implants? The state of the art is by definition time-dependent.

And as pointed out in DRI’s amicus brief, there was an enhancement of the FDA’s powers by the recent FDAAA. This contrasts a one possible way (congressional action) and a clearly worse way (complaining in state court litigation) to deal with perceived deficiencies in FDA action.

MDL Court Rejects Class Action In Genetically Modified Rice Litigation

The MDL court overseeing the litigation arising from alleged contamination of the U.S. rice supply by genetically modified strains has declined to certify a proposed class. In re Genetically Modified Rice Litigation, MDL No.1811, 2008 WL 3539879 (E.D. Mo. August 14, 2008).

Plaintiffs, U.S. long grain rice producers, alleged that the defendants contaminated the U.S. rice supply with non-approved genetically modified strains of rice, thereby affecting the market price for plaintiffs' crops. Plaintiffs alleged that the U.S. market price for rice dropped dramatically as a result of defendant's alleged contamination of the rice supply. (The United States is one of the leading producers in the world of rice, accounting for approximately 13% of the worldwide rice trade. Nearly half of the U.S. rice supply is exported to other countries.)

Mass Accident
While plaintiffs' primary claim for damages was that the defendants' activities caused a market loss injury to the U.S. rice market, the complaint asserted statutory and common law claims of public nuisance, private nuisance, negligence, products liability, and strict liability for ultra-hazardous activities. Thus, the court observed that, in many respects, the alleged widespread contamination of U.S. rice is akin to a “mass accident” mass tort - the sort of case that the Advisory Notes to Rule 23 say should rarely be afforded class treatment. A mass tort resulting in injuries to numerous persons is ordinarily not appropriate for a class action because of the likelihood that significant questions, not only of damages but of liability and defenses to liability, would be present, affecting the individuals in different ways. In these circumstances an action conducted nominally as a class action would degenerate in practice to multiple lawsuits separately tried. See Pruitt v. Allied Chemical Corp., 85 F.R.D. 100, 111 (E.D.Va.1980) (denying class certification for all plaintiffs who claimed to be injured as a result of defendant's pollution of a river, as the pollution affected various groups of plaintiffs in significantly different ways).

Damages Key on Predominance
MassTortDefense notes how significant the issue of damages was to the certification decision, and in particular the predominance inquiry balancing individual issues and alleged common issues. The court observed that, ordinarily, variation in individual damage amounts is not a bar to class certification. Even wide disparity among class members as to the amount of damages suffered does not necessarily mean that class certification is inappropriate. See Bell Atlantic v. AT & T Corp., 339 F.3d 294, 306 (5th Cir.2003). However, class certification “may not be suitable where the calculation of damages is not susceptible to a mathematical or formulaic calculation, or where the formula by which the parties propose to calculate damages is clearly inadequate.” Bell Atlantic, 339 F.3d at 306 (citing Broussard v. Meineke Discount Muffler Shops, Inc., 155 F.3d 331, 342-343 (4th Cir.1998)).

Here, plaintiffs argued that they could show on a class-wide basis the total amount of economic harm caused by the contamination. Plaintiffs argued they could show the total quantity of long-grain rice affected. Using these two market-based figures, plaintiffs would supposedly calculate damage on a per-hundredweight basis. This figure will be used to calculate each individual plaintiff's damages. Each class member would attest to the quantity of rice sold, and that figure would be multiplied by the per-hundredweight loss.

But the court was not persuaded that the calculation of damages in this case was a common issue. What plaintiffs have proposed was a convenient shorthand calculation that might represent an estimate of some damages for some plaintiffs. It might be a reasonable basis on which to reach a settlement of some claims, mused the court. But plaintiffs' proposed method for calculating damages does not represent an actual adjudication of any one plaintiff's claims. Rather, calculation of actual damage is an individual issue specific to each plaintiff in this case, involving a unique inquiry into the time, place, and manner in which each plaintiff both priced and sold the rice.

For example, some rice producers entered pools or cooperatives to sell their rice. Others sold rice through booking contracts, where a quantity of rice to be delivered or a price to be paid might be set far in advance. Rice producers using basis contracts or hedge-to-arrive contracts employed yet more complicated methods for pricing and selling their rice. An accurate, true assessment of any plaintiff's damages would require an extensive inquiry involving the circumstances of that particular plaintiff. This case was therefore more like those cases where class certification was denied because individual damages issues predominated over common elements. This individual inquiry on damages predominated over the common issues allegedly raised in the class action complaint.

Superiority Lacking
The class method was not superior either. The claims process would devolve into an endless series of “mini-trials” that would fail to meet the goals of class certification. Also, hundreds of plaintiffs had shown significant interest in prosecuting their own claims. While plaintiffs argued that to deny class certification in this case would result in hundreds of full-scale individual trials across five states, all dealing with the same issues, the court noted that there are many options available to resolve the hundreds of cases in this MDL. The parties can propose a collection of “test cases” to be tried to verdict before deciding how other cases should be handled. The MDL court also has the option of going to trial on the claims of the plaintiffs named in the master consolidated complaint that was filed in its home district.

The opinion is thus also instructive on the willingness to look at real world trial plans and alternate methods of moving an MDL forward, beyond class action treatment.

Federal Court Restricts Medical Monitoring To Toxic Torts

The U.S. District Court for the Western District of Missouri has dismissed a medical monitoring claim brought against the manufacturer of a medical device, finding that the applicable state law permits such a claim only in a true toxic tort case. Ratliff v. Mentor Corp., 2008 WL 3126300 (W.D. Mo.,  Aug. 5, 2008).

Plaintiff Toni Ratliff had a Mentor UB-Tape sling surgically implanted in her pelvis area to treat a condition. She brought a putative class action, including “all persons or entities in the State of Missouri who were treated, implanted or otherwise received the UB-Tape, designed, tested, manufactured, distributed and/or sold by Mentor Corporation.” Excluded from the class were all people with claims for personal injury or wrongful death. She alleged the device caused extrusions, infections and abscesses, often requiring secondary surgical procedures to correct the problem.

The relief sought included a notification, research, and medical monitoring fund for tests to catch those problems. Mentor moved to dismiss, arguing that a medical monitoring claim is not recognized in Missouri outside of the toxic torts context.

The court noted that Meyer v. Fluor Corp., 220 S.W.3d 712 (Mo. 2007) is the first and only Missouri Supreme Court case dealing with medical monitoring claims. It has been cited for the general proposition that Missouri recognizes a claim for medical monitoring. However, in Meyer, children allegedly exposed to lead sued smelter operators to recover damages for the expense of medical monitoring. The Missouri Supreme Court held that the children were entitled to recover such damages under a “medical monitoring claim” that “seeks to recover the costs of future reasonably necessary diagnostic testing to detect latent injuries or diseases that may develop as a result of exposure to toxic substances.” Id. at 716. Thus, by the Missouri Supreme Court’s own definition of a medical monitoring claim, the Meyer decision does not apply to potential latent injuries resulting from anything other than exposure to toxic substances.

The strict holding of Meyer is that, in Missouri, medical monitoring claims are available in toxic tort cases. Meyer does not necessarily support recognition of medical monitoring claims in garden variety products liability cases like plaintiff contended. This explicit limitation in Meyer led the district court to believe that the Missouri Supreme Court would dismiss medical monitoring claims that do not result from exposure to toxic substances.

Although the court did not get into policy issues, MassTortDefense notes that there is a growing recognition that medical monitoring should not be available in the context of drugs and medical devices. The voluntary use of a medical device or medicine prescribed by a health care professional is arguably far removed from the original medical monitoring notion of involuntary exposure to a chemical in the environment. In a case involving HRT, Vitanza v. Wyeth, Inc., 2006 WL 462470 (N.J. Super. Ct. Jan. 24, 2006), plaintiffs sought class certification of a group defined as all persons in New Jersey who had taken the drug Prempro and were not suffering from breast cancer, but who wanted medical monitoring for an alleged increased risk of future cancer. The court dismissed the claim, noting that the state's recognition of medical monitoring came in the unique context of manifest exposure to toxic substances in environmental tort actions, and was to be applied sparingly. The policy reasons applicable to the environmental exposure context (including the difficulty in proving exposure levels and duration, and even the identity of the chemicals at issue) are not present in the prescription drug context where claimants have access to relevant information through the label, pharmacy records, and their prescribing physician. The need to deter polluters, perceived to be present in the toxic tort context, does not apply to life sciences companies selling a product screened by the FDA.

The absence of these policy factors in a life sciences context was also observed in a recent Vioxx case. Sinclair v. Merck & Co., 195 N.J. 51, 948 A.2d 587 (N.J. 2008). The state supreme court ruled as a matter of law that plaintiffs could not maintain an action for medical monitoring in a pharmaceutical product liability action because they did not allege a presently manifested injury. The court held that the New Jersey Products Liability Act requires present manifest injury and therefore bars medical monitoring unless the present manifest injury element is satisfied. The court also examined prior precedents where medical monitoring was approved, and found those precedents were limited to personal injury stemming from asbestos exposure and exposure to environmental contamination. The majority declined to recognize any common law medical monitoring remedy. See also Parker v. Howmedica Osteonics Corp., 2008 WL 141628, at *5, n.6 (D.N.J.,  Jan.  14, 2008)(applying similar reasoning to device context). Similarly, in Conway v. A.I. DuPont Hosp. for Children, 2007 WL 560502 (E.D. Pa., Feb. 14, 2007), the court denied the defendant's motion to dismiss a medical monitoring claim regarding a medical device used in children with congenital heart defects. The court did, however, note that while medical monitoring was "suitable" in toxic substance exposure cases, the "same argument cannot be made for medical monitoring relief in products liability cases where diseases" are not caused by exposure to toxic substances.

