Early Alert for Nanotechnology Conference

Readers interested in nanotechnology issues may be interested in the Second NanoImpactNet Conference on the future with nanotechnology.  It is to be held in Lausanne, Switzerland, March 9-12, 2010.

Information on the preliminary program is available here.

And information on abstract submission and registration for the conference is available here.

The conference is organized by NanoImpactNet, a European network on the health and environmental impact of nanomaterials, including academic and government laboratories
working on nano-toxicology and nano-ecotoxicology. 

A Personal Note

No substantive post today, but an opportunity to wish all my readers a very Happy Thanksgiving. 

This year has been challenging for many of my readers and clients, and indeed for the legal profession.  In this context, it seems perhaps even more important, and appropriate, to take a moment to express thanks for those positive aspects of our lives, personal and professional.

I am very thankful that you, my subscribers and readers, take a moment out of your busy day to review the postings here. 

Here's hoping you have a wonderful holiday season.

 

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Anti-Iqbal Legislation Update

A few months ago, we alerted readers to the bill that Sen. Arlen Specter (D-Pa.) had introduced that would undermine the clarified civil pleading standards for plaintiffs set forth by the U.S. Supreme Court in the Bell Atlantic Corp. v. Twombly, 127 S.Ct. 1955 (2007) decision, and reaffirmed in Ashcroft v. Iqbal, 129 S.Ct. 1937 (2009), decided in May.

The so-called "Notice Pleading Restoration Act of 2009’’ would turn back the clock to the ancient and unrealistic interpretation of Rule 8 of the Civil Rules announced in Conley v. Gibson more than 5 decades ago. The bill is clearly aimed at helping the plaintiffs' bar and making it more difficult for defendants to get courts to dismiss frivolous and ungrounded litigation before expensive discovery. Specter, the newly turned Democrat facing an uphill re-election battle, submitted the bill over the summer. In the Senate, a hearing on the bill is expected in the Judiciary Subcommittee on administrative oversight and the courts, chaired by Sen. Sheldon Whitehouse (D-R.I.).

Last week, Rep. Nadler (D.N.Y.), along with Reps. John Conyers (D-Mich.) and Henry Johnson (D-Ga.), introduced a bill in the House (H.R. 4115) to overturn Iqbal and Twombly. Their version is called the “Open Access to Courts Act of 2009.”  Unlike the Specter bill, the House version incorporates specific language from the Supreme Court's ancient Conley decision. The bill states a court shall not dismiss a complaint “unless it appears beyond doubt that the plaintiff can prove no set of facts in support of the claim which would entitle the plaintiff to relief.”  The House bill also would expressly bar a federal court from using the Iqbal and Twombly analysis, stating a court shall not dismiss a complaint “on the basis of a determination by the judge that the factual contents of the complaint do not show the plaintiff's claim to be plausible or are insufficient to warrant a reasonable inference that the defendant is liable for the misconduct alleged.”  In other words, the claim need not even be plausible, and it is not a problem if no reasonable person could infer that the defendant might actually be liable.

The House bill follows directly from the efforts of the American Association for Justice, formerly the Association of Trial Lawyers of America, which convened a meeting of many of the pro-litigation, anti-business interest groups to map out a strategy to not just turn back the clock, but to replace the current common sense regime. They eventually sent a letter to the members of the House and Senate Judiciary committees, complaining that the current standards are hampering access to the courts and are denying their clients due process.  This coalition must have also thought that the Specter bill did not go far enough in simply trying to turn the clock back to the status quo ante.

In reality, it's hard to argue for overturning the two decisions without resort to hollow sloganeering or vague appeals to a warped definition of due process.  The decisions -- and think about whether you would want a case to proceed against you on this basis -- focus the trial courts' attention on mere “threadbare recitals” and vague and “conclusory statements,” to watch out for a mere re-stating of the hornbook legal elements of the case, and to look for a plaintiff to allege a “plausible” claim for relief that judges can evaluate based on their “judicial experience and common sense.”   In other words, say plaintiffs, please allow us to bring frivolous claims, alleging nothing of substance, and get into expensive protracted discovery so that we can force defendants to settle.  That's "due" process.

The legislation would likely create great confusion over the applicable legal standards for motions to dismiss, and eventually overwhelm the courts with frivolous lawsuits.  It seems the Democrats' goal to make it impossible for defendants to get cases dismissed early.

Not surprisingly, the House bill ignores the national security issues associated with overturning Iqbal, a case in which the plaintiff sought to sue a group of top government officials for allegedly violating his civil rights after he was arrested and detained in the immediate aftermath of the Sept. 11, 2001, attacks.  The Democrats appear to think it is a good idea to subject Justice Department and FBI and Homeland Security officials to suits that are not plausible, are conclusory, are mere recitals of the elements of a cause of action. 

At the very least, any legislative effort is premature, pending a study to measure the possible effects of the Iqbal and Twombly decisions that is being conducted by the Judicial Conference of the United States. A preliminary study, reviewing both district and appellate court cases, concluded there was little evidence to date that courts were dismissing meritorious claims under the Iqbal/Twombly standards.

MDL Court Denies Class Certification in Device Litigation

The court overseeing the MDL concerning panacryl sutures declined last week to certify a proposed national class action. In re Panacryl Sutures Products Liability Cases, 2009 WL 3874347 (E.D.N.C. 11/13/09).

Panacryl Sutures are synthetic, braided, un-dyed, absorbable surgical sutures, designed to remain in the body for 24-36 months after surgery to provide wound support. Various plaintiffs alleged that Panacryl Sutures were defective in that they allegedly caused a high rate of foreign body reactions when used as directed. Plaintiffs alleged also that defendants failed to provide adequate warning of the dangers associated with the devices. Plaintiffs eventually filed a Motion to Certify a National Class Action.

The court first addressed the difficult choice of law issue -- a central, overarching issue in a proposed national class.  The court analyzed the choice of law factors -- interests of interstate comity, the interests underlying the field of tort law, the interests of the parties, the interests of judicial administration, and the competing interests of the various states, and concluded that under New Jersey's choice of law rules it should apply the substantive laws of each class member's home jurisdiction to his or her claims.  Again, a not unusual result, and is one which directly impacts the class certification elements.

Turning to the Rule 23(a) requirements, the court first focused on Rule 23(a)(3), commonly referred to as the “typicality” requirement, which states that the claims and defenses of the class representatives must be typical of the claims of the other class members.  Here, because plaintiffs had not shown that the prospective class representatives' claims can encompass or would take into account the varying substantive laws governing every class member, this element was not met.

Similarly, although the named plaintiffs interests are in some ways similar to the interests of class, the “adequate representation requirement overlaps with the typicality requirement because in the absence of typical claims, the class representative has no incentive to pursue the claims of the other class members.” In re American Med. Sys., 75 F.3d 1069, 1083 (6th Cir., 1996). Plaintiffs here did not meet their burden of showing that the claims of the prospective class representatives would take into account the variations in state law. The court found that therefore the prospective class representatives here did not satisfy Rule 23(a)(4).

Turning to Rule 23(b), the court observed that in class actions governed by the laws of several states, variations in state law will often overwhelm any common issues. See Ward v. Dixie Nat'l. Life Ins. Co., 257 F. App'x 620, 628-29 (4th Cir. 2007), cert denied, 128 S.Ct. 82 (2008), Castano v. Am. Tobacco, 84 F.3d 741 (5th Cir.1996).  To have any shot here, plaintiffs must provide an “extensive analysis” of the laws of the interested jurisdictions showing that variations among the applicable state laws do not pose “insuperable obstacles” to class certification. Walsh v. Ford Motor Co., 807 F.2d 1000, 1017 (D.C.Cir.1986); Gariety v. Grant Thornton, LLP, 368 F.3d 356, 370 (4th Cir.2004). Plaintiffs did not carry this burden.

