MDL Defendant Moves for Coordination with State Court Proceedings

General Motors recently moved in Pennsylvania state court to to have discovery in an ignition defect lawsuit coordinated with the discovery in the 150+ cases in a federal multi-district litigation. In re General Motors LLC Ignition Switch Litigation, MDL No. 2543 (JPML June 9, 2014).

In many mass torts, plaintiffs have tactical options about choice of forum, including state vs. federal court.  Defendants have limited ability to impact these choices, including through removal to federal court of appropriate cases, and enforcement of venue rules and the forum non conveniens doctrine. It is not unusual for a federal MDL to be operating in parallel to a number of suits progressing in state courts, raising the same essential issues.

Such a posture raises a number of challenges regarding judicial administration, economy of judicial resources, efficiency for the parties, cost, and consistency (such as on protective orders).  While there is no mechanism for mandatory coordination of state and federal cases in this context, voluntary coordination is often utilized to reduce costs, delay, and the duplication of efforts. E.g., Dunlavey v. Takeda Pharm. Am., Inc., 2012 U.S. Dist. Lexis 120897 (W.D. La. Aug. 23, 2012). Many commentators encourage such coordination and cooperation.  E.g., Manual for Complex Litigation §§20.31, 22.4 (4th ed. 2004); The Judicial Panel on Multidistrict Litigation & The Federal Judicial Center, Ten Steps to Better Case Management: A Guide for Multidistrict Litigation Transferee Judges (2009); See the Multi-jurisdiction Litigation Guide.  

The defense motion here does a nice job of explaining why such coordination is essential and wise in the context of a product liability dispute. The MDL court had entered a Joint Coordination Order to prevent duplication of discovery, avoid undue burden on the courts and parties, save costs, and conserve judicial resources.  Some 13 state courts already adopted a similar order to govern the overlapping issues. 

Such coordination does not prevent a plaintiff from seeking necessary case-specific discovery, either through consent or through a motion. But more than 4 million pages of documents have already been produced in this MDL and it makes no sense to ignore that fact and have state court plaintiffs start discovery afresh. And it is impractical and unfair to expect a defendant to produce key company witnesses for deposition hundreds of time for every individual case, as opposed to allowing state court plaintiffs, through the coordination Orders, to meaningfully participate in the master MDL deposition of the key witnesses. 

Plaintiffs oppose the motion.

 

 

Class Discovery Sufficient for Merits Summary Judgment

Readers know that courts will sometimes, perhaps often, bifurcate discovery in a proposed class action between the discovery needed to assess certification issues and that related to merits issues. This procedural tool can save the parties costs, and expedite the crucial decision on class status, which needs to be made as soon as practicable.

Sometimes that class discovery can shed light on summary judgement issues as well.  In a recent case, the Eighth Circuit held that a class plaintiff was not entitled to merits discovery before the court considered summary judgment based solely on the class certification discovery.  See Toben v. Bridgestone Retail Operations, LLC,  No. 13-3329 (8th Cir. 5/13/14).

Patricia Toben filed a putative class action alleging a violation of the Missouri Merchandising Practices Act (MMPA).  Plaintiff alleged on behalf of the proposed class that defendant's service shop improperly charged 6 percent of labor charges as a shop supply fee. Defendant responded that the supply fee covered a wide array of essential stuff, such as cleaners and rags. Specifically, Bridgestone identified over 70 examples of shop supplies covered by the fee.

After limited discovery, Toben moved for class certification. Bridgestone moved for summary judgment. Toben moved to stay summary judgment pending merits discovery. The district court denied the stay and granted summary judgment.  Plaintiff appealed.

The court of appeals noted that plaintiff had set forth some kinds of facts she hoped to elicit from further discovery, but had not shown that the facts sought exist.  It is well settled that Rule 56 does not condone a fishing expedition where a plaintiff merely hopes to uncover some possible evidence. Mere speculation that there is some relevant evidence not yet discovered will never suffice.  Here, class discovery revealed relevant information about the shop supply fee, and plaintiff identified no documents or specific facts she believed would contradict that.

If all one had to do to obtain a grant of a Rule 56d motion were to allege possession by movant of certain information, every summary judgment decision would have to be delayed while the non-movant goes fishing in the movant's files.  Plaintiff's motion for a stay provided only "speculative hope" of finding evidence to support her claim.

Thus, the court could not conclude that the district court abused its discretion in denying it. Summary judgment affirmed.

 

 

 

State Supreme Court Rejects Fishing Expedition of Experts' Employer

The Texas Supreme Court rejected plaintiffs' attempt to engage in a "fishing expedition"  of the employer of two experts retained in a product liability dispute. See In re Ford Motor Co., No. 12-1000 (Tex., 3/28/14).

In this design-defect case, the plaintiff sought to discover alleged  potential bias of the defendant’s two testifying experts by seeking to depose a corporate representative of each expert’s employer. This suit arose from injuries plaintiff Saul Morales allegedly sustained after a Ford vehicle allegedly struck him. Morales had been in his own vehicle, fleeing police who suspected he was driving drunk, said the court. Eventually, Morales stopped his vehicle and continued his flight on foot. One of the police officers likewise left his 2004 Ford Crown Victoria Police Interceptor, then pursued and apprehended Morales. While the officer attempted to handcuff Morales, the officer’s vehicle allegedly began rolling backward toward the pair. The vehicle allegedly struck the plaintiff, injuring him. 

Morales sued Ford Motor Company, which designed and manufactured the police car, and the car’s seller, Ken Stoepel Ford, Inc. Morales alleged the vehicle had a design defect that allowed the officer unintentionally to place the gear-shift selector between park and reverse, which then caused the vehicle to go into an idle-powered reverse. To defend the lawsuit, Ford retained two expert witnesses: Erin Harley, of Exponent, Inc., and Hugh Mauldin, of Carr Engineering, Inc. After deposing both Harley and Mauldin, Morales sought corporate-representative depositions from Exponent and Carr Engineering on seventeen topics, arguing the additional depositions were necessary to prove each testifying expert’s bias in favor of Ford and other automobile manufacturers.

The courts have expressed concerns about allowing overly expansive discovery about testifying experts that can “permit witnesses to be subjected to harassment and might well discourage reputable experts” from participating in the litigation process. Ex parte Shepperd, 513 S.W.2d 813, 816 (Tex. 1974). The particular deposition notices in this case. said the court,  highlighted the danger of permitting such expansive discovery. In his deposition notices to Carr Engineering and Exponent, Morales sought detailed financial and business information for all cases the companies have handled for Ford or any other automobile manufacturer from 2000 to 2011. Such a "fishing expedition," said the court, seeking sensitive information covering twelve years, is just the type of overbroad discovery the rules are intended to prevent.

In any event, the most probative information regarding the bias of a testifying expert comes from
the expert herself. In this case, for example, Harley testified that 5% of the cases she handles
are for plaintiffs and that she has never testified against an automobile manufacturer. Similarly,
Mauldin testified that historically about 50% of Carr Engineering’s work is done for Ford.  That was all plaintiff was entitled to, and the lower court order was quashed.

 

 

 

Lone Pine Issue Appealed to State Supreme Court

Defendants in a fracking toxic tort case last week petitioned the Colorado Supreme Court to overrule an appeals court decision which had struck down a Lone Pine order issued by the trial court in the case. See Antero Resources Corp. et al. v. William G. Strudley et al., No. 2013SC576 (Colo. S. Ct.).

Readers may recall that we posted on this case before, describing the significant discovery and cost burdens presented by a case of this nature; the trial court had endeavored to invoke a more efficient procedure than we see in the standard case management order. The court required plaintiffs, before opening full two-way discovery, to make a prima facie showing of exposure and causation, a form of a Lone Pine order. See Lore v. Lone Pine Corp., No. L-33606-85, 1986 WL 635707 (N.J. Sup. Ct. Nov. 18, 1986). The court further determined that the prima facie showing requirement should not prejudice plaintiffs because ultimately they would need to come forward with this data and expert opinion on exposure and causation in order to establish their claims anyway.

Last month, the appeals court struck down the order finding there was no showing of "extraordinary circumstances" to require departure from the civil rules of procedure. Defendants sought an extension of time for filing a petition for writ of certiorari, which the Colorado Supreme Court granted.

Defendants recently filed a petition for writ of certiorari noting that the appeals court’s decision contradicts the many state cases endorsing active case management by trial courts. Those trial courts are vested with wide discretion to adopt non-standard case management procedures and to customize discovery based on the unique circumstances and needs of each case, particularly cases involving complex scientific or technical issues. 

The "good cause” to modify the standard case management order is fact-specific and thus a trial court finding it is entitled to deference on appeal. It unduly handcuffs and hamstrings the trial courts to suggest that it is beyond a trial court’s discretion to enter a modified case management order requiring toxic tort plaintiffs to come forward with basic evidence of exposure, injury and/or causation in an appropriate case.

This is definitely one to watch.

State Supreme Court Issues Opinion on Management of Discovery

Recently, the Colorado Supreme Court issued an opinion reaffirming that trial courts need to take an active, hands-on role in managing discovery and should consider cost-benefit and proportionality factors  to control excessive discovery. DCP Midstream, LP v. Anadarko Petroleum Corp., et al., Case No. 12SA307 (Colo. June 24, 2013). Note my colleagues at SHB filed an amicus brief on behalf of NAM in this matter. The decision is a victory for efforts to encourage a rule of reasonableness in discovery.

Plaintiff sued for breach of contract and other claims. During discovery, DCP sent Anadarko fifty-eight requests for production seeking millions of pages of paper and electronic documents and many of Anadarko's "title opinions"— attorney-authored opinions about the state of title to land or mineral interests. Anadarko refused to produce many of the requested documents. DCP then filed a motion to compel. Without holding a hearing, the trial court granted DCP's motion. The trial court did not address any of Anadarko's specific objections, nor did it provide any analysis under C.R.C.P. 26(b) in support of its conclusions. In a later written order, the trial court reasoned that DCP was entitled to discovery on any issue that is or may become relevant and ruled that Anadarko's title opinions were not privileged because they were based on public information.

Appeal ensued. The state Supreme Court noted that this proceeding raised important questions about the scope of discovery and the extent to which trial courts must manage the discovery phase of a case to accomplish the overriding purpose of the civil rules—"the just, speedy, and inexpensive determination of every action." C.R.C.P. 1. The state civil rules, and cases interpreting them, reflect an evolving effort to require active judicial management of pretrial matters to curb discovery abuses, reduce delay, and decrease litigation costs. See C.R.C.P. 16 committee comment ("It is expected that trial judges will assertively lead the management of cases to ensure that justice is served.").

This principle of active judicial management is reflected in the comments to the rules, and throughout the civil rules: e.g., C.R.C.P. 26(b) restricts the scope of discovery available as a matter of right; some material is limited to "good cause;" C.R.C.P. 26(b)(2) imposes limits on the number of depositions, interrogatories, and requests for production, and these limits can also be modified for "good cause."

