IOM To Study 510(k) Process for Medical Devices

The U.S. Food and Drug Administration announced recently that it had commissioned the Institute of Medicine (IOM) to study the premarket notification program used to review and clear certain medical devices marketed in the United States. (Established in 1970 under the charter of the National Academy of Sciences, the Institute of Medicine is supposed to provide independent, objective, evidence-based advice to policymakers, health professionals, the private sector, and the public.)

The IOM study will examine a premarket notification program, also called the 510(k) process, for medical devices. While the IOM study is underway, the FDA’s Center for Devices and Radiological Health (CDRH) will apparently convene its own internal working group to evaluate and improve the consistency of FDA decision making in the 510(k) process.

The FDA classifies medical devices into three categories according to their level of risk. Class III devices (highest level of risk) generally require premarket approval to support their safety and effectiveness before they may be marketed. Class I and Class II devices pose lower risks and most Class II devices and some Class I devices can be marketed after submission of certain premarket notifications— the 510(k) applications.  A 510(k) is a premarket submission made to FDA to demonstrate that the device to be marketed is at least as safe and effective -- that is, substantially equivalent -- to a legally marketed device (21 CFR 807.92(a)(3)) that is not subject to pre-marketing approval. Submitters must compare their device to one or more similar legally marketed devices and make and support their substantial equivalency claims. Devices that present a new intended use or include new technology that presents new questions of safety or effectiveness may not be found substantially equivalent and thus may require premarket approval.

The 510(k) process was established under the Medical Device Amendments of 1976 with two goals: to make safe and effective devices available to consumers, and to promote innovation in the medical device industry. FDA says that during the past three decades, technology and the medical device industry have changed dramatically, making it an appropriate time for a review of the adequacy of the premarket notification program in meeting these two goals.

As part of the study, the IOM will convene a committee to answer two principal questions: Does the current 510(k) process optimally protect patients and promote innovation in support of public  health? If not, what legislative, regulatory, or administrative changes are recommended to achieve the goals of the 510(k) process? The IOM review is supposed to be completed in 2011.

The study comes after the U.S. House Subcommittee on Health held hearings concerning medical devices last June.  The Democratic majority said there is evidence of an approval system that is "broken" - - that its standards, its procedures and its rules don't meet modern needs of getting medical devices to those in need with sufficient confidence in their safety.  However, while critics point to a handful of device recall issues, more than 250,000 devices have gone through the 510(k) process.
 

Use of Company Conduct Evidence to Prove Liability or Punitive Damages

As due process considerations have taken their more appropriate place in the law of punitive damages, see BMW of North America, Inc. v. Gore, 517 U.S. 559 (1996), trial courts have struggled with the intersection of traditional product liability law and new rules on evidence necessitated by such due process concerns. 

For example, plaintiffs frequently seek to use evidence of other allegedly similar conduct and allegedly substantially similar accidents, injuries, incidents for liability related issues such as notice and defect.  In Philip Morris USA, Inc. v. Williams, 127 S.Ct. 1057 (2008), however, the Court confirmed a significant constitutional principle limiting punitive damages awards: the Due Process Clause prohibits juries from basing punitive damages awards even in part upon the desire to punish a defendant for harm to persons that are not before the court. 

Williams arose from an Oregon trial wherein a jury awarded $821,000 in compensatory damages and $79.5 million in punitive damages against cigarette manufacturer Philip Morris. At trial, the plaintiff’s attorney had urged the jury to punish Philip Morris for alleged harm to smokers other than the plaintiff by referring to the defendant’s market share and the number of smokers not only in the state of Oregon, but nationwide, who had allegedly contracted a smoking-related illness in the last 40 years. The Supreme Court held that the Due Process Clause forbids a jury from assessing punitive damages to punish a defendant for injury that it inflicts upon non-parties or “strangers” to this litigation. While a jury may consider the actual or potential harm to non-parties in the narrow context of determining “reprehensibility” of the conduct, which in turn is one of the factors relevant to an analysis whether the punitive damages award is excessive or not, it may not punish the defendant for the impact of its alleged misconduct on other people, who may bring lawsuits of their own in which other juries can resolve their claims.

The Supreme Court cautioned state courts that they must make sure that the “jury will ask the right question, not the wrong one.”  That is, evidence regarding alleged injuries of those not before the court must be used solely to judge the reprehensibility of the conduct, not to assess damages for the harm caused to those strangers. While the Court commented on the Oregon court’s refusal to give a jury instruction clarifying this distinction, it noted generally that state courts cannot authorize any procedures that create an unreasonable and necessary risk of any such confusion occurring. When evidence is introduced or argument made that risks this confusion, the state court must take steps to protect against that risk. 

Another such conflict was seen in the recent Montana case involving the trial court's exclusion of a car seat manufacturer's evidence of regulatory compliance.  Malcolm v. Evenflo Co., 2009 WL 2917799 (Mont., September 14, 2009).  The state supreme court ruled that while the evidence should have been excluded from the jury's consideration of liability for compensatory damages, the evidence should have been admitted for purposes of assessing punitive damages.  It let stand the compensatory award, but vacated the punitive damages award.

The case arose from a motor vehicle accident during which plaintiff's decedent  rode in the back of an SUV in the OMW model 207 child seat. A northbound motorist swerved into plaintiff Malcolm's lane and forced Malcolm off the road. The vehicle rolled three times, traveled down a steep incline, and stopped in a ditch.  The left belt hook of the OMW broke off during the rollover. The seat belt slipped out from the open-ended belt hook on the opposite side of the seat. The forces of the accident ejected the OMW from the vehicle, which resulted in death, according to plaintiffs.

The theory at trial was strict liability in tort, design defect theory. The Malcolms claimed that the Evenflo OMW model 207 infant child safety seat constituted a defectively designed product that failed even though they had used the seat in a reasonably anticipated manner. The Malcolms pointed to the OMW's open-ended belt hook design that might have prevented the injury. The Malcolms contended that Evenflo could have manufactured the OMW using an allegedly  feasible superior alternative design that required the vehicle's seatbelt to be routed through an enclosed seat belt tunnel even when the seat was used without the base. The Malcolms also sought punitive damages. The Malcolms alleged that Evenflo “continued selling the defective product in conscious, deliberate and intentional disregard of the danger presented.”

Evenflo contended that the OMW model 207 was not defective in any way. Evenflo argued that the severity of the forces involved in the accident were the sole cause of the death. Evenflo argued that the “tremendous forces” that occurred during the rollover forced open the rear passenger door, which was immediately adjacent to Tyler's child seat. Evenflo posited that Tyler's car seat came into direct contact with the ground as the Suburban rolled. Evenflo argued that the contact caused the seat to detach from the seat belt system and ultimately fly out the open door.

The National Highway Traffic and Safety Administration (NHTSA) requires that all child restraint systems comply with the minimum requirements of Federal Motor Vehicle Safety Standard 213. See 49 C.F.R. § 571.213 (2009). NHTSA required Evenflo to conduct internal testing of the OMW to determine if it complied with the FMVSS 213 standards, which it did. NHTSA and Transport Canada, the Canadian testing agency, conducted random audit FMVSS 213 tests in addition to Evenflo's internal testing.

The first issue was the basic products issue: Evenflo argued that the trial court erred when it excluded any evidence that the OMW model 207 complied with FMVSS 213. Evenflo contended that the fact that the OMW model 207 passed 341 tests performed under FMVSS 213 was highly relevant to the claim that the model 207 was defective and unreasonably dangerous.

Evenflo noted that the standard would be admissible in a negligence case, and  there is no reason why such highly relevant evidence should not be used in strict products liability cases. Thus, Evenflo urged the Court to adopt the Restatement (Third) of Torts: Products Liability § 4 (1998). Section 4 provides that compliance with an applicable regulation is admissible in connection with liability for defective design. Evenflo noted that a majority of jurisdictions hold that compliance with product safety regulation is relevant and admissible on the question of defectiveness, even if it is not necessarily controlling.

The four-justice majority reiterated this court's adherence to “well-settled, decades-old principles of strict liability” that consider irrelevant a manufacturer's reasonableness and level of care. The court declined to adopt the Restatement (Third) of Torts: Products Liability, §4.  Montana thus continues to be one of those few states that cling to the now-discredited "bright line" verbal distinction between cases asserting strict liability in tort and those grounded in negligence theory. (This Court had previously distinguished strict liability from negligence when it rejected the “state of the art” defense, for example, because it raises issues of reasonableness and foreseeability --concepts fundamental to negligence law.)  It still argues that any attempt to inject so-called negligence principles into strict liability law would somehow sever Montana's strict products liability law from the core principles for which it was adopted.  The focus in design defect cases must be on “the condition of the product,” rather than “the manufacturer's conduct or knowledge."  And the way to do this, apparently, is to exclude relevant, material, probative evidence that the product passed regulatory muster.