Third Circuit Confirms Reliance Is Required For PA Consumer Fraud Act Claims

In a putative class-action suit alleging deceptive conduct by producers of smokeless tobacco products pursuant to the Pennsylvania Uniform Trade Practices and Consumer Protection Law, the Third Circuit has overruled a district court’s denial of defendants’ motion to dismiss, remanding the case for further proceedings under the rubric that a complaint alleging deceptive conduct must allege that plaintiff justifiably relied on defendant's wrongful conduct or representation.

In Hunt v. U.S. Tobacco Co., 2008 WL 2967249 (3d Cir., August 05, 2008), the Third Circuit considered whether a private plaintiff alleging “deceptive” (rather than fraudulent) conduct under the amended so-called catch-all provision of the Pennsylvania Uniform Trade Practices and Consumer Protection Law must prove that he justifiably relied on the defendant’s alleged deceptive conduct or statements.

Hunt and proposed class members alleged that U.S. Smokeless Tobacco Co. engaged in anti-competitive behavior that artificially inflated the price of the company’s moist smokeless tobacco products. Hunt claimed that consumers “relied on a presumption that they were paying prices set by an efficient market, when in fact they were paying prices artificially inflated by the anti-competitive and deceptive conduct.” The alleged misconduct was framed as consumer deception in violation of Pennsylvania’s Uniform Trade Practices and Consumer Protection Law. Specifically, plaintiff brought suit under the so-called “catch-all provision” of the Consumer Protection Law, which proscribes engaging in any fraudulent or deceptive conduct which creates a likelihood of confusion or of misunderstanding.

Defendant moved to dismiss the complaint under Federal Rule of Civil Procedure 12(b)(6) on the ground that Hunt failed to allege that he had justifiably relied on the alleged deceptive conduct and suffered harm as a result of that reliance. The district court denied the motion, holding that a plaintiff does not need to establish reliance under the catch-all provision of the Consumer Protection Law. Interlocutory review was granted.

The Third Circuit disagreed, focusing on the causation requirement in the Consumer Protection Law’s standing provision, the part permitting suit by private plaintiffs who suffer loss “as a result of” the defendant’s deception. A private plaintiff pursuing a claim under the statute must prove justifiable reliance, otherwise the loss is not as a result of the conduct. See, e.g., Schwartz v. Rockey, 932 A.2d 885, 897 n.16 (Pa. 2007) (“the justifiable reliance criterion derives from the causation requirement” which is express on the face of the statute’s private-plaintiff standing provision). The Pennsylvania intermediate Superior Court had also applied the Supreme Court’s standing rule to the catch-all provision, see Debbs v. Chrysler Corp., 810 A.2d 137, 156–58 (Pa. Super. Ct. 2002).

Pennsylvania thus rejects the approach of those states which interpret their consumer fraud acts, and the “as a result of” kind of language, to require only a mere and tenuous causal connection, which could be established by, for instance, proof that a misrepresentation supposedly inflated a product’s price, thereby injuring every purchaser because he paid more than he would have paid in the absence of the misrepresentation. [Even then, one wonders about proof that the plaintiff would not have happily paid the other price even knowing the info.] A justifiable reliance requirement, by contrast, requires the plaintiff to go further—he must show that he justifiably bought the product in the first place (or engaged in some other detrimental activity) because of the misrepresentation.

Indeed, the Third Circuit has already interpreted the justifiable reliance/standing requirement to apply to multiple substantive subsections of the Consumer Protection Law.  In Tran v. Metro. Life Ins. Co., 408 F.3d 130, 139–41 (3d Cir. 2005), the court observed that the plaintiff was wise to retreat at oral argument from his contention that, because he alleged only unfair business practices and deceptive conduct, not fraud, he need not allege justifiable reliance.

Such a reading is especially appropriate because the justifiable-reliance requirement emanates not from the catch-all provision that the legislature added to the consumer fraud act in 1996, but rather from the private-plaintiff standing provision. A private-plaintiff standing provision, by its nature, applies to all private plaintiffs, whatever substantive subsection of the act they invoke, for its purpose is to separate private plaintiffs (who may only sue for harm they actually suffered as a result of the defendant’s deception) from the state Attorney General (who typically may sue to protect the public from conduct that is likely to mislead).

The Third Circuit then went on to find that Hunt had not adequately alleged reliance. Hunt’s complaint was that defendant’s alleged “deception, including its affirmative misrepresentations and omissions concerning the price of moist smokeless tobacco products, likely misled all consumers acting reasonably under the circumstances to believe that they were purchasing moist smokeless tobacco products at prices born[e] by a free and fair market.” No real reliance there. And the court rejected Hunt’s suggestion that he enjoys a presumption of reliance, as this suggestion is inconsistent with Pennsylvania case law. Hunt could not enjoy a presumption of what he must prove affirmatively—that is, under the Consumer Protection Law, Hunt must prove justifiable reliance affirmatively.

Case remanded for consideration whether plaintiff should get leave to amend.

Federal Court Weighs In On Exposure Element Of Toxic Tort Claim

A federal court has weighed in on the issue of exposure in a toxic tort property damages suit, denying summary judgment and finding the presence of vinyl chloride in the air, even if undetectable, may constitute a physical injury to property under a common law property damage claim. Gates v. Rohm and Haas Co., 2008 WL 2977867 (E.D.Pa., July 31, 2008 ).

Plaintiffs in this putative class action sued Rohm and Haas and others pursuant to CERCLA, and state law, for damages allegedly resulting from contamination of their drinking water by pollutants that the Defendants allegedly generated and released. The proposed property damage class consisted of  about 500 "persons who presently own real property within McCollum Lake Village (‘Village’), or who owned real property within the Village as of April 25, 2006 through the present.” Defendants filed a motion for partial summary judgment with respect to the plaintiffs' common law property claims: public and private nuisance, negligent and intentional trespass, strict liability, negligence and negligence per se for damages arising out of alleged continuing airborne vinyl chloride contamination and past groundwater contamination.

The plaintiffs contended that this alleged “physical invasion” of their property by a carcinogenic contaminant caused a diminution in value of their property, in part due to the stigma caused by the alleged contamination. Rohm and Haas argued that applicable (Illinois) law does not recognize a cause of action for “economic harm” absent physical damage. The plaintiffs' property damage claim thus should fail because there was no evidence in the record of any physical injury to accompany the alleged economic injury (the diminution in value of the property due to supposed “stigma” associated with the alleged contamination).

According to the court, the first issue was the basic factual question of whether there was sufficient evidence of “present” contamination. The second issue was whether any such contamination constitutes a “physical injury.” And, finally, the third issue was whether diminution in value is an appropriate measure of damages based on the type of harm alleged.

A. “Present” Contamination
It was undisputed that at present no vinyl chloride or vinylidene chloride has been detected in any well in McCollum Lake Village. And it is undisputed that any alleged groundwater contamination was purely historical. It was unclear, however, to the court whether under Illinois law such past physical injury, coupled with ongoing alleged economic harm, suffices to permit pursuit of economic losses in tort. The fundamental factual question here for the court was whether there was sufficient evidence of permanent or ongoing physical injury to the plaintiffs' property. Although defendants made a strong showing, the court found a genuine dispute as to whether present levels of airborne vinyl chloride in McCollum Lake Village are below background levels and, accordingly, whether there is current airborne vinyl chloride “contamination.”

B. “Physical” Injury
Even assuming past and present vinyl chloride exposure, the court had to determine whether such exposure constitutes a “physical injury” for purposes of stating common law tort claims. The court reasoned that the presence of harmful chemicals in property loss actions is treated differently than the presence of non-hazardous materials. Notably, there is no requirement that a hazardous chemical be perceptible to the senses. The presence of an undetected hazardous chemical can support a claim for nuisance, thought the court. That the chemical is not immediately perceptible to the senses is not dispositive when when there is evidence of actual physical invasion of class area property.

Moreover, said the court, in contrast to the standards for medical monitoring claims, the exposure level need not necessarily present a health risk to make out a property damage claim. Such a view is not unanimous in the courts. E.g., Rockwell Int'l Corp. v. Wilhite, 143 S.W.2d 604, 620, 627 (Ky.App.Ct.2003); Rose v. Union Oil Co., No. 97-2808, 1999 U.S. Dist. LEXIS 967, at *3-4, *17 (N.D.Cal. Jan. 29, 1999). Nevertheless, this court concluded that the physical presence of vinyl chloride in the air, even if undetectable, constitutes a physical injury to the property for purposes of common law property damage claims.

C. The Appropriate Measure of Damages
Third, the court concluded that in the context of the present case, diminution in value was an appropriate measure of damages. The categorization of harm as “permanent” or “temporary” is not always dispositive. Rather than a compelling legal analysis to respond to defendant's strong argument on this point, the court resorted largely to the the generic policy observation that courts must be mindful of the fact that rules governing the proper measure of damages in a particular case are guides only and should not be applied in an arbitrary, formulaic, or inflexible manner. 

Senate Bill Introduced To Overturn Riegel

Two liberal Senators have followed the lead of liberal Democratic House lawmakers and introduced a Senate counterpart to the proposed Medical Device Safety Act of 2008. The bill would overturn the Supreme Court’s decision in Reigel v. Medtronic, which properly confirmed preemption of state tort suits for FDA-approved medical devices. The bill would permit individuals to sue device makers under state tort laws, and permit state court juries to second-guess the expert decisions of federal regulators. The bill would also encourage the creation of a 50-state hodge-podge of tort-based rules impossible for a manufacturer to comply with.

Sens. Edward Kennedy (D-Mass.) and Patrick Leahy (D-Vt.) introduced the companion bill to H.R. 6381, which has 62 co-sponsors in the House, and which was introduced in the House in June by Reps. Frank Pallone (D-N.J.) and Henry Waxman (D-Calif.). The Senators’ introductory statement can be viewed here

MassTortDefense has posted on preemption, including here and here.