The rules suggest that if a party objects to discovery because it is not relevant to a claim or defense, then the trial court must become involved. C.R.C.P. 26(b) requires trial courts to take an active role managing discovery when a scope objection is raised. When faced with a scope objection, the trial court must determine the appropriate scope of discovery in light of the reasonable needs of the case and tailor discovery to those needs. Because each case is unique and deserves unique treatment, the reasonable needs of the case will necessarily vary, depending on the subject matter and complexity of the case, the nature of the parties' claims or defenses, and the discovery necessary to resolve the dispute. To tailor discovery to the specific needs of the case, the Court said that the cost-benefit and proportionality factors listed in C.R.C.P. 26(b)(2)(F) will be helpful. These factors require active judicial management to control excessive discovery.

Bottom line, to resolve a dispute regarding the proper scope of discovery in a particular case, the trial court should, at a minimum, consider the cost-benefit and proportionality factors set forth in C.R.C.P. 26(b)(2)(F). When tailoring discovery, the factors relevant to a trial court's decision will vary depending on the circumstances of the case, and trial courts always possess discretion to consider any or all of the factors listed—or any other pertinent factors—as the needs of the case require.

So this one was vacated and remanded to the lower court for reconsideration.

Committee Approves Amendments to Civil Rules

Earlier this month, the Federal Courts' Committee on Rules of Practice and Procedure approved for publication a package of proposals that would, if enacted, impact the scope of discovery under the Federal Rules of Civil Procedure.

The agenda for the committee's June, 2013 meeting is here. The various proposals would appear to narrow discovery and try to curb some of the abuses that have occurred in recent years.  Many of these ideas came out of the 2010 Duke Conference as methods for reducing cost and delay in civil litigation.

Some highlights: New Rule 4(m) would be revised to shorten the time to serve the summons and complaint from 120 days to 60 days. The desired effect will be to get the action moving in half the time. The amendment responds to the commonly expressed view that four months to serve the summons and complaint is too long.

Rule 16(b)(2) now provides that the judge must issue a scheduling order within the earlier of 120 days after any defendant has been served or 90 days after any defendant has appeared. The recommended
revision, however, cuts the times to 90 days after any defendant is served or 60 days after any defendant appears. 

Another proposal  would add a new Rule 16(b)(3)(v), permitting a scheduling order to "direct that before moving for an order relating to discovery the movant must request a conference with the court." Many courts now have local rules similar to this proposal. Experience with these rules shows that an informal pre-motion conference with the court often resolves a discovery dispute without the need for a motion, briefing, and order. The practice has proved highly effective in reducing cost and delay.

Currently, Rules 30 and 31 establish a presumptive limit of 10 depositions by the plaintiffs, or by the defendants, or by third-party defendants, and a time limit. Rule 33(a)(1) sets a presumptive limit of "no more than 25 written interrogatories, including all discrete subparts." There are no presumptive numerical limits for Rule 36 requests to admit. The new proposals reduce the limit on interrogatories to 15. They add to Rule 36, for the first time, presumptive numerical limits of 25 RFA (other than genuineness of documents). The proposals would reduce the presumptive limit on the number of depositions from 10 to 5, and would reduce the presumptive duration to 1 day of 6 hours. Rules 30 and 31 would continue to provide that the court must grant leave to take more depositions "to the extent consistent with Rule 26(b)(1) and (2)." 

The proposed rule changes would re-emphasize the notion of proportionality in Rule 26: discovery must be proportional to the needs of the case considering the amount in controversy, the importance of the issues at stake in the action, the parties’s resources, the importance of the discovery in resolving the issues, and whether the burden or expense of the proposed discovery outweighs its likely benefit. This newly added proportionality language stems from the committee’s finding that the current rule’s “reasonably calculated” approach to the proper scope of discovery is too broadly interpreted.

Also, new proposed Rule 37(e) would provide certain protections against sanctions for the failure to produce any type of evidence (whether electronic or other evidence).  A party seeking sanctions would have to show both substantial prejudice and willful or bad faith conduct; or that the conduct irreparably denied a party any meaningful opportunity to present or defend against a claim. The amendments also seek to address the issue of parties who might otherwise be inclined to engage in burdensome and expensive “over-preservation.” 

Next step is a comment period that will extend into early 2014. It will important to keep an eye on the progress of these amendments.

Discovery of Expert Communications At Issue

 Here is one to watch for our readers who practice in Pennsylvania.  The state Supreme Court has before it the issue of discovery of communications between lawyers and their expert witnesses. See Carl Barrick v. Holy Spirit Hospital of the Sisters of Christian Charity, et al., No. 76 MAP 2012 (S.Ct. Pa.).

Barrick filed suit against Holy Spirit Hospital and Sodexho Management Inc. alleging personal injuries in the cafeteria of Holy Spirit Hospital.  An orthopedic surgeon who treated Barrick for injuries sustained from the accident was also named as an expert witness.  One of the defendants subpoenaed Barrick’s medical chart and other records, but the Doctor's medical center withheld some records which allegedly were trial preparation materials under Pennsylvania Rules of Civil Procedure.

The defendant filed a motion to compel, and after the trial court conducted an in camera review, the court ordered the release of the materials to the defendants.  This was in line with some state cases that suggested work product protections in Pennsylvania are not as strong as under the federal rules. The plaintiff appealed, and a panel of the Superior Court upheld the ruling in 2010. The issue was then reconsidered by the Superior Court sitting en banc, which ruled that the Pennsylvania Rules of Civil Procedure did not compel the disclosure of such communications between attorneys and their expert witnesses. Arguably this ruling offered more protection than the federal rules do.  It also made an interesting contrast with Rule 4003.5 which, upon cause shown, gives state courts some ability to compel experts to do more than the basic response to interrogatories regarding their anticipated testimony at trial.

The 8-1 majority reasoned that Pa.R.C.P. 4003.5 controls discovery regarding expert testimony, and it specifies that a party cannot directly serve discovery requests upon a non-party expert witness. Discovery regarding testimony of an expert other than through a defined set of interrogatories must be made upon the showing of good cause to the court, not through a subpoena. Here, the correspondence sought by the defendant did not fall into the area of interrogatory permitted under Rule 4003.5(a)(1).  

Following the en banc ruling, defendants appealed.  The issue before the supreme court now is whether the superior court’s holding “improperly provides absolute work-product protection to all communications between a party’s counsel and their trial expert.”

Federal Court Orders Class Action Plaintiffs to Share Defendant's Discovery Costs

A federal district court in Pennsylvania recently gave defendants in putative class actions new authority for requiring plaintiffs to share discovery costs. See Boeynaems v. LA Fitness International, LLC, No. 2-10-cv-2326-MMB, 2012 WL 3536306 (E.D. Pa. Aug. 16, 2012).  Specifically, Judge Michael Baylson ruled that when class action plaintiffs request “very extensive discovery, compliance with which will be very expensive,” plaintiffs typically should share defendant’s discovery costs – at least until plaintiffs’ certification motion has been filed and decided.

In discussing the case with my colleague Becky Schwartz, a class action guru, one of the things that jumped out at her was the notion: “If the plaintiffs have confidence in their contention that the Court should certify the class, then the plaintiffs should have no objection to making an investment.” Judge Baylson went on to say that the "Court is firmly of the view that discovery burdens should not force either party to succumb to a settlement that is based on the cost of litigation rather than the merits of the case.” 2012 WL 3536306, at *10. We have posted before about the dangers of blackmail settlements.

This case involved five named plaintiffs who alleged breach of contract and unfair trade practices related to alleged attempts to cancel their fitness club memberships. The parties were before the court on plaintiffs’ motion to compel production of additional documents and electronically stored information (“ESI”). One example of the parties’ disagreements involved defendant’s internal communications.  Defendant claimed that large numbers of internal memoranda had already been provided, while plaintiffs held fast to their demand that absolutely “all responsive internal documents” be identified and produced. The court compared the parties’ discovery dialog to “a Verdian opera scene, where a tenor and a bass boast of their qualities, to compete to win over the fair princess.” 2012 WL 3636306, at *2.

Recognizing that discovery in the case was “asymmetrical,” the court contrasted the “very few documents” in plaintiffs’ possession – e.g., their membership contract and related  correspondence – with the millions of potentially discoverable items in defendant LA Fitness’s possession. “The Court does not in any way suggest that counsel is acting otherwise than in the interests of their clients, but economic motivation and fairness are relevant factors in determining cost shifting of disputed discovery burdens,” Judge Baylson said. 2012 WL 336306, at *4.

“Plaintiffs have already amassed, mostly at Defendant’s expense, a very large set of documents that may be probative as to the class action issue,” the court opined. “If Plaintiffs conclude that additional discovery is not only relevant, but important to proving that a class should be certified, then Plaintiffs should pay for that additional discovery from this date forward, at least until the class certification is made.” 2012 WL 3536306, at *10.

My colleague Mark Cowing (many of our readers know Mark from his work on DRI’s Electronic Discovery Committee), pointed out that the court established a protocol by which the plaintiffs would list discovery that they still requested, being “specific as to what searching of ESI, or hard documents, is required.” Defendant’s response would include its internal costs for providing this information, including “the appropriately allocated salaries of individuals employed by Defendant who participate in supplying the information which Plaintiffs request, including managers, in-house counsel, paralegals, computer technicians and others involved in the retrieval and production of Defendant’s ESI.” 2012 WL 3536306, at *11. Plaintiffs would then be required to advise whether they were willing to make the necessary payment. Judge Baylson concluded the time-line by saying that “[t]he Court reserves the right to make an allocation of these costs depending upon the outcome of the class action motion and/or the merits of the case.” Id.

To help guide the process, the opinion itemized the categories of information that were considered to be relevant and irrelevant (i.e., “inside and outside the fence”) while certification remained pending. Citing the U.S. Supreme Court’s decision in Wal-Mart Stores, Inc. v. Dukes, 131 S. Ct. 2451 (2011), Judge Baylson noted that “the most relevant discovery at this stage of the case is that which will illuminate the extent to which Defendant’s membership cancellation policies and practices are set and followed nationally; Plaintiffs must show either that individual managers have no discretion or that there is a common mode of exercising discretion that pervades the entire company.” 2012 WL 3536306, at *11 (internal quotation marks omitted).

SHB’s Suggestions for Defense Counsel

I asked Mark, Becky, and my partner Denise Talbert, who chairs SHB’s eDiscovery, Data & Document Management Practice, for some e-discovery pointers for our readers, in light of this potentially important discovery decision. They suggest that defendants: 

1. From the outset, maintain a record of the volume, cost, and custodians of documents and ESI reviewed for responsiveness and produced to opposing counsel.

2. In responses to plaintiffs’ requests for production, take care to (a) describe what defendant is willing to produce without objection; (b) specify the parts of plaintiffs’ requests that are irrelevant to the claims and defenses in the case; and (c) explain how individual requests are overly broad and unduly burdensome.

3. Be alert for opportunities where defendant may be able to offer to produce only examples of certain types of documents “sufficient to show” notice or some other specific fact. This can reduce costs associated with the production of repetitive documents such as articles and monthly reports.

4. Proactively seek agreement on the custodians and sources from which collection and production will be made. Emphasize the value of first producing from a core group of custodians (hopefully no more than three to five) and defendant’s willingness to meet and confer about reasonable requests to search additional sources after plaintiffs have reviewed the initial production.

