Legislation Might Increase Litigation Against Foreign Product Manufacturers

Sen. Sheldon Whitehouse (D-R.I.) announced last week his plan to introduce legislation that would increase the ability of U.S. plaintiffs to sue foreign manufacturers of allegedly defective products. This development should be monitored by all foreign manufacturers selling into the United States.

Whitehouse announced the proposed legislation at a hearing by the Senate Judiciary Committee's Subcommittee on Administrative Oversight and the Courts. The hearing was entitled, “Leveling the Playing Field and Protecting Americans: Holding Foreign Manufacturers Accountable.” A variety of witnesses testified about the impact of the issue on both American consumers and American business, and whether there was a need for Congress to put foreign companies on a more equal footing with domestic companies in terms of litigation risks, and to reduce a possible “competitive disadvantage” suffered by U.S. manufacturers.

There are three main procedural hurdles faced by plaintiffs seeking to sue foreign parties: (1) obtaining personal jurisdiction; (2) serving process; and (3) enforcing U.S. judgments abroad. That is, a party suing must first be able to find a court that has Constitutional power/authority over the defendant, personal jurisdiction. Asahi Metal Industry Co. v. Superior Court of California, Solano County, 480 U.S. 102 (1987). Then after filing, the party must inform the defendant of the lawsuit and its contents.  And at the end of the lawsuit, the party must be able to collect any money awarded, especially when the defendant's assets are outside of the U.S.  If the defendant is judgment proof, the suit is a waste of time for plaintiffs.

One speaker, Prof. Teitz of the Roger Williams University School of Law, described that as a result of different approaches in other legal systems, U.S. consumers face difficulties recovering in U.S. courts and enforcing U.S. judgments abroad, in fact more difficulty than many foreign consumers face in the reverse situation. In addition, there is an obvious competitive impact on U.S.  manufacturers who are sued more easily and cheaply here for obvious reasons and against whom judgments can be enforced throughout the country under the Full Faith and Credit Clause. Service of process may be governed by international conventions and treaties, or may involve the use of diplomatic channels, the Professor said. Legislation to require domestic agents for service of process would reduce the cost and difficulty of service.

A plaintiff attorney testified that the transition of the U.S. economy away from manufacturing has resulted in a dramatic increase in foreign-made goods entering the country. The volume of imports has tripled over the last decade and is expected to triple again by 2015. He recommended legislation allowing jurisdiction based on aggregate national contacts and import licenses that require liability insurance as well as agents for service of process and consent to jurisdiction.

Another attorney noted a competitive disadvantage for U.S. companies that are subject to what he called the “tort tax.” But he cautioned that legislation should not burden U.S. business by expanding federal jurisdiction and changing choice-of-law rules. He also warned of possible problems with the constitutionality of the discussed legislation. For example, legislation might authorize jurisdiction over foreign entities by virtue of their national contacts in both federal and state courts. That may run afoul of the rule that state courts may only assert personal jurisdiction over defendants who purposefully establish minimum contacts with that forum state. See, e.g., International Shoe Co. v. Washington, 326 U.S. 310, 316 (1945).

Senate Holds Hearing on Chinese Drywall

A variety of public health officials testified last week at a hearing before the Consumer Protection, Product Safety, and Insurance Subcommittee of the U.S. Senate’s Committee on Commerce, Science, and Transportation, on the issue of allegedly toxic Chinese drywall installed in recently built homes.

Officials from the Centers for Disease Control and Prevention, the Consumer Product Safety Commission, the EPA, and Florida's Department of Health outlined the plan to study the effects of the drywall in a small number of test homes, to be completed by the end of June, and then expand the studies to a large-scale sample. The CPSC is also working with China's Administration for Quality Supervision, Inspection and Quarantine to find out how the drywall was made and to resolve significant difficulties in tracking the drywall's source.

The testifying officials warned that efforts to mitigate the drywall effects on homeowners shouldn't lead legislators to legislate policy ahead of scientific investigation. For example, Lori Saltzman, division director of the Office of Health Sciences at the CPSC, cautioned senators against legislation rushing to address any drywall issues before the ongoing studies are complete. And another panelist noted that a provision banning imported drywall composed of more than 5 percent organic material in a bill by Sen. Nelson, D-Fla., could shut down virtually all U.S. drywall imports, not just those from China suspected of being toxic.

According to allegations of homeowners, certain Chinese-made drywall — imported in the time frame 2005-2007 to meet an uptick in homebuilding demand after Hurricane Katrina — can cause respiratory problems and other health issues, produce a rotten smell, and corrode copper and metal fixtures, leading to fire hazards.