The Wall Street Journal weighed in on these issues in an editorial August 13th. Describing the Supreme Court's “sensible 8-1 ruling earlier this year” in Riegel v. Medtronic, the Journal noted how the FDA's authority to approve a drug or device pre-empts state product liability laws. “The Court's decision makes sense for many reasons, not least to avoid creating a sort of double-jeopardy for companies -- first having to run the FDA approval maze, then allowing a nationwide quilt of different laws and standards to second-guess that approval.” In 1976 Congress passed the Medical Device Amendments, establishing a national standard with express pre-emption language barring states from imposing their own requirements.

Democratic House member Henry Waxman said the decision "strips consumers of the rights they've had for decades." Who writes this stuff for Henry?, asks the WSJ. Far from representing a radical departure in the law, “the Court's reasoning upheld what had become a common opinion in the federal court system. In half a dozen holdings, federal circuit courts had already ruled in favor of pre-emption, covering states from Texas to Illinois to Pennsylvania.”

The Journal observed, “What Mr. Waxman really wants to restore is the trial lawyer bingo that can net jackpot jury awards while wreaking havoc on national standards. The FDA approval process is infamously labyrinthine, requiring years and tens of millions of dollars in investment to prove a device is safe and effective.” Of the 8-1 vote, the editorial mentioned, “You've got to love it when the tort bar and Democrats accuse those notorious right-wing Justices Stephen Breyer, Anthony Kennedy and David Souter -- who joined the majority opinion -- of being the greedy tools of business. Another liberal, John Paul Stevens, joined the majority with some caveats.”

Daubert Decision in Mold Case

A legal malpractice case is the somewhat surprising setting for an interesting Daubert toxic tort opinion, but we found one. Young, et al. v. Burton, et al, 2008 WL 2810237 (D.D.C. 7/22/08).

Plaintiffs sued a law firm for allegedly failing to file a timely personal injury lawsuit for their alleged mold-induced injuries. The lawsuit would have sought recovery from a landlord for damages suffered by plaintiffs allegedly as a result of exposure to toxic mold while residing in a DC apartment building. In order to succeed on their legal malpractice claim, plaintiffs needed to show their underlying claim was meritorious. Thus, plaintiffs needed admissible expert testimony as to the cause, nature, and extent of their injuries.

Defendants moved to exclude the expert’s testimony, arguing that his opinions were not based on a reliable methodology.

Following a Daubert hearing, the Court concluded that the diagnosis of plaintiffs, as well as the proffered opinions relating to general and specific causation, were not sufficiently grounded in scientifically valid principles and methods to satisfy Daubert.

Exposure Claim

Plaintiffs resided in the apartment for approximately thirty-four days, during which time plaintiffs contend they could smell noxious fumes from raw sewage. They testified they noticed extensive visible mold growth in an adjacent vacant apartment, although they estimated they were in that apartment for no longer than one or two minutes. There was no documentation of any visible mold growth in plaintiffs', and plaintiffs did not believe the two apartments shared a common air source.

Both plaintiffs submitted extensive medical records to document the health problems that they attribute to their mold exposure, but medical records also indicated significant medical problems prior to moving into the apartment

Plaintiffs’ expert, Dr. Shoemaker, used his own differential diagnostic procedure for mold illness. That procedure involves a two-tiered analysis. To satisfy the first tier, all three of the following factors must be met: (1) the potential for exposure; (2) the presence of a distinctive group of symptoms; and (3) the absence of confounding diagnoses and exposures. The second tier looks at levels of certain hormones and enzymes in the blood which the expert believes are altered by exposure to a biotoxin and thus serve as “biomarkers.”

Defense Argument

Defendants requested a Daubert hearing, arguing that there was no evidence as to the exact substance plaintiffs were exposed to or the level at which they were exposed, and thus formal toxicological causation analysis could not be performed. In addition, the tests Dr. Shoemaker used to reach his diagnosis are experimental and “not generally accepted in the toxicology community.” The traditional causation analysis, relying on the nine “Hill Criteria” that are necessary to establish a causal relationship, does not support a causal association between the dark material on the adjacent apartment walls and the plaintiffs' health complaints. (In a nutshell, the Hill Criteria are: 1) strength; 2) consistency; 3) specificity; 4) temporality; 5) biological gradient; 6) plausibility; 7) coherence; 8) experiment; and 9) analogy).

Mold Disease Causation
Courts throughout the country have varied widely with respect to the level of certainty they require with respect to the issue of causation in mold cases. See Jeffrey J. Hayward, The Same Mold Story?: What Toxic Mold is Teaching us about Causation in Toxic Tort Litigation, 83 N.C. L.Rev. 518, 536-38 (2005). One common method of plaintiffs attempting to demonstrate causation is showing a temporal relationship between exposure to a toxin and subsequent adverse health effects. However, while necessary, temporal association between exposure and illness, without more, is generally insufficient to establish causation. Under the traditional approach, in the absence of an established scientific connection between exposure and illness, the temporal connection between exposure to chemicals and an onset of symptoms, standing alone, is entitled to little weight in determining causation.

The most widely-used method of demonstrating causation in toxic tort cases is to present scientifically accepted information about the dose-response curve for the toxin which confirms that the toxin can cause the health effects experienced by the plaintiff at the dosage plaintiff was exposed to. Indeed, scientific knowledge of the harmful level of exposure to a chemical, plus knowledge that the plaintiff was exposed to such quantities, are minimal facts necessary to sustain the plaintiff's burden in a toxic tort case.

Diagnosis Flawed
Dr. Shoemaker could not show that plaintiffs met his own case definition. In the first tier of Dr. Shoemaker's case definition, the patient must have had exposure; clearly, a person cannot be made ill by mold toxins to which she has not actually been exposed. No environmental tests were conducted in plaintiffs' apartment to provide actual proof that plaintiffs did, in fact, inhale toxic substances when they resided there.

Shoemaker attempted to show that plaintiffs had the requisite exposure in two ways, neither of which was convincing to the court. First, Dr. Shoemaker believed that his case definition allowed him to use the diagnosis of the disease as evidence of actual exposure. In short, the symptoms fundamentally become the basis for explaining themselves. Such circular reasoning is not scientifically or medically acceptable. And factually, plaintiffs' complex of symptoms did not begin immediately after exposure. Also, the symptoms did not remain consistent over time. Finally, Dr. Shoemaker was unable to determine which symptoms are actually attributable to the mold. Rather, he testified that roughly 75% of plaintiffs' symptoms were probably attributable to this mold exposure, although he could not say which ones.

The third element of the first tier of Dr. Shoemaker's diagnostic protocol is that there be an absence of confounding diagnoses and exposures. This requirement is critical to a differential diagnosis, which is to conclude that only the chosen diagnosis could be responsible for the symptoms presented. Nevertheless, Dr. Shoemaker glossed over the explanation of how he ruled out all potential confounding explanations for plaintiffs' symptoms. At points, Dr. Shoemaker brushed off discussion of confounding diagnoses as almost irrelevant.

The most fundamental flaw in Dr. Shoemaker's Tier 2 analysis was that not one of his biomarker tests is generally accepted or clinically validated for the purpose of diagnosing “mold illness.” Additionally, the idea that levels of these biomarkers five years after an exposure is in any way related to that exposure is unsupported by generally accepted science.

General Causation

Shoemaker arrived at his opinions on general and specific causation based on novel and unaccepted theories and methodologies. Plaintiffs’ general causation evidence confronted the problem that there was no way of knowing what substance the plaintiffs were in fact exposed to, as Dr. Shoemaker freely admitted he did not know what molds or bacteria were present in plaintiffs' apartment. Second, his own peer-reviewed publication on “mold illness” was far too limited to stand alone as proof of general causation; only twenty-six subjects participated in the study, and the double-blinded, placebo-controlled clinical trial involved only thirteen of those subjects.

Specific Causation

On specific causation, in short, Shoemaker did not perform his five-step protocol on plaintiffs, and indeed could not possibly have done so, as he first met them long after they left the suspected mold environment. Nor was he able to base his causation opinion on the plaintiffs' response to treatment, for both plaintiffs chose not to take the medication that he had prescribed for them. 

Defendants did an outstanding job of holding plaintiff's expert to the standards he himself created, but could not attain.

Proposed Accounting Rule Makes No Sense For Mass Torts

At MassTortDefense we typically focus on litigation, with a touch of legislation thrown in. A newly proposed accounting rule – yes accounting – gets our attention today. The rule would modify the standard accounting provisions governing the disclosure of the costs and contingencies of ongoing litigation, and in so doing assist plaintiffs’ attorneys and threaten the attorney-client privilege.

The change (Exposure Draft, Proposed Statement of Financial Accounting Standards, Disclosure of Certain Loss Contingencies) was proposed by the Federal Accounting Standards Board earlier this year, and would expand the loss contingencies that are required to be disclosed, the disclosure of specific quantitative and qualitative information about the loss contingencies, and a tabular reconciliation of the loss contingencies. (FASB is a private organization that establishes standards used in preparing financial reports that are officially recognized by the SEC and the American Institute of Certified Public Accountants.)

Problems? It may require companies to disclose things that are very remote. The information is also going to have to be updated on a quarterly basis. That will require extensive effort by both outside and inside counsel, increasing costs significantly. More importantly, it will also impact litigation strategy. Mass tort litigation is driven by plaintiffs’ attorneys, more so than by law, science, or medicine. The new disclosure rules would undermine the attorney-client privilege and work product protection, especially to the extent they seem to expect the company to give its own assessment of what the results will likely be. They seem to require greater disclosure of the company’s litigation strategy and analysis of the strengths and weaknesses of its position to a far greater extent than ever seen before. The rules thus tilt the litigation balance in favor of disclosing info to companies’ litigation adversaries and, thus, work to the ultimate detriment of shareholders without providing meaningful disclosure to investors.