Moreover, courts have generally founds that common questions of fact do not predominate in medical products liability cases. See In re American Med. Sys., 75 F.3d at 1074 (decertifying class of users of penile implants because “complications ... may be due to a variety of factors, including surgical error, improper use of the device, anatomical incompatibility, infection, device malfunction, or psychological problems.”); Zinser v. Accufix Research Inst., Inc., 253 F.3d 1180 (9th Cir.2001) (affirming denial of class certification in an action involving allegedly defective pacemakers). Here, plaintiffs alleged a variety of complications from the product, each of which has potential other causes. And Panacryl Sutures were used in a variety of surgical procedures which require different skills and techniques on the part of the surgeon and present different risks of post-surgical complications. These individual facts would have to be weighed against the alleged defects of Panacryl Sutures in light of the normal background rate of the various post-surgical complications identified by plaintiffs.  So no predominance of common issues.

This in turn led the court to conclude that the difficulties in managing the class proposed here would undermine the theoretical efficiencies that might be obtained through class certification.

Perhaps most importantly to readers of MassTortDefense, plaintiffs' last-ditch effort turned to the "issue class." But, noted the court, Rule 23(c)(4) may not be used to manufacture predominance for the purposes of Rule 23(b)(3). See Castano v. Am. Tobacco Co., 84 F.3d 734, 745 n.21 (5th Cir.1996) (“A district court cannot manufacture predominance through the nimble use of subdivision (c)(4).”); Peoples v. Wendover Funding, Inc., 179 F.R.D. 492, 501 n.4 (D.Md.1998) (“Rule 23(c)(4) does not permit a federal district court to certify a class under Rule 23(b)(3) by splitting a class action to create predominance.”). Plaintiffs' proposed issues trial plan did not eliminate the necessity of applying the laws of several jurisdictions or the individualized inquiry into whether Panacryl Sutures caused each plaintiff's injuries. And even under plaintiffs' proposed c4 trial plan, the difficulty of applying the laws of several states to the issues of liability and general causation would remain.  Lots of reasons to deny class certification.

Summary Judgment in Proposed Medical Monitoring Class Action

A federal court has granted defendant CSX Transportation, Inc.’s Motion for Summary Judgment in a medical monitoring case arising from a train accident. See Mann v. CSX Transportation, et al., NO. 1:07-cv-3512 (N.D. Ohio Nov. 10, 2009).

The case arises from the derailment of 31 rail cars, nine of which contained hazardous materials, and the subsequent fire that burned for around sixty hours. Ohio emergency personnel oversaw an
evacuation of a one half mile radius. The next day, plaintiffs filed a putative class action complaint in state court, which was removed to the Northern District of Ohio. Plaintiffs’ complaint, under
theories of strict liability and negligence, primarily sought the establishment of a judicially administered medical monitoring program.

After discovery had been completed, defendant filed its motion for summary judgment. The court began by noting that Ohio law recognizes medical monitoring as a form of remedy for an underlying tort. See Wilson v. Brush Wellman, 817 N.E.2d 59, 63 (Ohio 2004). (Readers will note some states consider it a separate cause of action.) Therefore, medical monitoring is only granted if a plaintiff is able to prove all the elements of the underlying tort and the elements of medical monitoring. On the first part, in order to avoid summary judgment, plaintiffs thus must make a showing of a genuine issue of material fact as to the elements of a negligence claim under Ohio law: (1) defendant had a duty to plaintiffs, (2) defendant breached that duty, and (3) plaintiffs suffered damages directly and proximately caused by defendant’s breach. See, e.g., Menifee v. Ohio Welding Products, 15 Ohio St. 3d 75, 77 (Ohio 1984).

The first two issues were not contested for purposes of the motion. On injury and causation, the court noted the overlap with typical medical monitoring requirements, such that to meet this aspect of their negligence claim plaintiffs must demonstrate a genuine issue of material fact that: (1) the chemicals (dioxins) released into the air by the fire are known causes of human disease; and (2) that the plaintiffs were exposed to the dioxins in an amount sufficient to cause a significantly increased risk of disease such that a reasonable physician would order medical monitoring.

Plaintiff experts relied on classifications of the chemicals as carcinogens as their only evidence that dioxins cause the various endpoint diseases for which they seek medical monitoring.  Plaintiffs’ experts also failed to provide an independent assessment of the causal link between dioxins and disease.  Instead they "parroted" the conclusions of other experts and cited to EPA, IARC and NTP documents labeling dioxins as known carcinogens. This was an insufficient showing, said the court.

But even if plaintiffs could demonstrate a causal relationship between dioxins and cancer, plaintiffs had failed to establish that they were exposed to dioxins in an amount warranting a reasonable physician to order medical monitoring. See Day v. NLO, 851 F.Supp.869, 881 (S.D. Ohio 1994).

Plaintiffs’ theory was that they were at an increased risk of disease because they lived for eighteen months with alleged contamination from the fire inside and around their homes. However, none of the named plaintiffs presented evidence that a physician has examined them or their medical records and opined that they are at an increased risk of disease. Similarly, plaintiffs’ experts had not conducted any measurement of dioxin inside or outside of the homes of five of the seven named plaintiffs. At least three of the seven had not even lived in their air dispersion modeling expert's "impact zone" long enough to qualify for his proposed medical monitoring program. Even for those that did, mere residence in the so-called impact zone is insufficient evidence of sufficient contamination and increased risk because it ignores any individual variables, including other sources, and most notably, at what level each of the named plaintiffs was actually exposed to dioxins. The Sixth Circuit has stated “generalized proofs will not suffice to prove individual damages.”  Sterling v. Velsicol Chem. Corp., 855 F.2d 1188, 1200 (6th Cir. 1988).

Again, even if plaintiffs had presented sufficient evidence of the amount of named plaintiffs’ dioxin exposure, plaintiffs did not demonstrate that a reasonable physician would order medical monitoring based on this exposure. Plaintiffs attempted to rely upon the EPA soil cleanup level after the accident as a basis for justifying medical monitoring. The court found two fatal defects in using this EPA soil cleanup level. First, demonstrating why regulatory guidelines are often not useful in the tort litigation context, see Rowe v. E.I. DuPont de Nemours & Co., 2008 WL 5412912 (D.N.J. Dec. 23, 2008); Redland Soccer Club, Inc. v. Dep’t of the Army, 55 F.3d 827 (3d Cir. 1995), the EPA soil cleanup level represented a threshold for the cleanup of contaminated soil, not a danger point
above which individuals would require medical monitoring. And even if government regulations were relevant to showing increased risk, a conservative soil cleanup level should not be used in place of a medically based risk assessment or evidence of the actual dose level at which dioxin truly causes cancer – the danger point critical to a medical monitoring determination.  Second, the EPA’s threshold soil cleanup level represents an increase in the risk of developing cancer from the baseline level for the general population of one in a million. Thus, even assuming there were a million members in this class who had been exposed to this level of dioxin over their entire lives, and assuming causation, only one of them would develop cancer because of the exposure. Plaintiffs thus sought to commence medical monitoring based on this one-in-a-million risk, but this risk and indeed risks higher, have been found insignificant as a matter of law.  Medical monitoring typically requires a significantly increased risk. Plaintiffs' expert opinion to the contrary was a legal conclusion, and thus it did not create a genuine issue of material fact.