Randy Noel, a representative to the National Association of Home Builders, estimated the cost of replacing the Chinese-made drywall to be as much as $100,000 per home. More than 60 lawsuits have already been filed in seven states over the drywall, without conclusive scientific proof of its toxicity. Noel advocated a stay of the litigation until the CPSC and other agencies have concluded their investigations, identifying the scientific cause of the problems associated with the drywall and establishing a workable remediation strategy. He made the committee aware of a troubling new development in the area of drywall testing: the dramatic increase in the number of companies in the marketplace claiming to have the capability to test someone’s home to determine whether or not they have, or will have, a “toxic drywall” problem.

Not everyone has the same notion towards litigation: Saltzman reportedly remarked that the CPSC does not want to jeopardize any potential remedy for homeowners by having inadequate scientific proof to support and advance a possible court case.


Administration Releases Memorandum On Preemption

The Democratic assault on the preemption doctrine has taken its next step with the release last week by the White House of a Presidential memorandum which restricts federal agency statements on preemption and directs those agencies to review preemption pronouncements made in the past decade under the Bush Administration.

Ironically, the directive ostensibly rests on the grounds of States rights: noting State law and national law often operate concurrently to provide independent safeguards for the public, and that throughout our history, State and local governments have frequently protected health, safety, and the environment more aggressively than has the national government.  “An understanding of the important role of State governments in our Federal system is reflected in longstanding practices by executive departments and agencies, which have shown respect for the traditional prerogatives of the States,” argues the memorandum.

The memorandum comes two months after the Supreme Court’s ruling on preemption in the context of drugs in Wyeth v. Levine, and concurrently with democratic efforts in Congress to overturn Medtronic v. Riegel in the medical device context.

The memorandum sets for the general policy of the new Administration that preemption of State law by executive departments and agencies should be undertaken only with full consideration of the “legitimate prerogatives of the States and with a sufficient legal basis for preemption.” Specifically, it orders that agencies should not include in regulatory preambles statements that the department intends to preempt State law through the regulation except where preemption provisions are also included in the codified regulation. Also, agencies should not include preemption provisions in codified regulations except where such provisions would be justified under the (presumably re-assessed) legal principles governing preemption.

Finally, departments should review regulations issued within the past 10 years that contain statements in regulatory preambles or codified provisions intended by the agency to preempt State law, in order to decide whether such statements or provisions are justified under (again, re-interpreted) applicable legal principles governing preemption. Where the head of a department or agency determines that a regulatory statement of preemption or codified regulatory provision cannot be so justified, the head of that department or agency should initiate appropriate action, which may include amendment of the relevant regulation.

The memorandum is a political statement as much as a legal document, and is consistent with President’s Obama’s comments while a candidate. As it eventually evolves into specific agency statements and policy, it promises to create a hodge-podge regulatory quilt, under which business will struggle with product safety decisions which will comply with federal, national standards, be upheld in some state jurisdictions, but nevertheless be subject to review by lay juries in others.


Daubert Ruling In Zyprexa: A Lesson For Mature Mass Torts

Zyprexa is a mature mass tort, as the defendant has settled approximately 31,000 individual product liability lawsuits over the drug, which was widely used in the treatment of psychiatric disorders. The federal court overseeing the multidistrict litigation over Eli Lilly and Co.'s product has made an important ruling on a Daubert challenge to a plaintiff expert in 13 cases involving 20 of the remaining claimants. In re Zyprexa Products Liability Litigation, MDL No. 1596 (E.D.N.Y. May 12, 2009).

Plaintiffs proposed to call an expert to establish the specific causal relationship between the Zyprexa taken and the onset or worsening of their diabetes. After briefing and an extensive evidentiary hearing, Senior Judge Jack B. Weinstein granted Eli Lilly's motion to disqualify Dr. Stephen J. Hamburger, M.D. While the expert met the necessary educational and experiential qualifications warranting the admissibility of his expert opinions, the court found his testimony lacked sufficient scientific reliability.

The court noted that in longstanding and highly complex litigation (read mass tort), particular emphasis must be placed on the reliability and scientific validity of the expert's opinions. Particularly in a mature mass tort ("advanced stage" described the court) when the issues of the benefits and risks of the drug have been a focus of the scientific community for some time, precision with respect to the relevant scientific knowledge and its application to the facts of the individual cases is expected, said the court.

The record demonstrated to the court that this expert's opinions relied on "a subjective methodology, a fast and loose application of his scientific theories to the facts, and conclusion-driven assessments on the issues of causation in the cases on which he proposes to testify,” the order said. In particular, the court pointed to the opinion that Zyprexa supposedly has a direct adverse effect on cells essential to the body's production of insulin, even in cases in which there was no documented weight gain. This opinion was not based on sufficient facts or data, nor was it the product of a reliable method.