As anyone who has handled mass tort litigation can attest, budgeting for future contingencies is extremely difficult, with the number of cases, the jurisdictions involved, the courts’ case management techniques, and the number of trials, having huge impact on costs and all being outside defendants’ direct control. Estimating the costs of continuing litigation is highly subjective, subject to huge swings as underlying assumptions change, and unlikely to provide financial statement users with meaningful or reliable information

The proposed change also stipulates that companies may avoid disclosing certain information if the disclosure would be prejudicial to the ongoing legal proceeding, but it is unclear how this provision would protect companies in practice.  Almost all the new disclosures seem to be potentially prejudicial in that way.

Pharmaceutical companies are among those most affected by this proposal, because of the mass tort litigation that they face. Six leading drug makers sent a letter last Friday objecting to the proposed rule. The companies are currently defending a wide range of lawsuits, including tens of thousands of product liability lawsuits, many of the lawsuits class actions.

Here's hoping that comments cause a re-thinking of a rule that seems ignorant of the world of mass torts.

MDL Created For BPA Litigation

On August 13th, the JPML created MDL 1967, IN RE: BISPHENOL-A (BPA) POLYCARBONATE

The panel's order found that these actions share factual questions arising out of allegations that various defendants manufactured, sold or distributed polycarbonate plastic bottle products containing Bisphenol-A without disclosing its possible harmful effects. The cases were assigned to Judge Ortrie Smith of the Western District of Missouri.

At the time of the motion to create the MDL, this litigation consisted of fourteen actions pending in eight districts as follows: four actions in the Central District of California; two actions each in the Eastern District of California, the Western District of Missouri, and the Western District of
Washington; and one action each in the Eastern District of Arkansas, the District of Connecticut, the Northern District of Illinois, and the District of Kansas.

While the motion was pending, the Panel was notified that nine additional related actions have been filed: three actions in the Central District of California, and one action each in the Eastern District of Arkansas, the Northern District of Illinois, the District of Kansas, the Western District of Missouri, the Southern District of Ohio, and the Western District of Washington. These actions will be treated as potential tag-along actions.

MassTortDefense has posted on BPA and here.  BPA received considerable recent attention due to widespread human exposures and concern for possible reproductive and developmental effects reported in laboratory animal studies. A recent draft report by the Center for the Evaluation of Risks to Human Reproduction (CERHR) of the National Toxicology Program (NTP) examined the Food and Drug Administration finding that bisphenol-A is safe when used to line infant formula cans. The CERHR/NTP draft report expressed "some concern" based on animal studies that the chemical might affect the neurological systems and behavior of fetuses, infants, and children.

The NTP Brief on Bisphenol A is not a quantitative risk assessment, nor is it intended to supersede risk assessments conducted by regulatory agencies. The NTP Brief on Bisphenol A does not present a comprehensive review of the health-related literature; it does not include a comprehensive analysis of the issues related to this chemical. The NTP report relies heavily on animal testing, rather than human epidemiology. Regarding the neural and behavioral effects reported in some studies of rats and mice at relatively low BPA doses, the Panel authoring the report also acknowledges that it is not even clear whether these effects should be construed as an adverse toxicological response. The draft report does not conclude that BPA is dangerous. It notes that further research is needed – that’s the right approach to new data or concerns about a product that has been in use for decades. And the key reported low-dose effects are not replicated or corroborated.

The European Food Safety Authority recently concluded a report with a key conclusion that after exposure, the human body rapidly metabolizes and eliminates BPA. This represents an important metabolic difference compared with rats, and suggests certain animal models are not all that useful. That is, people metabolize and excrete BPA far more quickly than rodents. This evidence further limits the relevance of low-dose effects of BPA reported in some rodent studies used for human risk assessment.



President Signs CPSC Reform Act

Despite some concerns, President Bush on Thursday signed into law the Consumer Product Safety Improvement Act of 2008. A White House spokesman was quoted as saying, "This bill will help to ensure that the products Americans find on their store shelves are safe, and that the regulating agencies have the resources they need to enforce law."  Useful summary here.

The Act will increase funding for CPSC over five years; add whistleblower protections for employees of manufacturers and sellers; require third-party testing of certain children's products; adopt an interim toy safety rule and require CPSC to make new safety rules for toys; create a public database for consumer reports; ban six types of phthalates and lowers lead levels in certain products for children. Three of the phthalates would be temporarily banned pending further study. The American Chemistry Council said although there was no scientific basis for the phthalate restriction, they understood consumer concerns and were committed to working with the CPSC and others to conduct the studies.

One of the most controversial aspects empowers state attorneys general to enforce federal consumer rules.

MassTortDefense has posted about the legislation here and here.

FDA To Hold Public Meeting On Nanotechnology

The FDA will hold a public meeting on September 8, 2008, to gather information that will assist the agency in further implementing the recommendations of the Nanotechnology Task Force Report relating to the development of agency guidance documents concerning nanotechnology. The primary purpose of the meeting is to determine what factors the agency should consider in providing guidance on:

1) The information and data that may be needed to demonstrate the safety and effectiveness of FDA-regulated products containing nanoscale materials; and

2) The circumstances under which a product’s regulatory status might change due to the presence or use of nanoscale materials.

Nanotechnology allows scientists to work on the scale of molecules to create, explore, and manipulate materials measured in nanometers; billionths of a meter. MassTortDefense has posted on nano-issues here and here.

In July 2007, FDA issued a report analyzing scientific and regulatory considerations relating to the safety and effectiveness of FDA-regulated products containing nanoscale materials regulated by FDA, and making recommendations regarding these considerations. The Nanotechnology Task Force Report made recommendations which covered foods (including dietary supplements), food and color additives (including food contact substances), animal drugs and feeds, cosmetics, human drugs and biologics, and medical devices. Additionally, the Report summarized the state of the science for biological interactions with nanoscale materials.

In addition, FDA is working with the National Institutes of Health (particularly the NanoHealth Enterprise) to explore methods for receiving and sharing data relating to, for example, general product development, including research on failed product candidates, and biological interactions of certain characteristics of nanoscale materials.

The meeting will begin with a plenary session at which FDA will review the goals of the meeting and give a general overview of the analysis and findings of the Nanotechnology Task Force and agency activities since publication of the Report in July 2007. Following will be breakout sessions on medical devices, including diagnostics; prescription drugs, including
biological drugs, animal drugs and OTC drugs, including sunscreens; food and color additives, including food contact substances; dietary supplements; and cosmetics.

Ninth Circuit Vacates Class Action Order in Honda MDL

The Ninth Circuit recently vacated a district court order certifying a class in litigation against American Honda Motor Co. See Bonlender v. American Honda Motor Co., 2008 WL 2873264 (9th Cir., 7/22/08). The named plaintiffs alleged that certain models of the Honda CR-V and Element were prone to under-hood oil-fed fires, despite a low incidence of such fires.

The plaintiffs had filed four putative statewide class actions, which were among the cases consolidated for pretrial purposes in a multidistrict litigation. In re American Honda Motor Co. Oil Filter Products Liability Litigation (C.D. Cal., No. 2:06-ml-01737).

Honda appealed the district court's order apparently certifying a nationwide class. The Ninth Circuit agreed that the district court abused its discretion by sua sponte certifying a nationwide class without making any findings regarding Rule 23's requirements for class certification, including 23(b)(3)'s requirement that common issues predominate over individualized ones.

Among other things, the district court failed to analyze whether variations in applicable state law defeated Rule 23(b)(3)'s predominance requirement. MassTortDefense has posted on the impact of choice of law issues on nationwide classes here and here.

The court further ordered that the case be reassigned to a different district court judge on remand.

Federal Court Rejects Inkjet Printer Class Action

A federal district court has rejected a proposed nationwide class action in the litigation alleging that Hewlett Packard engaged in unfair and deceptive conduct in connection with the “smart chip” technology in its ink cartridges. In re HP Inkjet Printer Litigation, 2008 WL 2949265 (N.D.Cal. July 25, 2008). According to Plaintiffs, the “smart chips” are programmed to indicate prematurely that replacement is needed, when in fact “hundreds of additional pages” of ink remain. The “smart chip” technology allegedly also renders cartridges unusable on a concealed, built-in “expiration date,” which is the earlier of thirty months after installation or thirty months after a factory-set “install-by” date, regardless of the amount of usable ink remaining. Plaintiffs claim that HP's “SureSupply” marketing campaign falsely promised consumers an easy way to maintain adequate printer supplies that saves time and money while failing to disclose the premature ink warnings and built-in expiration dates. HP makes some of the best printers in the world and stands behind its technology.

Plaintiffs asserted several claims for relief including: (1) breach of express warranty; (2) breach of implied warranty; (3) unjust enrichment; (4) violations of several California consumer fraud statutes. The court addressed competing motions – defendant's for summary judgment and plaintiffs' for class certification.

Defendant moved for summary judgment, contending that named plaintiffs did not have standing because they cannot prove that they ever received a “low on ink” warning. However, the court found an issue of fact based on their deposition testimony, despite the fact they could not remember the precise wording of the low ink message received and did not recognize the actual message when shown it by opposing counsel at the deposition. “While the evidence is weak,” a reasonable jury could find that each named plaintiff has suffered a cognizable injury, said the court.

Specifically regarding the warranty claim, while neither plaintiff identified the precise language of the statements upon which he allegedly relied, the court found that recitation of the precise language is not an element of an express warranty claim. Again, while Plaintiffs' evidence is weak, it was sufficient to survive summary judgment.