On the punitive damages issue, Evenflo argued that the trial court's decision to exclude evidence of the OMW model 207's compliance with FMVSS 213 prevented it from introducing evidence bearing on its state of mind. A defendant's state of mind is a “key element” in assessing punitive damages, and the car seat maker should have been able to present evidence of its regulatory compliance. 

The trial court had concluded that the OMW model 207's compliance with FMVSS 213 had “absolutely no bearing at all upon the reprehensibility of the conduct of Evenflo.” But the supreme court could not sustain the verdict on punitives in light of the court's decision to exclude evidence that might show why Evenflo acted as it did, or failed to act, when the jury considered whether to award punitive damages. Evidence of Evenflo's good faith effort to comply with all government regulations, including FMVSS 213, would be evidence of conduct inconsistent with the mental state requisite for punitive damages.

Interestingly, the supreme court noted that while here a new jury here could consider evidence of the OMW model 207's compliance with FMVSS 213 for the purposes of determining whether Evenflo acted with actual fraud or actual malice, generally the Montana system provides for the presentation of evidence regarding liability for compensatory damages and punitive damages to the jury in a single proceeding. Thus, bifurcation is disfavored, and the trial courts must ordinarily trust that the jury will heed the court's instructions as to how to evaluate the evidence presented.

One dissenting justice would have also reversed the compensatory damages. He differed from the majority on how the trial was conducted and saw it as improperly biased against Evenflo. Two other dissenters agreed with the majority on the compensatory damages but would have sustained the punitive award, arguing that Evenflo's inability to present evidence of its compliance with regulations did not prejudice the company.

Juror Internet Search Warrants New Trial

Many a reader of MassTortDefense has wondered and worried about whether jurors were following a court's admonishment not to see or read anything about the issues in a case outside of the court room.  Sequestration is rare, especially in a civil case. (The O. J. Simpson jury was sequestered for eight and a half months.)  And with the advent of the Internet, jurors have potential access not only to publicity about the actual trial, but fingertip access to research tools on any issue in the case. Some of the same concerns arise with potential jurors; it may be impossible to ask enough specific questions in the voir dire process to ferret out every such issue.

A recent take on this comes in Russo v. Takata Corp., 2009 WL 2963065 (S.D. 9/16/09).  The South Dakota Supreme Court ruled that a potential juror's Google search of a defendant seat belt manufacturer, and his conversation about his findings with other jurors during deliberations, warranted a new trial.

Plaintiffs' decedent was a  sixteen year old driver of her mother's vehicle, on the way to school. The vehicle crossed the centerline, traveled back into its lane of traffic, slid sideways off of the shoulder of the road, and rolled almost three times down a steep ravine before hitting a tree. The girl was killed.  Plaintiffs alleged that the seat belt unlatched due to inertial forces acting on the buckles during the rollover. General Motors Corporation and Suzuki Motor Corporation settled their respective claims before trial.

Takata, the manufacturer of the model TK-52 seat belts installed in the vehicle, denied Plaintiffs' claims. Takata proceeded to trial under the theory that the decedent did not buckle her seat belt before the crash, and that she negligently failed to maintain control over the vehicle. Takata also denied that inertial unlatching of the model TK-52 seat belts was possible in real world accidents.
 

Takata filed a motion in limine seeking to exclude or limit evidence on alleged prior seat belt failures. The trial court determined that such evidence was “relevant solely to the issue of notice regarding the alleged defect” and irrelevant to whether a defect actually existed in the seat belt involved in this case. It then limited the evidence of prior alleged accidents, claims, and lawsuits to the issue of notice.


At trial, Plaintiffs presented evidence that other drivers or passengers had experienced seat belt failures in the past. Some of the witnesses were uncertain whether their seat belt was manufactured by Takata, or whether notification given to General Motors was passed on to Takata. Evidence was also presented to the jury that ten other lawsuits had been filed against Takata alleging seatbelt malfunctions. The jury was instructed that evidence of other lawsuits and complaints was “only for the purpose of establishing whether Takata had notice of the alleged defect.”

During deliberations, one juror asked out loud whether Takata had ever been sued. A juror (Flynn, according to the opinion) responded that he had done a Google search and had learned that Takata manufactured seat belts and airbags but did not find any lawsuits during his search. The entire exchange lasted approximately three to five minutes, and no report was made to the trial court concerning Flynn's remarks. The jury deliberated for approximately another one and one-half hours before reaching a verdict for Takata.  Plaintiffs later filed a Motion for New Trial alleging juror misconduct. Affidavits from ten jurors were filed with the motion.

The state Supreme Court noted it was announcing no hard and fast rule that all such types of Internet research by a juror prior to trial without notice to the court and counsel automatically doom a jury's verdict. Rather, the court gave deference to the trial court, which had the distinct advantage of being present throughout the nineteen-day trial. The trial court was in the best position to determine whether material was extrinsic to the issues before the jury, or whether the extraneous material prejudiced the jury. The trial court's award of a new trial was affirmed.
 

The reasoning: statutory language in many jurisdictions limits the type of information that a juror may be asked to provide via an affidavit or under oath at a hearing on a motion for new trial.  And that's the only way, typically, for a litigant to show juror conduct.  The prohibition on admitting testimony and affidavits pertains to intrinsic information, which includes statements or discussions which took place during deliberations.  Testimony and affidavits concerning extrinsic information, however, may be obtained from a juror.  Extrinsic information includes media publicity, conversations between jurors and non-jurors, and evidence not admitted by the court.  It also includes “knowledge relevant to the facts in issue not obtained through the introduction of evidence but acquired prior to trial, experiments, investigations, news media, etc.”   Secondly, the type of after-acquired information that potentially taints a jury verdict should be carefully distinguished from the general knowledge, opinions, feelings and bias that every juror carries into the jury room.

Takata argued that the information Flynn obtained during his Google searches was not extrinsic  because it was obtained before trial and was discoverable through voir dire.  As such, Takata argued it should have been explored during voir dire. The court found that Takata's argument that Plaintiffs could have asked more probing questions and possibly discovered Flynn's prior knowledge was likely valid. Takata's argument, however, missed the mark, said the court, in that Flynn obtained the information (that no lawsuits were listed on Takata's home page) after receiving his jury summons; that fact was specific to the defendant and relevant to evidence that was admitted at trial for a limited purpose under a carefully crafted order.  It pertained to the issue of knowledge of a defect with the TK-52 seat belt, an issue hotly contested between the parties, and it directly contradicted the evidence admitted at trial under the trial court's limiting order. This was not simply information that Flynn obtained in passing from media outlets prior to his awareness that a suit against defendants was pending.  The juror apparently sought out the information specifically in response to the receipt of the summons in which the names of the defendants were first made known to him, observed the court.

The burden of persuasion as to prejudice is on the party seeking a new trial. The trial court concluded as a matter of law that Flynn's extrinsic information prejudiced the jury's verdict. The information was presented to jurors at an arguably critical juncture during deliberations, and it had a tendency to influence the jury in a manner inconsistent with the evidence and the instructions of the trial court. Extrinsic information that goes beyond the mental processes of one juror and becomes known to other jurors can prejudice a jury verdict and affect the substantial rights of the party seeking a new trial. At least four jurors, including Flynn, were involved in the conversation in which Flynn revealed his Google search. While all jurors agreed that the jury did not discuss the Google search as a panel during deliberations, the state Supreme Court did not require that the entire jury be exposed to extrinsic information in order to proceed to determine whether there was prejudicial effect.

Takata argued on appeal that the verdict on the defect claims had already been put to a vote, and the jury found that her seatbelt was not defective. Plaintiffs argued in response that the jury verdict form had not been signed at the time Flynn made his remarks. Thus, they concluded the jury had yet to reach a final verdict at the time in question.

The state high court found that the trial court was in the best position to determine which claims had been dealt with and which ones remained to be discussed by the jury at the time of Flynn's comments. It concluded that the issue of whether the seat belts were defective and whether Takata had notice was "still in play" at the time Flynn revealed his Internet searches to members of the jury.

State Supreme Court Decision Turns On Absence Of Causation Proof

The Indiana Supreme Court issued a decision recently, reminding us of the importance of fully developing the causation case, in addition to the response to plaintiff's defect allegations. Kovach v. Caligor Midwest, 2009 WL 2871172 (Ind. September 8, 2009).

The plaintiffs alleged their son was given a fatal overdose of pain medication by a nurse after a surgical procedure. The plaintiffs sued the manufacturers and distributors of the medicine cup used to administer the medication, alleging that defects in design of the cup made it unsuitable for the precise measurements necessary for drugs, and alleging a failure to warn that the cup was not suitable for precision measurement. The interior of the cup bore translucent markings to measure its contents, and graduations delineated both 15 and 30 mL. The nurse had used that type of cup frequently, both at this surgical center and at other hospitals, and she had no difficulty reading its markings. The nurse testified she filled the cup approximately half-way and administered 15 mL of medication to plaintiff's decedent.  According to decedent's father, however, who was present when the drug was administered, the nurse gave the son a full cup of medicine.