In applying this theory to the facts of the cases (the "fit" required by Daubert), the expert had been, in the view of the court, “shockingly careless” about the scientific facts in these cases, including whether weight gain preceded or followed the plaintiffs' use of Zyprexa, and whether there was any weight gain at all. When confronted with these issues, he merely "shrugged off" factual discrepancies in his analyses or shifted to new theories on the fly.

Significantly, the court correctly observed that other mass torts had been subject to a kind of junk science, and it it could not "permit a major pharmaceutical litigation to become the subject of the kind of 'rubber-stamp' expert opinions that have so marred mass litigations such as those involving asbestos and breast implants.”

Happy Birthday To Us

Just a quick note to thank all the readers of MassTort Defense

Today marks the one-year anniversary of this blog.  In the past year, we have posted about 300 stories, on topics from Accutane to Zyprexa, on cases from Vermont to China.  The goal has been to highlight interesting and useful mass tort and product liability issues for the defense bar. 

In the first few weeks of this blog's life, we knew all the readers personally (as they were all relatives); and in just a few short months we have grown tremendously, with thousands of regular readers all around the world. 

Comments and feedback are always welcome, and we hope you continue to read and find some value in MassTortDefense in its second season.

Thanks again to all.


Cats Are Not People Too: Products Claims For Companion Animals

Defendants who doggedly fend off product liability claims, facing ever expanding claims including from people who aren’t hurt (CFA claims) or were merely exposed to the product (medical monitoring), may have avoided being bitten by a new class of plaintiffs: cats and dogs. In Goodby v. Vet Pharm Inc., 2009 WL 1262406 (Vt. May 8, 2009), the Vermont Supreme Court considered two questions: first, whether non-economic damages are available when a pet dies due to negligent or wanton acts of veterinarians and/or a pharmaceutical company; second, whether a claim for negligent infliction of emotional distress lies for the death of a pet when its human companion was not within any so-called zone of danger at the time of the mishap. The Court answered both questions in the negative.

According to plaintiffs' allegations, their two cats were being treated for hypertension by defendant veterinarians. The day after plaintiffs began administering a medication to their cats, they noticed that the cats seemed ill. The next day, plaintiffs brought one of the cats to the veterinary clinic, and eventually the other cat as well. Both died within a few days. Plaintiffs allege that the deaths of their pets were due in part to the fact that the refill tablets contained at least twenty times the labeled dose of the drug, causing severe toxicity in plaintiffs' cats. Plaintiffs further alleged that the defendant veterinarians negligently or wantonly failed to diagnose the toxicity in the cats.

The general rule is that animals are merely personal property. Plaintiffs asserted that the time has come to allow pet owners to sue for non-economic damages when their pets are killed by the negligent acts of others, citing those cases that recognize the special characteristics of companion animals. Plaintiffs reasoned that those same characteristics make it illogical to continue to categorize pets in the same class of personal property as agriculturally useful animals or inanimate objects. Plaintiffs and amicus the Animal Legal Defense Fund urged the Court to adopt the view that such pets are more properly considered as family members than personal property, so that recovery for non-economic damage occasioned by their loss should be similarly available as for the wrongful death of next of kin.

Reviewing the wrongful death statute, the Court pounced on the anomaly that plaintiffs were requesting a judicial expansion of law to recover for loss of a pet when that law does not allow for loss of a broad variety of critically loved human beings (such as grandparents). Whether the alleged familial quality of companionship between humans and their pets is relatively new or ancient, plaintiffs sought a dramatic alteration to the law. Such changes as plaintiffs requested were better presented to the legislature.

Regarding plaintiffs’ attempt to scratch out an emotional distress claim, the Court assumed, without deciding, that the pets qualified as “someone” close to plaintiffs who faced physical peril by virtue of defendants' negligence. After this threshold showing, where plaintiffs did not themselves suffer an actual “physical impact from an external force,” the remaining elements of an a negligent infliction of emotional distress claim require that: (1) plaintiffs must have been within the “zone of danger” of the acts imperiling their cats; (2) plaintiffs were subjected to “a reasonable fear of immediate personal injury;” and (3) as a result of such imminent danger to their persons, plaintiffs “suffered substantial bodily injury or illness.” Even if plaintiffs in this case could show that they suffered an emotional injury with physical manifestations as a result of their cats' deaths, they cannot establish either of the first two elements necessary for such a claim.

The Vermont Supreme Court affirmed the lower court's decision dismissing the two cat owners' emotional distress claims against their veterinarians and against animal drug distributor Vet Pharm Inc.  Defendants have enough issues dealing with alleged injuries to human plaintiffs.