No Class

Importantly for readers of MassTortDefense, the court rejected the proposed class. First, plaintiffs were seeking to represent the claims of a nationwide class without addressing any of the complexities involved in doing so. Plaintiffs appeared to simply presume that California law should apply to all putative class members nationwide; they made no attempt to satisfy their burden of establishing that the application of California law to the entire proposed class would be appropriate under Rule 23(b)(3). Plaintiffs did not adequately address any of the potential jurisdictional and due process limitations upon the application of California law to the claims of non-resident class members. Second, the plaintiffs did not address the potential choice of law problems that would arise should the court certify a nationwide class, noting each class member's home state has an interest in protecting its consumers from in-state injuries caused by foreign corporations and in delineating the scope of recovery for its citizens under its own laws.

In contrast to plaintiffs' dropping the ball, HP submitted a detailed analysis of the variations in state consumer protection and deceptive trade practice laws. This analysis demonstrates the many differences among states with respect to, for example, statutes of limitations, scienter requirements, and calculation of damages. See, e.g., In re Bridgestone/Firestone, 288 F.3d 1012, 1017-18 (7th Cir.2002) (“State consumer-protection laws vary considerably, and courts must respect these differences rather than apply one state's laws to sales in other states with different rules.”).

Based on the record before it, the court concluded that the proposed nationwide class would be unmanageable.

Lone Pine Order Entered in Celebrex MDL

The federal judge overseeing the MDL for Celebrex and Bextra has sided with defendants' view that a “Lone Pine” order is appropriate for managing the claims of the remaining, non-settling plaintiffs. In re: Bextra and Celebrex Marketing Sales Practices and Product Liability Litigation, No. M:05-cv-01699 (N.D. Cal.) (Pretrial Order No. 29, Aug. 1, 2008).

“Lone Pine” orders take their name from a 1986 New Jersey Superior Court case involving toxic tort claims; they refer to case management orders that require the plaintiffs to make a showing regarding causation, injury, and/or damages to demonstrate, typically at an early stage, some minimal level of evidentiary support for the key components of their claims which will be in dispute.

Defendants had first asked the court for a Lone Pine order in late June, arguing that each plaintiff should be required to submit a case-specific expert report on the issue of medical causation. The motion also sought to compel each plaintiff to turn over medical records that documented an injury, prescription records that showed medication history and dosages prescribed, and proof of dosage in relation to the confirmed injury. The benefits to the court of requiring plaintiffs to supply this information is that the parties would not have to engage in protracted discovery in thousands of cases just to see whether each one has some threshold evidence of medical causation. The production of such basic and threshold evidence was argued to be simply a part of a good-faith investigation that should precede the filing of a lawsuit.

Plaintiffs argued that the proposed order would be overly burdensome, was not needed, and was a retaliation for not settling. Plaintiffs also suggested that Lone Pine orders are generally issued as sanctions against plaintiffs who provide no other information to the defendants about the filed case. But the court disagreed with plaintiffs.

The court appeared mindful of what had happened on the eve of the first trial in the MDL, as the scheduled cases began to disappear. Thus, under the Order, plaintiffs will have 45 days to have a physician or other medical expert offer a case-specific expert report for each plaintiff including a review of the plaintiffs’ medical records, the dates they used Celebrex and/or Bextra, and whether they experienced a myocardial infarction, ischemic stroke, sudden death, or any other injury while taking the medications.

The court observed that all of this information should be already readily available to plaintiffs through the plaintiff fact sheets process. The court apparently expects that cases in which plaintiffs cannot show drug usage, injury, or causation, will drop from the docket before being scheduled for trial. Without threshold proof of Celebrex or Bextra usage, a compensable injury, and a link between usage and an injury, there could have been no good-faith basis for a lawsuit in the first place.

Moreover, requiring plaintiffs to identify basic information about injuries and causation is not unreasonable given the costs that mass tort claims have on the legal system, and on defendants. Lone Pine orders allow courts to weed out the frivolous suits where there is insufficient exposure, or no sufficient scientific connection between injury and exposure. Accordingly, Lone Pine orders can be effective when entered early in the game. Early disposal of frivolous claims allows the parties to focus their attention on the serious cases. Ideally, the order will actually phase discovery, and motions practice as well, with the Lone Pine issues pushed up front.

With their focus on causation, Lone Pine orders are especially useful when multiple plaintiffs claim a variety of different injuries, allege injuries incurred over a long period of time, and/or when plaintiffs allege diverse exposures.


CPSC Improvement Act Update

The White House received the Consumer Product Safety Commission Improvement Act of 2008 (H.R. 4040)  on August 6th, giving the president until August 18th to sign the bill into law. Apparently the Congress had delayed sending the bill to accommodate the president's travel schedule to the Summer Olympics.

The president has 10 days, excluding Sundays, in which to sign the bill into law.  All indications are that President Bush will sign the legislation.

As noted here at MassTortDefense both houses of Congress passed the CPSC reform bill with near-unanimous support. 

Seventh Circuit Rejects Remand of CAFA Mass Action

The Seventh Circuit Court of Appeals has affirmed a trial court’s ruling that a case involving plaintiffs alleging damages from chemicals escaping from a wood-processing facility is a “mass action” that belongs in federal court. See Bullard, et al. v. Burlington Northern Sante Fe Railway, et al., 2008 WL 2941359 (7th Cir. 2008).

A state court complaint by 144 plaintiffs sought damages from four corporations that had designed, manufactured, transported, or used chemicals that allegedly escaped from a Texas wood-processing plant and purportedly injured people living nearby. Among the plaintiffs’ claims are negligence, trespass, willful and wanton conduct, and fraudulent concealment, asserting that chemicals associated with creosote used to preserve wood were released into the environment through soil, ground water, and/or air mechanisms.

Defendants removed the suit, relying on the Class Action Fairness Act of 2005. CAFA expanded federal jurisdiction over various types of class actions. CAFA’s expanded jurisdiction was not limited to pure class actions, however. It also reaches a category of cases – “mass actions” – in which monetary claims of 100 or more persons are proposed to be tried jointly on the grounds that the plaintiffs’ claims allegedly involve common questions of law or fact. See 28 U.S.C. ¶1332(d)(11)(B)(i).

Plaintiffs moved to remand. They denied that the suit was a “mass action,” noting their complaint never proposed a trial. Thus, according to plaintiffs, defendants may remove a “mass action” only when a final pretrial order or equivalent document identifies the number of parties to the trial, which is to be “joint.” The district judge denied the motion for remand, and plaintiffs obtained interlocutory review “because the legal issue is novel.”

On appeal, plaintiffs argued they are entitled to litigate in state court because the Class Action Fairness Act has a loophole. Section 1332(d)(11)(B)(i) refers to “claims of 100 or more persons ... proposed to be tried jointly.” Complaints do not propose trials, plaintiffs insisted; they'd be happy to win by summary judgment or get a settlement. The case may never get to a trial. Cross that bridge when you come to it.

The Court rejected this reading. Plaintiffs' lawyers who want to avoid federal court, the Court said, have simply designed a class-action substitute. Their complaint alleges that several questions of law and fact are common to all 144 plaintiffs; it provides no more information about each individual plaintiff than an avowed class complaint would do. No one supposes that all 144 plaintiffs will be active; a few of them will take the lead, just as in a class action, and as a practical matter counsel will dominate, just as in a class action.

If the plaintiffs’ proposed strict reading were right, then, actually, §1332(d)(11) would be defunct, because it defines a class action to include a mass action. Taken to its logical end, in plaintiffs' view, no “mass action” could ever be a “class action”, for a suit cannot be officially identified as a “mass action” until the trial is finalized, not on the date of filing which, plaintiffs say, is the operative date. But “courts do not read statutes to make entire subsections vanish into the night,” said the Court.

A second reading would be to reject the date of filing as the only operative date and find that a case could become a “mass action” at any time. That could be long after filing, once plaintiffs are formally and explicitly proposed to be tried jointly. The prospect of this situation is why §1332(d)(11) allows the definition to be applied after the suits' filing date. But nothing in the statute says that the eve of trial is the only time when a “mass action” can be detected.

When plaintiffs take advantage of procedural rules that permit the joinder of multiple plaintiffs in a single suit where the claims arise out of “the same transaction or series of transactions” and “common questions of law or fact” are allegedly present, that's “exactly when a single trial is appropriate.” It does not matter whether a trial covering 100 or more plaintiffs actually ensues; the statutory question is whether one has been “proposed.” This complaint, which describes circumstances common to all plaintiffs, proposes one proceeding and thus, for statutory purposes, sufficiently alleges one trial.

And the Seventh Circuit went on to anticipate and reject plaintiffs' next likely reaction: A proposal to hold multiple trials in a single suit, or just one trial with 10 plaintiffs and the use of preclusion to cover everyone else, does not take the suit outside the language applying to any “civil action ... in which monetary relief claims of 100 or more persons are proposed to be tried jointly.” The question is not whether 100 or more plaintiffs answer a roll call in court, but whether the “claims” advanced by 100 or more persons are proposed to be tried jointly. A trial of 10 exemplary plaintiffs, followed by application of issue or claim preclusion to 134 more plaintiffs without another trial, is one in which the claims of 100 or more persons are being tried jointly, and this would bring the suit within federal jurisdiction.

Think Tank Releases Nano-Technology Report

A Washington, DC think tank last week released a new report with suggestions on how the next administration should approach regulation of nano-technology in products.  The Project on Emerging Technologies is based at the Woodrow Wilson Center in Washington. The Project was established in 2005 as a partnership between the Woodrow Wilson International Center for Scholars and the Pew Charitable Trusts. The Project is dedicated to helping ensure that as nanotechnologies advance, possible risks are minimized, public and consumer engagement remains strong, and the potential benefits of these new technologies are realized.