In sum, the court concluded that the plaintiffs had not presented a genuine issue of material fact that the circumstances would warrant a reasonable physician to order medical monitoring. Medical monitoring in Ohio is a form of relief which should only be granted "with prudence."  Interestingly, the court concluded that plaintiffs’ proposed program would likely be extremely expensive, said the court, and inconvenience thousands of people for many years in the future. (Note to readers, the potential down-sides of medical monitoring must be explored in each case.) Plaintiffs had not presented enough evidence for a reasonable jury to conclude that such a burdensome program is warranted.

 

 

BPA Update- Part II

Yesterday, we posted about events in the MDL.  Today, the science, and it probably shouldn’t surprise readers of MassTortDefense that studies suggesting a product bears some risk get far more media attention than studies showing a product is safe, even when the latter are more rigorous. Similarly, studies funded by industry are dismissed by the media as hopelessly biased, as if product sellers have no interest in exploring their products, but studies from a pro-plaintiff, pro-litigation, anti-business, pro-regulation, big government biased interest group are deemed “neutral.”

Such continues to be the case with BPA. Consumer Union came out with a report of BPA levels detectable in 19 canned foods. They admitted that the study was limited and that the tests only “convey a snapshot of the marketplace and do not provide a general conclusion about the levels of BPA in any particular brand or type of product tested.”  Levels in the same product purchased at different types or places or in other brands of similar foods might differ from CU test results, they acknowledged. Published reports have noted that the group refuses to release the names of the external laboratories they used for testing; and the "study" would not have been published in a peer-reviewed scientific journal without a detailed description of the analytical methods used. The CU also apparently relies on animal studies in which the animals were injected with BPA, instead of ingesting it. Basic toxicology would indicate that the route of administration is important.

However, BPA has been confirmed as safe for use in food contact materials by the world’s major regulatory agencies. The food contact materials in your supermarket, including epoxy can linings, meet current regulatory standards, and as importantly, actually enhance food safety and extend product shelf life. Thus, BPA-based epoxy coatings in metal packaging provide important and measurable health benefits by reducing the potential for the serious and often deadly effects from food-borne illnesses. This packaging enables the high-temperature sterilization of food products when initially packaged and continuously protects against microbial contaminants. The head-long rush by a few zealots to ban BPA overlooks the need to balance this factor.

The levels CU says it detected are substantially below the advisory level of 600 parts per billion established by the European Union as a level of safe consumption for all ages, and below current U.S. guidelines that establish the daily upper limit of safe exposure as 50 micrograms per kilogram of body weight. They thus do not pose a health risk to consumers, of all ages.

The media gave far less attention to a study released that is a significant development in better understanding the safety of BPA. See Ryan, et al., In Utero and Lactational Exposure to Bisphenol A, in contrast to Ethinyl Estradiol, Does not Alter Sexually Dimorphic Behavior, Puberty, Fertility and Anatomy of Female LE Rats (Toxicological Sciences 2009). The study was sponsored by the Environmental Protection Agency. The study conclusion states: “The lack of effect of BPA on female and male rat offspring after oral exposure to low doses in our studies is consistent with the lack of adverse effects on growth, vaginal opening, fertility and fecundity of low doses of BPA in several other robust, well designed, properly analyzed multigenerational studies (Cagen, et al.,1999; Ema, et al., 2001; Tinwell, et al., 2002; Tyl, et al., 2002).”  This new rodent study thus finds that low-dose exposures to BPA showed no effects on the broad range of reproductive functions and behavioral activities measured. Well-conducted, peer-reviewed studies such as this should provide the basis for reasoned government assessments and regulatory decisions -- not the murky at best, results driven CU report.


 

BPA Litigation Update- Part I

In the BPA MDL, Judge Ortrie D. Smith granted in part and denied in part defendants’ motions to dismiss various claims. In re: Bispehnol-A Polycarbonate Plastic Products Liability Litigation, MDL No. 1967 (W.D. Mo.).

Readers of MassTortDefense will recall that last year the Judicial Panel on Multidistrict Litigation centralized fourteen cases; since then, the Panel has continued to transfer cases from around the country, so now about thirty-eight cases have been transferred. In addition, approximately ten cases have been filed in the MDL District and have become part of the consolidation. Defendants roughly fall into two categories: the Bottle Defendants and the Formula Defendants. Generally, the Bottle Defendants make baby bottles, sippy cups and similar products for infants and toddlers, and/or sport bottles. The Formula Defendants sell infant formula packaged in metal cans.

Most of the complaints assert, on behalf of consumers, various causes of action including: (1) violation of state consumer protection laws, (2) breach of express warranty, (3) breach of the implied warranties of merchantability and fitness for a particular purpose, (4) intentional misrepresentation, (5) negligent misrepresentation, and (6) unjust enrichment.

In one Order the court began by addressing the motions to dismiss claims for fraud, misrepresentation and breach of express warranties. The MDL court had previously, mindful of Rule 9, required plaintiffs to identify defendants’ alleged statements that form the basis for their claims of fraud, misrepresentation, and breach of express warranties. Plaintiffs’ continued failure to do so was, said the court, now fatal to these claims. Likely because they were unable to comply, and perhaps because they recognized what compliance would do to their already slim chances for class certification (because of the individual issues that a response would highlight), plaintiffs responded to the aforementioned requirement by saying that they had not identified any advertisements or other media because the allegations are not based on any particular representations. A misrepresentation claim not based on any misrepresentation. Rather, plaintiffs’ allegations are based on defendants’ supposed “overall course of conduct” in marketing and selling the products at issue. Taken as a whole, defendants’ alleged “overall course of conduct” somehow deceptively conveyed the impression or message that the products at issue are safe and healthy for use by infants and children.

By disclaiming reference to any particular fraudulent act, plaintiffs had disclaimed one of the essential elements of a fraud or misrepresentation claim. All states require proof of reliance and causation. For a statement to be relied upon and thus cause a purchaser’s injury, the statement must have been heard by the purchaser. Plaintiffs’ theory – that the placement of a product in a stream of commerce alone somehow conveys a sufficient representation about the product’s safety that can serve as grounds for fraud liability – is a rule that has not been demonstrated to exist in any of the fifty states.

Allowing the mere sale of products to convey an affirmative representation regarding safety would eviscerate the law of warranty and be contrary to the rationale supporting the limited circumstances in which actions constitute representations, noted the court.  Plaintiffs’ failure to identify any expressions made by defendants to them about their products precludes any claim that an express warranty was made, let alone violated. Given the absence of any “affirmation of fact or promise,” (see UCC Article 2-313), plaintiffs cannot allege an express warranty was made. The Supreme Court’s decision in Iqbal requires a plaintiff to identify the basis for, if not the content of, the alleged warranty. And, in a related issue, plaintiffs’ were thus unable to allege how the supposed, non-existent, warranties became “part of the basis of the bargain.”  A representation cannot be part of the “bargain” if the other party to the bargain did not know the representation was made! Merely alleging a representation became part of the bargain does not satisfy Iqbal. If one party (here, the buyer) is not aware of the statement, that party cannot claim the statement became a part of the parties’ bargain.

The court declined to dismiss the claims for fraudulent omissions, based on what it called a “common-sense” view of Rule 9 under which it was unnecessary to require plaintiffs to specifically identify who failed to disclose information and each occasion upon which they failed to disclose it. Rule 9 is satisfied, said the court, with respect to a claim of fraudulent omissions if the omitted information is identified and “how or when” the concealment occurred.

The claim for breach of implied warranty of fitness for a particular purpose was dismissed because while the ordinary purpose for baby bottles can be described as to allow babies and toddlers to drink liquids, a plaintiff cannot rely on this ordinary purpose to support a claim that there was a warranty of fitness for a particular purpose; they must point to some other purpose that is not “ordinary” in order to support their claim.