5. Don’t jump the gun on a cost-shifting motion. It may well be stronger once a threshold volume of information has been produced and plaintiffs’ further requests begin to appear even more onerous.

6. Consider these approaches not only in class actions but in all complex cases in which a client is asked to produce documents and ESI in large volumes. 
 

ABA Urges Respect For Foreign Privacy Laws

“Commerce among nations should be fair and equitable.”  -- Benjamin Franklin

The global economy of the 21st century has given rise to an important international conflict of laws, the tension between foreign privacy laws and expansive discovery law in U.S. courts. Countries such as Germany, France and Switzerland, have established laws that protect the personal information of their citizens (including data privacy laws, banking secrecy legislation, as well as so-called “blocking” statutes). U.S. courts are increasingly being asked by litigants to compel discovery of information located outside of the U.S. despite such laws, and by their opponents to respect the policies that may preclude or limit such discovery.  These litigants express concern that the courts simply fail to understand the untenable position a global company is put in when such discovery proceeds. 

The American Bar Association last week weighed in on the issue, adopting a policy urging U.S. courts to respect foreign privacy laws when managing discovery in civil litigation.  The House of Delegates passed Resolution 103A  by a vote of 227 to 188 stating that U.S. courts in civil discovery disputes should consider and respect foreign privacy laws "where possible in the context of the proceedings before them." 

Those in favor of the resolution emphasized the “Hobson’s choice” for litigants who must choose between following laws in one jurisdiction or another, but not both, when discovery orders require disclosure.  The U.S. Supreme Court recognized the need to respect non-U.S. law in the discovery context of civil litigation at least as far back as 1987, when it held in Aerospatiale v. District Court of Iowa, 482 U.S. 522 (1987), that international comity compels American courts to take care to demonstrate due respect for any special problem confronted by the foreign litigant on account of its nationality or the location of its operations, and for any sovereign interest expressed by a foreign state. But most U.S. courts do not give weight to foreign statutes that limit pretrial discovery, even when based on a different and stricter views of privacy rights and disclosure obligations.

Growing globalization guarantees that more and more disputes in U.S. courts will involve protected data located in and subject to the laws of foreign countries.  The ABA is concerned that the courts of other countries may take a hardened view of U.S. laws and regulations to the detriment of U.S. litigants in their courts. Rulings by courts here that may be seen as parochial or insufficiently accommodating of interests of other legal regimes could also stymie the growth of global commerce, including the cross-border movement of personnel and the hiring of local employees.

 

 

Injunction Issued in Protracted Dryer Litigation

We have posted before about the ongoing Thorogood v. Sears Roebuck & Co. litigation, when the 7th Circuit rejected the proposed class action; when the court held that a "copycat" class action suit could not go forward in federal court in California;  and when the court reaffirmed its decision in an unusual opinion on the petition for rehearing.

The district court had certified a multi-state class of Kenmore-brand clothes dryer purchasers. On appeal, the Seventh Circuit called the case “a notably weak candidate for class treatment.” Not only did common issues of law or fact not predominate over the issues particular to each purchaser of a stainless steel Kenmore dryer, as Rule 23(b)(3) requires, there were, the court said, “no common issues of law or fact.” 547 F.3d at 746-47.

The same plaintiffs' lawyer then brought Murray v. Sears, Roebuck & Co., No. 4:09-cv-5744-CW (N.D. Cal.). Murray was a member of Thorogood’s class, and he brought essentially the identical claim in California. Sears Roebuck sought an injunction halting the new class action in front of Judge Leinenweber, who had presided over and eventually dismissed Thorogood’s original class suit, but he ruled that Sears could obtain adequate relief against being harassed by repetitive litigation by pleading collateral estoppel in Murray’s suit in California. Sears appealed, asking the court to to reverse the district court's denial of Sears’s motion to enjoin the virtually identical class action suit.

Ordinarily the ability to plead res judicata or collateral estoppel gives a litigant adequate protection against being harassed by repetitive litigation by the loser in a previous suit against him. But this case was unusual, said Judge Posner for the panel, both because it involved class action litigation and because of the specific tactics employed by class counsel. Class members are interested in relief for the class but the lawyers are primarily interested in their fees, and the class members’ stakes in the litigation are ordinarily too small to motivate them to supervise the lawyers in an effort to align the lawyers’ incentives with their own. The defendant wants to minimize outflow of expenditures and the class counsel wants to increase inflow of attorneys’ fees. "Both can achieve their goals if they collude to sacrifice the interests of the class.” Leslie, “The Significance of Silence: Collective Action Problems and Class Action Settlements,” 59 Fla. L. Rev. 71, 79-81 (2007). And when the central issue in a case is given class treatment and so will be resolved once and for all, a trial becomes a roll of the dice. Depending on the size of the class, a single throw may determine the outcome of an immense number of separate claims (hundreds of thousands, in the dryer litigation)—there is no averaging of decisions over a number of triers of fact having different abilities, priors, and biases. The risk of error becomes asymmetric when the number of claims aggregated in the class action is so great that an adverse verdict would push the defendant into bankruptcy; in such a case the defendant will be under great pressure to settle even if the merits
of the case are slight.

In the most recent iteration, the district court -- nothing the "tortured path" the case has taken through the judicial system -- has followed the direction of the 7th Circuit. Needless to say,  the parties disagreed as to the terms of the injunction that should be issued.  The primary areas of dispute were whether the injunction should be broad enough to encompass class action claims against co-defendant Electrolux and whether former members of the class should be allowed to pursue class-wide discovery against Sears as a non-party.   Sears argued that its advertising would still be at issue, and that Electrolux was obligated to indemnify Sears for any damages related to the marketing of the dryers.  That is, the only basis for Murray’s claims against Electrolux was the same advertising and marketing by Sears at issue in this case. As such, allowing Murray and his lawyers to continue to burden Sears with class-wide discovery concerning that issue would defeat the purpose of the injunction and circumvent the ruling in Thorogood.

The court concluded that any injunction should not allow class-wide discovery from Sears related to its advertising or representations regarding the composition of the dryer drums. Based on the representations of Murray’s counsel to the California court, it was clear that if his class action suit against Electrolux were allowed to continue, his attorneys plan to seek the same discovery from Sears as they would have if Sears itself were the defendant. No matter what it is called — third–party discovery, non–party discovery — by any name the Seventh Circuit has held that this amounts to irreparable harm.

Regarding whether the focus of the injunction should be on the issues that were litigated and decided in the previous Thorogood rulings, or on the identity of the parties, the court decided that the injunction precedents were couched in terms of the issues decided in the prior case, not the specific parties involved. There was no indication in any of the Seventh Circuit’s rulings that this conclusion depends on the party sued over these representations. Moreover, an injunction is not invalid merely because it may benefit non-parties. See Easyriders Freedom F.I.G.H.T. v. Hannigan, 92 F.3d 1486, 1501–02 (9th Cir. 1996).

Thus, the Court found that Sears would invariably be drawn into the defense of any class-action lawsuit regarding its marketing of the dryers as containing stainless steel drums, regardless of what party is named as a defendant. This would defeat the purpose of the Seventh Circuit’s ruling in Thorogood and prevent Sears from receiving the full measure of relief ordered by the Seventh Circuit. Murray and the other members of the class were free to pursue on a class basis claims against Electrolux not related to Sears’ marketing of the dryers, but they may not use a suit against Electrolux as a back-door method of evading the Seventh Circuit’s ruling in Thorogood.

 


 

Marital Privilege Over Emails Rejected in Oil Spill Litigation

The massive litigation over the Gulf oil spill has spawned a wide range of significant legal issues.  Here's an interesting little one. The magistrate judge in the MDL has held that a BP drilling engineer cannot assert marital privilege regarding e-mails to his spouse sought by the plaintiffs. In re Oil Spill by the Oil Rig “Deepwater Horizon” in the Gulf of Mexico on April 20, 2010, MDL 2179 (E.D. La., 3/28/11).

Mr. Morel was employed by BP as a drilling engineer on the Macondo Well.  Plaintiffs and several defendants wanted to depose him.  The witness asserted the marital privilege as to certain email communications which were produced by BP to the Plaintiff Steering Committee. He contended that 93 documents containing email communications between himself and his wife should be returned to him or destroyed. His wife was a production engineer for BP, with no duties relating to the well. 

All of the email communications at issue were made through their BP email accounts. But the witness urged that: (1) BP permitted the personal use of company email; (2) it did not indiscriminately or randomly monitor its employees’ emails; (3) no third party other than BP had a right to access Mr. Morel’s email account.  The court framed the issue as whether BP’s notification
statements and email policies were sufficient to defeat Mr. Morel’s assertion of the marital privilege over the emails.

BP computer screens included the statement that “[w]ithin the bounds of law, electronic transmissions through internal and external networks may be monitored to ensure compliance with internal policies and legitimate business purposes."  BP’s Code of Conduct Policy provided that: Personal data, information or electronic communications created or stored on company computers or other electronic media such as hand-held devices are not private.

Mr. Morel, however, argued that the determination of privilege should not be made on the basis of the written BP policies but on how those policies were implemented.

There are a number of cases finding that when an employer has a rule prohibiting personal computer use, an employee cannot reasonably expect privacy in their prohibited communications.   Miller v. Blattner, 676 F.Supp.2d 485 (E.D.La. 2009); Thygeson v. U.S. Bankcorp, 2004 WL 2066764 (D. Or.); Kelleher v. City of Reading, 2002 WL 1067442, *8 (E.D. Pa.).

BP had no such prohibition, but BP notified its employees that electronic communications could
be monitored and accessed by BP. There are a few cases indicating that policies short of a prohibition of personal use can defeat an expectation of privacy. Muick v. Glenayre Electronics, 280 F.3d 741 (7th Cir. 2002); United States v. Etkin, 2008 WL 482281 (S.D.N.Y); Sims v. Lakeside School, 2007 WL 2745367, *1 (W.D. Wash.).

Based on these cases, this court found that it was not objectively reasonable for an employee to have an expectation of privacy where the employers’ policies clearly demonstrate that the employee’s electronic communications may be monitored and accessed by the employer; and thus they were subject to production by a subpoena.
 

State Supreme Court Vacates Plaintiff Verdict After Trial By Ambush

The Mississippi Supreme Court has vacated a $4.5 million verdict in favor of plaintiffs in a case against defendant Hyundai over a serious car accident. Hyundai Motor America v. Applewhite, No. 2008-CA-01101-SCT (Miss., 2/10/11).

Casino co- workers Dorothy Applewhite, Cecilia Cooper, and Anthony Stewart were traveling in Applewhite's 1993 Hyundai Excel after work.  It is unclear who was driving, but the two women were in the front seats, and Stewart was in the rear seat. A co-worker traveling ahead of them testified that he noticed the car weaving, drifting onto the shoulder, and finally swerving into the northbound lane, where it collided with another vehicle. The Excel separated into two pieces. All three passengers in the Excel died at the scene of the accident. 