So, as is frequently the case, a potential malpractice claim is turned into a product liability claim against an ostensibly deeper pocket, unencumbered by med mal tort reform restrictions.

The plaintiffs presented expert evidence opining that the cup was defective in design and warnings, evidence that was challenged by the defense.  Plaintiffs also argued that if the medicine cup had been better suited as a precision measuring device or had contained a warning that it was not suitable for precision measurement, the decedent would not have received an overdose -- the alleged causal link.  The court did not have to reach the issues surrounding the alleged defects and the expert affidavit which plaintiffs had put forward to support their theory of defect, because the facts established that there was no such causal connection. The results of an autopsy revealed that the decedent had more than twice the recommended therapeutic level of codeine in his blood stream. The undisputed evidence thus demonstrated that if there was an overdose in this case, it was not caused by an imprecise measurement of medication attributable to less than readily discernible marks. (The plaintiff expert had estimated that the cup's imprecision could result in up to a 20% to 30% margin of error.) Rather, if the drug was the medical cause of the death, it was due to an erroneous, double dosage; the accident therefore cannot be attributed in a legal cause sense to any alleged defects in the cup itself.

Plaintiffs tried to then rely on the "read-and-heed" presumption -- i.e., the notion in some jurisdictions that the jury can presume that if an adequate warning had been given it would have been heeded. Such a presumption may aid a defendant when a warning was given.  Plaintiffs often try to use the presumption to attempt to clear the causation hurdle when no warning is given.  But the presumption does not completely dispose of the causation issue in a failure-to-warn case, said the court. The most the presumption does is establish that a warning would have been read and obeyed. It does not necessarily establish that the defect in fact caused the plaintiff's injury. The plaintiff invoking the presumption must still show that the danger which allegedly would have been prevented by an appropriate warning was the danger that actually materialized in the plaintiff's case.  

Plaintiffs could not show that element, given the circumstances of the drug usage. The judgment of the trial court granting summary judgment in favor of the cup defendants was affirmed. 

 

Medical Monitoring Decision Set For Interlocutory Appeal

Readers of MassTortDefense interested in the issues surrounding medical monitoring will want to keep their eyes on Hess v. A.I. DuPont Hosp. For Children, 2009 WL 2776606 (E.D.Pa., August 28, 2009).  The court recently granted Defendants' Petition for Certification of Immediate Appeal (to the Third Circuit).

Doctors at the A.I. duPont Hospital for Children in Wilmington, Delaware, implanted a Cheatham Platinum stent (“CP stent”) in plaintiffs, who alleged that they had been injured or were at risk of injury from the use of the CP stent. After discovery, the trial court granted summary judgment to defendants on a number of the claims, but summary judgment was denied on Count VI, the medical monitoring claim. The trial court predicted that the Delaware Supreme Court would recognize a medical monitoring cause of action if presented with the facts of these cases.

The trial court recognized that there are substantial grounds for disagreement over whether Delaware will actually recognize a cause of action for medical monitoring. While Delaware courts, including the Delaware Supreme Court, have had medical monitoring claims before them on several occasions and have not totally disavowed medical monitoring as a legally cognizable cause of action, neither have they formally recognized the tort as a legally cognizable cause of action.  (In some jurisdictions it is a remedy, not a cause of action.)

Even if the Delaware Supreme Court were to recognize a medical monitoring tort, there are substantial grounds for disagreement over whether plaintiffs here could state a claim. Plaintiffs' theory that medical devices can be the basis for a medical monitoring claim is novel, at best  (and has been rejected in many states: Drugs and devices do not present the same policy issues as involuntary exposure to environmental toxins).   Indeed, there appear to be no cases precisely like this one in which a plaintiff has alleged and a court has recognized a medical monitoring claim where the plaintiff has had a Class III medical device implanted that did not have FDA premarket approval and where the plaintiff did not offer evidence that the device was defective. The court was satisfied that plaintiff's novel theory here is one in which certification of an interlocutory order for appeal is appropriate.

Motion To Dismiss Filed in Combination Aspirin MDL

Bayer Healthcare LLC moved last week to dismiss the master complaint in the federal MDL involving combination aspirin products. In Re: Bayer Corp. Combination Aspirin Products Marketing and Sales Practices Litigation, No. 1:09-md-02023 (E.D. N.Y.). Aspirin has been sold in the United States for more than a hundred years; a daily regimen of low-dose aspirin is widely recognized as useful in preventing heart attacks and strokes.

Plaintiffs are consumers who claim to have purchased Bayer combination aspirin and dietary supplement products. They do not claim that they were injured by these products or that the products were ineffective. Instead, plaintiffs seek damages because they say they would not have purchased these products if they had known that Bayer, instead of submitting a New Drug Application (“NDA”) for each of these combination products, relied on the preexisting separate regulatory review of aspirin and the supplements. Plaintiffs allege that Bayer misled and deceived
consumers into believing that the products had been proven to be safe and effective for their marketed purposes.
 

The Motion argues that plaintiffs’ claims fail, first, because they are, in essence, private attempts to enforce the FDCA, 21 U.S.C. §301 et seq.  MassTortDefense notes that courts have repeatedly refused to construe such private attempts to enforce the FDCA as valid state law causes of action like the plaintiffs have brought in this litigation. Under the FDCA, the United States government has the exclusive power to enforce the FDA’s regulatory requirements (which include provisions relating to the approval of new prescription and over-the-counter drugs, as well as regulation of dietary supplements and food additives). The FDCA provides that “[a]ll such proceedings for the enforcement, or to restrain violations, of this Act, shall be by and in the name of the United States.” 21 U.S.C. § 337(a) (2009).

Even if a state were to recognize it, a cause of action based on a failure to obtain FDA approval would be preempted as interfering with the FDA’s approval processes. Courts have repeatedly held that private plaintiffs fail to state a claim where they, in essence, seek redress for a violation of the FDCA. Courts have applied this doctrine to dismiss a variety of causes of action, from RICO and the Lanham Act, to state law unfair competition and consumer fraud act claims. See, e.g., Mylan Labs. v. Matkari, 7 F.3d 1130, 1139 (4th Cir. 1993) (dismissing Lanham Act claim); In re Epogen & Aranesp Off-Label Mktg. & Sales Practices Litig., 590 F. Supp. 2d 1282, 1290 (C.D. Cal. 2008) (dismissing state consumer fraud and false advertising and RICO claims); Ethex v. First
Horizon Pharm. Corp
., 228 F. Supp. 2d 1048, 1055 (E.D. Mo. 2002) (dismissing deceptive trade practices claims and Lanham Act claim).

Additionally, defendant argues that plaintiffs, who do not claim harm or that their products did not work, have not alleged a cognizable injury. Accordingly, plaintiffs have not stated a claim for any of the causes of action they have brought. Under Fed. R. Civ. P. 12(b)(6), a complaint must be dismissed if it fails to articulate grounds upon which relief can be granted. Under Rule 8(a), a plaintiff’s obligation to provide the grounds of his entitlement to relief requires more than labels and conclusions, and a formulaic recitation of the elements of a cause of action will not do. Bell Atlantic Corp. v. Twombly, 550 US 544, 555 (2007).   The Supreme Court recently reaffirmed these principles in Ashcroft v. Iqbal, 129 S. Ct. 1937 (2009).

These standards apply to injury and loss requirements as well as to other elements of a claim. As the Second Circuit recently explained, to state a claim for relief, a plaintiff must do more than simply allege an injury or loss – that theory must be “plausible.” McLaughlin v. American Tobacco Co., 522 F.3d 215, 227 (2d Cir. 2008). Legally cognizable theories of injury must also not require a court to “engage in a series of speculative calculations to ascertain whether, or in what amount, plaintiffs suffered a loss.” Id. at 230.  Like many convoluted consumer fraud actions, plaintiffs' claims here fail to allege a plausible theory that is open to private plaintiffs.
 

 


 

 

State Supreme Court To Address Government Use Of Contingency Fee Private Counsel

Next month the Supreme Court of Pennsylvania will hear argument in a pharmaceutical case that has implication for all readers of MassTortDefense, regardless of what industry they may represent. See Commonwealth of Pennsylvania, C/O Office of General Counsel v. Janssen Pharmaceutica, Inc., No. 24 Eap 2009 (S.Ct. Pa.).  This case presents not only significant constitutional and statutory issues, but also impacts policies affecting the public interest in open government, health care policy, and the regulation of the practice of law in the context of governmental litigation.