The court put off ruling on the claims for breach of the implied warranty of merchantability because defendants’ arguments (including lack of privity, untimeliness, and failure to provide notice), seemed premised on the unique characteristics of various states’ laws. Thus, they seemed more amenable to analysis at the time of any class certification decision, which will inevitably raise choice of law issues. A similar deferral was applied to dismissal of all unjust enrichment claims. Many of defendants’ arguments seemed to depend on unique aspects of various states’ laws, found the court.

Defendants also made a strong argument that the claims, at bottom, were improper “no injury” claims. The court agreed as to the category of plaintiffs who disposed of or used up the products before learning about BPA. They received all the benefits they desired and were unaffected by defendants’ alleged concealment. Importantly, the court recognized that while they may contend they would not have purchased the goods had they known more about BPA, these plaintiffs received 100% use (and benefit) from the products and have no quantifiable damages. In this instance, plaintiffs’ position “leads to absurd results.”  These buyers obtained the full anticipated benefit of the bargain. While they may not have paid the asking price, had they allegedly known, offset against this is the fact that they received the full benefits paid for – leaving them with no damages. Plaintiffs here may allege they would not have purchased those products had they supposedly known the true facts, but, again, they obtained full use of those products before learning the truth: the formula was consumed or the children grew to an age where they did not use bottles and sippy cups, so they were discarded. These consumers thus obtained full value from their purchase and have not suffered any damage. These plaintiffs are relegated to the unjust enrichment claim.

The court distinguished, however, those plaintiffs who learned about BPA’s presence and potential effects and either still have the goods or subsequently replaced or disposed of them. Defendants’ argument does not apply to this category, found the court.

That left before the court only plaintiffs’ claims that defendants made fraudulent omissions, violated various state consumer protection statutes, breached the implied warranty of merchantability, and that defendants were unjustly enriched. With these remaining claims pending, the court, in a second order, granted in part defendants’ motion to dismiss on the basis of preemption and denied their motion to dismiss on the ground of primary jurisdiction.

Defendants’ preemption and primary jurisdiction arguments were generally alike in that they both contend their use of BPA should only be subject to regulation by the FDA. Indeed, FDA has issued regulations prescribing the conditions for “safe” use of resinous and polymeric coatings, allowing the coatings to be formulated from “optional substances” that may include “[e]poxy resins” containing BPA. Thus, BPA’s presence in some resinous and polymeric coatings and in polycarbonate resins is subject to regulation by the FDA. It is also a fair reading of FDA’s regulations authorizing BPA’s use that the FDA thinks that food additives containing BPA could be used safely without labeling requirements.

The doctrine of primary jurisdiction applies when enforcement of a claim that is originally cognizable in the courts requires the resolution of issues which, under a regulatory scheme, have been placed within the special competence of an administrative body. The FDA clearly has specialized expertise and experience to determine whether BPA is “safe.” However, said the court, the ultimate issues in these cases, as alleged by plaintiffs, are whether defendants failed to disclose material facts to plaintiffs and thus, for example, whether defendants breached the implied warranty of merchantability through the sale of products containing BPA. FDA’s decision that BPA is “safe” is not determinative of any of those issues, said the court. This conclusion seemed to give insufficient attention, in our view, to the argument that plaintiffs have predicated their claims on proof that BPA is allegedly unsafe: the undisclosed facts are not material unless BPA is not safe. The products are not unmerchantable unless BPA is unsafe, Since plaintiffs base their claims on such evidence, the claims seemed to fall within the primary jurisdiction of the FDA.  The MDL court did not agree.

Turning to the preemption issue, the court first rejected the claim of implied preemption. While noting that FDA has approved BPA use in food additives and noting the agency’s decision not to require labeling, the court concluded that the FDA’s approval of BPA as safe without labeling requirements establishes only a regulatory minimum; nothing in these regulations either required or prohibited defendants from providing the disclosures sought. The court cited Wyeth v. Levine for the proposition that that there is no preemption when federal law did not prevent the drug manufacturer from strengthening its drug label as necessary to comply with the standard to be imposed by state law.

However, the Formula Defendants also raised express preemption; they asserted that the FDA regulations exempt Formula Defendants from having to disclose the presence of BPA in their products. Express preemption exists when a federal law explicitly prohibits state regulation in a particular field. With respect to food labeling, federal law generally prohibits states from establishing any differing requirements for the labeling of food. Thus, plaintiffs’ claims are expressly preempted because they would impose disclosure requirements concerning BPA, the exact opposite of the exemption. Now, here is the interesting twist: plaintiffs asserted that Congress also provided an exception to express preemption under the law for “any requirement respecting a statement in the labeling of food that provides for a warning concerning the safety of the food or component of the food.”  But, the court noted, plaintiffs cannot have it both ways.  If their claims are based on warnings about the safety of food, then their claims would have been subject to dismissal under the primary jurisdiction doctrine because the determination whether BPA is “safe” is solely the province of the FDA, and the FDA has concluded that the use of BPA in epoxy liners is “safe” so long as the manufacturer abides by the FDA’s prescribed conditions. See 21 C.F.R. § 175.300 (2009).  If the claims against the Formula Defendants are not subject to primary jurisdiction, as plaintiffs argued, then they are subject to express preemption analysis.

It may seem clear to readers of MassTortDefense that even with respect to those claims the court concluded should not be dismissed on the pleadings, the court's analysis highlights several issues that may make it difficult for the plaintiffs to proceed as a viable class action. 

 

Spyware Claim Does Not Survive Summary Judgment

A federal court has granted a software maker summary judgment in a case arising from the use of "spyware."  The plaintiff failed to convince the court that product liability claims were proper against the company who made the software the plaintiff's former wife allegedly targeted him with.  Hayes v. SpectorSoft Corp., 2009 WL 3713284 (E.D.Tenn. 11/3/09).

Plaintiff alleged that his former wife purchased software, including one called the “Spector Professional Edition for Windows," and installed it on his computer.  Plaintiff contends that following the installation of these software programs, the software recorded all his chat conversations, instant messages, e-mails sent and received, and the websites visited by plaintiff whenever he used his laptop computer, and re-transmitted such electronic communication to her (or a sister). SpectorSoft's software is apparently primarily used by parents and employers to monitor Internet use by children and employees.

The parties disputed whether SpectorSoft knew of the illegal use of the SpectorSoft software to gain access to plaintiff's private laptop communications. Plaintiff alleged that SpectorSoft knew or should have known about such usage. He thus asserted several causes of action (including negligence) against SpectorSoft for its alleged role in allowing his personal computer usage to be captured--  and that defendant  “aided and abetted” in the violation of his rights.

The court concluded first that plaintiff had not created a genuine issue of material fact regarding whether SpectorSoft aided and abetted the alleged invasion of his privacy. There was no evidence that SpectorSoft took an affirmative act that encouraged the women to violate plaintiff's rights. In fact, SpectorSoft attempted to protect the rights of persons like plaintiff by requiring purchasers to accept its licensing terms prior to being allowed to install its software (which prohibited this kind of use). There was similarly no evidence that SpectorSoft knew anything about how the women were using its software. While some retailers marketed SpectorSoft's products to spouses concerned about adultery, SpectorSoft itself did not market its product for such uses, and it provided its users with a licensing agreement that it had reason to believe was valid. Furthermore, said  the court, even a broad-based marketing campaign does not provide the requisite affirmative act of specific encouragement or assistance to the individuals at issue in this case.

Turning to the claim under the state Products Liability Act , a seller of a consumer product may be liable for “injury to a person or property caused by the product” if “the product is determined to be in a defective condition or unreasonably dangerous at the time it left the control of the manufacturer or seller.”  The court did not reach the issue whether software constitutes a “product” under the statute (nor the "misuse" issue which springs to mind), because the  Act defines a “product liability action” as one brought “for or on account of personal injury, death or property damage."  But plaintiff cited to no Tennessee authority suggesting that a products liability claim can be brought for emotional injuries alone, unaccompanied by some sort of physical injury or actual damage to property. Plaintiff did not allege in his Complaint that the alleged invasion of his privacy actually damaged his property, such as his computer or his business.