Family members of the three decedents sued Hyundai. At trial, the plaintiffs undertook to prove that the Excel was not crashworthy due to alleged defects in both its design and manufacture, including the welds in the vehicle. Plaintiffs offered the testimony of several expert witnesses, including Andrew Webb, an accident reconstructionist.  Webb testified that he had used a computer program to reconstruct the accident and concluded that, had the Excel remained intact, the occupants would have experienced a change in velocity of thirty-five miles per hour. Another expert then testified that at thirty-five miles per hour, it was more likely than not that the occupants would have survived the crash.

The jury awarded the plaintiffs $4.5 million, or $1.5 million for each of three decedents, finding that the automobile at issue was defective in both its design and manufacture.

On appeal, Hyundai argued that it was entitled to a new trial because it was ambushed by changes
to Webb’s opinion. As noted, one of Webb’s main contentions was that, had the Excel remained
intact, the vehicle would have experienced a change in velocity (delta-v) of no more than thirty-five miles per hour. Hyundai deposed Webb before trial, at which time Webb gave a detailed
explanation of his calculations. Months after the deposition, Webb signed an errata sheet concerning his deposition testimony, changing four key variables that he had used to make his calculations. Most notably, Webb changed the angle of the Excel from 22 degrees to 44 degrees and increased the closing speed of the Excel from 68 miles per hour to 78 miles per hour. Despite these dramatic changes, Webb did not alter his ultimate conclusion that the car would have sustained a delta-v of only thirty-five miles per hour had it remained intact.

At trial, Webb testified about the errata sheet, claiming that he had to change several variables because he realized after he had been deposed that he had made some mistakes in his initial analysis. It is undisputed that Webb’s errata sheet was not done to correct errors made by the court reporter or to clarify his testimony. On the sheet itself, Webb listed the reason for the changes simply as “range not asked.”

Hyundai moved to strike Webb’s testimony at trial, alleging that it had never received the errata sheet during discovery and that these changes were a surprise. In response, the plaintiffs argued that the changes were not material because they did not alter Webb’s ultimate conclusion. The plaintiffs also produced a letter trying to demonstrate that they had forwarded Webb’s errata sheet to the defendant. The trial court heard extensive arguments on the issue and denied the defendant’s motion.

The Supreme Court did not agree.  The discovery rules impose a duty on the parties to amend a prior response when the party knows that the response, though correct when made, is no longer
true and the circumstances are such that a failure to amend the response is in substance a
knowing concealment. The failure seasonably to supplement or amend a response is a discovery violation that may warrant sanctions, including exclusion of evidence. Whether the plaintiffs did or did not send the errata sheet was unnecessary and irrelevant to a proper analysis. Even if Hyundai did receive the errata sheet, simply giving the defendant this document did not relieve the plaintiffs of their duties under the rules. The purpose of an errata sheet is to correct scrivener’s errors or provide minor clarification; it is not a means of making material, substantive changes to a witness’s testimony. See e.g., Garcia v. Pueblo Country Club, 399 F.3d 1233, 1242 n.5 (10th Cir. 2002) (“A deposition is not a take home examination.”) If a witness changes his testimony in a manner that conflicts with prior discovery responses, the sponsoring party has a duty under the rules (Rule 26(f) in this state) seasonably and formally to amend or supplement the response -- not try to sneak it through in an errata sheet. This the responsibility of the party sponsoring the witness, not the responsibility of the witness.

The plaintiffs argued that Webb’s changes were not material because they did not alter his opinion that, had the car not separated, the occupants would have experienced a delta-v of only thirty-five miles per hour. The Court did not agree. The changes in Webb’s calculations were material changes because they were essential components of the basis for his opinion. When Hyundai attempted to cross-examine Webb about his calculations, Webb referred to his errata sheet at least seven times to demonstrate that he had corrected his mistakes. It is clear from Webb’s own trial testimony that the figures on the errata sheet were important to his calculations. Moreover, when Hyundai’s experts performed crash testing, they relied on and used the figures given by Webb in his deposition in an attempt to test his opinions and refute his testimony. When Webb changed his calculations, the entire crash test using Webb’s initial calculations lost much of its relevance.  

The Court found that the trial judge abused his discretion by not enforcing the rules, noting "we do
not condone trial by ambush." Hyundai was entitled to full and complete disclosure of the plaintiffs’ expert testimony, and neither these plaintiffs nor any other party litigant may rely on a witness’s notations on a deposition errata sheet as a substitute for formal and timely supplementation. 

Third Circuit Affirms Forum Non Conveniens Dismissal

We have posted before about how foreign plaintiffs desire to take advantage of U.S. product liability law and remedies.  The Third Circuit last week affirmed the granting of a forum non conveniens motion against the claims of hundreds of Australian plaintiffs seeking to sue Alcoa Inc. in the U.S. over injuries allegedly caused by emissions at three refineries in Western Australia. See Cameron Auxer et al. v. Alcoa Inc., No. 10-2131(3d Cir. 1/20/11).

These five consolidated cases involved 244 plaintiffs who claim to have suffered personal injuries caused by their alleged exposure to emissions from three alumina refineries in Western Australia.  The plaintiffs filed suit in June, 2009, alleging that Alcoa was liable for exposing them to a variety of  toxic chemicals from the Wagerup, Kwinana and Pinjarra refineries, and allegedly intentionally concealing the dangers of the pollution.  Alcoa produces alumina or aluminum oxide at its Western Australia facilities. 

FYI, the state of Western Australia is Australia’s face on the Indian Ocean. Its capital, Perth, is closer to Singapore and Jakarta than it is to Canberra. The majority of people live in and around Perth. Western Australia is the largest Australian State. With an area of more than 2,500,000 sq km, a 12,500 km coastline, and spanning 2,400 km from north to south, it occupies a third of the continent.

Defendant moved to dismiss, and the lower court dismissed the five consolidated suits on forum non conveniens grounds. Plaintiffs appealed.

While plaintiffs acknowledged that their exposure, injuries, diagnoses, and medical treatment all occurred exclusively in Western Australia, and that none of the operative facts material to causation, injuries, diagnoses and treatments occurred in Pennsylvania, they insisted that the witnesses and documentary evidence necessary for the plaintiffs to prove liability are located at defendant’s corporate headquarters in Pittsburgh.  Thus, the cases should proceed in Pennsylvania.

The key issues to be considered in reaching a decision on the appropriate forum are: (1) what degree of deference is to be given the plaintiffs’ choice of forum, (2) whether there is an adequate alternative forum, (3) whether a balancing of the private factors weighs in favor of dismissal, and (4) whether a balancing of public factors weighs in favor of dismissal. See, e.g., Lacey v. Cessna Aircraft Co., 862 F.2d 38, 43 (3d Cir. 1988).

The court of appeals addressed the lower court's treatment of factors 2-4.  On the second, Alcoa was registered to do business and subject to service of process in Western Australia; the courts of Western Australia had jurisdiction over cases of this kind and recognize theories of liability for negligence, reckless conduct, and “damage caused by hazardous activities,” and, the applicable foreign court rules provide for discovery of documents, interrogatories, and the compelling of the attendance of witnesses and production of documents at trial by court-ordered subpoenas. For these reasons, numerous federal courts have found Australia to be an adequate alternative forum and dismissed on grounds of forum non conveniens. Some have specifically held that the mere absence of pretrial depositions does not render an alternative forum inadequate.

On factor three, the court observed that Pennsylvania evidence from a party would be much more accessible to plaintiffs for trial in a Western Australian forum than Western Australian evidence from non-parties would be for Alcoa for trial in a Pennsylvania forum. Because of this distinction between access to party and non-party witnesses and documents and the primary importance of a party’s being able to present its case at trial, the District Court correctly had concluded that this factor weighed heavily in favor of dismissal.

On the final factor, the lower court was fully aware that plaintiffs alleged culpable conduct in Pennsylvania and expressly recognized at the outset of its public interest factor discussion that it must consider the locus of the alleged culpable conduct and the connection of that conduct to plaintiff’s chosen forum.  But, said the Third Circuit, even if the District Court had failed to take this interest of Pennsylvania into account, it would not alter the outcome of these appeals. The applicable precedent does not suggest that, where culpable conduct takes place in a mass tort case in both jurisdictions and injury in only one, the interests of the two are in any way “comparable.”  This issue is "not a close call."

Amended Federal Rules Take Effect

Readers will recall from our previous posts that amendments to the Federal Rules of Civil Procedure were in the works for some time.  They finally took effect earlier this month. With regard to Rule 26, the amendments extend work-product protection to the discovery of draft reports by testifying expert witnesses and, with three important exceptions, to the discovery of communications between testifying expert witnesses and retaining counsel. The amendments also provide that a lawyer relying on a witness who will provide expert testimony but is not required to provide a Rule 26(a)(2)(B) report – because the witness is not retained or specially employed to provide expert testimony and is not an employee who regularly gives expert testimony – must disclose the subject matter of the witness’s testimony and summarize the facts and opinions that the witness is expected to offer.

The prior 1993 amendments to Civil Rule 26 had been interpreted by some courts to allow discovery of all draft expert witness reports and all communications between counsel and testifying expert witnesses.  The experience under those amendments revealed significant practical problems in the eyes of many litigators. The rule changes are generally seen as an improvement for trial lawyers.  Experts and attorneys may now communicate more freely, such as by email, instead of engaging in time-consuming dances designed to avoid creating potentially discoverable communications. The amendment allows attorneys and experts to exchange draft reports for review and discussion without fear of the consequence of the production of such communications. It also eliminates attorney time spent trying to negotiate a stipulation with opposing parties in order to avoid disclosure of this type of information. 

The rules still permit discovery of communications related to the experts' compensation, any assumptions provided by counsel to the expert to rely on; and facts or data that counsel provided to the testifying expert.  Time will tell if the courts interpret the latter two as being limited to disclosure of objective information the lawyer provided to the expert, and not the general conversations they had surrounding those facts or interpretations of those facts.  One likely effect is that counsel will want experts, to the extent possible, to find facts and data for themselves in public sources.

 

Oil Spill MDL May Appoint Special Master

The judge overseeing the Gulf oil spill  MDL has given notice of its intent to appoint Duke Law Professor Francis McGovern, as a special master to help the parties address several complex issues arising from the Deepwater Horizon accident.  In re: Oil Spill by the Oil Rig "Deepwater Horizon" in the Gulf of Mexico, on April 20, 2010, MDL No. 2179 (E.D. La.).

In the order last week, the court accordingly, pursuant to Rule 53 of the Federal Rules of Civil
Procedure, provided notice to the parties of its intention to appoint a special master.  In mass tort litigation, courts often appoint special masters to assist in managing the matters, especially the discovery. Rule 53 permits the court to appoint a master for pretrial matters that cannot be addressed effectively or in a timely manner by the court. Appointment of a special master to supervise discovery may be appropriate where the financial stakes justify imposing the expense on the parties, and where the amount of activity required would impose undue burdens on a judge.

