State High Court Rejects Mold Expert Opinion

Here's an interesting expert analysis that arises in the less common Frye context.  In Chesson v. Montgomery Mut. Ins. Co., No. 97 (Md., 9/24/13), the Maryland high court affirmed the exclusion of an expert's methodology for linking alleged mold exposure and the plaintiffs' illness; among other things, the approach failed to take into account the level of mold exposure plaintiffs experienced.

The case at hand originated in workers’ compensation claims filed by six employees of the Baltimore Washington Conference of the United Methodist Church. The employees claimed that they had sustained physical injury, specifically neurocognitive and musculoskeletal symptoms, as a result of exposure to mold in the Baltimore Washington Conference’s office. To prove causation, the employees proffered Dr. Ritchie Shoemaker as their expert. Montgomery Mutual, however,
sought to exclude Dr. Shoemaker under Frye (called Reed in this state), arguing that his methodology to determine causation was not generally accepted in the relevant scientific community.

After some procedural events, the lower court eventually held a Frye-Reed hearing, in which the judge considered whether the relevant scientific community generally accepted as reliable and
valid Dr. Shoemaker’s methodologies and theory that identified mold exposure as the cause
for the neurocognitive and musculoskeletal symptoms allegedly suffered by the employees.  At the hearing, Dr. Shoemaker testified that the indoor air of a water-damaged building known to contain mold caused neurocognitive and muscuoloskeletal symptoms. He based his opinion on something he called his “Repetitive Exposure Protocol,” in which he would identify the presence of mold in the building, through visual identification of mold, detecting a musty smell, or lab testing of a sample, such as a piece of drywall. The individual at issue would then be removed from the subject building and, for two weeks, receive a treatment to relieve the symptoms allegedly related to mold exposure, and then be returned to the subject building for three days, during which, he
opined, the individual would report that the symptoms had redeveloped.

The trial court allowed the testimony but the Court of Appeals held that Dr. Shoemaker’s testimony was not admissible under Frye-Reed, reasoning that his methodology was flawed and not generally accepted because it failed to account for the levels of mold exposure. The Court, moreover, concluded that based on an examination of relevant scientific journal articles that the scientific community remained uncertain as to Dr. Shoemaker’s techniques and conclusions.  The plaintiffs appealed.

The high court noted that in Maryland when an expert opinion is offered to support the existence of new or novel scientific theory or methodology, “the basis of that opinion must be shown to be generally accepted as reliable within the expert’s particular scientific field.” Reed v. State, 283 Md. 374, 381, 391 A.2d 364, 368 (1978), citing Frye v. United States, 293 F. 1013, 1014 (1923). The general acceptance test imposes a significant gate-keeping role on the judge to determine whether a scientific theory or methodology should be admitted for consideration by jury.  Moreover, validity and reliability are the linchpins of  the scientific method: validity, having been defined as the extent to which something measures what it purports to measure, and reliability, characterized as the ability of a measure to produce the same result each time it is applied to the same thing.

The court stressed that on cross-examination, Dr. Shoemaker admitted that he did not test any of the buildings, either the Baltimore Washington Conference’s office or any others in which an
individual resided or worked who underwent his “Repetitive Exposure Protocol,” to determine the level of mold exposure that an individual working or residing therein would have experienced. According to Dr. Shoemaker, the mere "identification" of mold in a building, even by the presence of a musty smell alone, was sufficient to conclude that an individual residing or working in that building inhaled mold that caused neurocognitive and musculoskeletal symptoms, without any further assessment of not only the level of mold, but also what other chemicals the plaintiff may have been exposed to.

Defendants called a Dr. Cheung who testified that Dr. Shoemaker’s “Repetitive Exposure Protocol”
was not generally accepted as valid in the relevant scientific community, not only because it was experimental as well as controversial in its “second tier” of biological markers approach and use of treatment drugs in an off-label fashion, as well as in its failure to account for stress levels in individuals, but also primarily because it failed to measure the levels of mold exposures by individuals in the water-damaged buildings. Mold exposure can be low to medium to high, he testified, and should include consideration of the pathways that mold must travel to reach an individual, such as the building’s ventilation system, walls, or ceiling, as well as the pressure or air flow of the building.  Dr. Cheung also testified to a survey that he had commissioned relative to whether Dr. Shoemaker’s diagnosis was generally accepted and found it was not.  Most importantly, Dr. Cheung testified regarding the absence of any study utilizing the scientific method that confirmed the relationship of mold exposure to neurocognitive and musculoskeletal symptoms.