Plaintiffs Denied Discovery In Class Certification Phase

The certification decision in a proposed class action may be the most important aspect of such litigation. Few certified class actions go to jury verdict (they settle), and, frequently, cases in which class certification is denied are dismissed without even named plaintiffs’ claims being adjudicated. Accordingly, the preparation for the class certification hearing/briefing is crucial. Both sides have important tactical decisions to make about the amount and nature of pre-certification discovery they wish to conduct. Discovery of named plaintiffs and absent class members, when available, can show important distinctions among the class members, which in turn demonstrate an absence of commonality, a predominance of individual issues, and manageability problems. Not infrequently, plaintiffs object to defendants’ attempted discovery as allegedly "going to the merits" and thus as inappropriate for the certification stage. In an interesting, recent little decision in the Ketek antibiotic litigation, the show was on the other foot.

Plaintiffs, who alleged the maker of the antibiotic Ketek fraudulently concealed the drug's dangers, were denied the right to depose various non-party witnesses at the certification stage of this litigation. Sergeants Benevolent Association Health and Welfare Fund v. Sanofi-Aventis U.S. LLP, 2009 WL 1181808 (E.D.N.Y., 4/30/09). The plaintiffs are employee benefit plans that paid for Ketek, known generically as telithromycin. The FDA approved Ketek in 2004 for treatment of three medical conditions. Plaintiffs assert that this approval was based in part on data generated in a study that allegedly “was contaminated by fraudulent activity.”

As part of class certification discovery, plaintiffs proposed to take the deposition of nine non-party witnesses, all of whom were involved with the challenged study and the FDA's approval of Ketek. The court found “unconvincing” plaintiffs' assertion that the proposed non-party depositions were necessary to establish common impact through a “loss of value” methodology; the court found that plaintiffs had misunderstood that methodology in the Zyprexa litigation, which they claimed to be mirroring. Second, the proposed non-party depositions were highly unlikely to produce or lead to evidence relevant to numerosity, typicality, or adequacy of representation. Evidence relating to the complexity of attempting to prove plaintiffs' civil RICO claim may be relevant to predominance and superiority, but plaintiffs need not actually prove their RICO claim, or conduct the discovery necessary to prove that claim, in order to make this showing. Third, defendants did not dispute that the evidence relating to the study was common to all members of the putative class. Thus, discovery postponed to merits phase.

Class Certification Rejected in French Fry MDL

A federal court has rejected class certification in the multidistrict litigation concerning McDonald's Corp.'s french fries. In Re McDonald’s French Fries Litigation, MDL No. 1784, Civ. No.06-C-4467 (N.D. Ill. May 6, 2009). Plaintiffs in all 50 states and Washington, D.C., brought claims against McDonald's for allegedly putting hydrolyzed wheat bran and hydrolyzed casein in a beef flavoring for oil used in production of french fries and hash browns. Plaintiffs included individuals with celiac disease; galactosemia; autism; and wheat or gluten allergies. Defendant was alleged to have falsely claimed the "Potato Products" were gluten, wheat, and dairy-free through its website and in literature available at the restaurants.

The plaintiffs did not claim that they were physically harmed by the presence of trace amounts of wheat gluten and casein — a milk protein — in the beef flavoring. Rather, they based their claims on theories of consumer fraud and alleged economic losses. Plaintiffs claim they purchased Potato Products based solely on defendant’s representations that those products were free of gluten, milk and/or wheat ingredients, that the Potato Products in fact contained these allergens, and that absent defendant’s misrepresentations, plaintiffs would not have purchased the Potato Products.

The court first addressed the class definition. Named plaintiffs had testified in their depositions that they were quite satisfied with the Potato Products they consumed. (This shows the importance of pre-certification discovery, and the common common disconnect between the theories of class counsel and the reality of the class). None of the named plaintiffs had any physical reaction to eating the Potato Products. It was clear, therefore, that many persons in the class as defined by plaintiffs had gone on eating defendant’s Potato Products even after defendant clarified its product disclosures. Expert testimony showed that many patients with food allergies conduct their own ‘trials’ to determine what foods with gluten they have previously enjoyed that they may eat in moderation without experiencing symptoms. People who continued to use the products suffered no injury, not even the economic one claimed in this lawsuit. So the class was both over-inclusive and too indefinite for certification.