The Manual for Complex Litigation says that it is preferable for the court to appoint the special master with the parties' consent, and here the court is giving the parties an opportunity to weigh in.  The success of the special master in the role the court assigns depends in the first instance on the person selected.  Prof. McGovern is well known to our readers, having served as special master or mediator in dozens of major mass torts, including several asbestos matters, DDT toxic exposure litigation, the Dalkon-Shield controversy, and silicone gel breast implant litigation.  As an academic, he has advocated for enhanced roles for court appointed special masters as "case managers" and "settlement masters." As a practicing case manager, he has helped courts to organize the pretrial administration of a case, and used ADR techniques to help the parties agree on efficient discovery approaches and schedules. (But note the Manual for Complex Litigation advises against referral of extensive pretrial management to a special master, at Section 10.14). His role as settlement master in some cases has required that he develop innovative ways to implement potential settlements. In the Dalkon Shield litigation, he helped organize and administer the distribution of the $2.4 billion trust established to compensate 100,000 women who had sued the maker of the device.

He is also a prolific author on mass torts issues, including A Model Mass Tort: The PPA Experience, 54 Drake Law Review 621-638 (2006); A Model State Mass Tort Settlement Statute, 80 Tulane Law Review 1809-1826 (2006); and A Proposed Settlement Rule for Mass Torts, 74 UMKC Law Review 623-636 (2006).

The final order appointing the special master will specify the scope of the reference, the circumstances under which ex parte communication will be deemed appropriate, and other relevant details.  Ordinarily, the special master will produce a report on the matters in his or her charge, with findings of fact and conclusions of law which would be reviewed by the district court.

 

Toyota Court Recognizes "Apex" Rule for Corporate Executive Depositions

The Michigan Court of Appeals ruled last week that two top Toyota executives do not have to give depositions in a personal injury lawsuit involving the death of a Flint, Mich., woman whose vehicle allegedly suddenly accelerated and struck a tree. See Alberto v. Toyota Motor Corporation, No. 296824 (Mich. Ct. App.,  8/5/10).

Plaintiff filed this wrongful death action and claimed that decedent drove a 2005 Toyota
Camry at a speed of less than 25 miles per hour when the vehicle suddenly accelerated to a speed in excess of 80 miles per hour. Plaintiff also asserts that decedent attempted unsuccessfully to apply the vehicle’s brakes, but the vehicle struck a tree, went airborne, struck another tree; plaintiff’s decedent sustained fatal injuries.

Plaintiff noticed the video depositions of Yoshimi Inaba, defendant’s Chairman and Chief
Executive Officer, and Jim Lentz, defendant’s President and Chief Operating Officer, and defendant moved in response for a protective order to prevent the depositions because neither Mr. Inaba nor Mr. Lentz participated in the design, testing, manufacture, warnings, sale, or distribution of the 2005 Camry, or the day-to-day details of vehicle production.  Thus neither officer had unique
information pertinent to issues in the case.  The trial court denied the protective order, and defendant appealed.

This appeal presented the question whether Michigan should formally adopt the apex
deposition rule in the corporate context. As used by other state and federal courts, the apex
deposition rule provides that before a plaintiff may take the deposition of a high-ranking or
“apex” government official, the plaintiff must demonstrate that: (1) the government official or officer possesses superior or unique information relevant to the issues being litigated, and (2)  information cannot be obtained by a less intrusive method, such as by deposing lower-ranking persons. See, e.g., Baine v Gen Motors Corp, 141 F.R.D. 332, 334-35 (M.D. Ala. 1991).  Courts have applied the apex deposition rule not to shield high-ranking officers from discovery, but rather to sequence discovery in order to prevent litigants from deposing high-ranking government officials as a matter of routine procedure before less burdensome discovery methods are attempted. See, e.g., Sneaker Circus, Inc. v. Carter, 457 F Supp 771, 794 n. 33 (E.D.N.Y. 1978).

Courts have reasoned that giving depositions on a regular basis would impede high-ranking government officials in the performance of their duties, and thus contravene the public interest. See, e.g., Union Savings Bank v. Saxon, 209 F. Supp. 319, 319-320 (D.D.C. 1962). In essence, the apex deposition rule prevents high-ranking public officials from being compelled to give oral depositions unless a preliminary showing is made that the deposition is necessary to obtain relevant information that cannot be obtained from another discovery source or mechanism. Baine, 141 F.R.D. at 334-336.

Premised on similar reasoning, several federal appellate and district courts have extended
application of the apex deposition rule to high-ranking corporate executives. Generally, these
cases hold that before a high-ranking corporate executive may be deposed, the plaintiff must
establish that the executive has superior or unique information regarding the subject matter of the
litigation, and that such information cannot be obtained via a less intrusive method, such as by
deposing lower-ranking executives, etc. See, e.g., Salter v. Upjohn Co., 593 F.2d 649, 651 (5th Cir.
1979); Lewelling v Farmers Ins. of Columbus, Inc., 879 F.2d 212, 218 (6th Cir. 1989); Thomas v.
Int’l Business Machines
, 48 F.3d 478, 482-484 (10th Cir. 1995); Mulvey v. Chrysler Corp, 106 F.R.D.
364, 366 (D.R.I. 1985); Evans v. Allstate Ins. Co., 216 F.R.D. 515, 518-519 (N.D. Okla. 2003).

Some state courts, including California and Texas, have also adopted the apex deposition rule
in the corporate context. For example, in Liberty Mut. Ins. Co. v. Superior Court, 10 Cal. App. 4th
1282; 13 Cal. Rptr. 2d 363 (1992), the California Court of Appeals, relying on federal decisions
adopted the apex deposition rule in the corporate context and held that the potential deponent, the company President and Chief Executive Officer, could not be deposed absent a showing that the officer had “unique or superior personal knowledge of discoverable information.” Id. at 1289.

The court here adopted the apex deposition rule in the public and private corporate context as consistent with Michigan’s broad discovery policy, which allows a trial court to control the timing and sequence of discovery for the convenience of parties and witnesses and in the interests of
justice. Recognizing that the highest positions within a business entity rarely have the specialized
and specific first-hand knowledge of matters at every level of a complex organization, courts
have adopted the apex deposition rule in the corporate context to: (1) promote efficiency in the
discovery process by requiring that before an apex officer is deposed it must be demonstrated
that the officer has superior or unique personal knowledge of facts relevant to the litigation, and (2) prevent the use of depositions to annoy, harass, or unduly burden the corporate parties.

The rule does not mean that an apex or high-ranking corporate officer cannot be deposed under any circumstances. The rule is to ensure that discovery is conducted in an efficient manner and that other methods of discovery have been attempted before the deposition of an apex officer is conducted.

Adopting the apex deposition rule in the corporate context does not shift the burden of proof, but
merely require the party seeking discovery to demonstrate that the proposed deponent has unique
personal knowledge of the subject matter of the litigation and that other methods of discovery
have not produced the desired information.  It is invoked only after the party opposing discovery has moved for a protective order and has made a showing regarding the lack of the proposed deponent’s personal knowledge and that other discovery methods could produce the required information. In other words, after the party opposing the deposition demonstrates by affidavit or other testimony that the proposed deponent lacks personal knowledge or unique or superior information relevant to the claims in issue, then the party seeking the deposition of the high-ranking corporate or public official must demonstrate that the relevant information cannot be obtained absent the disputed deposition, said the court of appeals.

Here, the record reflected that Mssrs. Inaba and Lentz had only generalized knowledge of Toyota’s alleged unintended acceleration problems, but had no unique or superior knowledge of or role in designing the subject vehicle or in implementing manufacturing or testing processes.

Toyota MDL Judge Issues Discovery Order

The judge overseeing the Toyota unintended acceleration MDL has issued an order permitting expanded discovery. In Re: Toyota Motor Corp. Unintended Acceleration Marketing, Sales Practices, and Products Liability Litigation, Case No. 8:10ML2151 JVS (Order No. 5: Phase I Discovery Plan, July 20, 2010).

Judge Selna (C.D. Calif.) noted that the Phase I Discovery Plan being promulgated was intended solely to educate the parties about foundational issues involved in the litigation, including the identification of the proper parties to this litigation, the identity of relevant third-parties, organizational structure, the identify of relevant witnesses, and identity, nature, and location of relevant documents. The court expects that discovery on foundational issues during Phase I will enable the parties to develop a more narrowly tailored discovery plan for subsequent phases of the litigation and to be more focused, economical and efficient in subsequent phases of discovery. In addition to the foundational information to be provided to plaintiffs by Toyota, Phase I will also provide Toyota the opportunity to obtain foundational, threshold information from plaintiffs, the class representatives, and relevant third-parties.

Phase I Discovery will last for 100 days, and the parties agreed the Phase I discovery plan needs to be coordinated to the extent feasible with related cases pending in state courts.

Under the order, the Toyota Defendants are to produce witnesses pursuant to Rule 30(b)(6) to testify concerning the twenty-one issues, including:

• organizational structure,
• the roles and responsibilities of each of the various Toyota companies with respect to the design, manufacture and sale of Toyota vehicles,
• the identity, nature, location and retention of documents related to the design, evaluation, manufacture, and testing of the ETCS system and any modifications or adaptations of the ETCS system for Toyota vehicles,
• the identity of the persons and departments involved in the design, evaluation, testing and manufacture of the ETCS and its components,
• the identity, nature, location and retention of documents related to information Toyotas has received about speed control, surge, and SUA events in Toyota and Lexus vehicles, including specifically warranty records, customer complaints, claims and lawsuits,
• procedures employed for investigating and responding to complaints of unintended acceleration by owners or operations of any Toyota vehicles, and
• the internal decision-making process by the Toyota Defendants about what and when to inform Toyota customers, governmental agencies and the public about SUA events and the identities of the persons and departments involved in that decision-making process and the identity of the persons and departments involved in that process.

The court ruled that during this litigation the parties must endeavor to avoid duplicative depositions or repetitive questions and to avoid deposing any witness more than once on the same subject matter. But it held off on ruling on Toyota’s position that no Toyota witness deposed during Phase I
would be deposed again in subsequent phases of this litigation on the same subject matter, except by agreement of the parties. Plaintiffs did not agree with Toyota’s position.

Plaintiffs are to provide completed Plaintiff Fact Sheets and Class Representative Fact Sheets, including the production of any documents responsive to the fact sheets. Fact Sheet Responses to information requests are deemed interrogatory responses pursuant to FRCP 33 and may be treated as such at time of trial, under the order. Responses have to set forth all information known or reasonably ascertainable to the party and/or their counsel. The parties are obligated to make a reasonable search and diligent inquiry for information or documents responsive to the request.
Fact Sheet Responses to document requests and the production of documents are deemed responses and production under FRCP 34. 

Additionally, the Toyota Defendants shall be permitted to conduct inspections of the subject vehicles.  Plaintiffs and class representatives have to identify whether the subject vehicle exists, and if so, its current location, general condition, and vehicle identification number, if known.  The parties agreed that vehicle inspections would be permitted commencing in Phase I. The protocol for vehicle inspections will apparently be determined on a case-by-case basis. 

 

Lone Pine Ruling Affirmed in Vioxx

The Sergeant Joe Friday character on Dragnet was created and played by actor Jack Webb.  Like so many famous lines, the immortal words, "Just the facts, ma'am," were apparently never uttered by the character.  What Friday actually said in early episodes is "All we want are the facts, ma'am."  

Either way, that's our motto when we post about litigation the firm has been involved in.  But with that limitation, a noteworthy decision is In re Vioxx Products Liab. Litig., 2010 WL 2802352 (5th Cir. July 16, 2010).