Nanotechnologies are hailed by many as the next industrial revolution. They promise to change everything from the cars we drive to the clothes we wear, from the medical treatments our doctors can offer to our energy sources and workplaces. Although focused on very small particles, nanotechnologies offer large potential benefits. From new cancer therapies to pollution-eating compounds, from more durable consumer products to detectors for bio-hazards like anthrax, from novel foods to more efficient solar cells, nanotechnologies are changing the way people think about the future.

The Project on Emerging Nanotechnologies collaborates with researchers, government, industry, NGOs, policymakers, and others to look long term, to identify gaps in knowledge and regulatory processes, and to develop strategies for closing them. The Project's stated mission is to try to provide independent knowledge and analysis that can inform critical decisions affecting the development and commercialization of nanotechnologies.

A source of uncertainty for nanotechnology is regulation. The Project released a 28-page regulatory agenda for the next administration, noting that whichever candidate wins is going to have to deal with this issue, probably sooner rather than later. The next president has the opportunity to ensure that nanotechnology’s benefits will be maximized and its risks identified and mitigated, says the group. 

The report, Nanotechnology Oversight: An Agenda for the Next Administration, calls for the White House and federal agency policymakers to maximize the use of existing laws to improve nanotechnology oversight. Such measures include defining nanomaterials as “new” substances under federal toxics and food laws, thereby enabling the Environmental Protection Agency (EPA) and the Food and Drug Administration (FDA) to consider the novel qualities and effects of nanomaterials. The group addresses whether the Federal Food, Drug and Cosmetic Act, the Toxic Substances Control Act and the Consumer Product Safety Act need to be amended to cover nanotechnology.

The Project notes that more nanotech products are hitting the market. From March, 2006 to February, 2007, the number of manufactured goods using nanotech tripled to 600.  For fiscal 2009, the federal government has devoted $1.5 billion to nanotech, a sum split up between various agencies. Under the Bush administration, EPA has a Nanoscale Materials Stewardship Program, which is endorsed by the Synthetic Organic Chemical Manufacturers Association, the American Chemistry Council and the NanoBusiness Alliance. Some state governments, however, are pushing forward with their own rules on nanotech.

Coincidentally, consumer advocates said this week that food produced by using nanotechnology is quietly coming onto the market, and they want U.S. authorities to force manufacturers to identify them. New consumer products created through nanotechnology are coming on the market at the rate of 3 to 4 per week, according to The Project on Emerging Nanotechnologies.

MassTortDefense has posted on nanotechnology here and here.


Lipstick Wars: Latest Round

Recently, MassTortDefense posted about a proposed class action alleging lead in lipstick. See Stella v. LVMH Perfumes and Cosmetics USA Inc., No. 1:07-cv-06509, 2008 WL 2669662 (N.D. Ill. 7/8/08). The Northern District of Illinois denied the motion to dismiss consumer fraud claims. Now, a federal judge has thrown out a purported class action against L’Oreal USA Inc. and Procter & Gamble Distributing LLC that accused the companies of selling Cover Girl and Maybelline lipsticks containing lead. Koronthaly v. L’Oreal USA, Inc., et al., No. 07-5588 (D.N.J. July 29, 2008), opinion found here.

The plaintiff brought various claims, including unjust enrichment, breach of implied warranty and violations of the New Jersey Consumer Fraud Act. The plaintiff asked the court to enjoin the companies from carrying the lipsticks at issue and requested compensatory damages to recover the money she allegedly spent on the products. She also asked for damages to cover the costs of medical monitoring to detect lead poisoning. Plaintiff contended she would not have bought the lipsticks if the defendants had revealed that they contained the lead.

In contrast to the ruling in Illinois, the New Jersey District Court found the plaintiff lacked standing to sue since she had alleged no injury, harm or ascertainable loss from having purchased the lipstick. Plaintiff's allegations of a merely potential future injury were too remote and abstract to qualify as a concrete and particularized injury. Plaintiff had not alleged any present injury. Plaintiff's mere demand for damages did not establish injury-in-fact either. Plaintiff bought lipstick and used the lipstick, only complaining that the lipstick's alleged levels of lead were unsatisfactory to her. The FDA does not provide limitations on lead levels in lipstick. The FDA does not otherwise regulate lipstick. The plaintiff's analogy to lead in candy was insufficient. Plaintiff cannot seek a remedy for a harm that she has not actually or allegedly suffered.

The plaintiff's allegation of economic injury in a products liability action is insufficient to establish an injury-in-fact. The plaintiff had suffered no ill effects from use of the product, and had not alleged that any future harm was expected. The so-called benefit of the bargain injury could not sustain a claim under these circumstances.

What is interesting is that the court's analysis focused not so much on the elements of the state statue, but the requirement of standing under Article III. The triad of injury in fact, causation, and redressability comprises the core of Article III's case or controversy requirement. Plaintiff's alleged injury was too conjectural and hypothetical to satisfy the injury in fact requirement. Plaintiff thus lacked standing to bring her claim. And standing cannot be "acquired through the back door of a class action."


Partial Summary Judgment Granted in Aredia MDL

Novartis Pharmaceuticals Corp. has prevailed in a motion to end certain failure-to-warn claims in cases in the MDL relating to its bone cancer drugs Aredia and Zometa. The U.S. District Court for the Middle District of Tennessee granted defendant’s motion for partial summary judgment, dismissing claims of eight Texas-based plaintiffs. In Re: Aredia and Zometa Products Liability Litigation, No. 06-md-01760 (M.D. Tenn.) Opinion found here.

The motion was based upon a Texas statute which protects a defendant from any products liability claims involving failure to provide adequate warnings if the drug at issue and accompanying warnings were approved by the FDA. The statute creates the presumption such warnings were adequate, and then specifically explains how a claimant can rebut this presumption:

(b) The claimant may rebut the presumption in Subsection (a) as to each defendant by establishing that: (1) the defendant, before or after pre-market approval or licensing of the product, withheld from or misrepresented to the United States Food and Drug Administration required information that was material and relevant to the performance of the product and was causally related to the claimant’s injury. Tex. Civ. Prac. & Rem. Code Ann. § 82.007(b)(1).

The court noted that plaintiffs were correct that the language of the Texas statute specifically creates a rebuttable presumption that a defendant is not liable for failure-to-warn claims if the warnings provided with the product were approved by the FDA. The Texas Legislature, however, went on to establish certain evidentiary standards for rebutting this presumption. The presumption of adequate warnings, therefore, is unrebuttable unless one of the specific statutory provisions applies.  Here, the only possible exception was the so-called fraud-on-the-FDA exception. However, in Buckman Co. v. Plaintiffs’ Legal Comm., 121 S.Ct. 1012 (2001), the Supreme Court found that the plaintiffs’ state law fraud-on-the-FDA claims conflicted with and were therefore impliedly preempted by the Federal Food, Drug and Cosmetic Act. Noting that policing fraud against federal agencies is hardly a “field which the States have traditionally occupied,” the Court held that it is the FDA’s exclusive responsibility to police fraud or wrongdoing in connection with approval of products before the FDA. Id. at 1017.   The Court stated that fraud-on-the-FDA claims would “inevitably conflict with the FDA’s responsibility to police fraud consistently with the Administration’s judgment and objectives.” Id. at 1018. In sum, the Court opined, this sort of litigation would exert an extraneous pull on the scheme established by Congress, and it is therefore preempted by that scheme. Id. at 1020.

Under the Texas law, in order to rebut the presumption plaintiffs must establish that defendant withheld or misrepresented “required information” to the FDA. The Court found that the task of determining whether certain information was “required” by the FDA would raise the federalism concerns expressed in Buckman.

Second, the Texas statute also requires that the information which was withheld or misrepresented be “material and relevant” to the performance of the product. Because subsection (b) concerns misrepresentations to the FDA, it is reasonable to infer that the information must be “material and relevant” to the FDA. Determining what information would have been important to the FDA would also create the federalism concerns noted by the Court in Buckman.

Finally, the information which was allegedly withheld or misrepresented must, under the Texas statute, be causally related to plaintiffs’ injuries. Unless the withheld information would have resulted in some definite change by the FDA, such as either non-approval of the drug or a labeling change, such withheld information could not be causally related to a plaintiff’s injury. Again, in order to establish that the FDA would have acted differently if defendant had submitted accurate information, plaintiffs would have to “go behind” the FDA processes, raising the concerns sought to be avoided in Buckman.

The Court thus found that the requisite showing under the Texas statute is analogous to and sufficiently equivalent to asserting a claim of fraud on the FDA that the fraud claim/presumption defense/statutory exception is itself preempted under Buckman. For all these reasons, Defendant’s Motion for Partial Summary Judgment was granted.

The ruling on the Texas claims follows the MDL court's April ruling dismissing claims by Michigan plaintiffs. The court had relied on Garcia v. Wyeth-Ayerst Laboratories, 385 F.3d 961 (6th Cir. 2004), for the proposition that the Michigan fraud exception was also preempted under the U.S. Supreme Court's decision in Buckman.

Recent Preemption Ruling: Wait For Levine

A recent trial court decision shows the state of flux in applying the preemption doctrine in pharmaceutical cases. In the Celexa/ Lexapro MDL, the court denied without prejudice the defendant’s preemption motion, to allow further discovery and expressly because the United States Supreme Court has granted certiorari in Levine v. Wyeth, 128 S.Ct. 1118 (2008), to consider the extent to which prescription drug labeling judgments imposed on manufacturers by the FDA, pursuant to FDA's comprehensive safety and efficacy authority under the Federal Food, Drug, and Cosmetic Act, preempt state law product liability claims premised on the theory that different labeling judgments were necessary to make drugs reasonably safe for use. See In re Celexa and Lexapro Products Liability Litigation, 2008 WL 2906713 (E.D.Mo. July 24, 2008), found here.