Regarding a narrower possible class of persons who because of their diagnosis of celiac disease, galactosemia, autism or a wheat, gluten or dairy allergy would not have eaten McDonald’s french fries or  hash browns if they had known they contained, potentially, a small amount of hydrolyzed wheat bran and hydrolyzed casein in the beef flavor that makes up one percent of the oil in which the potato suppliers par-fry the potatoes before shipping them to McDonald’s, and who relied on a representation by defendant that its Potato Products were wheat or milk free in purchasing and eating the french fries or hash browns….the court found that individual issues and individualized proofs would destroy manageability of a class action. That class in essence asked the court or jury to, at a minimum, review and evaluate potentially millions of letters from doctors for each class member. In addition, each claimant would have to individually affirm that he or she had seen the representation, purchased Potato Products on the basis of the representation, and no longer did so following defendant’s expanded product disclosure in February, 2006. Such a necessary separate evidentiary inquiry into each class member’s claim precluded certification.

Finally, choice of law issues ensured that individual issues of law clearly predominated over
common issues, making a nationwide class unmanageable. In at least some jurisdictions, reliance is necessary to connect the representations with the economic harm claimed, and in others individual proof is necessary to show that any injury was proximately caused by the misrepresentation made by a defendant.

FDA Food Inspection Audits At Issue

Published reports cite data suggesting that the FDA is having difficulty meeting its audit goals for food-safety inspections done contractually by states on its behalf.  The FDA is ultimately responsible for the safety of about 80% of the U.S. food supply.  It tends to focus on high risk foods, and contracts with approximately 40 states for inspections of other foods. Nationally, about half of all inspections are performed by states, according to the GAO.

The FDA audits state inspections done on its behalf, with a goal of auditing 7% of the state efforts so as to ensure quality inspections. Recently released data suggests the agency did not meet this audit target in at least 17 states, with five states receiving no audits in the last reporting period. The quality of state inspections came under intense scrutiny this year during the salmonella outbreak allegedly traced to Peanut Corp. of America in Georgia. And, as readers of MassTortDefense realize, the end result can involve mass tort litigation.  Experts hypothesize that so many state and federal resources are devoted to major food-borne illness outbreaks, audits may get postponed.

President Obama's selection to head the FDA, Dr. Margaret Hamburg, has pledged to make protecting the country’s food supply a major priority. And the new proposed federal budget calls for a $260-million increase for the FDA's food safety program. Part of the new funding would go to rebuild the ranks of inspectors; the number of FDA food inspectors has dropped since 2003. Hamburg has noted that the globalization of food production (about 20% of our food supply comes from abroad), the emergence of new and complex food technologies, and the risk of adulteration or deliberate terror attacks on our food supplies all raise major concerns. She proposes a shift from chasing outbreaks after they have occurred to trying to prevent them in the first place.

White Paper Explains Detrimental Impact of Proposed Medical Device Anti-Preemption Bill

Much of the debate over the preemption doctrine, certainly in the media and even in many legal circles, has focused on the alleged inadequacy of the FDA to regulate drugs and devices, and the purported consequent  need to have state juries of lay people “police” the health industry. Comparatively little attention has been given to the other impacts of eliminating federal preemption.

A new white paper demonstrates that erasing this doctrine would decrease access to life-enhancing medical devices, increase health care costs, and reduce medical device industry employment. Congressional Democrats are seeking to do just this in the device context -- the Medical Device Safety Act of 2009 was crafted in response to the U.S. Supreme Court's 8-1 ruling in February, 2008 in Riegel v. Medtronic, upholding preemption for certain medical devices when the devices, and their warning labels, had been approved by the U.S. Food and Drug Administration.

The Economic Impact of Eliminating Federal Preemption for Medical Devices on Patients, Innovation and Jobs” was authored by Ernst Berndt, professor in applied economics at MIT's Sloan School of Management, and Mark Trusheim. They argue that among the effects of the bill would be:

 • Reduced patient access to products and the health benefits they provide

• Unreliable, variable patient access to products and the health benefits they provide as varying state regulations and tort liabilities discourage or eliminate products in some regions but not others

• Increased medical costs and lower net public health compared to what could be achieved with increased medical device innovation and product introductions

• Increased defensive medical practices by physicians to avoid possible litigation, raising health costs and exposing patients to greater risks from the added unnecessary procedures

• Reduction in the number of products being developed as manufacturers and their investors respond to greater uncertainty regarding product approval and economic sustainability

• Transfer of health regulatory decisions to untrained, non-expert juries who are exposed to only a biased fraction of the scientific fact base on which to base their decisions

The authors compare the bill to what happened with vaccines: from 1967 to 2004 the number of vaccine makers plummeted from 26 to 3, leading to reduced access, higher costs, no new products, shortages of existing products, a fragile vaccine supply chain, reduced employment and increases in preventable illness. Congress had to step in and take the vaccines out of the traditional tort system.