Similarly, plaintiff failed to provide appropriate legal support for his general negligence claim. Tennessee law does recognize a claim for general emotional distress caused by the negligent actions of another in the form of a negligent infliction of emotional distress claim. See Eskin v. Bartee, 262 S.W.3d 727, 733 (Tenn.Sup.Ct.2008). But the Tennessee Supreme Court has established that where a case is purely one for emotional injury unaccompanied by damages for physical injury or other damages, the plaintiff must present material evidence as to each of the five elements of general negligence --duty, breach of duty, injury or loss, causation in fact, and proximate or legal, cause -- and, in order to guard against trivial or fraudulent actions, the law ought to provide recovery only for “serious” or “severe” emotional injury. 

On the duty element, the general duty of care does not include an affirmative duty to act for the protection of another, unless the defendant stands in some special relationship to either the person who is the source of the danger, or to the person who is foreseeably at risk from the danger.  There is no precedent for the proposition that a manufacturer of spyware software owes a duty to avoid emotional injury to the victim of the misuse of that software in violation of the software's licensing agreement. Plaintiff fails to demonstrate legal support for the proposition that SpectorSoft had a special relationship or that SpectorSoft somehow assumed a duty of care towards plaintiff.

Finally, plaintiff failed to present evidence of his severe or serious emotional distress. Without such evidence of severe emotional distress, plaintiff's negligence claim that asserts only garden variety anxiety and mental distress as damages must be dismissed. 

 

Causation Proof Still Insufficient In Drug Case

A while back we posted about an interesting toxic tort case involving important causation issues. See Zandi v. Wyeth, 2009 WL 2151141 (Minn.App.).  A Minnesota appeals court recently refused to rehear its prior affirmance of summary judgment for defendants in a suit by a woman who alleged hormone replacement drugs caused her breast cancer.  2009 Minn. LEXIS 648. 

Plaintiff alleged that between approximately 1981 and 2001, she ingested hormone replacement therapy (HRT) drugs manufactured, designed, packaged, marketed, and distributed by defendants. In November 2001, Zandi alleges she was diagnosed with "hormone-dependent breast cancer." She contended that the HRT drugs caused her cancer. 

The trial court found that plaintiff's specific causation evidence did not satisfy Minnesota's standard for admissibility of expert testimony. Zandi offered testimony from Dr. Lester Layfield and Dr. Gail Bender to try to prove that HRT drugs caused her cancer. Minnesota courts use the Frye standard to determine the admissibility of novel scientific evidence. Zandi's claims were based on the following propositions: 1) it is supposedly generally accepted that HRT causes hormone-dependent breast cancer, and 2) there is a generally accepted method of diagnosing the cause of hormone-dependent breast cancer in an individual. The appellate issues revolved around the second.

Plaintiff's experts based their specific causation opinions in part on "differential diagnosis."  As readers of MassTortDefense know,  differential diagnosis, sometimes called “differential etiology”  is a process through which all the scientifically plausible causes of an injury are “ruled in,” and the expert then “rules out” the less plausible causes until reaching the one that theoretically cannot be ruled out.  If you've watched "House" on TV, you have seen the use of differential diagnosis to discover what disease a patient is suffering from.  Less traditional, and more questionable, is the use of the technique to discover what is the cause of the disease in the patient.  Most doctors don't care as much about the cause of the disease as getting the right disease and treating it.  As used by toxic tort plaintiffs, differential diagnosis adopts a process of elimination to identify not just the injury (which may be debated) but also the cause; in theory, it seeks to eliminate the possibility of competing causes or confounding factors. 

Again, in performing a differential diagnosis, a physician begins by ruling in all scientifically plausible causes of the patient's injury. The physician then rules out the least plausible causes of injury until the most likely cause remains. Yet, breast cancer does not lend itself to such a differential diagnosis because the scientific community has not accepted that breast cancer has a limited number of discrete and recognized possible causes such that ruling out one or a few causes would necessarily implicate another. For differential diagnosis to be sufficiently reliable to even come close to proving causation, even assuming one accepts the method in this context, the diagnostician should rule out all other hypotheses, or at least explain why the other conceivable causes are excludable. But additional risk factors that plaintiff failed to adequately account for here in this case included family history. When faced with this dilemma, as is common when a disease has many idiopathic cases, plaintiff's experts simply suggest that it is possible to conduct a reliable differential diagnosis without ruling out other hypotheses, as long as "major" or "most" explanations are ruled out.  Courts should be wary of this.

Courts generally recognize that the proffered expert must have a sufficient basis to “rule in” the drug or toxic substance at issue as a plausible cause of plaintiff’s injury. E.g., Jazairi v. Royal Oaks Apts., 217 Fed. Appx. 895 (8th Cir. 2007).  But this case is a good reminder that the plaintiff's expert testimony must also reliably “rule out” the other plausible causes of the injury--  again, especially difficult when its causes are largely unknown.  On this record, the court said, “We conclude that there is not a method of diagnosing the specific cause of a particular woman's breast cancer that is generally accepted in the relevant scientific community. This reality leaves Zandi without a legally sufficient ability to prove specific causation.”  See also Perry v. Novartis, 564 F. Supp.2d 452 (E.D. Pa. 2008).

This clear reasoning can be contrasted with the inexplicable finding of the 8th Circuit in Scroggin v. Wyeth, 2009 WL 3518245 (8th Cir. Nov. 2, 2009), which accepted plaintiff's carefully constructed circular reasoning.  Unable to prove that the breast cancer was caused by hormone therapy drugs, plaintiff's expert simply re-diagnosed the disease as hormone-induced breast cancer.  This allowed the expert to engage in a so-called differential diagnosis to determine the cause of the breast cancer simply by ruling out the two possible sources of these hormones: (1) plaintiff produced the hormones herself, or (2) they came from the hormone replacement therapy she had allegedly taken for the past eleven years.  Under this circular reasoning, any form of cancer can easily be linked to the defendant's product because it will be re-characterized as the sub-type of disease caused by the substance at issue. 
 

 

Appeals Court Affirms Rejection of Class Action in HDTV Case

The  California appeals court has affirmed a trial court's decision to deny plaintiff's motion for class certification in a case involving high definition (HD) television services. See Cohen v. DIRECTV, Inc., No. B204986, 2009 WL 3069116 (Cal. Ct. App. 2d Dist. 10/28/09).

A subscriber to services delivered by a satellite television company filed a proposed class action complaint alleging the company had disseminated false advertising to induce him and other subscribers to purchase more expensive HD services.  The complaint alleged that DIRECTV switched its HDTV channels to a lower resolution, reducing the quality of the television images it transmits to its subscribers.

Importantly, the complaint did not allege that DIRECTV breached its subscribers' contracts for satellite television services by allegedly transmitting a lower resolution television image than it was contract-bound to deliver. Instead, plaintiff alleged a species of fraud in the inducement, alleging that subscribers to DIRECTV's HD services purchased those services in reliance on the company's supposedly false advertising. In that vein, Cohen alleged that he and the other putative class members subscribed to the HD service package based upon DIRECTV's national advertising and marketing.  Thus, plaintiff  asserted two causes of action: (1) violation of the Consumer Legal Remedies Act or “CLRA” (see Civ. Code, § 1750 et seq.), and (2) violation of the Unfair Competition Law or “UCL” (see Bus. & Prof. Code, § 17200).