In the underlying case, the Commonwealth seeks damages for asserted financial harm allegedly caused by Janssen’s supposed deceptive marketing practices in promoting its anti-psychotic drug, Risperdal, for off-label uses. This action was originally filed in the Court of Common Pleas of Philadelphia County in February 2007. In June 2008, Janssen filed a Motion to Disqualify Plaintiff’s Counsel, the private Texas-based plaintiff personal injury firm of Bailey Perrin & Bailey, which had been hired by the state on a contingency fee basis.   Public records indicate that during the precise time period that the fee contract was negotiated and executed, one of Bailey Perrin’s founding partners made repeated and significant contributions, totaling more than $100,000, to Pennsylvania Governor Rendell’s re-election campaign and to the Democratic Governors Association, according to defendant.

The Commonwealth opposed the Motion; the trial court denied the Motion on December 8, 2008. Janssen thereafter sought extraordinary appellate relief in the state Supreme Court, which was granted.

The Commonwealth’s retention of contingent fee private counsel in this matter raises significant issues including whether and when state law authorizes the Office of General Counsel to enter into a contingent fee contract with outside counsel; whether the Commonwealth’s hiring of outside litigation counsel on a contingent fee basis violates the state constitution, including the separation-of-powers mandate of the Pennsylvania Constitution; and whether the Commonwealth’s hiring of outside litigation counsel on a contingent fee basis violates the due process rights of the defendant company.

In many contexts, the legal policy of the Commonwealth -- like many states -- strongly favors open, competitive bidding for contracts involving state funds. Such requirements, included in the state Constitution and various statutes, are designed to prevent fraud, eliminate bias and favoritism, and thus protect vital public interests.

Those same goals of open and good government reside in the requirement that state officials give their undivided loyalty to the people of the Commonwealth. The antithesis of these goals and policies is “pay-to-play,” the award of government contracts to major campaign contributors. This case threatens to expand the scope of pay-to-play in unprecedented fashion. The very sovereignty of the Commonwealth itself – its legal enforcement authority and parens patriae powers – should not be subject to sale. Public records reveal hundreds of thousands of dollars of contributions to the benefit of the state governor in close proximity to the issuance of a no-bid, contingency fee contract to one of the contributors, according to defendant.  The media has widely and correctly assailed the appearance of impropriety thus created.


Aside from its questionable origins, the contingent fee contract violates the core principle that attorneys pursuing actions on behalf of the Commonwealth represent a sovereign whose obligation to govern impartially is essential to its right to govern. Government attorneys must exercise independent judgment as a ministers of justice and not act simply as advocates. The impartiality required of government lawyers cannot be met here, where the private pecuniary interest inherent in the contingent fee is the primary motive force behind the bringing of this very action. By turning over sovereign prosecutorial power to contingency counsel, the Governor effectively created a new branch of government – motivated by the prospect of private gain rather than the pursuit of justice or the public welfare.

This subversion of neutrality does more than implicate the due process rights of those confronting such tainted prosecutions. Direction of state prosecutions by financially interested surrogates also damages the very public interest that such litigation is supposed to advance. Here, it is already clear that Pennsylvania’s in-force health care policies concerning the use of atypical anti-psychotic medications dramatically conflict with the reckless allegations of contingent fee counsel’s complaint. Those (typical plaintiff) allegations broadly equate all “off-label” use of prescription drugs with “medically unnecessary” use, and blindly assert that all such “medically unnecessary” use is “illegal.” The law, however, recognizes off-label use as generally accepted by the medical community and the FDA, and as perfectly legal, and does not consider prescription drugs unsuitable for use merely due to lack of FDA approval. The allegations of the complaint – crafted more for the pecuniary goals of counsel than for the needs of the patients served by the affected state programs – risk the public health by threatening to deprive some of our neediest citizens of a medicine that the Commonwealth’s own unbiased administrators consider “preferred” for the same off-label indications that the complaint brands “illegal.”

It will be interesting to see how the Supreme Court approaches these significant issues int he coming weeks.

[Your faithful blogger was able to contribute to the amicus brief of the Washington Legal Foundation , the public interest law and policy center, in this matter.]

Sophisticated User/Bulk Supplier Defenses Applied In Chemical Case

In a wrongful death suit brought by the family of a chemical plant employee, the U.S. District Court for the Southern District of West Virginia predicted last week that West Virginia would allow the application of the “sophisticated user” and “bulk supplier” defenses to the plaintiff's product liability claim. Roney, et al. v. Gencorp, et al., No. 3:05-cv-00788 (S.D. W.Va. Sept. 4, 2009).

From 1965 until 1982, Mr. Roney worked at the Pantasote Corporation/Gencorp Inc. Polyvinyl Chloride plant in Point Pleasant, West Virginia. There, he worked extensively with vinyl chloride monomer (“VCM”) – a major raw component of Polyvinyl Chloride (“PVC”). VCM is now associated in some scientific studies with the particular form of liver cancer – angiosarcoma – to which Mr. Roney succumbed. Mr. Roney’s estate filed suit against the defendants for failure to disclose their alleged full knowledge of the danger of VCM and for failing to warn Mr. Roney of its hazardous nature.

Such cases raise, as readers of MassTortDefense know, the related and difficult issues of the duty and ability of a remote supplier of a bulk product to warn downstream users, the customers or employees of their actual customers.  The issue is complicated by the duty of the supplier's immediate customer, in its own right, to warn its customers and to provide a safe workplace for its own workers.  When should that independent or separate duty, imposed on a party who is arguably in a more direct position to pass on effective warnings, cut off the chain of causation flowing up to the remote supplier?  And what about when the employer/intermediate customer is itself an expert in the potential hazards of the product?

Here, in defense of the failure to warn claim, the main product supplier asserted that it had no duty to warn because that duty was obviated by the employer’s own duty to warn its workers. Such a defense, commonly referred to as a “sophisticated user” defense, is available in many states but had not been explicitly adopted or rejected in the state courts of West Virginia. In some jurisdictions the stress is on the bulk supplier aspect and the practicability of warning downstream users; in others the emphasis is in the knowledge of the customer.  Here, the court addressed both aspects.

Section 388 of the Restatement (Second) of Torts addresses a supplier’s potential liability
for a “Chattel Known to Be Dangerous for Intended Use.” Comment n of this section is commonly cited as the basis for the sophisticated user defense: There is necessarily some chance that
information given to the customer will not be communicated by him to those who are to use the
chattel. This chance varies with the circumstances existing at the time the chattel is turned over to the person, including the known or knowable character of the third person and the purpose for which the chattel is given. "Modern life would be intolerable unless one were permitted to rely to a certain extent on others' doing what they normally do, particularly if it is their duty to do so."

Plaintiff relied on the fact that the West Virginia Supreme Court has rejected the learned intermediary doctrine, a defense plaintiff claimed was similar to the sophisticated user defense. See State ex Rel. Johnson & Johnson Corp. v. Karl, 647 S.E.2d 899 (W.Va. 2007). The reasoning of that decision, questionable in its own right, is not applicable to a scenario outside of the prescription pharmaceutical context and the rise of direct-to-consumer advertising. In deciding Karl, the court had recognized that through such DTC advertising pharmaceutical companies had arguably gained direct access to patients, a relationship starkly different than that which had existed when the learned intermediary doctrine was developed – when patients received drug information exclusively through their doctors. And starkly different from the industrial context. Chemical workers would typically have had little opportunity to influence the choice of products to which they would be exposed. Instead, they relied upon their employer to determine the scope of their duties and their role in the production process. They were insulated from the manufacturer of the chemicals they used, much as the patient used to be insulated from the drug manufacturer, observed the court.

The duty to warn, said the federal court, involved an analysis of the reliability of the third party as a conduit of necessary information about the product; the magnitude of the risk involved; and the burdens imposed on the supplier by requiring that it directly warn all users. That, in turn, included the degree to which the danger related to the particular product is clearly known to the  purchaser/employer. Thus, West Virginia would recognize a sophisticated user defense.

As with the sophisticated user defense, the bulk supplier notion is rooted in Restatement § 388
comment n. While the sophisticated user defense focuses on the reasonableness of reliance on the employer, the bulk user defense concerns the burden which would be imposed on the supplier if it were bound to directly warn all downstream users.  The impracticability of the manufacturer getting a warning for a chemical shipped in tank trucks or rail cars to the employees of the customer would also be recognized as a defense in the state, predicted the federal court.

The court rejected the defendant's third assertion that the dangers of vinyl chloride monomer are “open and obvious," as the connection between cancer and VCM is not readily known outside scientific, medical and industrial communities, said the court.

 

FDA Launches Two Food Safety Initiatives

The U.S. Food and Drug Administration has launched two Internet-based initiatives that may be noteworthy for MassTortDefense readers involved in food safety issues.