Under the bill, the authors note, state juries would be asked to render decisions regarding device safety and efficacy based on a limited range of information focused on individual risk versus broad benefit at a trial typically lasting at most several weeks. Allowing state tort suits to do this will place state juries in the position of replacing, by overriding, professionally trained federal regulators in evaluating and quantifying the risks of medical devices. And unlike federal regulators, state juries will not balance, perhaps not even consider, the benefits to those for whom the medical devices enhances health and quality of life -- who of course are not parties to the action.

Justice Souter To Resign -- A Mass Tort Perspective

Justice David Souter plans to retire from the Supreme Court when the current term ends in June. This announcement, and the inevitable speculation about the identity and judicial philosophy of his replacement, makes one wonder about the impact of the impending change on those of us in the mass tort and products liability field.

What jumps to mind? In the field of mass torts, Justice Souter authored the majority opinion in Ortiz v. Fibreboard Corp., 527 U.S. 815 (1999), the decision rejecting a Rule 23(b)(1)(B) limited fund settlement class action in the asbestos mass tort litigation. After Ortiz, non-opt-out settlement class actions became difficult as a potential mass tort settlement mechanism, particularly as a potential vehicle for resolving future claims in mass torts.

Justice Souter, writing for a 5-3 majority, also authored the landmark ruling limiting punitive damages in the long-running Exxon Valdez saga. The Supreme Court overturned a $2.5 billion punitive damages award assessed against Exxon for the 1989 Valdez oil spill, holding that the award was excessive under (maritime) common law. See Exxon Shipping Co. v. Baker, 128 S.Ct. 2605 (2008). Justice Souter stated that, under maritime law, the upper limit for punitive damages is a 1:1 ratio to compensatory damages. Although the Court’s ruling was limited to maritime cases, its reasoning was not.

According to Souter, punitive damage awards, along with runaway juries and a lack of legislative standards, have led to unpredictable outcomes and outlier awards. The Court found that the best way to cure the defect was to impose a 1:1 ratio of punitive to compensatory damages as the upper limit for punitive damages. His infamous footnote 17, however, referenced “a body of literature” that documented the unpredictability of punitive damages. But then, somewhat puzzlingly noted that: “Because this research was funded in part by Exxon, we decline to rely on it.”  Court observers have speculated on why he bothered to refer to the literature if he wasn't going to rely on it. Of course, there are times – particularly in long running mass torts -- when litigants pay for relevant empirical studies that are used in litigation, in part because often the litigants are the only ones with enough at stake to pay for expensive research studies.  And both sides do it.

In the area of preemption, Justice Souter joined the majority in Riegel v. Medtronic, Inc., 128 S.Ct. 999 (2008), holding that the preemption clause of the Medical Device Amendments of 1976 (21 U.S.C. § 360k(a)) bars common-law claims challenging the safety or efficacy of a medical device marketed in a form that has received pre-market approval from the FDA. However, he sided with the anti-preemption forces in Altria v. Good, 129 S.Ct. 538 (2008), to form a narrow 5-4 majority holding that federal law doesn't preempt cigarette makers from state law suits accusing them of deceiving consumers by marketing "light" or "low tar" cigarette brands. This despite extensive regulation of the “lights” area by the Federal Trade Commission, dating to the 1960’s, and the Congressional mandates on labeling in the Federal Cigarette Labeling and Advertising Act of 1965. Similarly, Justice Souter sided with the majority in the recent Levine v. Wyeth, 129 S.Ct.  1187 (2009) decision, finding that FDA actions had not preempted a state law claim concerning warnings about the side effects of the drug Phenergan.  The effects of that decision are yet to be felt, but the majority risked creating a hodge-podge of inconsistent state-based regulation of drugs (through jury verdicts) that need a consistent, national regulatory approach. 


New Report from Project on Emerging Nanotechnologies

A new report from the Project on Emerging Nanotechnologies argues that existing health and safety agencies are unable to cope with the risk assessment, standard setting, and oversight challenges of advancing nanotechnology. The new report, Oversight of Next Generation Nanotechnology, says the nation needs a new agency to deal with the health and environmental impacts of these technically complex products promised by rapid 21st century scientific advances.

Nanotechnology involves working at the scale of single atoms and molecules. The U.S. government defines nanotechnology as “the way discoveries made at the nanoscale are put to work.” The nanoscale is roughly 1–100 nanometers. There are 25.4 million nanometers in an inch and 10 million nanometers in a centimeter.

Nanoscale materials often behave differently than materials with a larger structure do, even when the basic material (e.g., silver or carbon) is the same. Nanomaterials can have different chemical, physical, electrical, and biological characteristics. For example, an aluminum can is perfectly safe, but nano-sized aluminum is explosive.