After a tentative settlement was reached in the Vioxx litigation, the MDL court entered several pre-trial orders with respect to the claims of those plaintiffs who could not or chose not to participate in the Master Settlement Agreement (MSA).  PTO 28 required non-settling plaintiffs to notify their healthcare providers that they must preserve evidence pertaining to the plaintiffs' use of Vioxx. Plaintiffs were also required to produce pharmacy records and medical authorizations, answers to interrogatories, and a Rule 26(a)(2) report from a medical expert attesting that the plaintiff sustained an injury caused by Vioxx and that the injury occurred within a specified time period. Failure to comply could result in dismissal of the plaintiffs' claims with prejudice.

PTO 28 is characterized as a Lone Pine order, named for Lore v. Lone Pine Corp., No. L-33606-85, 1986 WL 637507 (N.J.Super. Ct. Law Div. Nov. 18, 1986). Lone Pine orders are designed to handle the complex issues and potential burdens on the aprties and the court in mass tort litigation. Acuna v. Brown & Root Inc., 200 F.3d 335, 340 (5th Cir.2000).

The trial court extended deadlines, but eventually defendant Merck moved for an Order to Show Cause as to sixty-one plaintiffs for alleged failure to provide a case-specific expert report as required by PTO 28. The plaintiffs filed responses, arguing that they were in substantial compliance with PTO 28 and that state substantive law only required general forms of causation proof. In April 2009, the district court dismissed these plaintiffs' complaints with prejudice for failure to comply with PTO 28.

A district court's adoption of a Lone Pine order and decision to dismiss a case for failing to comply with a Lone Pine order are reviewed for abuse of discretion. Acuna, 200 F.3d at 340-41. The district court stated that “it is not too much to ask a plaintiff to provide some kind of evidence to support their claim that Vioxx caused them personal injury.”

The court of appeals had previously held that such orders are issued under the wide discretion afforded district judges over the management of discovery under Federal Rule 16. The court had held that the Lone Pine orders essentially required information which plaintiffs should have had before filing their claims pursuant to Rule 11.  Each plaintiff should have at least some information regarding the nature of his injuries, the circumstances under which he could have been exposed to harmful substances, and the basis for believing that the named defendants were responsible for his injuries.

The Fifth Circuit reaffirmed its view that it is within a trial court's discretion to take steps to manage the complex and potentially very burdensome discovery that these mass tort cases would require. The court of appeals thus affirmed the judgment of the district court.
 

Facebook Groups and Class Actions

Plaintiffs have sued the Procter & Gamble Co. in a proposed national class action, alleging that  new Pampers diapers containing “Dry Max” technology is causing rashes and "chemical burns" in some infants. See Clark, et al. v. Procter & Gamble Co., No. 10-301 (S.D. Ohio, 5/11/10). Plaintiffs seek reimbursement for the cost of diapers, as well as for alleged medical expenses and treatment.  The plaintiffs allege that P&G knew or should have known that the diapers with Dry Max technology could harm kids' bottoms. They assert causes of action for breach of implied warranty of merchantability, breach of  implied warranty of fitness for a particular purpose, violation of consumer fraud acts, negligence, unjust enrichment, and strict liability.  Then came word that the Consumer Product Safety Commission would review consumer complaints regarding Pampers with the new Dry Max technology.

P&G notes that the Dry Max technology is a significant innovation in diapers. The Dry Max technology allows the diapers to be thinner and lighter, but still absorbent.  The Proctor & Gamble website notes the safety of the diapers  for babies, and the heavy testing -- the product is one of the most tested diapers in the company's history. To date, there have been in excess of two billion diaper changes using the new product, with only a handful of rash complaints, none of which were shown to be caused by the type of materials in the product. In fact, the company has received fewer than two complaints about diaper rash for every one million diapers sold, which apparently is average for the diaper business and does not deviate from the number of calls received prior to Dry Max.

It is hard to imagine that common issues will predominate over the individual issues arising from causation and injury, in the putative class action. Diaper rash is very common, and sometimes severe, regardless of the diaper used. At any given moment, more than 250,000 babies will experience a serious rash. Disposable diapers in fact have helped reduce the incidence of rash by more than 50 percent since they were first introduced in the 1960s because they pull wetness away from a baby's skin. It is very common for long-time consumers of child care or personal care products to correlate a change in product style or design with an adverse effect.

What is most interesting for our readers, perhaps, is the fact that this litigation was apparently spurred by the social networking site, Facebook, where some parents have been blaming the new diapers for rashes.  This has spread not only word of the incidence of a possible problem, but also the non-scientific, non-expert attribution of causation.  Here, for example, there have actually been very few complaints to the CPSC, but the CPSC said the on-line activism was part of what has prompted them to examine the alleged diaper issues.

Sites like Facebook give consumers a bigger platform to voice their opinions and find other similarly situated individuals, and product sellers need to realize how that can spur litigation. Social media alone do not produce litigation, of course.  But from a potential liability standpoint, the social networking sites are becoming a new resource for plaintiff product liability  attorneys.   Facebook provided plaintiff attorneys potential access to thousands of product users documenting their experiences with the product.  Some even have posted relevant photographs. The diaper Facebook group apparently grew to more than 10,000 members. Such Internet activity can include product users talking about the possibility of litigation and searching for attorneys. Some members of the plaintiff bar have used on-line media to communicate with potential clients, and identify ideal class representatives.  

Defense lawyers need to recognize they can research and learn from plaintiffs' on-line activities, as well, particularly before the involvement of plaintiff attorneys. Discovery requests for
Facebook profiles, forensic examinations of computers, or, at proper times, third-party requests directly to the social networking site, may be part of their arsenal.  There may be information about named class representatives, or the class in general. After litigation is filed, some class members continue to participate in Facebook groups.  People will say things in that informal environment that they might not say in a deposition.

Of course, several advisory ethics opinions remind litigators that rules of professional responsibility apply when accessing social networks for case purposes. Contacting parties or witnesses through a “friend request” must be done in accordance with the applicable Rule of Professional Conduct.

 

Duke Hosts Conference on Civil Rules

At the request of the Standing Committee on Rules of Practice and Procedure, the Advisory Committee on Civil Rules sponsored a conference last week at Duke University School of Law. The purpose of the conference was to explore the current costs and burdens of civil litigation, particularly discovery, and to discuss possible solutions. The Conference was designed in part to highlight some new empirical research done by the Federal Judicial Center, and others, to assess the degree of satisfaction with the performance of the present system and the suggestions of lawyers as to how the system might be improved.  The Conference included insights and perspectives from lawyers, judges and academics, on the discovery process (particularly e-discovery), pleadings, and dispositive motions. Other topics considered included judicial management and the tools available to judges to expedite the litigation process, the process of settlement, and the experience of the state courts on these issues.

Specifically, the empirical data from the FJC was discussed by Judge Rothstein, and Emery Lee and Tom Willging of the FJC; the ABA Litigation Section research data was to be reported by Lorna Schofield; the NELA Data was next.  Prof. Marc Galanter commented on vanishing jury trial data. Litigation cost data from the Searle Institute, and RAND data were circulated. The next section of the agenda focused on pleadings and dispositive motions, fact based pleading, Twombly, Iqbal. Participants included several judges and academics. The following panel asked about excessive discovery, and included practitioners, judges, and academics. The judicial management issue, and the level of early judicial involvement, was next.

Day Two focused on e-discovery and the degree to which the new rules are working or not.  The U.S. Chamber Institute for Legal Reform weighed in with a white paper.  The conference turned next to whether the process was structured sufficiently for trial and settlements as they really occur, i.e., should the endgame be viewed as settlement rather than trial. Corporate counsel, outside lawyers, public and governmental lawyers weighed in next. The following panel offered perspectives from the state courts. Finally, the Bar Association and lawyer group proposals were on the table. The Lawyers for Civil Justice, DRI, Federation of Defense & Corporate Counsel, and International Association of Defense Counsel submitted a white paper.

One speaker summed up the two-day discussion, suggesting that consensus had formed around the proposition that federal judges should provide strong, early, consistent case management, although plaintiff lawyers felt there was no need to give the judges any more formal authority.  But there was great disagreement on critical questions of the scope of discovery, the breadth of possible voluntary disclosures, and pleading requirements. Readers have read my posts about  Twombly and Iqbal, which clarified the requirements of what must be included in a complaint.

A survey of the Oregon system, a fact-based pleading approach, was presented by the Institute for the Advancement of the American Legal System. It has not led to more dismissals, and most observers agreed that fact-based pleading was revealing the key issues and narrowing the contentions earlier. 

The notion that the cost of the process is so large that it may be making litigation beyond the reach of many potential litigants is something a number of participant expressed concern about. One judge noted that he now requires lawyers to estimate the costs of discovery, and report that to their client. One participant raised the issue of cutting off discovery for defendants who move to
dismiss, although it is unclear how that would be an effective remedy for any current unsatisfactory case management methods.

 

Informal Discovery Leads to Dismissal in MDL

The court in the welding fume MDL litigation has dismissed the claims of the  plaintiff who had been chosen for the seventh bellwether trial in this national consolidated welding fume products liability litigation. In re: Welding Fume Products Liability Litigation [Ernest Ray, No. 04-18252], MDL 1535, No. 03-17000, N.D. Ohio.

Plaintiff Ray had moved to dismiss his claim, with prejudice, last November. Thousands of claims have been dismissed in this litigation, so why post about this one?  A reminder to readers of MassTortDefense to travel all lanes of the information superhighway in doing fact investigation, including the so-popular social media hubs.

It appears that plaintiffs were forced to move to dismiss the Ray case after plaintiff’s claims of severe disability were refuted by Internet (specifically Facebook) photos discovered by defendants that appeared to show plaintiff competing in strenuous high-speed powerboat races.

In 2006, the MDL Court implemented a new case evaluation process to try to ensure that only “trial-worthy” cases reached the later stages of pre-trial litigation. This process, which required medical records collection and a certification by plaintiffs’ attorneys that cases were trial‐worthy, prompted plaintiffs to dismiss thousands of cases.  Even with that, this is about the sixth trial-ready case plaintiffs have been forced to dismiss due to revelations in discovery.

Appropriate review of public web sites requires no disclosure to opposing counsel, and can be done relatively cheaply. Today's technology, via the Internet, can result in a wealth of information on the opposing party or witness.  Web sites like the popular myspace.com and facebook.com can now provide a profile of a witness or opposing party, or, like here, information on interests and activities. An individual might have posted comments about his condition, as well. Good luck surfing!

Federal Rule of Civil Procedure 26: Amendment Update

We love to hear from our faithful readers, and one recently asked us to update the status of the proposed amendments to Rule 26. We posted on them last year, noting that there would be public comment opportunities throughout 2009.

Below, a review of those comments.  But first a reminder of the proposed changes. The amendments would extend work-product protection to the discovery of draft reports by testifying expert witnesses and, with three important exceptions, to the discovery of communications between testifying expert witnesses and retaining counsel. The amendments also provide that a lawyer relying on a witness who will provide expert testimony but is not required to provide a Rule 26(a)(2)(B) report – because the witness is not retained or specially employed to provide expert testimony and is not an employee who regularly gives expert testimony – must disclose the subject matter of the witness’s testimony and summarize the facts and opinions that the witness is expected to offer. The 1993 amendments to Civil Rule 26 have been interpreted by some courts to allow discovery of all draft expert witness reports and all communications between counsel and testifying expert witnesses. The experience under those amendments revealed significant practical problems in the eyes of many litigators.