First, the FDA has launched an Internet-based registry to track patterns in contaminated food.  The site, explained here, is a result of 2007 legislation requiring food facilities to report potentially dangerous products. Food industry officials are required to use the Reportable Food Registry to alert the FDA when they discover a risk that  their products might injure people or animals, the agency stated last week. By fostering real-time submission to the FDA of information on food safety hazards, the registry is supposed to enhance the agency’s ability to act quickly to prevent food-borne illness. The goal is to catch the problem before people get sick. 

Facilities that manufacture, process, or hold food for consumption in the U.S. must now tell the FDA within 24 hours if they find a “reasonable probability” that an article of food will cause severe health problems or death to a person or an animal. The reporting requirement, which applies to all foods and animal feed regulated by the FDA, does not reach infant formula and dietary supplements.

Any person who has to submit registration information to the FDA for a food facility that
manufactures, processes, packs, or holds food for human or animal consumption is deemed a “responsible party” and must follow the reporting requirement. A responsible party also must investigate the cause of the adulteration if the adulteration of food may have originated with the responsible party. 

The registry's proposal drew criticism from some industries, and they in fact had asked the FDA last month to extend the effective date for reporting. For example, national organizations representing the grain, feed, grain processing and pet food industries said that, at the very least, the FDA should exercise enforcement discretion in order to provide an appropriate phase-in period. FDA did not do so.

The launch of the FDA registry comes just as Congress is considering a new food safety bill that would give the FDA more funding and greater authority to order recalls of products. The House passed a food safety bill in the summer, and the Senate is expected to take up the issue later this fall.

At the same time, the administration is rolling out a new Web site designed to streamline food safety information for the public. Health and Human Services Secretary Sebelius announced the new Web site  last week. The site is a joint effort among HHS, the Department of Agriculture and the FDA.

The site will put food-related information from all federal agencies in one place.  It includes sections on how to "Keep Food Safe"; what to do in the case of suspected "Food Poisoning"; a section for industry relating to "Inspections & Compliance"; as well as food news, agency events (such as workshops, meetings, and conferences) for FDA, CDC, USDA; and educational materials on food safety.  Of particular interest to our readers may be the links to agency speeches and presentations, communications to Congress, and Congressional testimonies.

 

CAFA "Local Controversy" Exception Explored

The Tenth Circuit has upheld a trial court ruling remanding a proposed class action under the “local controversy exception” to federal jurisdiction under the Class Action Fairness Act (CAFA).  See Coffey v. Freeport-McMoRan Copper & Gold, No. 09-6106 (10th Cir.  9/4/09).  Plaintiffs filed a proposed class action in state court in Oklahoma on behalf of themselves and all other similarly situated persons asserting state law claims based on the defendants’ alleged contamination of their property through operation of the Blackwell Zinc Smelter in Blackwell, Oklahoma. The case alleges that the mining companies failed to clean up lead, arsenic and cadmium contamination in the Blackwell area from the decades-out-of-operation smelter plant.

 Defendants removed to federal court, and plaintiffs filed a motion to remand, arguing that there was no basis for federal jurisdiction. The district court granted the motion, concluding that plaintiffs had demonstrated that their case fell within the “local controversy exception” to CAFA, and did not raise a federal question under CERCLA.

CAFA was enacted to respond to perceived abusive practices by plaintiff attorneys in litigating major class actions. CAFA allows federal jurisdiction over class actions involving at least 100 members and over $5 million in controversy when minimal diversity is met (between at least one defendant and one plaintiff-class member). It is undisputed that those standards were met here. Congress did create an exception to CAFA, however, for those cases consisting of primarily local, intrastate matters, which it characterized as the “Local Controversy Exception,” S. Rep. No. 109-14, at 39 (2005).  The court concluded this case presents a classic example of what Congress intended to cover when it created this exception. It is a “truly local controversy— a controversy
that uniquely affects a particular locality to the exclusion of all others.”

There are three main requirements for plaintiffs to meet in order to satisfy the “local controversy exception.”  The defendants did not contest that plaintiffs met two of the three requirements—all of the members of the plaintiff class are Oklahoma citizens, and the principal injuries occurred in Oklahoma. What was in dispute was that requirement that there be at least “one real local defendant.” In order to satisfy this “local defendant” requirement, plaintiffs must show that at least 1 defendant is a defendant from whom significant relief is sought by members of the plaintiff class; whose alleged conduct forms a significant basis for the claims asserted by the proposed plaintiff class; and who is a citizen of the State in which the action was originally filed.  In particular, defendants argued that plaintiffs failed to show that defendant BZC -- the alleged local -- was a defendant from whom significant relief is sought or that BZC was a citizen of Oklahoma.

Although BZC was the operator of the smelter from 1922-1974, defendants argued that the language “from whom significant relief is sought” requires consideration of a defendant’s ability to pay a judgment, citing Robinson v. Cheetah Transportation, No. 06-0005, 2006 WL 468820 (W.D. La. Feb. 27, 2006).  Since BZC had no assets to satisfy any potential judgment, therefore BZC could not be considered a defendant from whom significant relief is sought.  The district court ultimately rejected defendants’ position, concluding that the CAFA exception refers to a defendant from whom significant relief is “sought,” rather than a defendant from whom the relief “may be obtained” or “can be collected” or words of similar import. The 10th Circuit agreed with the district court’s plain language analysis. The statutory language was found to be unambiguous, and a “defendant from whom significant relief is sought” does not mean a “defendant from whom significant relief may be obtained.”  There was nothing in the language of the statute that indicates Congress intended district courts to wade into the factual swamp of assessing the financial viability of a defendant as part of this preliminary consideration, said the per curiam opinion.

On the second issue, citizenship, a district court’s determination about a corporation’s principal place of business “is a question of fact that we review for clear error.”  BZC owned the real property in Oklahoma and pays taxes on that property; it had filed an application for a permit to operate a groundwater treatment plant in Oklahoma.  Thus, the court concluded that BZC’s clean up activity was a “substantial activity in which it is currently engaged” and that this “activity suffices to establish Oklahoma as BZC’s principal place of business.” 

Although the appeals court has discretion to exercise its appellate jurisdiction to review the CERCLA issue, the Tenth Circuit said, it declined to exercise that discretion.

Two Consumer Fraud Class Actions Offer Contrast

Two recent consumer fraud class actions offer contrasting lessons.  First, the federal court declined to certify a class of Ford Motor Co. truck owners who alleged the vehicles are prone to a shimmying problem. Lewis v. Ford Motor Co., 2009 WL 2750352 (W.D. Pa. 8/25/09).

According to Plaintiffs, their vehicles were subject to front-end suspension defects which caused severe oscillation under ordinary driving conditions and allegedly created a safety hazard for the drivers of the vehicles as well as other motorists. Pennsylvania residents Timothy Lewis and Timothy Trapuzzano sued Ford on behalf of a statewide class of owners of 2005–2007 model year F-250 and F-350 trucks.  Plaintiffs moved seeking class certification as to Count III of their Complaint, the alleged violation of the Pennsylvania Unfair Trade Practices and Consumer Protection Law.  The court noted that the 3rd Circuit has recently re-evaluated the standard of review to be applied by a district court in considering a motion for class certification. First, the district court must consider carefully all relevant evidence and make a definitive determination that the requirements of Rule 23 have been met before certifying a class;  that is, it is no longer sufficient for a party to assure the court that it intends or plans to meet the requirements. Second, the decision to certify a class requires rigorous consideration of all the evidence and argu-ments offered by the parties.  This may require the court to resolve all factual or legal disputes relevant to class certification, even if they overlap with the merits -- including disputes touching on elements of the cause of action.  Finally, weighing conflicting expert testimony at the certification stage is not only permissible; it may be integral to the rigorous analysis Rule 23 demands. In other words, to certify a class the district court must find that the evidence more likely than not establishes each fact necessary to meet the requirements of Rule 23. In re Hydrogen Peroxide Antitrust Litig., 552 F.3d 305, 310 (3d Cir.2008.)

Originally, plaintiffs alleged the defendant failed to comply with the terms of a written guarantee or warranty given to the buyer at, prior to or after a contract for the purchase of goods or services.  But at the motion stage, instead, plaintiffs relied on the so-called “catch-all” provision, which broadl includes “unfair methods of competition” or “unfair or deceptive acts or practices” to include “engaging in any other fraudulent or deceptive conduct."   This switch may have been done to avoid the argument that plaintiffs need to prove relaince -- an indivdualized inquiry that can impede certification.  The court consluded, based on the almost universal agreement of the district courts of the 3rd Circuit, that a plaintiff must allege and show justifiable reliance even for claims brought under the catch-all provision of the state's Consumer Protection Act.

The reliance element was individual, and interestingly, the court noted that this affected the 23(a) issue of commonality as well as the 23(b) issue of predominance. Next, plaintiffs argued that while there may be some individual differences in the amount of damages, such discrepancies were not sufficient to defeat class certification. However, the court noted, they failed to recognize that the threshold questions do not concern the amount of the individual damages but whether or not the individual injury occurred. Proof of injury or fact of injury (whether or not an injury occurred at all) must be distinguished from calculation of damages (which determines the actual value of the injury. 