The novel characteristics of nanomaterials mean that risk assessments developed for ordinary materials may be of limited use in determining the health and environmental risks (and thus product liability and mass tort risks) of the products of nanotechnology. A body of literature speculates about the potential for unusual health and environmental risks given that nanometer-scale particles can get to places in the environment and the human body that are inaccessible to larger particles. Nanomaterials have a much larger ratio of surface area to mass than ordinary materials do. It is at the surface of materials that biological and chemical reactions take place, and so some expect nanomaterials to be more reactive than bulk materials.

The report explains that almost all the current applications of nano are “passive,” in that they involve adding a nanomaterial to an ordinary material as a way of improving performance. For example, adding carbon nanotubes to rubber can greatly increase the toughness of the rubber without reducing its flexibility. Passive nanotechnology applications thus include using materials like carbon nanotubes, silver nanoparticles and porous nanomaterials to add functionality to products by nature of their physical and chemical form, rather than by how they respond to their environment.

Second generation, "active" nanostructures, typically involve nanometer-scale structures that change their behavior in response to changes in their environment. These changes might come about as a result of a mechanical force, a magnetic field, exposure to light, the presence of certain biological molecules or a host of other factors.

A good deal of research, involving a variety of different nanotechnologies, is being devoted to cancer detection and cure. One of the main goals of using nanotechnology for medical purposes, observes the report, is to create devices that can function inside the body and serve as drug delivery systems with specific targets. Another hot area: researchers are exploring the use of nanomaterials and nanotechnology techniques to vastly improve computers.

Even the first-generation nanotechnologies challenge traditional risk assessment methods, argues the report. Multiple characteristics contribute to the potential toxicity of many nanomaterials; they include not just mass or number of particles but also the shape of the particles, the electrical charge at the particle surface, the coating of the particle with another material and numerous other characteristics. Science has yet to determine which of these characteristics are most important under what circumstances.

After describing the current regulatory regime, the paper calls for a more unitary regulatory approach, including a new Department of Environmental and Consumer Protection to oversee product regulation, pollution control and monitoring, and technology assessment.

CPSC Responds To Criticism on China Drywall Investigation

The Consumer Product Safety Commission has issued a report on the imported drywall situation, noting that nearly 200 consumers from at least 13 States and the District of Columbia have reported health symptoms or certain metal corrosion problems in their homes that may be related to drywall imported from China. (CPSC says it is still investigating the scope of the drywall problem, working to identify the links from foreign manufacturers to the U.S. consumers in consultation with the Chinese government and the U.S. Customs and Border Protection.)

The update comes on the heels of criticism by Senator Nelson (D. Fla.) of how quickly the CPSC was moving. The agency, together with the Environmental Protection Agency and the Department of Health and Human Services, is looking at charges of health symptoms or the corrosion of certain metal components in their homes allegedly related to the presence of drywall produced in China. The majority of the reports to the CPSC have come from consumers residing in Florida while others have come from consumers in Louisiana, Virginia, Wisconsin, Ohio, Alabama, Mississippi, Missouri, California, Washington, Wyoming, the District of Columbia, Arizona, and Tennessee. Consumers largely report that their homes were built in 2006 to 2007, when an unprecedented increase in new construction occurred in part due to the hurricanes of 2004 and 2005.

The judicial panel on multidistrict litigation recently agreed to consider consolidating the
more than 30 federal lawsuits filed so far over the drywall.The lawsuits so far name Chinese-based manufacturers, as well as importers, developers and builders, contractors, suppliers and others.

Common features of the reports submitted to the CPSC from homes believed to contain
problem drywall have been:
• “rotten egg” smell within their homes.
• health concerns such as irritated and itchy eyes and skin, difficulty in breathing, persistent cough, bloody noses, runny noses, recurrent headaches, sinus infection, and asthma attacks.
• blackened and corroded metal components in their homes and the frequent replacement of components in air conditioning units.

The federal government is working on an (1) evaluation of the relationship between the drywall and the reported health symptoms; (2) evaluation of the relationship between the drywall and electrical and fire safety issues in the home; and (3) the tracing of the origin and distribution of the drywall. One obvious challenge has been figuring out how much problem drywall there is in any house, given that it is already installed, likely painted and may not be clearly marked.

On the health side, the most frequently reported symptoms are irritated and itchy eyes and skin, difficulty in breathing, persistent cough, bloody noses, runny noses, recurrent headaches, sinus infection, and asthma attacks. Some of these symptoms are similar to colds, allergies or reactions to other pollutants sometimes found in homes. As such, it is difficult to determine if the reported symptoms are related to the drywall and not any other environmental factors or pollutants in the home.

Data being gathered include from in-home air sampling; laboratory elemental characterization studies of domestic and imported drywall; and laboratory chamber studies of domestic and imported drywall to separate and isolate chemical emissions from drywall as opposed to chemicals emitted from other home products (e.g., carpets, cleaners, paint,adhesives, beauty products).

