SHB Partner Gets ILR Award

Very pleased to note for our loyal readers that my partner from Shook, Hardy & Bacon Washington D.C., Co-Chair of the Public Policy Group Mark Behrens received the 2015 U.S. Chamber Institute for Legal Reform Individual Achievement Award. Mark accepted the award at the organization’s 16th Annual Legal Reform Summit on October 27 at the U.S. Chamber of Commerce headquarters in Washington, D.C.

The annual Legal Reform Awards honor individuals whose outstanding work has contributed to improving the U.S. civil justice system. Mark was recognized in particular for his advocacy before state legislatures and courts, and his years of writing and briefing on liability issues. For the past 25 years, he has worked to improve the civil justice system; his efforts contributed to the passage of landmark reform legislation in Ohio, Oklahoma, Arizona and West Virginia. 

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Abandonment Issues in an MDL

The defendant in a medical device MDL recently flagged an important and thorny issue that impacts many if not most MDL's.  And it has to do with bellwether trials and the selection of bellwether plaintiffs.

As we have noted, bellwethers come from the notion that it is highly unlikely, sometimes impossible, that all or even most cases in a multidistrict litigation will go to trial.  The theory is that properly selected bellwether plaintiffs can provide crucial information for the court and the parties that can contribute meaningfully to resolution of the overall litigation.  The selection of bellwether plaintiffs, accordingly, can advance or retard this goal.

Courts and commentators have identified all measure of bellwether selection processes, using multiple different criteria, ranging from random selection, to selection by the court, to suggestions by the parties for selection by the court, a draft system of selection by the parties, and more.  Under almost any selection process, a potential monkey wrench toss occurs based on the fact that a selected plaintiff may, for many reasons, decide not to pursue his or her claim.  Particularly, if a selected plaintiff would not be a good strategic choice for plaintiffs' counsel or the other plaintiffs, there is tremendous incentive to abandon the claim in some fashion rather than have the trial.

Such abandonments/dismissals create a number of issues, with concerns of plaintiffs gaming the system, of remaining cases not meeting as well the goals of the bellwether process, and of delay. The latter arises because, often, only a subset of cases within the MDL are selected for case-specific discovery, and sometimes only a further subset of those are selected for full trial work-up. Thus the loss of bellwether cases to voluntary dismissal can necessitate a further round of work.  For example in In re: Cook Medical, Inc. Pelvic Repair System Products Liability Litigation, MDL No. 2440 (S.D. W.Va. 5/19/15) (responding to serial abandonment by plaintiffs of their own selections by ordering 253 more cases into the pool).

Defendants' brief in In Re: Zimmer Nexgen Knee Implant Products Liability Litigation, No. 1:11-cv-05468 (N.D. Ill.) is instructive: apparently more than a dozen bellwether plaintiffs were abandoned as they came up for trial. MDL courts have employed various methods to try to minimize this, such as use of Lone Pine-type orders, loss of draft picks or extra draft picks to the other side (so instead of alternating plaintiff and defendant choices, there may be two selections in a row by one side). None of those procedures are fully effective.

Here, defendant moved to compel participation (leading to dismissal); and then moved to preclude any future withdrawal or dismissal that was linked to any failure on the part of the plaintiff attorney to timely screen the case thoroughly.

It will be interesting to see the reaction and further development of deterrence.

 

TSCA Reform Bill May Move Forward

The U.S. Senate appears to be moving closer to acting on a bill that would update the Toxic Substances Control Act. We have posted about this long effort several times

A version of the bill was passed by the House last June (TSCA Modernization Act, H.R. 2576), and the Senate version (now known as the "Frank Lautenberg Chemical Safety for the 21st Century Act" after the late Senator from NJ) came out of the Environment and Public Works Committee in the Spring. Recently the number of Senate co-sponsors jumped to approximately 60, suggesting movement may come. 

Both versions are intended to update TSCA, and the Senate bill will likely include  increased funding for EPA from fees on industry,and simplification of the waiver process for states. Possible sticking points include the degree of preemption of state law, a feature that really is necessitated by the need to have some national uniformity.

 

Federal Court Rejects Jurisdiction Over French Manufacturer

A federal court in Mississippi has rejected the assertion of personal jurisdiction over a French medical device company.  See Arnoult v. CL Med. Sarl, No. 14-00271 (S.D. Miss. 9/21/15).