The comments? First, the arguments in favor:

• Lawyers and expert witnesses take elaborate and costly steps to avoid creating any discoverable draft report or any discoverable communications between the lawyer and expert. These steps can include hiring two sets of experts, one to testify and one to consult; avoiding any note-taking by the expert; and avoiding the creation of any draft report. At the same time, lawyers take elaborate and
costly steps to attempt to discover all of the other side’s drafts and communications.


• Experience has shown that the elaborate steps to avoid creating discoverable drafts or communications result in inefficient, costly, and wasteful litigation behavior. At the same time, experience has also shown that extensive, time-consuming, and costly efforts to discover every change in draft reports by experts and every communication between experts and retaining counsel rarely produces information that bears on the strengths or weaknesses of the experts’ opinions.

• Many experienced lawyers routinely stipulate that they will not seek to discover draft reports from each other’s experts or communications between the experts and the retaining lawyers. That good lawyers stipulate to avoid the present rule indicates problems with it.

• Some states have implemented procedures similar to the proposed amendments.  State  practitioners representing both plaintiffs and defendants report a degree of consensus about the success of these procedures in improving the ability to use expert witnesses and to discover the basis for their opinions.


• The proposed amendments would not limit discovery into the areas that are genuinely important for learning the strengths and weaknesses of a testifying expert’s opinion. The proposed amendments specifically allow discovery into communications between a lawyer and testifying expert about: (1) the compensation for the expert’s study or testimony; (2) the facts or data provided
by the lawyer that the expert considered in forming opinions; and (3) the assumptions provided by the lawyer that the expert relied upon in forming an opinion.

Opposing Views:

• The proposed amendments limit discovery that could show the extent of the retaining lawyer’s influence on the testifying expert’s opinions. That could make it easier for lawyers to influence the opinions their testifying experts present.

• The proposed amendments only limit discovery of draft reports and certain communications. They do not apply to inquiries into such matters at the trial itself. It may be unclear whether the draft reports and communications will be protected from disclosure at trial. As a result, the amendments may not eliminate the costly and wasteful steps to avoid creating draft reports or records of attorney/expert communications. (MassTortDefense wonders how many lawyers will venture into these issues at trial without the benefit of any discovery.)

Overall, comments received during the notice-and-comment period made it appear that the vast majority of practitioners, on both the plaintiff and defense sides, support the proposed rule amendments. Interestingly, lots of academics spoke up against the rule.

So what's the status? On September 15, 2009, the Judicial Conference met and approved the recommendations of the Committee on Rules of Practice and Procedure and approved the proposed rules. The rules were then transmitted to the Supreme Court in December with a recommendation that they be approved and transmitted to Congress in accordance with the Rules Enabling Act.  The schedule would still have them taking effect, if not rejected by the Court or Congress, on December 1, 2010.

 

Digitek MDL Plaintiffs Ordered To Respond To Discovery

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

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

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

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

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

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

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

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

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

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

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

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

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Sanctions Against Plaintiffs in HRT Litigation

The judge in charge of multidistrict litigation involving Wyeth Pharmaceuticals' hormone replacement pill, Prempro, has decided to sanction a law firm representing hundreds of plaintiffs, for its failure to timely produce completed client fact sheets. In re: Prempro Products et al., No. 4:03-cv-01507 (E.D. Ark.). 

Judge Wilson of the U.S. District Court for the Eastern District of Arkansas recently granted Wyeth's motion for sanctions against a Texas-based firm, although he declined to dismiss the plaintiffs.

Readers of MassTortDefense know the role plaintiff fact sheets (PFT) play in mass tort litigation, replacing some aspects of basic fact discovery; allowing defendants to gather information for early case assessment; beginning the process that winnows the number of cases that will be subjected to fuller case-specific fact discovery and expert discovery; and eventually informing the pool of cases available for initial trials if the case management process includes bellwether trials. 

The information requested on the PFT is often a negotiated topic, but typically includes information that any plaintiff's attorney who has done a good faith, Rule 11 assessment of the claim should have, or could readily access. The Manual for Complex Litigation notes that in lieu of interrogatories, questionnaires directed to individual plaintiffs in standard, agreed-on forms were used successfully in the breast implant and diet drug litigation.  It also includes sample case management orders regarding, inter alia, plaintiff fact sheets. (For other examples of plaintiff fact sheets, see In re Baycol Products Litigation, MDL 1431, Pretrial Order No. 10 (D. Minn. Mar. 18, 2002) and In re Phenylpropanolamine (PPA) Products Liability Litigation, MDL No. 1407, Case Management Order No. 6 (W.D. Wash. Mar. 21, 2002)).

Wyeth showed the court that the plaintiff firm missed several court deadlines to serve completed fact sheets for each of its clients. Wyeth first argued in 2008 that plaintiffs represented by the firm had repeatedly submitted incomplete fact sheets in which they provided merely a “will supplement” answer to several questions. Judge Wilson agreed and issued an order on Dec. 17, 2008,
directing the firm to produce completed fact sheets by Feb. 2, 2009.  In February, defendant again complained to the court that hundreds of fact sheets had not been served by the deadline and that many of those that had been produced remained incomplete, with plaintiffs replacing “will supplement” with the vague language that plaintiffs do "not recall and do not have reasonable access to the information that would be responsive to this question without undue burden or cost.”
Plaintiffs were then given until April 13 to resubmit the fact sheets in accordance with the order, and the responses led Wyeth to renew its bid for sanctions including dismissal.

The judge directed the firm to pay $5,000 to Wyeth to partially compensate it for the time and effort involved in seeking adequate fact sheets.  The firm must also assign an associate or paralegal to immediately contact all plaintiffs identified by Wyeth as still having insufficient fact sheets and to have the documents filled out by August 5th.

The court warned that it was likely that additional sanctions — and perhaps considerably more severe sanctions — will be imposed if substantial effort is required to review the adequacy of fact sheets filed by Aug. 5, 2009. 

The court indicated it had seriously considered dismissing all the affected cases without prejudice, and with the proviso that if a case was refiled it must have a reasonably accurate fact sheet attached and that sanctions against counsel would likely be imposed if additional fact sheets were attached with non-answers.  Only the administrative burden of dealing with amended complaint filings prevented this.

California Enacts E-Discovery Reform

California Gov. Arnold Schwarzenegger has signed into law a new enactment governing e-discovery in that state.  Readers of MassTortDefense know what a significant issue electronic discovery has been in products litigation, particularly since the amendments to the Federal Rules of Civil Procedure more specifically focused on e-discovery issues. Rather than a device to uncover relevant facts for the litigation, e-discovery often is about plaintiffs’ attempt to find some alleged misstep by the defendant that will bring sanctions.

The Governator signed the Electronic Discovery Act, establishing new rules and procedures for litigants who seek electronically stored information.  The law is designed to make discoverable only  those reasonably accessible sources of electronic data, and it provides that litigants shouldn't be sanctioned for losing data through the ordinary operation of an electronic system. The law establishes that a party may move for a protective order from an electronic discovery request on the grounds that the information sought is inaccessible, though it gives courts discretion to require limited discovery in those cases if the demanding party shows good cause, subject to specified restrictions in specified circumstances.

California courts may also limit electronic discovery from accessible sources if they determine that the information sought could be obtained by other means, is duplicative, or if the expense of
the discovery outweighs its likely benefit. While the Electronic Discovery Act allows courts to
impose sanctions on parties which fail to comply adequately with discovery requests, the courts shall not impose sanctions on a party (or any attorney of a party) for failure to provide electronically stored information that has been lost, damaged, altered or overwritten as the result of the routine, good faith operation of an electronic information system.

The new law also requires discovered materials to be produced in the form in which they are kept in the ordinary course of business.

MassTortDefense noted that a survey by the U.S. Chamber of Commerce Institute for Legal Reform of chief legal officers at Fortune 100 companies revealed that:

-On average, 45‐50% of respondents’ civil litigation costs in 2007 related to discovery activities.

-Discovery of ESI accounted for, on average, a significant share (between 33‐39%) of total discovery costs.

-Costs associated with e‐discovery vendors were reported in 63% of large cases. When used, e‐discovery vendors accounted for, on average, 10‐12% of total costs.

-About 61% of case respondents felt that certain discovery requests received from the opposing party were designed to impose undue settlement pressure by increasing the costs to continue the litigation.

-In both state and federal court, the company respondents reported that more than half of their civil litigation matters involved the receipt of discovery requests that sought information beyond the claims or defenses at issue.

- About 31% of company respondents reported that at least 40% of the time ESI requested from them by the opposing party is not reasonably accessible.

This bill is to take effect immediately as an urgency statute.
 

Plaintiffs Denied Discovery In Class Certification Phase

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

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

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

Latest Update on Digitek MDL

The Digitek MDL Judge, on March 5th,  entered PTO # 16, which details important case management and scheduling deadlines in this mass tort. 

For those interested in some of the nuts and bolts of managing an MDL: the Order  requires that within 45 days, each defendant named in the Master Complaint shall file a Master Answer or a Fed. R. Civ. P. 12 motion in response to the Master Complaint.

The Order sets deadline for plaintiffs to request and brief class certification of any wrongful death, personal injury or medical monitoring putative class in September, 2009.

Plaintiffs are required to fill out and sign Plaintiff Fact Sheets, providing basic fact discovery.  It sets up a process for handling deficiencies in the responses.

Plaintiffs are to provide signed undated authorizations for the gathering of medical records, and addresses for each health care provider, including hospitals, clinics and outpatient treatment centers, and any other custodian of records identified in a plaintiff’s Fact Sheet.

Plaintiffs are ordered to produce medical and pharmacy records in their  possession establishing that the plaintiff was prescribed Digitek and the date(s) on which each prescription issued.

The Order set up a procedure for governing the oft-debated ex parte contact by defendants of treating physicians.

Defendants are ordered to provide organizational chart information as well as QC/QA structures. Also specifications, instructions, test methods and standard operating procedures relating to the manufacture of  Digitek;  quality assurance/control and testing records for Digitek, and any of its component ingredients, including but not limited to records related to batch sampling, post-manufacturing testing and finished goods testing. 

The Order establishes a procedure for privilege logs. The parties were directed to reach an agreement concerning a document production protocol to include the production format of paper and electronic documents, objective coding and metadata, privilege logs and any other applicable issues. In the event the parties cannot agree, the issues will be presented to Magistrate Judge Stanley for resolution.

The PTO also sets deadlines for service of interrogatories, document requests, and company witness depositions. As to expert discovery: Plaintiffs shall serve their reports from liability experts no later than January 1, 2010. The parties shall complete their depositions of Plaintiffs’ liability  experts no later than March 12, 2010.  Defendants shall serve their reports from liability experts no later than March 31, 2010.  The parties shall complete their depositions of Defendants’ liability experts no later than June 11, 2010.