If a house has “problem” drywall, the CPSC is recommending that consumers with health issues consult a physician as soon as possible; those with any of the electrical or fire safety concerns should consult the local gas or electric supplier and a licensed electrician or building inspector as soon as possible. Consumers are cautioned to beware of unqualified testing and remediation services already seeking to o take advantage of consumers struggling to address this issue.

CPSC admits it could be months before it can confidently address the scientific relationships, if any, between the problem drywall and the health and safety concerns raised by consumers.

Sixth Circuit Weighs In On Differential Diagnosis

A federal appeals court has reinstated a suit in which a Tennessee plaintiff alleged his exposure to a pool cleaner caused him to lose his sense of smell. The 6th Circuit found that the trial court had improperly excluded his medical expert from testifying. Best v. Lowe's Home Centers Inc., 2009 WL 1010883 (6th Cir.  4/16/09).

Of great interest to readers of MassTortDefense is the court’s treatment of the concept of differential diagnosis. This diagnostic method has long been used by treating physicians to assess what ails a patient, and it involves a logical process of ruling in and ruling out possible diagnoses based on symptoms, test results, and other medical evidence. The process has been hijacked by plaintiff experts to offer an aura of reliability to opinions not only about the diagnosed injury, but the cause of the injury. Plaintiff experts may make no effort to establish why a cause is even on the list to be ruled out (assuming general causation), and may rule out potential alternative causes with far less rigor than doctors would exclude alternative diagnoses in the real world.

Plaintiff in Best claimed to suffer from permanent loss of his sense of smell as a result of a pool chemical spilling onto his face and clothing at a Lowe's Home Center store. Best planned to introduce the expert testimony of Dr. Francisco Moreno, a board-certified otolaryngologist, in order to establish the causal link between the chemical spill and his injuries. The district court excluded Dr. Moreno's testimony, holding that the method employed by the doctor in drawing his conclusions regarding causation was “unscientific speculation.” This resulted in summary judgment.

In summary, because of the temporal relationship between Best's exposure to the chemical and the onset of his symptoms, in conjunction with an effort to eliminate other possible causes of anosmia, Dr. Moreno formed the opinion that the inhalation of the Aqua EZ caused Best to lose his sense of smell. The 6th Circuit stated that Dr. Moreno thus employed a “differential diagnosis” methodology in forming his opinion. Differential diagnosis is, according to the court, the method by which a physician determines what disease process caused a patient's symptoms. The physician considers all relevant potential causes of the symptoms and then eliminates alternative causes based on a physical examination, clinical tests, and a thorough case history. Hardyman v. Norfolk & W. Ry. Co., 243 F.3d 255, 260 (6th Cir.2001). The court was less than precise in its treatment of the slippery slope between causation of symptoms (what disease is causing the symptoms) to causation of disease (what toxic exposure caused the disease that caused the symptoms).

Dr. Moreno formed his opinion regarding Best's alleged loss of his sense of smell by considering a list of the possible causes of such an injury, including virus, accident, tumor, surgery, or exposure to chemicals, as well as Best's use of medications. He noted that the chemical was quite concentrated, and relied on Best's report that the material splashed onto his face and clothing. Dr. Moreno ruled out medications as the cause, based on his knowledge of the side effects.

The 6th Circuit said it recognizes differential diagnosis as an appropriate method for making a determination of causation for an individual instance of disease. Differential diagnosis is considered to be “a standard scientific technique of identifying the cause of a medical problem by eliminating the likely causes until the most probable one is isolated.” Hardyman, 243 F.3d at 260 (quoting Westberry, 178 F.3d at 262).

But the court did note that not every opinion that is reached via a differential-diagnosis method will meet the standard of reliability required by Daubert. To determine which opinions do and do not, the court adopted the reasoning of the Third Circuit in In re Paoli Railroad Yard PCB Litigation, 35 F.3d 717 (3d Cir.1994).  A medical causation opinion in the form of a doctor's differential diagnosis is reliable and admissible where the doctor (1) objectively ascertains, to the extent possible, the nature of the patient's injury, (2) “rules in” one or more causes of the injury using a valid methodology, and (3) engages in standard diagnostic techniques by which doctors normally rule out alternative causes to reach a conclusion as to which cause is most likely. In connection with the third “rules out” prong, if the doctor engages in very few standard diagnostic techniques by which doctors normally rule out alternative causes, the doctor must offer a good explanation as to why his or her conclusion remains reliable. Similarly, the doctor must provide a reasonable explanation as to why he or she has concluded that any alternative cause suggested by the defense was not the sole cause.