California Supreme Court Agrees To Hear Contingent Fee Public Nuisance Issue

The California Supreme Court has agreed to hear a public nuisance case involving lead paint manufacturers that raises the important issue whether public entities can hire outside attorneys on a contingency fee basis in these kinds of cases. County of Santa Clara v. Superior Court (Atlantic Richfield), No. S163681 (Cal. S.Ct.).

In granting review last week, the Court stated: “This case presents the following issue: May a public entity retain private counsel to prosecute a public nuisance abatement action under a contingent fee agreement?”

Ten or so California cities and counties are plaintiffs in the case which accused several former lead paint manufacturers of fraud, strict liability, negligence, unfair business practices, and public nuisance. Eventually, the plaintiffs agreed to move forward with only the public nuisance question. In February, 2007, the defendants filed a motion to bar payment of contingency fees to private attorneys hired by the government plaintiffs. Under an agreement reached by the cities and counties, private counsel apparently were to receive only a small fee upfront, but then 17% of any net recovery.

The California superior court barred the public entities from compensating their private counsel through contingency fees. In April, 2008, the Sixth Appellate Court of Appeal overturned that decision, saying private counsel would only play a limited role in this particular litigation – so the arrangement was acceptable. The court of appeals' opinion tried to draw a distinction between situations where private counsel are performing tasks on behalf of and in the name of the government in a public nuisance abatement action – where private counsel must be absolutely neutral and cannot be compensated by a contingent fee arrangement – and the situation where private counsel are “merely assisting” government attorneys in the litigation of a public nuisance abatement action and are explicitly serving in a subordinate role. In the latter case, private counsel are not themselves acting in the name of the government and have no role in the balancing of interests that triggers the absolute neutrality requirement, the court stated. The defendants filed a petition for review.

When an attorney wields the power of the state in court, there are ethical and prudential concerns. Not only is a government lawyer's neutrality essential to a fair outcome for the litigants in the case in which he or she is involved, it is essential to the proper function of the judicial process as a whole. Our system relies for its validity on the confidence of society; without a belief by the people that the system is just and impartial, the concept of the rule of law cannot survive. When a government attorney has a personal interest in the litigation, the neutrality so essential to the system is violated. For this reason prosecutors and other government attorneys can be disqualified for having an interest in the case extraneous to their official function.

The justification for the prohibition against contingent fees seen in criminal actions has been extended to certain civil cases. In People ex rel. Clancy v. Superior Court, 39 Cal.3d 740, 218 Cal.Rptr. 24 (Cal. 1985), the Court did not adopt a per se ban on such contingency fees, but did note that there is a class of civil actions that demands the representative of the government be absolutely neutral. This requirement would preclude the use in that class of cases of a contingent fee arrangement.

The abatement of a public nuisance involves a balancing of interests. On the one hand is the interest of the people in ridding their community of the alleged obnoxious or dangerous condition; on the other hand is the interest of the landowner in using/selling his property or products. Thus, as with an eminent domain action, the abatement of a public nuisance involves a delicate weighing of values. Any financial arrangement that would tempt the government attorney to tip the scale cannot be tolerated, said Clancy. It will be interesting to see if the "merely assisting" distinction succeeds.

That type of distinction was adopted by the Rhode Island Supreme Court in State of Rhode Island v. Lead Industries Association, Inc., No. 2004-63-M.P. (R.I. July 1, 2008), found here. In that case, the fee agreement provided that, in return for their legal representation on behalf of the state in the lead paint litigation, counsel would be entitled to a fee reflecting 16 2/3 percent of any monies recovered. Although the Court ruled for the defendants on the merits, it addressed the fee issue as one of extreme public importance, and as capable of repetition but evading review. The Court noted that the propriety vel non of contingent fee agreements in the public sector is a much controverted and still developing area of the law. It concluded that the Attorney General is not precluded from engaging private counsel pursuant to a contingent fee agreement in order to assist in certain civil litigation, so long as the Office of Attorney General retains absolute and total control over all critical decision-making in any case in which such agreements have been entered into. Accordingly, in order to ensure that a contingent fee agreement is not adverse to the standards that an attorney representing the government must meet, it is vital that the Attorney General have absolute control over the course of any litigation originating in that office. The Attorney General’s discretionary decision-making must not be delegated to the control of outside counsel; rather, it is the outside counsel who must serve in a subordinate role.

Ohio Federal Court Declines To Dismiss Consumer Fraud Putative Class Claim

A federal court has denied Whirlpool Corp.’s motion to dismiss in a proposed class action arising over allegedly defective ice chutes in the company’s side-by-side refrigerator models. Nessle v. Whirlpool Corp., No.1:07-cv-03009 (July 25, 2008 N.D. Ohio). See here.

Judge Christopher Boyko denied the motion, finding plaintiff had sufficiently pled the key elements required to allege a claim under the Ohio Consumer Sales Practices Act. MassTortDefense has posted before on the growing impact of state-law based consumer fraud class actions.

Nessle purchased a Whirlpool-manufactured side-by-side refrigerator in May, 2006. The refrigerator came with a one-year limited warranty. It was sold under Whirlpool’s “Gold” label, which Nessle alleges she took to mean that the product was special and worth purchasing at a premium, or at a minimum would work properly, according to the opinion. Within a few weeks of purchasing the refrigerator, Nessle claimed, she began experiencing problems with the ice dispensing function of the refrigerator’s ice maker, including clogs in the ice chute. A service technician was dispatched to service the ice maker on several occasions, the complaint claimed. But plaintiff alleged that the ice chute would allegedly jam up and freeze again.

The lawsuit, filed in October, 2007, claims Whirlpool was aware of an alleged design defect in the refrigerators and failed to disclose the defect. It seeks to represent a statewide class consisting of all current and former Ohio residents who have, since 2000, purchased a side-by-side Whirlpool refrigerator with a purportedly defective ice chute. The complaint seeks an order requiring Whirlpool to repair or replace the defective ice chutes, as well as monetary relief.

Whirlpool argued that plaintiff failed to plead any act or omission by the company that would constitute an unfair or deceptive act under the OCSPA. Second, plaintiff had failed to adequately plead the element of proximate cause.

The court gave a narrow reading to the Supreme Court guidance in Bell Atlantic v. Twombly, 127 S.Ct. 1955 (2007), as requiring only enough facts to state a claim that is plausible on its face. Of course, the Court also has stated that, “Factual allegations must be enough to raise a right to relief above the speculative level.” Id. at 1965.

On the conduct element, and the use of the term “Gold,” the court relied on the purpose of the Act to compensate consumers and the need to “liberally construe” such legislation.  One would presume that beyond the motion to dismiss stage a serious challenge exists to plaintiff's alleged interpretation of the term "Gold." 

On the causation issue, defendant stressed that plaintiff did not contend the “Gold” label affected her decision to buy her refrigerator, and that Plaintiff did not read, hear, or see any statements of fact by Whirlpool prior to purchasing the refrigerator. Defendant’s argument, the court said, is “largely unpersuasive” because there is no provision in the statute itself requiring Plaintiff to show reliance on any statement of fact or omission. While proximate cause is an essential element of an OCSPA claim, the court relied on dicta from the Sixth Circuit that “a showing of subjective reliance is probably not necessary to prove a violation of the OCSPA.” Butler v. Sterling, Inc., No. 98-3223, 2000 WL 353502 at *4 (6th Cir. Mar. 31, 2000).

The court also relied on an intermediate appeals level state court opinion, which the court read to suggest  that individual reliance is not necessary with regard to class action suits under the state consumer fraud act. Amato v. General Motors Corp., 11 Ohio App. 3d 124, 126 (1982). In Amato, the court specifically noted: “[C]onsumer claims would amount to little if acceptance of the representations made for the product could be manifested only by one-on-one proof of individual exposure.”   MassTortDefense notes that that 25 year-old opinion actually held that proof of reliance may be sufficiently established by inference or presumption from circumstantial evidence to warrant submission to a jury without direct testimony from each member of the class. That does not mean that reliance is not relevant to the causation element. And how one proves causation in an alleged fraud case without showing reliance of some sort is an issue many state courts have refused to clarify in their desire to have the reliance element not defeat consumer class actions (as a dominant individual issue). 

Judge Boyko also let stand Nessle’s claim for breach of implied warranty of merchantability, and unjust enrichment, but dismissed the claim for breach of express warranty. “The written warranty contains no language pertaining to the reliability or performance of the ice maker, and provides only for repair or replacement of any defective parts during the one-year limited warranty period.”

Class Certification Denied In Peanut Butter MDL Litigation

A federal court last week refused to certify two different classes of plaintiffs in multidistrict litigation that accuses ConAgra Foods Inc. of selling salmonella-contaminated peanut butter. In Re ConAgra Peanut Butter Products Liability Litigation, MDL-1845, 2008 WL 2885951 (N.D.Ga., July 22, 2008). 

The MDL transferee court ruled that the plaintiffs' economic claims (unjust enrichment) and personal injury claims were not suitable for class certification on predominance, manageability (choice of law), and superiority grounds (alternative means for resolution).

The litigation arises from the illness of several hundred people in numerous states; plaintiff class action lawyers allege the clients became ill from salmonella poisoning after eating ConAgra's peanut butter manufactured at its Sylvester, Ga., plant.

The plaintiffs had asked the court to certify two classes: a class of purchasers of the peanut butter, which was allegedly rendered “unusable and valueless” when the product was recalled; and a class of plaintiffs who consumed the peanut butter and claimed personal injury.