Plaintiff requested the trial court to certify a class defined as follows:  “Residents of the United States of America who subscribed to DIRECTV's High Definition Programming Package.”  The motion to certify the class was supported in significant part with evidence seeking to show DIRECTV's print advertising and promotional materials for its HD Package; DIRECTV's opposition to the motion for class certification was supported in large part by a number of declarations from subscribers to the company's HD Package, each of whom explained that their individual decisions to buy the upgraded service had not been precipitated by any printed advertising or other promotional materials disseminated by DIRECTV.

California's Code of Civil Procedure section 382 authorizes a representative plaintiff to pursue a class action “when the question [in the action] is one of a common or general interest, of many persons, or when the parties are numerous, and it is impracticable to bring them all before the court . . . .” A plaintiff moving for class certification must establish the existence of (1) an “ascertainable” class and (2) a “commonality” of interests among the members of the class. E.g., Lockheed Martin Corp. v. Superior Court, 29 Cal.4th 1096, 1103-1104 (2003).

The appeals court, first, disagreed with trial court which had found the proffered defined class not ascertainable. The defined class of all HD Package subscribers was sufficiently precise, with objective characteristics and transactional parameters which could be determined by DIRECTV's own account records.

However, the class did fail on the issues surrounding commonality.  In this proposed national class, subscribers' legal rights would vary from one state to another state, and subscribers outside of California may well not be protected by the CLRA and UCL.

Beyond legal issues, the record supported the trial court's finding that common issues of fact do not predominate in the proposed class because the class would clearly include subscribers who never saw DIRECTV advertisements or representations of any kind before deciding to purchase the company's HD services.  The proposed class would include subscribers who only saw and/or relied upon advertisements that contained no mention of technical terms regarding bandwidth or pixels, and also subscribers who purchased DIRECTV HD primarily based on word of mouth or because they saw DIRECTV's HD in a store or at a friend's or family member's home.

Interestingly, the court of appeals distinguished the state's supreme court's recent decision in In re Tobacco II Cases,  46 Cal.4th 298 (2009).  The opinion suggests that Tobacco II held that, for purposes of standing in context of the class certification issue in a “false advertising” case involving the UCL, the absent class members need not be assessed for the element of reliance. Or, in other words, class certification may not automatically be defeated on the ground of lack of standing upon a showing that class members did not all rely on common false advertising. The court of appeals found that Tobacco II essentially ruled that, for purposes of standing, as long as a named plaintiff is able to establish that he or she relied on a defendant's false advertising, a absent class members may also be deemed to have standing, regardless of whether any of those class members have in any way relied upon the defendant's allegedly improper conduct.

MassTortDefense readers will likely find that notion ridiculous, particularly when the courts typically do not enforce the ostensible requirement that named plaintiffs should be typical and adequate class representatives.  In the contextual setting presented by the present case, however, Tobacco II was seen to be irrelevant because the issue of “standing” simply is not the same thing as the issue of “commonality.” Standing, generally speaking, is a matter addressed to the trial court's jurisdiction because a plaintiff who lacks standing cannot state a valid cause of action. Commonality, on the other hand, in the context of the class certification issue, is a matter addressed to the practicalities and utilities of litigating a class action in the trial court. The court saw nothing in the language in Tobacco II which suggests that the state supreme court intended California trial courts to dispatch with an examination of commonality when addressing a motion for class certification.

Developments in Proposed Class Actions in China Drywall MDL

In the Chinese Drywall  MDL, certain plaintiffs recently moved for leave to amend their Class Action Complaint to expand the class definition as to defendant Taishan Gypsum, from a Virginia state-wide class to a national class of all persons allegedly impacted by defective drywall made by that defendant. Plaintiffs assert that there will be no undue delay nor prejudice to defendants from the change; the amendment does not alter the proposed sub-classes as to other defendants who are the builders and installation contractors who allegedly installed the product. The amendment would also include new assertion of a violation of the consumer fraud acts of the various states. In re: Chinese-Manufactured Drywall Products Liability Litigation, No. 09-md-02047 (E.D. La.).

An Omnibus [Proposed] Class Action Complaint is to be filed in the MDL on or before December 9, 2009 by the plaintiffs against another defendant, Knauf Plasterboard (Tianjin) Co., Ltd (“KPT”) and other defendants who were involved in the manufacture, sale, importation, brokerage, distribution, construction and installation of homes containing KPT drywall, and any others who were involved in the stream of commerce for the KPT drywall. In order to assist in the consolidation and efficient handling of claims by affected homeowners, defendant KPT has apparently agreed to accept service of process for homeowner plaintiffs who are to be named in an Omnibus Amended Complaint, and waive its right to demand service of process through the Hague Convention. (We have posted about the issues related to suits against foreign defendants before.) However, to be eligible for inclusion in this Omnibus [Proposed] Class Action Complaint and the service waiver, homeowners must provide, by no later than December 2, 2009, sufficient indicia that the homes in question contain KPT drywall (e.g., photographs, samples, visual inspections or reports identifying KPT markings on drywall in the home), and must also submit by December 14, 2009, a fully completed and executed Plaintiff Profile Form, in accordance with PTO #11. The complaint will not be amended to include additional named plaintiffs after it is filed, the court has indicated.


 

Federal Court Dimisses Consumer Fraud Allegations in Washer Litigation

A federal court has dismissed (with prejudice) a variety of consumer fraud and unjust enrichment claims in litigation alleging issues with front-loading washers. Butler, et al. v. Sears, Roebuck and Co., No. 06 C 7023 (N.D. Ill. Nov. 4, 2009).

In their Consolidated Complaint, plaintiffs alleged that the washing machines they bought
from Sears suffered from electronic control board failure and an alleged design defect that prevented adequate water drainage and proper self-cleaning. The water drainage and
cleaning defect allegedly resulted in odors on clothes. Plaintiffs contended that the electronic control board failure is manifested by the washing machines prematurely and repeatedly failing mechanically. 

Defendant was alleged to have known about the defects because of allegedly similar problems with other washing machines, and customer complaints of mold problems. As a result, plaintiffs contended that Sears violated their respective home states’ consumer fraud statutes.

The case has a bit of a history, as prior versions of these allegations had been the subject of three motions to dismiss. Although the court did allow plaintiffs to file this consolidated amended complaint (these cases were consolidated for purposes of discovery and pretrial proceedings on January 6, 2009), plaintiffs did not request leave to re-allege the claims that were dismissed with prejudice in the prior rulings, including consumer fraud claims under the laws of California, Illinois, Indiana, Kentucky, Michigan, Minnesota, New Jersey, New York, and Washington. See 2008 WL 4450307, at *8. Plaintiffs. however, re-alleged these claims in substantially the same form in their Consolidated Complaint.  Without leave to do so, and new details, these claims could not survive.

In order to survive a Rule 12(b)(6) motion, the complaint must not only provide the defendant with fair notice of the claim’s basis, but must also establish that the requested relief is plausible on its
face. Ashcroft v. Iqbal, 129 S. Ct. 1937, 1949, (2009); see also Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007). Allegations of fraud are subject to the heightened pleading standard of Rule 9(b), which requires a plaintiff to state with particularity the circumstances constituting fraud. Fed. R. Civ. P. 9(b). This means that the plaintiff must plead the “who, what, when, where, and how" of the alleged fraud.

The court found that the new allegations  were insufficient to meet Rule 9(b)’s pleading requirements. Plaintiffs adequately averred defendant's knowledge, but they did not adequately allege the other required elements. For example, plaintiffs had not indicated how the alleged reported failure rate compares with the failure rates of comparable machines produced by comparable manufacturers. Plaintiffs also failed to specify how often design or manufacturing defects related to self-cleaning features of washers occur. No meaningful engineering explanation had been alleged. The language reproduced in the Consolidated Complaint offered far from a meaningful engineering explanation for the defects; the allegations were vague and indeterminate.