The court also noted that other jurisdictions have determined that Dr. Shoemaker’s theory, based on his “Repetitive Exposure Protocol,” is neither generally accepted nor reliable. See Young v. Burton, 567 F. Supp. 2d 121, 130-31 (D.D.C. 2008) (also listing Virginia, Florida, and Alabama as jurisdictions rejecting Dr. Shoemaker’s theory).

The Court of Appeals agreed with the intermediate appeals court, finding that the expert's failure to account for the level of mold exposure was a fundamental flaw in his methodology .Without an expert's admissible opinion on causation, plaintiffs were unable to prove that mold in the walls of their office building was the cause of their neurocognitive and musculoskeletal symptoms.

 

Hearing Questions EPA Stance on Fracking

The House Subcommittee on Energy and Environment held a hearing earlier this week to review federal hydraulic fracturing research activities. The hearing examined research activities by the Environmental Protection Agency (EPA), Department of Energy (DOE) and the Department of Interior (DOI) in an inter-agency effort to “address the highest priority challenges” related to the production of domestic unconventional oil and natural gas resources.  Readers may recall we have posted about fracking issues before. 

Chairman Lamar Smith (R-Texas) noted a widely publicized handful of unsubstantiated charges that fracking pollutes ground water; the EPA is at the center of this debate, linking fracking to water contamination in at least three cases, only to be forced to retract their statements after further scrutiny.

Members questioned administration witnesses on the objectives of the interagency initiative as they relate to the administration’s regulatory intentions and track record of unsubstantiated attacks on the safety of hydraulic fracturing.  

Witnesses included:

Dr. Kevin Teichman, Senior Science Advisor, Office of Research and Development, Environmental Protection Agency
Mr. Guido DeHoratiis, Acting Deputy Assistant Secretary for Oil and Gas, Office of Fossil Energy, Department of Energy
Dr. David Russ, Regional Executive, Northeast Area, U.S. Geological Survey
Dr. Robin Ikeda, Acting Director, Agency for Toxic Substances and Disease Registry, Department of Health and Human Services

The hearing also noted the administration’s interagency working group had committed to release a draft of their research plan by October 2012 and complete the final plan by January 2013. The Administration has yet to even release a draft for public comment. 

Energy Subcommittee Chairman Cynthia Lummis (R-Wyo.) noted that her home state of Wyoming is at the center of this issue since the EPA put it in the national spotlight with a “draft” report implying that fracking was somehow responsible for the quality of the water. However, in the days and weeks that followed this announcement, the State of Wyoming, industry, and other federal agencies exposed EPA’s study as deeply flawed.

Environment Subcommittee Chairman Chris Stewart noted that largely as a result of the expanded use of cheap natural gas from 2005 to 2011, the U.S. has decreased its carbon dioxide output more than any other nation, including those countries that have implemented aggressive green energy agendas, such as Germany and Spain.  It is perhaps ironic that many of the most passionate advocates for action on climate change also oppose fracking.

Ninth Circuit Vacates Asbestos Verdict on Daubert Basis

The Ninth Circuit earlier this month vacated a $9 million award for a plaintiff who allegedly contracted mesothelioma working for decades at a paper mill, because the trial court failed to assess the reliability of expert testimony for the plaintiffs under Daubert v. Merrell Dow Pharm.,
Inc
., 509 U.S. 579 (1993). See Henry Barabin et al. v. AstenJohnson Inc., et al., Nos. 10-36142 and 11-35020 (9th Cir.). 

Plaintiff's employer used dryer felts containing asbestos allegedly made or sold by defendants. During his employment, he allegedly worked in various jobs that exposed him to the dryer felts that defendants had provided. He also took pieces of dryer felt home to use in his garden.  In November, 2006, Plaintiff was diagnosed with pleural malignant epithelial mesothelioma.  It was undisputed that exposure to respirable asbestos can cause mesothelioma (general causation).