To efficiently manage discovery for all currently pending and future cases in the MDL, the cases will be divided into groups, with each group having a separate scheduling order. Following completion of the first wave of Plaintiffs’ Fact Sheets the Court shall schedule a hearing for purposes of  selecting the initial trial pool of cases (“Group 1”). No later than 5 days before the hearing, Plaintiffs shall select 15 cases and the Defendants shall select 15 cases, and each side shall exchange lists of such selections and submit them to the Court.  Within 10 days after the scheduled hearing, the Court shall select a total of no more than twenty of the proposed trial pool cases to constitute Group 1.

Case specific discovery is set up by Group, with staggered dates of initial discovery (DID),  corresponding discovery deadlines, and Daubert and dispositive motions deadlines 310 days after  DID.

Update on Proposed Amendment to Federal Rules on Expert Discovery

Experts play a vital role in mass tort defense.  Selection, preparation, and discovery of experts are crucial pre-trial tasks of the defense attorney.  Thus, the rules of civil procedure governing those tasks really matter.

The end of the time period for public comment on proposed changes to Federal Rule of Civil Procedure 26 is rapidly approaching. The formal process to amend the rule governing expert discovery began in early 2008 when the Advisory Committee on civil rules met to consider rule changes recommended by the American Bar Association. After drafting a proposed rule, the committee published the changes for public comment. Written comments are due by February 17, 2009.  There will be a final public Judicial Conference hearing in San Francisco, California, on February 2, 2009.  Guidelines for submitting comments can be found here.


After the comment period ends in February, the advisory committee is expected to consider comments and, if needed, redraft the rule.  Under the Rules Enabling Act, the rule will then be forwarded to the Standing Committee on Rules of Practice and Procedure, which must consider the changes. The standing committee would review the rule at a meeting planned for June, and submit it to the Judicial Conference for consideration at its September session. The proposed changes could go to the U.S. Supreme Court in time for the October session. Assuming this timeline holds up, the Supreme Court must act on the changes by May, 2010. The final step will require consideration by Congress, which will have seven months to act on the proposal. By statute, non-action would allow the rule changes to take effect early as December, 2010.

But the first deadline is the looming end to the public comment period.

What would the rule do?

The key changes extend work-product protection to drafts of Rule 26(a)(2)(B) expert reports and 26(a)(2)(C) party disclosures, and also to certain attorney-expert communications. The proposed amendments are designed to reflect what the Standing Committee calls the “lessons of experience” as opposed to theory, and to provide useful discovery while reducing practices that now impede the best use of expert trial witnesses.

Under the proposal, Rule 26(b)(4) would be amended to extend work-product protection to drafts of expert reports, drafts of party disclosures, and communications between expert witnesses and counsel. Exceptions are carved out for discovery of compensation, identification of facts or data the attorney provided to the expert and that the expert considered in forming the opinions to be expressed; and any assumptions that the attorney provided to the expert and that the expert relied upon in forming opinions.

Some courts have interpreted the Advisory Committee note on existing Rule 26(a)(2)(B) to allow parties to inquire into all communications between experts and counsel, multiplying expenses with little benefit to the parties, and impeding the way cases are actually prepared for trial. This approach has also contributed to the practice of retaining two experts, one to testify and the other to consult. Many lawyers will stipulate out of discovery of draft reports and attorney-expert communication because the costs of such discovery seem higher than the infrequent, small benefits that may be gained. The changes thus are needed to create efficiencies and to reduce litigation costs.

Some academics and the plaintiffs’ bar argue, however, that any restriction on inquiry into the expert's relationship with retaining counsel is a bad idea. Some have even started a letter-writing campaign opposing the proposed amendments. Comments from DRI, on the other hand, suggest that the protections should extend to communications between attorneys and the expert's staff as well.
 

Discovery Battles Continue In Zyprexa MDL

Two interesting developments in the ongoing discovery battles in the Zyprexa MDL, which involves claims by several states and health entities alleging that defendant Eli Lilly made misleading statements about the medication. The states allege that they would not have funded Medicaid patients taking Zyprexa had they known about the risks of the drug...But don't seem eager to prove it.

First, the magistrate judge denied defendant’s motion for sanctions against Montana, New Mexico, Louisiana, and Mississippi, but ordered the states that have not yet produced their complete Medicaid databases as requested to do so on pain of sanctions.

Second, the court ordered the states to produce non-party medical records requested by Lilly. The defendant, not surprisingly, wanted to be able to compare the records of other antipsychotic medications in the relevant periods. As the court said, "the records are in fact relevant to Lilly’s defenses. For example, as Lilly notes, the use of a statistically significant sample of Medicaid patient records can help to explain information obtained from Medicaid databases, and may provide information on potential confounding variables."

The states argued that their respective physician-patient privilege laws prohibited discovery of the patient medical records. It is axiomatic that state privilege laws do not govern in federal question cases. Although several of the plaintiff states did not allege violations of federal law in their
complaints, and each has vigorously challenged the basis for federal jurisdiction, Judge
Weinstein has held that jurisdiction lies under federal law. 

The court also felt that the states’ doctor-patient privilege argument was not well taken, because the order was for the production of de-identified medical records with patient names redacted. Federal statutes and regulations make clear that de-identified health information is discoverable in litigation in federal court, with or without patient consent, and it appears that the states’
respective privilege laws would not apply to de-identified information either.

The court also denied the states' request that Lilly subpoena the records, as a step that would needlessly prolong discovery.  Significantly, Lilly does not know the identities of the patients whose medical records it seeks. Moreover, the states are in a better position to ensure that the medical records produced are a randomly selected, statistically significant sample. If Lilly were constrained to subpoena the medical records, it would likely target only certain records, which would inevitably lead to protracted argument over whether the records subpoenaed represent a statistically significant sample, said the court.

MassTortDefense has posted on this litigation before. It continues to be an excellent example of the type of attenuated and indirect injury claim that requires in-depth and detailed discovery to defend. Also an example of plaintiffs who are more willing to assert complex damages theories than to provide the evidence to test those claims.
 

Defense Use Of Plaintiffs' Treaters As Experts In MDL Disallowed

The Magistrate Judge in the Kugel Mesh Hernia Repair Patch MDL has refused to allow defendants to retain as experts any physicians who have treated any of the plaintiffs. See In re: Kugel Mesh Hernia Repair Patch Litigation, MDL Docket No. 07-1842ML (Order 9/19/08).

The Court had previously ordered that defendants were precluded from engaging in substantive ex parte communications with plaintiffs’ treating physicians. Defendants proposed, however, to have the ability to retain a plaintiff’s treating physician as a consulting or testifying expert as long as they do not call the expert in his/her patient’s case and refrained from discussing with him/her the medical history of that patient/plaintiff.

The Court saw the motion as requiring it to balance the trust and confidentiality embodied
in the physician-patient relationship against a litigant’s right to reasonably assemble and present a defense.

The reality of some mass torts is that:

-the sheer number of plaintiffs may preclude defendants from retaining any consultants who are not also treating physicians of some plaintiffs;

-this is especially true in the case of medical devices in which the experts in the devices are experts mainly because they treat people using those devices;

-in mass torts, with thousands of cases in multiple venues, defendants need multiple experts;

-allowing defendants access to treaters -- who are not automatically experts for the plaintiff, but who possess knowledge needed by both sides – may accelerate the discovery process.

The Court here, however, adopted the balancing performed by the Rhode Island Superior Court, which currently sees more than 1000 of these cases. See In re: All Individual Kugel Mesh Cases, 2008 R.I. Super. LEXIS 101 (R.I. Super. August 26, 2008). The state court concluded that any “potential inconvenience” to defendants in engaging experts was “significantly outweighed” by plaintiffs’ right to confidentiality in their medical matters. Id. at *9.

The Court may have given insufficient weight to the protection available from the fact that the treater, if consulted by the defense on plaintiff X, is under an independent ethical duty not to disclose confidential information about patient Y. And the doctor is always available to be deposed about whether he or she was even asked any questions about a patient.

The Court criticized the defendants for not specifically identifying the “small group of hernia repair specialists” who were inevitable, likely treaters of one or more plaintiffs. (“The fact that only one surgeon to date has fallen into the consultant/treating physician category belies Defendants’ claims of prejudice.”) However, generally, and without any knowledge of this specific MDL, MassTortDefense would assert that the issue was not whether defendants had already identified many potential experts who were also treaters. The prejudice comes when defendants cannot find qualified experts who are not treaters and thus must turn to the treater pool –even if they haven’t already done so and thus cannot identify the specific overlapping people. Defendant has no easy way, absent revealing substantial confidential work product, of showing that it cannot find adequate and sufficient experts without resort to the treater pool. Courts, particularly MDL courts, may need to seek a deeper understanding of the reality of expert retention.
 

Shoe On The Other Foot: State/Plaintiff Criticized For Discovery Reponses

Managing the potentially vast scope of discovery requests in life sciences industry litigation can be daunting. The discovery requests in such litigation may be quite broad, following the product through its entire life cycle, and under the new(ish) Federal Rules can be even broader than in the past. They may now involve requests for samples, requests for access to databases, requests for technical support and IT depositions.

Companies in the life sciences area know well that multiple kinds of litigation now regularly arise from same product issue or nucleus of facts, including
– product liability
– medical monitoring
– securities
– consumer fraud class action
– DOJ and government investigations

The vast array of litigation raises the potential for inconsistent positions in the different parts of the litigation concerning same subject. In addition, defendants must be on guard against spoliation attacks and the plaintiffs’ new favorite, the “Gotcha” Game, in which plaintiffs seek discovery not for information, but to find and challenge wherever defendant drew the line in document or data preservation. All in all, the management and conduct of e-discovery has become an area of true specialization.

Defendants may have wondered whether discovery is a two-way street under the new rules. Plaintiffs don’t have as much data, perhaps, and courts have been reluctant to hold individual plaintiffs to the same standards as corporate defendants. In a recent decision in the Zyprexa litigation, a governmental plaintiff may have been, however.

The magistrate judge overseeing discovery in the MDL has weighed in on the state of New Mexico’s apparent failure to properly respond to discovery requests in a lawsuit it filed against Eli Lilly & Co. over Zyprexa. Madrid v. Eli Lilly & Co., No. 07-cv-1749 (MDL-1596 E.D.N.Y.).

As is typical in this branch of the litigation, the state alleges that it would not have spent Medicaid funds on Zyprexa if it had known more about the supposed risks of the drug. The lawsuit was removed to the U.S. District Court for the District of New Mexico in 2006 after it was originally filed in state court. It was transferred for pretrial proceedings to the U.S. District Court of the Eastern District of New York by the panel on multidistrict litigation.

Earlier this month, Eli Lilly challenged the adequacy of the state's responses to interrogatories and document demands it had made in June. The magistrate judge's Order concluded that New Mexico had neither replied to Lilly's attempts to confer in good faith on this issue nor had it provided the court with any justification whatsoever for its boilerplate objections. The state's silence on this issue “underscores the indefensible nature of its responses.” Apparently, the state had ignored the specificity requirement for objection and merely labeled each request as “unintelligible” or “irrelevant.” The court also faulted the state for not including a privilege log.

Discovery is supposed to be a two-way street.