The alleged violation of California’s Song-Beverly Consumer Warranty Act, Cal. Civil Code § 1790 et seq., survived the motion to dismiss.  But, overall, product manufacturers can appreciate the court's application of the Twombly doctrine, the fraud pleading requirements, and its reluctance to give plaintiffs many, many bites of the apple.  Federal court litigation should not be "if at first you do not succeed, try, try again," with the trial court offering plaintiff's counsel a road map how to construct a proper pleading.

Supreme Court Hears Oral Argument In Class Action Restriction Case

The Supreme Court heard oral argument earlier this week in Shady Grove Orthopedic Assocs. v. Allstate Ins. Co. (No. 08-1008), a case which considers whether a state law (here, New York's) prohibiting class actions for certain statutory damages claims can preclude class certification in a federal court diversity action. (The Second Circuit's decision is at 549 F.3d 137 (2d Cir. 2008).)

The case takes your humble blogger back to Civil Procedure class in law school and Prof. Steve Burbank who was, and is, a leading authority on the Rules Enabling Act, because the case potentially implicates the Act's command that the Federal Rules of Civil Procedure "shall not abridge, enlarge or modify any substantive right."  28 U.S.C. 2072(b). But for readers of MassTortDefense, the import is the ability of state legislatures to restrict the availability of class actions in federal court.

Plaintiff brought a case pursuant to a New York insurance law that provides for interest penalties on claims that are paid late. However, New York Civil Practice Law and Rules §901(b), prohibits plaintiffs from recovering state statutory penalties in class actions unless class proceedings are authorized in the statute (which they were not). The District Court found Section 901(b) applied, which meant the case could not proceed as a class action in federal court.

Civil procedure mavens will note that the case depends in part on whether the state law at issue is substantive or procedural. Plaintiff, Shady Grove, argued that the law is procedural and thus cannot displace the federal rules; class action Rule 23 would trump any contrary procedural state statute or rule. Shady Grove argued that Section 901(b) does not create a substantive right not to face a class action, but rather provides a mere procedural entitlement not to be subject to a class action seeking certain forms of relief in the New York state courts. Justice Ginsburg, at oral argument, however, wondered why the ban was not akin to a restriction on remedies, such as a ceiling on the amount of damages that could be recovered under  state law (and was thus substantive).

Allstate took the view that the statute is substantive, that while Rule 23 sets forth the criteria governing class action certification in federal court, it does not address the initial question of whether a claim is eligible for class certification. Applying Rule 23 would overrule substantive policy decisions that certain claims are categorically ineligible for class certification, and that would venture beyond the bounds of the Rules Enabling Act. Their defense brief included a list of various federal and state laws that represent substantive policy choices curbing class action remedies or ruling out class action claims in specific contexts. At argument, Shady Grove conceded that at least some of them would be invalid under plaintiff's theory.

Allstate also raised the specter of forum shopping: plaintiffs would be drawn to federal court, thwarting a state's efforts to limit liability for those claims. The Second Circuit agreed that the New York law barred the plaintiff from bringing its claim against Allstate as a class action under Federal Rule of Civil Procedure 23.  And at oral argument, Allstate asserted that New York State made the substantive policy decision that class actions seeking monetary penalties for misconduct defined by this state law would unduly magnify those penalties, and thus barred lawsuits combining such claims, forcing plaintiffs to sue for them one at a time. Justice Sotomayer seemed skeptical, wondering if under Allstate's theory, states could pass a law stating that no cause of action under state law can be brought as a class action, ever.

The Partnership for New York City Inc. joined with the U.S. Chamber of Commerce and some other  groups to support Allstate, while Public Justice, a Washington-based liberal pro-plaintiff interest law firm, filed an amicus brief in support of Shady Grove. The plaintiff amicus argued that the controlling doctrine is not Erie, but the decision in Hanna v. Plumer, which, they argued, requires that a valid federal procedural rule must be applied by a federal court in a case involving citizens of different states regardless of contrary state law.

For readers of MassTortDefense, who recognize the overwhelming trend in federal courts not to certify personal injury product liability class actions, there is the countervailing concern that states could choose to expand the availability of class actions, and whether the Supreme Court might adopt an approach that would later force federal courts to certify actions that would seem uncertifiable under Rule 23. And much of the questioning by the Court related to one "slippery slope" or another.

One final thought: given the Court’s recent emphasis on federalism and state’s rights (underlying, in part, recent questionable preemption decisions), a respect for state legislative prerogatives could favor Allstate here.  Indeed, at oral argument Allstate counsel argued that if a state has created a legal claim, it is only appropriate that it be allowed to define its terms and limits. And Justice Ginsburg remarked that this Court has been sensitive to state limitations.

 

Federal Inter-agency Task Force Releases Preliminary Test Results On Chinese Drywall

The federal inter-agency task force investigating alleged problems with Chinese-made drywall released initial results of three studies last week, which may impact the MDL litigation. The CPSC, the EPA, HUD, the CDC, and the Agency for Toxic Substance and Disease Registry are members of the task force. Health departments in Florida, Louisiana, and Virginia have also participated in the task force. An executive summary of the studies, and the draft studies themselves are available here.


To date, close to 2000 consumers have contacted the CPSC to report alleged problems in their homes. The primary issues reported are: 1) corrosion, or blackening, of indoor metals, such as electrical components and central air conditioning system evaporator coils; and 2) various health symptoms, including persistent cough, bloody and runny noses, headaches, difficulty in breathing and irritated and itchy eyes and skin. Imported drywall from China came into more widespread use after hurricanes in 2004 and 2005 led to a surge in home reconstruction and caused shortages of North American-made drywall.

In sum, the three studies involved:
(1) Elemental and Chemical Testing: The study of the elemental and chemical composition of drywall samples showed higher concentrations of elemental sulfur and strontium in Chinese drywall than in non-Chinese drywall. The elemental and chemical testing of Chinese and non-Chinese drywall samples was undertaken to characterize the specific chemical composition of the drywall. The results were expected to identify differences between the two sets of drywall that might account for the reported corrosion and health issues. While the studies have discovered certain differences between Chinese and non-Chinese drywall, further studies must be completed, said the report, to determine any nexus between the drywall and the reported health and corrosion issues. The analysis was conducted on 17 samples of drywall collected from warehouses, suppliers and manufacturers. These samples were unpainted and uninstalled.

(2) Chamber Studies: Preliminary results of ongoing testing to detect gases emitted from drywall in laboratory chambers showed higher emissions of total volatile sulfur gases from Chinese than from non-Chinese drywall. The chamber studies, conducted by Lawrence Berkeley National Laboratory, were intended to isolate the chemicals emitted from drywall. From these chamber studies, said the task force, it was possible to isolate the drywall emissions from the interferences of other materials or furnishings in a house that might emit or absorb such emissions. No comprehensive exposure and risk assessment has yet been carried out.

(3) Indoor Air Studies: Indoor air testing of 10 homes in Florida and Louisiana was conducted to identify and measure contaminants and to inform a drywall home indoor air testing protocol. The tests did not detect the presence or found only very limited or occasional indications of sulfur compounds of particular interest to the task force – hydrogen sulfide, carbon disulfide, and carbonyl sulfide. Concentrations of two known irritant compounds, acetaldehyde and
formaldehyde, were detected at concentrations that could exacerbate conditions such as asthma in sensitive populations, but were found in both homes with and without Chinese drywall. The levels of formaldehyde were not unusual for new homes, however, said the report. The results of the air testing in this very small sample of homes was being reported to offer a very preliminary indication of what compounds may be present in the indoor environments of homes in Florida and Louisiana with and without Chinese drywall.