Defendants filed a motion in limine to exclude plaintiff's expert witnesses on specific causation. The district court excluded one (Dr. Cohen) as an expert because of his “dubious credentials and his lack of expertise with regard to dryer felts and paper mills. . . ” Additionally, the district court limited a second (Dr. Millette), requiring disclosure to the jury that Dr. Millette’s tests were “performed under laboratory conditions which are not the same as conditions at [plaintiff's workplace].”  However, during a pre-trial conference, the district court reversed its decision to exclude Dr. Cohen’s testimony. The district court explained that plaintiffs had clarified Dr. Cohen’s credentials, including that he had testified in other cases. The district court did not hold a Daubert hearing.

After the jury verdict and post-trial motions, defendants appealed.  The court of appeals noted that in its role as gatekeeper, the district court determines the relevance and reliability of expert testimony and its subsequent admission or exclusion. See Ellis v. Costco Wholesale Corp., 657 F.3d 970, 982 (9th Cir. 2011). Admission or exclusion under Daubert rests on the scientific reliability and relevance of the expert testimony.  The expert’s opinion must be deduced from a “scientific method” to be admissible. The test under Daubert is not the correctness of the expert’s conclusions but the soundness of his methodology. Compliance with Rule 702 is gauged by the district court’s assessment of the reliability of the proffered expert testimony. Specifically, the district court is charged with determining whether the proffered expert testimony is trustworthy. In a case involving scientific evidence, evidentiary reliability will be based upon scientific validity. Scientific validity is, in turn, assessed in large part by the degree to which the theories propounded by the expert have been subjected to and survived scrutiny in the relevant scientific community.  The "decision to admit or exclude expert testimony is often the difference between winning and losing a case."

Since the decision to permit the testimony was based on reconsideration, the record was limited. Once presented with the additional information in the response to the motion in limine, at a minimum the district court was required to assess the scientific reliability of the proffered expert testimony.  Unfortunately, said the court of appeals, because no Daubert hearing was conducted as requested, the district court failed to assess the scientific methodologies, reasoning, or principles Dr. Cohen applied. None of the Daubert factors was considered. "Instead, the court allowed the parties to submit the experts’ unfiltered testimony to the jury."  In failing to do so, the district court neglected to perform its gatekeeping role.  Rather than making the required determinations, the district court left it to the jury to determine the relevance and reliability of the proffered expert testimony in the first instance, said the panel. The 9th Circuit panel seemed influenced in part by the fact that, in its order, the district court wrote: In the interest of allowing each party to try its case to the jury, the Court deems admissible expert testimony that every exposure can cause an asbestos-related disease. (emphasis added).

"Let the parties try their cases; let the jury sort it out" is not what Daubert allows or requires.  The district court committed reversible error when it failed to assess the proferred expert testimony for relevance and reliability, concluded the court. Prior decisions dictated that a new trial be provided in this circumstance.

Supreme Court Hears Arguments in Comcast

We alerted readers before about the Supreme Court consideration of the role of Daubert at the class certification stage.   See Comcast Corp. v. Behrend, U.S., No. 11-864 (cert. granted 6/25/12). The Court had indicated it was interested in the question "whether a district court may certify a class action without resolving whether the plaintiff class has introduced admissible evidence, including expert testimony, to show that the case is susceptible to awarding damages on a classwide basis." Readers will recall that in Wal-Mart Stores Inc. v. Dukes, 131 S. Ct. 2541 (2011) the Supreme Court in dicta referenced the question. Justice Scalia observed that the district court had "concluded that Daubert did not apply to expert testimony at the certification stage of class-action proceedings," but the majority replied that "we doubt that is so." 131 S. Ct. at 2554. Thus, Dukes strongly suggested that it was appropriate for defendants to make the expert challenge at the class certification stage, and important for the court to resolve the issue then.