If proof of the essential elements of the cause of action requires individual treatment, then class certification is unsuitable. Here, each class member would have to show not only justifiable reliance but also loss as a result of that reliance, aspects subject to individual, rather than common questions of law or fact. This lack of commonality rendered this case unsuitable for class treatment.  And it logically followed that if plaintiffs failed to satisfy the criteria for showing commonality, they cannot satisfy the more strenuous demands of the predominance analysis.

Shortly thereafter, the 9th Circuit handed down a decision announcing a standard of review for legal issues related to certification orders, and overruled a district court's denial of class certification in a consumer fraud class action.  Yokoyama v. Midland Nat'l Life Ins. Co., 2009 WL 2634770
(9th Cir.  8/28/09).

Three consumer senior citizens, all residents of Hawaii, alleged that they had purchased Midland's annuities from an independent broker. Plaintiffs alleged that the the annuities were marketed through deceptive practices, in violation of Hawaii's Deceptive Practices Act. The district court held that the plaintiffs could not satisfy Federal Rule of Civil Procedure 23's requirements that common issues predominate over individual issues and that a class action is a superior method of adjudication.

The dispositive issue on appeal was whether the Hawaii Act requires a showing of individualized reliance.  But there was a debate over the standard of review.  WHile certification decisions generally were reviewed under an abuse of discretion standard, the 9th Circuit panel agreed with the Seventh Circuit's explanation of the appropriate standard of review. Andrews v. Chevy Chase Bank, 545 F.3d 570, 573 (7th Cir.2008).  That is, the underlying rulings on issues of law must be reviewed de novo even when they are made in the course of determining whether or not to certify a class. We generally review a grant of class certification for abuse of discretion, but purely legal determinations made in support of that decision are reviewed de novo. (Note that Judge Smith argued in his concurrence that Ninth Circuit precedent cannot be overturned by two judges, only en banc).

Hawaii courts have interpreted the word “deceptive” to include those acts that mislead consumers acting reasonably under the circumstances, observed the panel.   And a deceptive act or practice is  a representation, omission, or practice that is likely to mislead consumers acting reasonably under the circumstances.  The representation, omission, or practice is material if it is likely to affect a consumer's choice. Whether information is likely to affect a consumer's choice is an objective inquiry, turning on whether the act or omission is likely to mislead consumers as to information important to consumers in making a decision regarding the product or service.  Therefore, said the court, since Hawaii's consumer protection laws look to a reasonable consumer, not the particular consumer, inidivudal relaince is not an element. The fact-finder will focus on the standardized written materials given to all plaintiffs and determine whether those materials are likely to mislead consumers acting reasonably under the circumstances.

 

 


 

Chamber of Commerce Requests Open Debate on Science of Global Warming

The U.S. Chamber of Commerce last week filed a supplemental request for an “on-the-record” hearing to debate the evidence behind the Environmental Protection Agency’s expected finding that greenhouse gases endanger the public health and welfare.

Readers of MassTortDefense may recall that in 2007, in Massachusetts v. EPA, 549 U.S. 497 (2007), the Supreme Court found that greenhouse gases could be regarded as air pollutants, and held that EPA must determine whether or not emissions of greenhouse gases from motor vehicles cause or contribute to air pollution which may reasonably be anticipated to endanger public health or welfare, or whether the science is too uncertain to make a reasoned decision. In making these decisions, the agency is required to follow the language of section 202(a) of the Clean Air Act. The Supreme Court decision resulted from a petition for rulemaking under section 202(a) filed by more than a dozen environmental, renewable energy, and other organizations.

The EPA is proposing to find that the current and projected concentrations of the mix of six key greenhouse gases — carbon dioxide (CO2), methane (CH4), nitrous oxide (N2O), hydrofluorocarbons (HFCs), perfluorocarbons (PFCs), and sulfur hexafluoride (SF6) — in the atmosphere threaten the public health and welfare of current and future generations. This is typically referred to as an "endangerment finding."  EPA is further proposing to find that the combined emissions of CO2, CH4, N2O, and HFCs from new motor vehicles and motor vehicle engines contribute to the atmospheric concentrations of these key greenhouse gases and hence to the threat of climate change.  While an endangerment finding under the Clean Air Act would not by itself automatically trigger extensive regulation under the entire Act, many observers expect such regulations.  Moreover, the finding could prod the Congress to pass controversial climate legislation.  Finally, it may impact the pace and weight of climate change litigation.

The Chamber argues that the informal notice-and-comment process employed here has not worked to air the issues, and the only real solution is an on-the-record hearing for a transparent review of all the evidence.  Having reviewed the evidence in EPA’s endangerment docket, the Chamber observes flaws and omissions in the reasoning underlying the proposed endangerment finding. The Chamber is thus asking for more transparency in this process, as the ruling could ultimately cause a "regulatory train wreck" with inescapable economic consequences, as well as an impact on mass tort litigation. The agency has apparently ignored evidence contradicting its preliminary conclusions on a wide range of issues, such as the alleged effect higher temperatures will have on net mortality and on the levels of other pollutants.  Media reports have surfaced that EPA ignored a study by two members of its staff concluding that the agency had relied on outdated studies and that the current state of climate science refutes the proposed endangerment finding.



 

FDA Considering Rules on Acrylamide in Food

The FDA is considering issuing guidelines on acrylamide content in food.  The agency has published a notice seeking comments from industry on the issue.

Acrylamide is a chemical formed primarily in baked and fried foods by a reaction between sugars and the amino acid asparagine. The reaction is partly responsible for the golden color and tasty flavor of baked, fried, and toasted foods. In 2002, some Swedish scientists reported unexpectedly high levels of acrylamide in carbohydrate-rich foods and also published a study associating the chemical to cancer in laboratory rats. Further research subsequently determined that acrylamide can form in some foods during certain types of high-temperature cooking.

FDA has not yet issued guidance for manufacturers on reducing acrylamide in food. However, it is anticipated by the agency that new information will soon be available about the toxicology of acrylamide, which may shed light on acrylamide's potential carcinogenicity in laboratory animals. Readers of MassTortDefense know how difficult it is to leap from animal studies to causation conclusions in human beings, because of the physiological and metabolism differences between species, the excessive dosages that are (and typically must be) given to experimental animals, and the varying biological defense mechanisms that species have to environmental insults.

International efforts to develop approaches to acrylamide mitigation are also beginning to prove successful. Moreover, FDA is aware that at least some manufacturers in the United States are seeking ways to reduce acrylamide in their products. In this context, FDA is considering issuing guidance for industry on reduction of acrylamide levels in food products.

Health Canada recently added acrylamide to that nation’s toxic substances list, as part of its ongoing review of over 200 chemical substances in commercial use. It stated that current consumption levels “may constitute a danger in Canada to human life or health,” but it also acknowledged that research into a possible carcinogenic link for humans has so far been inconclusive.

In fact, dietary intakes of acrylamide are not related to increased risks of brain cancer, according to a recently released study of 58,279 men and 62,573 women, published by Maastricht University in the Netherlands. J.G.F. Hogervorst, et al., “Dietary Acrylamide Intake and Brain Cancer Risk,” 18 Cancer Epidemiology, Biomarkers & Prevention (2009).  Researchers have also reported in the Journal of the National Cancer Institute that dietary acrylamide was not linked to lung cancer risk, and that the compounds may even reduce the risk in women. "Lung Cancer Risk in Relation to Dietary Acrylamide Intake," 101(9) JNCI 651-662 (2009).

 

 

In seeking comments, the FDA has asked food manufacturers to respond with details of any manufacturing changes they have made, the success and cost-effectiveness of those changes, methods for acrylamide reduction that could be appropriate for smaller manufacturers, and changes to on-pack instructions for consumers to mitigate acrylamide formation.

 

 

Nano-particle Study Generates More Heat Than Light

A new study published in the European Respiratory Journal is generating media attention, and some observers assert it may have far-reaching implications for the nano-tech industry. Is this warranted?

In this study, Song, et al., Exposure to nano-particles is related to pleural effusion, pulmonary fibrosis and granuloma, 34(3) Eur. Respir. J. 559-567 (2009), researchers at China's Capital University of Medical Sciences linked lung disease in seven Chinese workers, two of whom reportedly died, to nano-particle exposures in a print plant where a paste containing nano-particles was sprayed onto a polystyrene substrate, with subsequent heat-curing.