In this product liability case. plaintiff (a Mississippi resident) alleged that the product, a mid-urethral sling for treatment of stress urinary incontinence, caused her to suffer injuries. The I-STOP was manufactured in France by defendant CLMS, a French corporation. CLMS exported the device to the United States, where it was distributed by defendant Uroplasty. Plaintiffs brought design and warning defect claims under the Mississippi Products Liability Act, as well as claims for negligence, breach of express and implied warranties, fraud, fraud by concealment,  negligent  misrepresentation, negligent infliction of emotional distress, and loss of consortium.

Various motions were filed, including a motion to dismiss by CLMS.

The court noted that when a nonresident defendant moves to dismiss for lack of personal jurisdiction, the plaintiff bears the burden of establishing the district court’s jurisdiction over the nonresident. A plaintiff must satisfy this burden by presenting a prima facie case for personal jurisdiction. E.g.,  Unified Brands, Inc. v. Teders, 868 F. Supp. 2d 572, 577 (S.D. Miss. 2012).  The district court is not limited to consult only the assertions in the plaintiff’s complaint; rather, the district court may consider the contents of the record at the time of the motion, including affidavits.

The Due Process Clause, said the court, permits the exercise of personal jurisdiction over a nonresident defendant when (1) that defendant has purposefully availed himself of the benefits and protections of the forum state by establishing minimum contacts with the forum state; and (2) the exercise of jurisdiction over that defendant does not offend traditional notions of fair play and
substantial justice. Unified Brands, 868 F. Supp. 2d at 577. Plaintiffs argued that CLMS had enough contacts with Mississippi to confer specific jurisdiction. Specific jurisdiction exists when the defendant has purposefully directed his activities at residents of the forum, and the litigation results from alleged injuries that arise out of or sufficiently relate to those activities. Clemens v. McNamee, 615 F.3d 374, 378 (5th Cir. 2010).

In this circuit, the court is to apply a three-step analysis to determine specific jurisdiction: (1) whether the defendant has minimum contacts with the forum state; (2) whether the plaintiff’s cause of action arises out of or results from the defendant’s forum related contacts; and (3) whether the exercise of personal jurisdiction is fair and reasonable. See Jackson v. Tanfoglio Guiseppe S.R.L., 615 F.3d 579, 585 (5th Cir. 2010).  The court’s inquiry thus focuses on the relationship among the defendant, the forum, and the litigation.  Walden v. Fiore, 134 S. Ct. 1115, 1121 (2014). The relationship must arise out of contacts that the defendant himself creates with the forum state, and the contacts must be with the forum state itself, not the defendant’s contacts with persons who reside there.  Further, a
defendant’s relationship with a plaintiff or third party, standing alone, is an insufficient basis for jurisdiction. Due process requires that a defendant be haled into court in a forum based on his own
affiliation with the state, not based on the random, fortuitous, or attenuated contacts he makes by interacting with other persons affiliated with the state.

Plaintiffs here apparently relied on a stream-of-commerce theory of specific jurisdiction, the controversial and yet to be clarified branch of cases involving a product sold or manufactured by a foreign defendant, and plaintiffs argue that the minimum contacts requirement is met so long as the court finds that the defendant delivered the product into the stream of commerce with the expectation that it would be purchased by or used by consumers in the forum state.  Not all courts accept this approach, and some part of the Supreme Court are skeptical.  Even under this approach, the defendant’s contacts must be more than random, fortuitous, or attenuated, or of the unilateral activity of another party or third person.

Here, plaintiffs argued that it was foreseeable to CLMS that its products would end up in Mississippi because it entered into a distribution agreement with Uroplasty to market and sell those products in the United States. But plaintiffs failed to prove the terms of the actual distribution agreement between CLMS and Uroplasty – to show it provided the foreign manufacturer with adequate notice that its products were being marketed in the forum.  Furthermore, there was no evidence here of a product specifically manufactured for an industry located in the state of Mississippi. Finally, plaintiffs alleged that only four of the devices were sold to patients in Mississippi.


For these reasons, the court found that plaintiffs’ allegations fell short of the mark. Plaintiffs'  argument was more attenuated, relying on inference-upon-inference without sufficient evidence to connect CLMS to the state of Mississippi.

Since plaintiffs alleged that only four of the devices were sold to patients in Mississippi, this case was very close to – if not within – the category of cases governed by the plurality opinion in J. McIntyre Machinery, Ltd. v. Nicastro, 131 S. Ct. 2780 (2011) (a single, isolated sale is not sufficient to confer personal jurisdiction, even if it was anticipated). 

The court concluded that plaintiffs had not carried their burden.