The justices heard arguments from both sides November 5th.  The district court in Comcast originally certified a class; following the court of appeals' decision in Hydrogen Peroxide, 552 F.3d 305, the district court granted in part Comcast‘s motion to reconsider its certification decision. After further briefing, plaintiffs got the case re-certified after convincing the district court that they could show that they had an expert methodology to prove damages on a classwide basis. On the current appeal, the Third Circuit agreed that the lower court had applied the "rigorous analysis," adding that at the class certification stage, "we are precluded from addressing any merits inquiry unnecessary to making a Rule 23 determination.” The Petitioners argued that the Third Circuit affirmed the certification order after expressly declining to consider several “merits” issues necessary to determine whether, as required by Rule 23(b)(3), common questions predominate over individual ones. The focus on damages, which some have viewed as narrowing the issue presented, still is a question that arises not just in antitrust cases, but also in mass torts, which are front and center for our readers.

Plaintiffs seemed to get more questions from the bench than did defendant, especially about any problem with allowing potentially inadmissible evidence to form the basis for the crucial class certification decision. 

Comcast emphasized flaws in the expert's damages model, including that the damage model was not linked to the class theory certified by the lower court, that the alleged monopolization of the Philadelphia area through clustering deterred competitors, or “overbuilders,” from competing. The district court should not have relied on it to certify the class. Plaintiffs argued waiver, that the company failed to bring up Daubert v. Merrell Dow Pharmaceuticals Inc., 509 U.S. 469 (1993), until it was too late. That focus led Justice Kagan to note, “I am still in search of a legal question that anybody disagrees about here.” Justice Elena Kagan observed it seemed the parties apparently agreed that if the Daubert question was not waived, the lower court should have held a hearing on the admissibility of the expert opinions. Comcast emphasized it had argued to the trial court that this model did not work, ought to be precluded, and was not a valid methodology.

Plaintiffs argued that allowing district courts to defer admissibility determinations under Daubert  until after the class certification stage is consistent with the broad discretion given judges on evidentiary issues.  But that failed to address the pressure that class certification puts on defendants to settle, a point that was not a focus of the arguments. Plaintiffs also seemed to be arguing for a standard in which the district court has to decide simply that it is more likely than not that the damages model/expert opinion will be admissible at trial, and will meet the standard that’s required to get to a verdict.  But Justice Sotomayor asked "can a district court ever say that it’s persuaded by unreliable or not probative evidence.” Justice Alito similarly asked how could this expert "report be probative if it did not satisfy Daubert?”
 

Comcast argued that the trial court needed to conduct more than a limited Daubert hearing, agreeing with what defendant called the holding of the Seventh Circuit in American Honda that the question at the class cert hearing is not solely one of whether the evidence would be admissible, but also  -- keeping in mind that the focus of the class certification hearing is to decide whether the case should be tried as a class --  whether it is a methodology that sufficiently fits the facts and is reliably based on a scientific method so that plaintiffs will be capable of proving, class-wide, this issue at trial.

Justice Scalia asked about a hybrid approach where the court would focus at the class stage on reliability, and leave other Daubert inquiries (like fit)  for trial. But a focus of Justice Ginsburg's questions right out of the box was whether any finding of reliability was necessary on damages. She noted that in discrimination law contexts, courts may, if the liability questions can be adjudicated on a class basis, have the damages question adjudicated individually.  Of course, that view of class actions seems to slight the manageability requirement in a (b)(3) context, and invites truncated procedures that violate a defendant's due process rights.

One to watch for sure.
 

 

CPSC Commissioners Testify At Hearing Regarding Database

Issues about the product complaint database set up by the U.S. Consumer Product Safety Commission bubbled over again last week.  We have posted on the topic before.

The CPSC-operated database allows consumers, government agencies, and others to submit reports of alleged injury or death allegedly caused by a product. Since the beginning of the database notion, there have been serious concerns about the accuracy and confidentiality of reports of alleged injury submitted and conveyed back to the public in the database. There has always been an apparent lack of attention to legitimate issues of a manufacturer's goodwill and reputation, to the costs of unnecessary panic among product consumers, and the mischief that some plaintiffs' lawyers might cause with unwarranted increase in litigation against manufacturers.  Obviously, false or inaccurate information does not serve the interests of consumers. And CPSC allows reports by parties who are more likely to have an agenda that goes beyond merely advising CPSC of an incident. The possibility that someone might attempt to seed the database with inaccurate or misleading information to provide ostensible support for lawsuits is a real concern for many observers.