The agencies expect the results of an air-sampling study of 50 homes in late November. An engineering analysis of electrical and fire safety issues is also forthcoming. .A study of long-term corrosion issues, that seeks to simulate decades of exposure and corrosion, will not be completed until June of 2010.

The study follows in the wake of the four-day U.S.-China summit that aimed to reinforce the notion that the United States—specifically the CPSC—will hold accountable importers of products into the United States if their products pose hazards or violate safety standards. The CPSC delegation reportedly discussed drywall safety concerns with Chinese government officials.

The CPSC stressed that this report was preliminary; the findings of each report released today must be considered within the limitations of each study and viewed in the context of the overall drywall investigation, which is still ongoing. While the studies have discovered certain differences between Chinese and non-Chinese drywall, further studies must be completed to determine any nexus between the drywall and the reported health and corrosion issues.
 

Absence of Causation Evidence Leads to Reversal of Accutane Verdict

An appellate court in Florida last week overturned a verdict in favor of a plaintiff in the Accutane litigation.  Hoffmann-LaRoche Inc. v. Mason, 2009 WL 3430190 (Fla. 1st DCA 10/27/09). The opinion reminds readers of the crucial nature of the causation inquiry during discovery, especially in a warnings context.

Plaintiff developed severe acne while in middle school, which caused him to seek treatment from  a dermatologist. After the acne failed to respond to topical agents and antibiotics, Dr. Fisher prescribed Accutane, which was also later prescribed by plaintiff's family practitioner, Dr. Kenneth Counselman, until November 2000, at which time he was diagnosed with Crohn's Disease, a form of Inflammatory Bowel Disease (for which the epidemiology, BTW, does not show any association with the drug).

Plaintiff filed suit under theories of strict liability and negligent failure to warn alleging that Accutane's warning label was inadequate to warn his physicians about the risk of developing IBD. Specifically, plaintiff presented an expert witness who testified that the warning was insufficient because it allegedly did not adequately describe the relationship between Accutane and IBD. At the close of plaintiff's case, defendant moved for a directed verdict, arguing that plaintiff had failed to establish that his injury was proximately caused by any inadequacies in the warning. The trial court denied the motion after the jury returned its verdict in favor of plaintiff in the amount of $7 million.

The issue on appeal was the adequacy of the warnings testimony, and on particular, the causation issue. 

While plaintiff presented testimony that the warning label was allegedly inadequate to warn physicians that Accutane use could lead to IBD, Dr. Fisher, the prescribing physician, testified that he understood the warning label to mean that there was at least a possibility of a causal relationship between Accutane and IBD. (Dr. Fisher testified that he understood the phrase “temporally associated” to mean that there was a possibility of a causal relationship; virtually all doctors understand that this means an association in time; you take the drug and later you get the effect).  He testified that he would still be willing to prescribe Accutane to his patients even if there was evidence showing that it could cause IBD in rare cases. He also testified that even if the warning label contained all of the additional information suggested by plaintiff's expert, he would still have prescribed the medication. Thus, any alleged inadequacies in Accutane's warning label could not have been the proximate cause of plaintiff's injury because Dr. Fisher understood that there was a possibility that use of the drug could lead to plaintiff developing IBD. And he made an informed decision to prescribe the drug for this patient despite this risk.  Dr. Counselman admitted that he did not consult a prescribing reference manual before prescribing the drug, and thus a different warning would not have mattered to him. 

While a jury somehow found that the alleged failure to provide an adequate warning was a substantial contributing cause of plaintiff's development of IBD, plaintiff actually presented no evidence to establish proximate cause. The trial court erred in denying the motion for a directed verdict. Again, because plaintiff presented no evidence from either prescribing physician that a differently worded warning would have resulted in either physician not prescribing Accutane for his extreme acne, plaintiff failed to establish that the allegedly deficient warning was the proximate cause of his injury; judgment reversed.

 

State Supreme Court Clarifies Subsequent Remedial Measure Doctrine

The Iowa Supreme Court last week issued an interesting decision clarifying the subsequent remedial measure doctrine in that jurisdiction, and offering some good general notions. Scott v. Dutton-Lainson Co., 2009 WL 3415937 (Iowa 10/23/09).

A little background.  Readers of MassTort Defense know that despite the nostalgic effort of some courts to try to maintain a bright line between strict liability and negligence claims, it is pure semantics to try to confine certain product defect claims to a "strict" regime.  Specifically, failure to warn claims and design defect claims (as opposed to manufacturing defect claims) have been largely recognized as sounding, at least in part, in negligence.  In the Restatement (Third) of Torts: Products Liability, the standards for design defect and failure-to-warn claims require consideration of reasonableness and therefore incorporate negligence principles.

Beyond the articulation of the causes of action, the classification of the claims has other potential impact in a products liability claim, such as in this case. Plaintiff worked for a boat dealership and suffered an injured foot when the jack on a boat trailer collapsed.  Plaintiff offered a design defect theory, that the jack's pin should have been longer, allowing users to better see whether the pin was engaged. (A competitor allegedly made a longer pin.)  Below, plaintiff sought to introduce three bits of testimony regarding defendant's alleged subsequent changes to the pin tooling, which lengthened it and thus allowed it to reach further into the pin hole.  The first was deposition testimony from a company officer concerning changing the tooling.  Second was a deposition of a witness who reportedly heard a company official say the pin was lengthened as a result of plaintiff's accident. The third was proposed testimony that the redesign allowed the pin to move further into the hole.

As in some states, Iowa Rule of Evidence 5.407 excludes evidence of subsequent remedial measures to prove negligence or culpable conduct, but not in strict liability claims.  Plaintiff, of course, argued that the proposed testimony was for his strict liability claims.  The trial court excluded the evidence at trial, which resulted in a defense verdict.

The state supreme court held that design defect and failure-to-warn claims sound in negligence, rather than strict liability.  Thus, the lower court had been correct to exclude evidence of the subsequent measures at the trial. Evidence of subsequent remedial measures, which a party seeks to introduce in an action based on a design defect claim, a failure to warn claim, or a breach of warranty claim brought under either theory, is not categorically exempt from exclusion under rule 5.407, because these claims are not strict liability claims. Instead, trial courts must analyze the reason a party seeks to admit such evidence. According to rule 5.407, evidence of subsequent remedial measures is not admissible to show negligence or culpable conduct. Such evidence is admissible to show “ownership, control, or feasibility of precautionary measures, if controverted, or impeachment.” Iowa R. Evid. 5.407.

The court found that the exceptions in the rule adequately accommodate a plaintiff's burden to prove a reasonable alternative design.  A plaintiff has the opportunity to introduce evidence of subsequent remedial measures if the defendant disputes the feasibility of a suggested alternative design.

The court found that important policy reasons, including the need to avoid deterring individuals from making improvements or repairs after an accident, supported the exclusion. Plaintiffs, and misguided academics, often assert that manufacturers will choose to make improvements to a product even if those improvements are admissible because the producer would otherwise risk litigation and negative publicity.  But there is a substantial body of criticism of that notion, which overstates the relevance of subsequent remedial measures, appears to have an over-focus on mass product producers (when the rule applies to everyone), and invites confusion of the jury, both by diverting its attention from whether the product was defective at the relevant time to what was done later, and by facilitating, in the minds of jurors, an inappropriate equation between subsequent design modification and an admission of a prior defective design.  This plaintiff's argument premises its conclusions concerning hypothetical manufacturer conduct upon the assumption that the product at issue is in fact defective, overlooking the situation where the product is not defective but could have been, and may be later, improved.