The study reported that seven young female workers (ages 18–47), exposed to nano-particles for 5–13 months, were admitted to the hospital, all with shortness of breath and pleural effusions. Polyacrylate, consisting of nano-particles, was confirmed in the workplace. Pathological examinations of the patients' lung tissue displayed non-specific pulmonary inflammation, pulmonary fibrosis, and foreign-body granulomas of pleura. By transmission electron microscopy, nano-particles were observed to have lodged in the cytoplasm and caryoplasm of pulmonary epithelial and mesothelial cells, but also were located in the chest fluid.

The authors expressed concern that long-term exposure to some nano-particles may be related to serious damage to human lungs.  But, putting the media reception aside, this study appears to do more to highlight the common sense need to follow good industrial hygiene practices than to provide compelling evidence of any unique health risks posed by engineered nano-particles. The plant sprayed a strong chemical paste and then heated plastic material in an enclosed space apparently lacking ventilation.  The room in which the women worked was small and unventilated for a significant part of their exposure period. Only on occasion, they wore mere "cotton gauze masks." 

From the study it appears that the workers had a complicated exposure history to a mix of chemicals; while there was a reported association of nano-particles with lung disease, it is unclear which, if any, of the chemical exposures might have contributed to the lung issues. Readers of MassTortDefense know that an association is not causation.  For example, formation of thermodegradation fume products are known to cause significant occupational disease, and paint spraying has been shown to be potentially harmful long before nano-sizing of chemicals was utilized. 

Moreover, sufficient exposure information necessary to even begin to think about a causal connection between exposure to nano-sized particles in the paste/dust and lung and heart disease in the workers was missing.  Clearly, there may be alternative explanations for what the study authors described finding in the patients.

As noted here before, NIOSH emphasizes the use of a variety of engineering control techniques, implementation of a risk management program in workplaces where exposure to nanomaterials exists, and use of good work practices to help to minimize worker exposures to nanomaterials.
 

 

 

Motion For Default Filed in China Drywall MDL

An Alabama construction company that is a party in the multidistrict litigation over allegedly tainted Chinese-made drywall has asked for a default judgment against a foreign manufacturer/seller of gypsum drywall. Mitchell Co. Inc., et al. v. Knauf Gips KG, et al., No. 09-cv-4115 (E.D. La.).

Mitchell filed a motion last week  in the U.S. District Court for the Eastern District of Louisiana asking for a default judgment against China-based Taishan Gypsum Co. Ltd.  The motion alleges that Taishan has not responded to the plaintiff's complaint nor entered an appearance.  Mitchell filed its original complaint back in March, in the Northern District of Florida, seeking to represent a class of plaintiffs who allege they incurred expenses stemming from defective drywall.  The complaint names several drywall makers and sellers.  The case was later transferred with related actions to the MDL in front of Judge Fallon. In re: Chinese-Manufactured Drywall Products Liability Litigation, No. 09-md-02047 (E.D. La.). 

Interestingly, the motion comes as the Congress debates a bill that would make it easier for foreign manufacturers to be sued when their products allegedly injure U.S. consumers, the Foreign Manufacturers Legal Accountability Act of 2009.

MassTortDefense has posted about the alleged problems with Chinese imported drywall. In litigation over the issues, Lennar Corp., the U.S.' second largest home-builder (by volume), has sued more than two dozen manufacturers, suppliers and installers.  As noted here before, Sens. Bill Nelson, D-Fla., and Mary Landrieu, D-La., have introduced legislation tied to Chinese drywall.  Also, the CPSC reports that it has now received a total of 810 reports related to the allegedly defective drywall, including complaints from two additional states, Pennsylvania and South Carolina. That means the Commission (criticized in some circles for its work on this issue)has received reports from homeowners in 23 states and the District of Columbia. The majority of the reports continue to be from Florida, Louisiana, and Virginia. About 6.2 million sheets of Chinese drywall were imported into the U.S. during 2006.

 

Class Certification Denied In Beryllium Exposure Case

A California appellate court last week affirmed a trial court ruling denying class certification to a group of Boeing employees suing over alleged exposure to harmful levels of beryllium. Marin v. Brush Wellman Inc.,  No. B208202 (Calif. Ct. App., 2nd Dist. Aug. 24, 2009).

The plaintiffs alleged that Brush Wellman, a contractor of their employer, misrepresented the permissible limit for beryllium exposure. Beryllium is a potentially toxic metal that is used in aircraft construction and other industrial applications because of its light weight and great strength. However, some exposed persons are beryllium sensitization, which can be a precursor to chronic beryllium disease, which is a serious illness. 

The court of appeals agreed with the trial court that common issues did not predominate. In a toxic tort case, the plaintiff must first establish some threshold exposure to the defendant's defective, toxic products, and must also establish to a reasonable medical probability that a particular exposure or series of exposures was a legal cause of his injury, i.e., a substantial factor in bringing about the injury. This typically requires expert testimony about the level of exposure that is unsafe, and expert testimony that exposure above a certain level will cause injury or disease. The significance of this is  that when individual claimants differ both in their makeup and in the amount of their exposure to the substance, the evidence of their injuries will differ from individual to individual.

Here, each of the class members would have to show where he worked, when he worked within each location or facility, what the beryllium levels were at these locations, and how much of the beryllium was Wellman's.  It is patent that each such package of facts will be largely unique to each claimant.  The six named plaintiffs worked at six different facilities, some of which had multiple buildings, over differing periods covering up to 40 years. Boeing's air monitoring and industrial hygiene records showed non-uniform results. In other words, the levels of exposure varied widely among the facilities over time, and even within a single facility. The sales and use evidence that could be used to trace the beryllium to Wellman implicated a necessarily individualized inquiry, not a common one.

In an effort to salvage a class, plaintiffs' counsel explained at oral argument that the proposed class was only for those who required medical monitoring. Those persons who actually contracted illness would be excluded from the class as their claims would be necessarily unique and individualized.  Even assuming this issue was properly presented to the trial court, the plan to certify a class of persons requiring medical monitoring and, in addition to such a class, allowing the more serious cases to proceed individually and separately, was to the court "an invitation to a litigation disaster."   Recourse to such a class would do nothing to streamline this litigation but would most probably convert it into a nightmare.

Device Group Comments on FDA Draft Guidance on Risk Information

Readers of MassTortDefense know how FDA regulatory treatment of advertising and promotion can impact product liability litigation involving drugs and medical devices. Earlier this year, the FDA issued draft Guidance for Industry Presenting Risk Information in Prescription Drug and Medical Device Promotion.  This draft guidance describes factors FDA considers when evaluating advertisements (ads) and promotional labeling for prescription drugs, ads for restricted medical devices, and promotional labeling for all medical devices for their compliance with the Federal Food, Drug, and Cosmetic Act and relevant regulations. The draft guidance discusses factors that are relevant to the disclosure of risk information and provides numerous examples to illustrate FDA’s thinking on these factors. The recommendations contained in this draft guidance apply to promotional materials directed to both consumers and healthcare professionals.

As the comment period has drawn to a close, the medical device trade group AdvaMed has weighed in, arguing that the FDA's draft guidance on presentation of risk information in advertisements fails to adequately distinguish between devices and drugs.  The group asserts that the draft lacks content and specificity for device makers, and that a separate guidance document for medical devices is probably warranted. One example is the discussion in the draft of the important concept of over-warning, which is done solely with drug examples.

The comments also not the inherent differences between drugs as therapy and a device which requires a separate intervention (surgery) to be used. Because devices are often used in conjunction with other devices and drugs, communications with consumers of medical devices may need to focus more on a broader spectrum of risks and benefits of ongoing therapies, with a larger group of health care professionals.

AdvaMed also questions the draft's notion that risk information should be spread throughout a promotional piece, rather than located in one easy spot for the consumer to find.  Overall, the draft appears to focus on risk information without adequately discussing the intersection with benefit information.

The group agrees with a move towards the "reasonable consumer" standard for evaluating promotional pieces, and suggests the same direction be taken with DTC advertisements. Highly trained regulators cannot easily evaluate DTC ads as would an average consumer.   Finally, the group argues the draft should provide more specific guidance on use of the Internet for promotion, and the use of hyperlinks.  Increasingly the Internet is a source of information for medical consumers.

 

 

Consumer Fraud Class Action Rejected In Supplement Case

A putative class action of purchasers of the asserted mood enhancer and belly fat reducer Relacore was recently rejected by a New Jersey appeals court.  Lee v. Carter-Reed Co., 2009 WL 2475314 (N.J. Super. Ct. App. Div. 8/14/09).  The court affirmed a lower court's decision not to certify the class action, in which plaintiffs had alleged that the defendant falsely advertised the benefits of the product.

Plaintiff Melissa Lee alleged she purchased Relacore, manufactured and distributed by Carter-Reed Co., and asserted that she purchased the product based on the promise that it would reduce belly fat. But, she averred, she actually gained belly weight during the time she took the product.  She claims that defendant's advertising campaigns touted that Relacore helps reduce stress-induced belly fat. Lee claimed that the defendant devised and utilized a fraudulent, deceptive advertising campaign for Relacore. She sought relief under the New Jersey Consumer Fraud Act, and related common law fraud theories.