As we noted, an anonymous company sued the CPSC last Fall over an apparently false report in the database.

Last week, Commissioner Anne Northup testified before a Subcommittee on Commerce, Manufacturing, and Trade of the House Energy and Commerce Committee at a hearing on “Oversight of the Consumer Product Safety Commission.” She addressed generally the issues with CPSC regulatory approaches. Commissioner Nord also testified, and she has reported that many of the complaints on the database were filed by law firms.

Chairwoman Mary Bono Mack, R-Calif., noted that the public database remains a source of controversy. Manufacturers continue to express their concern that most of the complaints are not vetted by the CPSC before they are made public, "opening the door to all kinds of mischief, whether to fuel law suits or to try and ruin a competitor’s brand."

Video of the hearing here.

House Hearing on CAFA- Seven Years Later

A topic near and dear to the hearts of readers of MassTortDefense was the subject of a recent hearing by a subcommittee of the U.S. House Judiciary Committee. Entitled "Class Actions Seven Years After the Class Action Fairness Act,” the hearing was designed to address what has worked with the law, what has not, and what Congress overlooked when it passed CAFA.

Witnesses included a plaintiff-side attorney, who typically complained about CAFA's impact on consumer fraud class actions, and Professor Redish from Northwestern, who talked about the need for legislative revision of the use of so-called “cy pres” awards in class action proceedings in particular.

Rep. Trent Franks (R-Ariz.) is the chairman of the Subcommittee on the Constitution, and has expressed concern over the ability of plaintiffs to engage in a new form of forum shopping under CAFA, filing cases in particular federal circuits they think are more hospitable to class actions.

John Beisner, who typically represents defendants in class actions, testified on behalf of the U.S. Chamber Institute for Legal Reform; he noted that a small number of judicial rulings have ignored Congress’s intent behind this landmark legislation, meriting further legislative attention. From imposing a heightened “legal certainty” standard on defendants with respect to CAFA’s amount-in-controversy requirement to broadly construing CAFA’s narrow exceptions to federal jurisdiction, these rulings run afoul of CAFA’s presumption in favor of federal jurisdiction. Second, he argued that Congress should also assess certain troubling aspects of federal class action jurisprudence that were not affected by CAFA. These issues include: (1) efforts by a small number of federal courts to loosen the requirements of Rule 23; (2) the increasing use of cy pres settlements to support large fee payouts to class counsel; and, he noted, (3) judicial approval of class actions that encompass substantial numbers of uninjured individuals (that is, persons who lack Article III standing).

House Committee Tackles Regulations

The House Judiciary Committee held a hearing last week on a bill that would require federal agencies to evaluate the costs of proposed regulations before adopting them, and that would arguably make it easier for product sellers to challenge onerous regulations in court.

The hearing focused on the Regulatory Accountability Act of 2011 (H.R. 3010). Rep. Lamar Smith (R-Texas), the committee chairman, introduced the bill this Fall to propel needed changes in the regulatory system, updating out of date aspects of the Administrative Procedure Act, a 1946 statute.  The Senate version of the bill (S. 1606), was introduced in September, and was authored by Sens. Rob Portman (R-Ohio), Mark Pryor (D-Ark.), and Susan Collins (R-Maine). The Regulatory Accountability Act would be the first major revision of the APA’s core regulatory procedures.

The bill would require a more formal rule-making process, under which agency officials would have to defend their regulatory proposals to affected persons. Federal agencies also would be required to give greater weight to the impacts and costs of the proposed rules.  The proposal would limit the ability of agencies to regulate in the guise of voluntary “guidance” documents. (Readers know hos such regulations can impact mass tort and product liability litigation in a real way.)