The court first rejected the plaintiffs' argument that it should apply Georgia's choice of law rules in the case. In multidistrict litigation, under 28 U.S.C. § 1407, the transferee court applies the state law that the transferor court would have applied. Murphy v. F.D.I.C., 208 F.3d 959, 965 (11th Cir. 2000). When this action was consolidated, separate actions had been filed in 10 different states. Thus, the MDL court needed to apply choice of law rules from each of the transferor courts, the court said. The obvious inference from that situation alone is that the class would be unmanageable.  Even if a class is not ipso facto unmanageable due to the application of different choice of law rules, there is substantial conflict between Georgia substantive law and other jurisdictions on the issues raised. On unjust enrichment, some states have a common law claim; others have a preemptive statute.  Privity is required in some; some but not all states require a direct benefit conferred by the plaintiff upon the defendant as a prerequisite; some but not all states have a state of mind requirement for recovery, etc. The court also found that proving damages under the unjust enrichment claim would require individualized determinations.

The un-manageability arsing from the choice of law issue also impacted the absence of superiority, what the court called the “inferiority of classwide resolution due to discerning the many differing legal standards.” Moreover, the defendant's refund program provided an alternate way of addressing the claim.

The court also declined to certify the class pursuing a personal injury claim, even a  limited "issues" class. The court found that such an issues class would not promote judicial economy or materially advance the litigation. “Although the defendant has not formally admitted liability, it is highly unlikely that it will deny that salmonella-contaminated peanut butter is a defective product and makes people sick who eat it,” the court said.

The importance of this reasoning to readers of MassTortDefense is that it points out that in balancing predominance, and assessing superiority and manageability, the court needs to take a realistic view of what issues will actually be litigated. The trial plan proposed by the parties has to reflect the real issues to be litigated.  The allegedly predominant common issue of defect or defendant negligence is immaterial if that is not an issue on which the parties will spend considerable time and effort.

Moreover, although the court focused on the predominance issue in denying the personal injury class, it made an important observation about the constitutional implications of an issue class or a bifurcated class proceeding. Denying the common issues personal injury class here also avoided "potential constitutional problems." Rule 23(c)(4) issues classes can violate the parties' Seventh Amendment jury trial rights, especially in personal injury cases. Many jurisdictions differ on the details of even a negligence claim.  Such nuances "can be important, and its significant is suggested by a comparison of differing state pattern instructions on negligence and differing judicial formulations of the meaning of negligence and the subordinate concepts.” In re Rhone-Poulenc Rorer, Inc ., 51 F.3d 1293, 1300 (7th Cir.1995).  And there is the very real risk that a second jury (even if just on damages) would have to reconsider some of the liability issues decided by the first jury: too substantial a risk to certify the issues class. The Court thus heeded the "binding authority" which cautions that separate trials of liability and damages must be approached "with trepidation” to avoid offending the Seventh Amendment. State of Alabama v. Blue Bird Body Co., Inc., 573 F.2d 309, 318 (5th Cir.1978).

Yet another important observation by the court was that the plaintiffs' case for class certification collapses when it confronts the fact that certification of a common issues class will not dispose of a single case or eliminate the need for a single trial. Any saving in judicial resources is speculative at best. See Castano v. American Tobacco Co., 84 F.3d 734, 749 (5th Cir.1996). Under the plaintiffs' trial plan, at least 6,000 individual trials on exposure, injury, causation, damages and other individual issues would have to be prosecuted whether or not a class is certified, presumably by the lawyers already retained by the personal injury claimants. The lesson here is the court was willing to "look down the road" to how the case would go.

Finally, another gem on the issue of superiority: While it would be possible, said the court, to have a common issues trial on the issue of, “Can eating peanut butter that is contaminated with the bacteria listed above cause illness?” (i.e. the general causation issue), "why bother having a trial on issues of such abstract generality?"  And a class trial of issues such as what the defendant allegedly knew or should have known and the adequacy of its general plant sanitation practices in relation to the onset of illness for thousands of people -- plaintiffs' quintessential "common" issues -- would require special interrogatories and a verdict form "of unimaginable complexity. I cannot imagine how to fashion a verdict form that would provide meaningful answers...."  

FDA Advisory Committee Discusses Nano-technology Issues

The FDA’s Advisory Committee for Pharmaceutical Science and Clinical Pharmacology met last week. Among the agenda topics was a discussion of current thinking on issues pertaining to the use of nanotechnology in drug manufacturing, drug delivery, or drug products. (The general function of this committee is to provide advice and recommendations to the agency on regulatory issues.) Scheduled to speak were representatives of the Office of Pharmaceutical Science at CDER, nano-medicine industry leaders, and academics.

MassTortDefense has posted on nano-technology here.

As CDER grapples with questions regarding how to regulate nanomaterial-containing products, several issues have surfaced, including 1) what are the types of nanotechnology applications that will be reviewed by CDER, 2) what are the unique features of these applications that may pose a scientific and/or regulatory challenge to reviewers, 3) are FDA’s current regulatory requirements adequate for the evaluation of nanomaterial-containing products, and 4) what can FDA do to expedite the development of safe and effective nanomaterial-based pharmaceuticals.

Nanotechnology applications in drug development are likely to have a significant impact on the products that FDA regulates. Products containing nanomaterials are being investigated for potential applications as therapeutics, and some products containing nanoscale materials are already on the market. While some of these nanomaterials are nanoscale versions of larger materials used in approved products, other nanomaterials are novel and have never been used in drug products. CDER has initiated a number of activities in order to evaluate how this new technology fits into the current regulatory framework. There have been questions raised about the need for “nano”-specific requirements, in part to aid the development of products containing nanomaterials, and in part because nanomaterial containing products may need to fulfill different regulatory requirements prior to approval.

The FDA established a Nanotechnology Task Force, which issued a report in July 2007. In the task force report, recommendations were made regarding FDA’s future direction for regulating nanomaterial-containing products. Guidance development was included as one the recommendations. FDA believes, however, that the preclinical studies currently required of sponsors are very comprehensive, and include many studies that measure endpoints that could predict possible injury in many organ systems. While general issues have been raised, no one has clearly communicated in what respect the current requirements might be lacking in their capacity to assess safety concerns from such products, and what might be other tests that would improve the predictive value of the current regulatory preclinical requirements.

Nevertheless, because it is widely accepted that there are unique features associated with
nanotherapeutic products, these unique features may lead to future challenges for the development, manufacturing, and possibly safety evaluation and review of these products. Accordingly, the committee was set to discuss:

1. Is CDER guidance needed for the development of nanotechnology-derived drug applications?
2. If guidance is needed from CDER, what areas should this guidance focus on?
3. In light of the many definitions of nanotechnology available, how should CDER define nanotechnology, for the purposes of guidance development?
4. Should particle size information be routinely requested of drug developers, regardless of whether nanomaterials are included in the product? How might this information help in the assessment of safety and efficacy of drugs?

Clearly this is no small issue.


CPSC Legislation Passes Both Houses

A quick update on the CPSC reform legislation: The House voted 424-1 (9 not voting) to agree to the Conference Report on the Consumer Product Safety Commission Reform Act of 2008. Last night, the Senate agreed to the Conference Report by a vote of 89-3 (neither Presidential candidate present to vote). On to the White House.

European Food Safety Authority Weighs In On BPA

The European Food Safety Authority’s AFC Panel has issued a further scientific opinion report on the chemical bisphenol-A (BPA). MassTortDefense has posted on BPA here and here. The goal of the assessment was to focus on the chemicals’ elimination from the body and how that might relate to the risk assessment of BPA in humans. The work took into account the most recent data since the EFSA’s 2006 opinion report, which concluded that exposure to BPA is well below the Tolerable Daily Intake (TDI).  A TDI is a regulatory standard for dietary exposure calculated to ensure that no adverse effects occur.

About EFSA
The European Food Safety Authority is an independent European agency funded by the EU. The EFSA is governed by an independent Management Board whose members are appointed to act in the public interest and do not represent any government, industry, or private sector. EFSA’s role is to assess and communicate on all risks associated with the food chain. Since EFSA’s advice serves to inform the policies and decisions of risk managers, a large part of EFSA’s work is undertaken in response to specific requests for scientific advice from the European Commission, the European Parliament, and EU Member States. The AFC Panel focus is on food additives, flavorings, processing aids and materials in contact with food.


The key conclusion of the Panel on BPA is that after exposure, the human body rapidly metabolizes and eliminates the substance. This represents an important metabolic difference compared with rats, and suggests certain animal models are not all that useful. That is, people metabolize and excrete BPA far more quickly than rodents. This evidence further limits the relevance of low-dose effects of BPA reported in some rodent studies used for human risk assessment.

The Panel further concluded that the exposure of a human in utero to BPA would be negligible because the mother rapidly metabolizes and eliminates BPA from her body. The scientists also concluded that newborns are similarly able to metabolize and eliminate BPA at doses below 1 milligram per kilogram of body weight per day. This implies that newborns could effectively clear BPA at levels far in excess of the TDI of 0.05 mg/kg bw set by the Panel, and therefore its 2006 risk assessment remains valid. The TDI provides a sufficient margin of safety for the protection of the consumer, including fetuses and newborns, EFSA said.

EFSA took note of the U.S. National Toxicology Program’s draft brief on BPA, and of the Canadian government’s recent Draft Screening Assessment on BPA, which took into account findings from low-dose animal studies, notably with respect to neuro-developmental toxicity. It pointed out that these studies were limited in rigor, consistency and biological plausibility.

The new European report is consistent with the statements of the FDA that a large body of evidence indicates that currently marketed products containing BPA, such as baby bottles and food containers, are safe and that exposure levels to BPA from these products are well below those that may cause health effects.