Supreme Court Offers Some Guidance on Standing

The Supreme Court has decided a case involving injury-in-fact and standing issues that may have significant impacts on class actions.  See Spokeo Inc. v. Robins, No. 13-1339 (U.S. 5/16/16).

Spokeo, Inc. operated a “people search engine,” which searches a wide spectrum of databases to gather and provide personal information about individuals to a variety of users, including employers wanting to evaluate prospective employees. After respondent/plaintiff Robins discovered that his Spokeo-generated profile allegedly contained inaccurate information, he filed a federal class action complaint against Spokeo, alleging that the company willfully failed to comply with the Fair Credit Reporting Act’s requirements.

The District Court dismissed Robins’ complaint, holding that he had not properly pleaded injury in fact as required by Article III. The Ninth Circuit reversed. Based on Robins’ allegation that “Spokeo violated
his statutory rights” and the fact that Robins’ “personal interests in the handling of his credit information are individualized,” the appeals court ruled that Robins had adequately alleged an injury in fact.

The Supreme Court ruled that the Ninth Circuit failed to consider both aspects of the injury-in-fact requirement, so its Article III standing analysis was incomplete. A plaintiff invoking federal jurisdiction bears the burden of establishing the “irreducible constitutional minimum” of standing by demonstrating (1) an injury in fact, (2) fairly traceable to the challenged conduct of the defendant, and (3) likely to be redressed by a favorable judicial decision. Lujan v. Defenders of Wildlife, 504 U. S. 555, 560–561. Particularly relevant here, the injury-in-fact requirement requires a plaintiff to show that he or she suffered “an invasion of a legally protected interest” that is “concrete and particularized” and “actual or imminent, not conjectural or hypothetical.” Id. at 560. 

The Ninth Circuit’s injury-in-fact analysis neglected the independent “concreteness” requirement. Both observations it had made about the statutory claim concerned only “particularization,” i.e., the requirement that an injury “affect the plaintiff in a personal and individual way,” Id.at 560, n. 1.  But an injury in fact must be both concrete and particularized. Concreteness is quite different from particularization and requires an injury to be “de facto,” that is, to actually exist.  

The Ninth Circuit also failed to address whether the alleged procedural violations entail a degree of risk sufficient to meet the concreteness requirement. A “concrete” injury need not always be a physical or “tangible” injury. See, e.g., Pleasant Grove City v. Summum, 555 U.S. 460. To determine whether an intangible harm constitutes injury in fact, both history and the judgment of Congress are instructive. Congress is well positioned to identify intangible harms that meet minimum Article III requirements, but a plaintiff does not automatically satisfy the injury-in-fact requirement whenever a statute grants a right and purports to authorize a suit to vindicate it. Article III standing requires a concrete injury even in the context of a statutory violation.  So, the violation of a procedural right granted by statute can be sufficient in some circumstances to constitute injury in fact; in such a case, a plaintiff need not allege any additional harm beyond the one identified by Congress, see Federal Election Comm’n v. Akins,
524 U. S. 11, 20–25. But in some circumstances a mere alleged violation of a federal statute will not be sufficient. Plaintiffs cannot automatically satisfy the demands of Article III by alleging a bare procedural violation. In addition, not all substantive inaccuracies cause harm or present any material risk of harm.

The Court remanded for consideration of these issues (which means the case may come back up).

The ruling that a mere allegation of a statutory violation by itself and mere procedural violations of a statute do not necessarily create standing will likely impact numerous class actions.  Lead plaintiffs will not be able to assert mere statutory violations as a means to show standing with respect to each absent putative class member.  Often, there will need to be an individualized inquiry as to each class member on issues surrounding the concreteness of each injury, the degree of risk posed by each violation to each class member, such as the nature and level of information the defendant allegedly got wrong. Many plaintiff lawyers, in order to maximize damages, seek to draw their class so broadly as to almost certainly include many individuals who have only a technical claim. The need for individual inquiry will loom large in the predominance analysis. Absent a proper standing analysis, the economy will continue to see huge payouts in no-injury lawsuits, a wealth transfer that overcompensates for non-existent injuries and over-deters insubstantial or technical regulatory violations.  

Ninth Circuit Refuses to Revive Water Class Action

The Ninth Circuit this week declined to revive a proposed class action in Washington federal court accusing defendant of mis-labeling a water drink containing caffeine.  See Harold Maple v. Costco Wholesale Corporation, No. 13-36089, 14-35038 and 14-35059, 2016 WL 2621345 (9th Cir. 5/9/16).