Following discovery limited to class suitability, plaintiff moved for class certification. Defendants opposed the motion. Following oral argument, the trial court denied the application for class certification, citing absence of superiority,  manageability, and predominance. In an unpublished per curiam opinion, the Superior Court affirmed and held that individual issues predominated over issues allegedly common to the class.

The court noted first that the superiority requirement requires an analysis that includes: (1) an informed consideration of alternative available methods of adjudication of each issue, (2) a comparison of the fairness to all whose interests may be involved between such alternative methods and a class action, and (3) a comparison of the efficiency of adjudication of each method. Manageability of the class is a consideration, as well, but it is “disfavored” in NJ to deny class certification on this basis alone. In order to justify denial of class certification on this basis, the management issues must be of great magnitude. 

Here, the issues of superioirty and of manageability were subordinate to the issue of predominance.  A party asserting a CFA claim in New Jersey must establish wrongful conduct, an ascertainable loss, and a causal relationship or nexus between the wrongful conduct and the loss. A common law fraud claim requires proof of  a material representation of a presently existing or past fact, made with knowledge of its falsity and with the intention that the other party rely thereon, resulting in reliance by that party to his detriment. 

In this case, the central issue for the consumer fraud claim was the existence of a causal nexus between the wrongful conduct and any loss.  Plaintiff asserts that she relied on a false marketing campaign and she was induced by the false representations to purchase and use the product. Neither plaintiff nor the court knew, however, what caused others to purchase and use the product. Neither plaintiff nor the court knew whether putative class members even saw the alleged print or Internet advertisements or whether they purchased the product due to a recommendation from a friend or family member or for some other reasons.

Moreover, the Relacore market campaign was multi-faceted. In some ads, it was touted as a belly fat retardant; in others, a mood elevator; in others, a stress reducer.  There was no way to know on a common basis the reason any putative class members purchased the product, even assuming they heard or saw any advertising. This distinguished the case from Varacallo v. Massachusetts Mutual Life Insurance Co., 332 N.J. Super. 31 (N.J. Super. Ct. App. Div. 2000), in which the court certified a class of those who purchased “vanishing premium” life insurance, and in which the advertising approach was uniform and common to all class members.

The lack of predominance was even more obvious in the context of plaintiff's common law fraud claim. For this claim, the putative class must prove reliance -- which they could not on a common basis.

The case is useful as it analyzes establishing a causal nexus between the challenged conduct and an ascertainable loss.  Properly viewed, that causal link ought to be a major impediment to class certification because it requires individualized factual determinations for absent class members. Plaintiff's argument to extend Varacallo to false advertising product cases brought forth numerous opposing amici, including PLAC.


 

Digitek MDL Plaintiffs Ordered To Respond To Discovery

The federal court has ordered plaintiffs in the MDL concerning the heart medication Digitek to respond to discovery relating to whether the individuals in each identified case had sufficient evidentiary support to justify filing their claim.  The decision is also interesting for all those in mass torts struggling with plaintiffs' typically inadequate responses to initial fact discovery and Plaintiff Fact Sheets. In re: Digitek Products Liability Litigation, MDL-1968 (S.D. W.Va.).

In April, 2008, the FDA announced a recall of the drug Digitek® (Digoxin) distributed by Mylan Bertek Pharmaceuticals, Inc. and UDL Laboratories, Inc. The recall stated that certain lots of the tablets may have contained more than the approved level of the drug’s active ingredient, thereby exposing patients with renal failure who consumed the drug to the risk of digitalis toxicity. Soon thereafter, the plaintiffs filed civil actions against the defendants in state and federal courts across the country. In August, 2008, the Judicial Panel on Multidistrict Litigation entered an order establishing a multidistrict litigation proceeding, which consolidated federal Digitek® related actions for joint case management. The plaintiffs generally allege that the defendants manufactured, marketed, tested, promoted, and/or distributed Digitek® with inconsistent amounts of the active ingredient.

As is fairly typical, plaintiffs were required to fill out basic fact information about their use of the drug and alleged injuries in Plaintiff Fact Sheets.  Such fact sheets are often used instead of  interrogatories, and allow the parties and the court to assess the various types of cases in the mass tort. They can be crucial to decide on trial plan, the scope and timing of additional discovery, and even settlement analysis. 

Defendants served three requests for admission in 39 individual cases, seeking information relating to whether the plaintiff in each identified case had sufficient evidentiary support to justify filing a claim. The requests at issue asked the plaintiff or their counsel  to "admit that you did not serve Defendants with any of Plaintiff’s medical records when you served the Plaintiff Fact Sheet;"  to "admit that you did not have any of Plaintiff’s medical records or pharmacy records in your possession when you filed the Complaint in this case;" and to "admit that you did not have Plaintiff’s medical records or pharmacy records in your possession when you served Defendants with the Plaintiff Fact Sheet."

The Plaintiffs’ Steering Committee in the MDL submitted the plaintiffs’ master objections to the defendants’ requests. They argued that the discovery was premature: before the parties may begin
discovery on an individual case, that case must be selected for inclusion in a trial group. Second, they allege that the defendants are attempting to cure deficient Plaintiff Fact Sheets with the
requests, rather than through the deficiency process outlined in previous pre-trial orders.  Third, in a preemptive strike, they argued that since the Plaintiff Fact Sheets constitute discovery responses,  defendants cannot pursue sanctions for them under Rule 11.  Finally, plaintiffs also asserted that the requests were not reasonably calculated to lead to the discovery of admissible evidence, and alleged that the targeted information is protected by the attorney-client privilege and/or the work product doctrine.

The court noted that the defendants have expressed serious concerns about the merits of many of the cases filed in the MDL. They believe that a large number of cases lack sufficient evidentiary support demonstrating that the identified plaintiffs exhibited digitalis toxicity as a result of ingesting nonconforming Digitek® tablets. The defendants are attempting to determine whether the plaintiffs served with the requests possessed their medical and pharmacy records at the time their complaints were filed and the Plaintiff Fact Sheets were submitted. The defendants suspect they were not. If their suspicions prove true, the answers to the requests may be used to support future Rule 11 motions for sanctions.

The court first held that the provisions and stipulations contained in previously entered pretrial orders do not prohibit the defendants from serving requests for admission on individual plaintiffs at this time.

Next, regarding the deficiency process, the court noted that the defendants were not seeking information that must be contained in a Plaintiff Fact Sheet. Rather, they are seeking Rule 11 information relating to whether the plaintiffs had a sufficient evidentiary basis to file suit. The requests specifically target information concerning whether the plaintiffs possessed their medical and pharmacy records at particular times. This information is outside the scope required to be disclosed in a Plaintiff Fact Sheet. The deficiency process described in pretrial orders has no application in determining whether the defendants’ requests for admission are proper.

Third, while the plaintiffs are correct that Plaintiff Fact Sheets are considered discovery responses according to the case management order, their argument about Rule 11 is premature because the defendants have not yet filed a Rule 11 motion for sanctions. Even so, the plaintiffs again missed the point of the defendants’ requests. The defendants were not attempting to discover whether the plaintiffs committed sanctionable conduct in their Plaintiff Fact Sheets. Instead, they were trying to gather information as to whether there were appropriate Rule 11 prefiling investigations.

Also, the court found that the requests were specifically aimed at discovering information relevant
to the defendants’ defense. If the plaintiffs in the 39 cases in fact failed to comply with Rule 11, serious issues arise as to the merits of those plaintiffs’ claims. The defendants would
be able to use the information gathered from the requests to support a defense that the claims lack
evidentiary basis. Thus, the information sought by the defendants is within the scope of discoverable material under Rule 26(b)(1).

Finally, the court acknowledged that information relating to Rule 11 may raise potential privilege
and conflict issues. However, if the information received by an attorney from a client is relevant to
whether a complaint is well-founded, it probably will eventually be disclosed, either in a pleading
or in later discovery. Schwarzer, Sanctions Under the New Federal Rule 11--A Closer Look, 104
F.R.D. 181, 199 (1985). Thus, the fact that information may be incorporated into work product does
not immunize it from disclosure.

In summary, based upon the allegations contained in the complaints, a prefiling investigation without first obtaining medical and pharmacy records would be reasonable only in an extremely
limited set of circumstances. The records would be essential in determining whether the plaintiffs
have a colorable claim. Rule 11 applies to the same extent in mass tort and multidistrict litigation as it does in more conventional disputes.The defendants’ requests for admission were sufficiently and narrowly tailored to reveal whether the plaintiffs were in possession of the relevant records at the time suit was initiated. The requests would not cause the plaintiffs any undue burden or hardship as the information necessary to answer the requests should be readily ascertainable. 

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