 

This was a putative class action arising from allegedly unfair or deceptive statements found on the label of a product known as VitaRain Tropical Mango Vitamin Enhanced Water Beverage (“VitaRain”) bottled by Niagara Bottling and sold by Costco. The putative class was defined as all Washington residents who purchased the VitaRain product over the four years preceding the filing of the lawsuit.
Plaintiff's First Amended Complaint asserted claims for violations of the Washington Consumer Protection Act (“CPA”), RCW 19.86.010 et seq.; misrepresentation; and negligence. Plaintiff specifically alleged that the VitaRain beverage (1) lacked a front-facing disclosure that the beverage contains caffeine; (2) failed to disclose the relative amount of caffeine in the beverage; and (3) falsely claimed that the beverage was a “natural tonic” and that it contained “natural caffeine.”

Thus this case falls within the ongoing trend of litigation challenging anything and everything a product maker says on a label, no matter how innocent or general.

The district court dismissed the complaint, and plaintiff Harold Maple appealed. The 9th Circuit affirmed that the district court correctly held that the complaint failed to state a claim. As a matter of law, the name of the beverage is not “likely to mislead a reasonable consumer.” Panag v. Farmers Ins. Co. of Wash., 204 P.3d 885, 894–95 (Wash.2009). Here, the term “Vita” could mean many things,not necessarily vitamins, and rain could not be an actual ingredient, and the label contained no misleading statements.  To the extent that Plaintiff's claim challenged the labeling of the type of “caffeine” or “tonic” as “natural” or “all natural” and the failure to describe the caffeine and other ingredients as “unnatural,” the claim failed because Plaintiff did not allege that he read those parts of the label. Accordingly, he could not establish causation. See, e.g., Indoor Billboard/Wash., Inc. v. Integra Telecom of Wash., Inc., 170 P.3d 10, 22 (Wash.2007) (“A plaintiff must establish that, but for the defendant's unfair or deceptive practice, the plaintiff would not have suffered an injury.”).

The district court also correctly held that dismissal without leave to amend was proper. On appeal, Plaintiff argued that amendment could save the complaint because he could somehow allege a subclass of plaintiffs who did read the relevant parts of the label. But because Plaintiff's own individual claim failed, dismissal without leave to amend was correct.  Here's the useful point - the potential existence of other classes of which Plaintiff is not a member is irrelevant. Sanford v. MemberWorks, Inc., 625 F.3d 550, 560–61 (9th Cir.2010); Boyle v. Madigan, 492 F.2d 1180, 1182 (9th Cir.1974) (citing O'Shea v. Littleton, 414 U.S. 488, 494 (1974)).

The only error was dismissing without prejudice, which the panel corrected.

 

 

First Circuit Affirms Exclusion of Specific Causation Opinion

The First Circuit recently affirmed the exclusion of plaintiff's expert in a toxic tort claim, leading to summary judgment. See Milward v. Rust-Oleum Corp., No. 13-2132, 2016 WL 1622620 (1st Cir. 4/25/16).

Plaintiff Milward worked as a pipefitter and refrigerator technician for over thirty years. During the course of his employment, Milward was exposed to varying levels of benzene from paints and other products manufactured by (among others) Rust–Oleum Corporation. In 2004, he was diagnosed with Acute Promyelocytic Leukemia (“APL”). Three years later, Milward and his spouse sued Rust–Oleum.

To succeed against Rust–Oleum, the Milwards had the burden of establishing, through expert testimony, general and specific causation. In other words, they needed to show that exposure to benzene can cause APL (general causation), and that exposure to benzene was, in fact, a substantial factor in the development of Brian's APL (specific causation). The district court bifurcated the proceedings; it planned first to address the admissibility of expert testimony on general causation, and then to consider the specific causation issue.  

The issue on this appeal was specific causation. The Milwards retained occupational medicine physician Dr. Sheila Butler to serve as their expert witness, and the admissibility of her opinion testimony was at the heart of this appeal.  In her proposed testimony, Dr. Butler presented three theories.  First, she testified that although benzene is naturally occurring, there is no safe level of benzene exposure. This was her predominant theory, and she consistently reiterated her hypothesis. She emphasized that she reached this conclusion by examining “the biology, the pathophysiology, what the substance does to the person and the disease process.” And, she noted, she was able to do so without relying on any of the relevant epidemiological studies. Given this no-safe level theory, Dr. Butler maintained that Milward's exposure was likely the cause of his APL. The district court rejected this hypothesis because it could not be properly tested with any known rate of error. The Milwards did not meaningfully challenge the district court's conclusion on appeal.

Second, Dr. Butler rather cursorily concluded that even beyond the no-safe level hypothesis, certain epidemiological studies have established that an individual's “relative risk” of developing APL increases when exposed to specified amounts of benzene. She then compared Milward's exposure levels to those that had been found to be dangerous in that research. Since Milward's alleged exposure was higher than the amounts found to be hazardous, Dr. Butler reasoned that benzene exposure was likely the cause of his APL. Notably, she did not explain why she chose the studies on which she relied, nor did she address any study with contrary findings. In fact, during Dr. Butler's deposition, defendant's counsel asked her a number of questions about her ability and willingness to engage with the relevant epidemiological research. For instance, counsel asked, “Are you aware of any studies which find that there is no relationship between benzene exposure and APL,” to which she answered “Yes ... the literature has support for both.” Counsel then asked, “Do you intend in this case to weigh the different epidemiological studies and offer an opinion as to which ones we should rely on and which ones we should discount,” to which she replied, “No.”


Finally, Dr. Butler engaged in a so-called “differential diagnosis” to conclude that benzene exposure likely caused Milward's APL. Through this method (essentially a process of elimination) Dr. Butler “ruled out” some of the more common factors associated with APL, among them obesity and smoking. She then determined that since benzene exposure was a potential cause, she could also “rule out” an idiopathic diagnosis (or, a diagnosis without a known cause). Thus, since benzene exposure was the only significant potential cause remaining, she concluded that it was likely the culprit.

The court of appeals noted that it is NOT true that scientific studies must present diametrically opposing conclusions to be in tension with one another. Here, a number of studies were identified that showed a correlation between APL and benzene exposure at a specific level, while other studies do not show that correlation. In order to establish specific causation by the relative risk method, Dr. Butler was required to choose a study, or studies, to serve as a baseline to which she could then compare this case. There can be no serious question that choosing a study that showed a correlation above a specific level, rather than one that did not exhibit any such correlation, yields a vastly different comparison. The district court did not clearly err in finding that the studies were sufficiently distinct from one another such that utilizing one, rather than another, would necessarily lead to different testimony.  Generally, where an expert's medical opinion is grounded exclusively on scientific literature, a district court acts within its discretion to require the expert to explain why she relied on the studies that she did and, similarly, why she disregarded other, incompatible research. See, e.g., Kuhn v. Wyeth, Inc., 686 F.3d 618, 623–24 & 633 (8th Cir.2012) (permitting testimony where the expert witness relied on methodologically reliable studies and provided an explanation for why those studies were chosen); Norris v. Baxter Healthcare Corp., 397 F.3d 878, 886 (10th Cir.2005) (noting in the context of a general causation finding that the expert witness's inability to address contrary views made the opinion unreliable).

It is self-evident that, when an expert engages in a relative risk analysis in the manner that Dr. Butler did here, the district court is on firm ground in requiring such an explanation, since the validity of the approach depends on the reliability of the studies chosen. See 3 Mod. Sci. Evidence § 23:27 (2014–2015 Ed.) (discussing the use of the relative risk approach in establishing specific causation).  So, the district court reasonably ruled that there needed to be some indication of why Dr. Butler utilized the studies that she did. Indeed, her complete unwillingness to engage with the conflicting studies (irrespective of whether she was able to or not) made it impossible for the district court to ensure that her opinion was actually based on scientifically reliable evidence and, correspondingly, that it comported with Rule 702.

On the third issue, while a “differential diagnosis” can be a “reliable method of medical diagnosis: in some contexts, see Granfield v. CSX Transp., Inc., 597 F.3d 474, 486 (1st Cir.2010), an expert must still show that the steps taken as part of that analysis—the “ruling out” and the “ruling in” of causes—were accomplished utilizing scientifically valid methods. See Ruggiero v. Warner–Lambert Co., 424 F.3d 249, 254 (2d Cir.2005).  Since Dr. Butler was only able to “rule out” an idiopathic APL because she had “ruled in” benzene as a cause, the validity of her differential diagnosis turns on the reliability of that latter conclusion. See Ruggiero, 424 F.3d at 254 (noting that an expert must use reliable scientific methods to “rule in” causes); see also Best v. Lowe's Home Ctrs., Inc., 563 F.3d 171, 179 (6th Cir.2009); Glastetter v. Novartis Pharm. Corp., 252 F.3d 986, 989 (8th Cir.2001). Indeed, the reliability of that decision was particularly critical here given the extensive number of APL cases that are idiopathic. Under such circumstances, eliminating a number of potential causes—without properly and explicitly “ruling in” a cause—is simply “of little assistance.” Restatement (Third) of Torts; Phys. & Emot. Harm § 28, cmt. c(4)(2010).  

Dr. Butler “ruled in” benzene exposure solely by relying on her two other theories. But, both of these theories were unreliable. Given that the record did not contain a scientifically reliable basis to “rule in” benzene, Dr. Butler needed some other method to “rule out” an idiopathic diagnosis. She did not provide one. As such, the district court acted within its discretion to conclude that the extraordinary number of idiopathic APL cases, coupled with the lack of a reliable means to rule out an idiopathic diagnosis here, muted Dr. Butler's ability to reliably apply this methodology.

Once the district court excluded Dr. Butler's testimony, it then correctly granted Rust–Oleum's motion for summary judgment. As is well-established under Massachusetts law, “expert testimony is required to establish medical causation.” Reckis v. Johnson & Johnson, 28 N.E.3d 445, 461 (Mass.2015).