Witnesses included C. Boyden Gray, Christopher C. DeMuth of the American Enterprise Institute for Public Policy Research, and Arnold Baker, owner of Baker Ready-Mix Building Materials.  Gray argued that the bill would strengthen judicial review of agency actions on questions of regulatory interpretation, factual issues, and cost-benefit analysis, at least in cases where the agency’s own process fails to satisfy the Act’s heightened requirements. Judicial review of agency action requires a delicate balance—the applicable standards of review are somewhat deferential, but those standards must be firmly enforced. The proposed Act strikes that balance well. DeMuth focused on the requirement of a cost-benefit standard, and the provision that agencies must adopt the least costly approach to achieving statutory objectives unless they demonstrate that the additional benefits of more costly rules justify the additional costs.  And Baker offered the example of a business struggling to stay afloat in a sea of regulations, and the need for agencies to do a much better job of understanding the full impact that their regulations will have on businesses and jobs – along with possible alternatives – before they impose the most costly new rules.

A number of law professors oppose the bill, but seem to forget that it is Congress' job to decide if and when regulatory burdens have become too excessive.

Meanwhile, the House Judiciary Committee approved last week the Regulations from the Executive in Need of Scrutiny (REINS) Act (H.R. 10), which would require a vote in Congress before any regulation with an economic impact of more than $100 million could go into effect. Federal regulations cost the economy $1.7 trillion each year. Congress would take a simple up-or-down vote on such huge new government regulations before they could be enforced. 

 

House Hearing on Food Marketing to Kids -- Seller Beware

Two subcommittees of the House Energy and Commerce Committee, the Subcommittee on Commerce, Manufacturing, and Trade and the Subcommittee on Health, held a joint hearing last week on the issue of “Food Marketing: Can ‘Voluntary’ Government Restrictions Improve Children’s Health?”

Speakers came from the CDC, the U.S. Department of Agriculture, the FTC, Campbell Soup Company, and the Association of National Advertisers.

The background of the hearing is that the 2009 Consolidated Appropriations Act contained report language forming an Interagency Working Group (IWG), comprised of the Federal Trade Commission, the Department of Health and Human Services, and the Department of Agriculture. The IWG was tasked with conducting a study and issuing a report to Congress concerning standards for marketing food to children.  Instead of conducting the prescribed study or providing a report to Congress, the IWG issued a document entitled “Preliminary Proposed Nutrition Principles to Guide Industry Self-Regulatory Efforts.”

The document presented a a sweeping set of “voluntary” principles for marketing foods to kids,  based on nutritional standards that exceed and conflict with those of other government programs. They also reflect a tenuous grasp of science, lacking evidence, critics say, showing that childhood obesity is related to advertising of food that doesn’t comply with the proposed principles.  The guidelines are so restrictive that many healthy foods, like low-fat yogurts, whole wheat bread, and 2% milk could not be marketed to those 17 and under. Even non-sweetened cereals would not meet the IWG guidelines.  According to one analysis, 88 out of the 100 most advertised foods and drinks would be in violation of these standards.

Regardless of whether a child sees a commercial for an item, the ultimate purchasing decision rests with the parent who purchases the groceries – and those groceries carry nutrition labels that every parent can read.  Of course, this is the nanny state rearing its head again. And there are serious issues of infringement of constitutionally protected commercial speech.

But a legitimate concern to our readers is that while these guidelines are labeled as voluntary, what happens when a litigious group sues a food manufacturer because it showed a commercial advertising a new kind of chocolate treat or drink that does not comply?  Our readers are surely familiar with example of courts allowing plaintiff experts to note "voluntary" or "recommended" guidelines.

Why We Can't Sue Our Way to Prosperity

The House Judiciary Committee's Subcommittee on the Constitution held a hearing earlier this week on "Can We Sue Our Way to Prosperity?: Litigation's Effect on America's Global  Competitiveness."

Speakers included a public policy expert from NERA; a law school professor; and my friend, esteemed litigator John Beisner.

Paul Hinton testified that the direct cost of the U.S. tort system is estimated to be approximately $250 billion in 2009 or about 2 percent of GDP.  The U.S. costs are the highest as a percent of GDP amongst those reported for other industrialized countries and more than double the estimates for countries such as the U.K, France, and Japan.  Small businesses bear a relatively larger share of tort costs than larger businesses.

Professor Silver from Texas tried to make the case that the civil justice systems contributes greatly to the prosperity of the U.S.  He seemed to think that litigation is the only thing that deters doctors from committing widespread medical malpractice.

John Beisner noted that given the lucrative potential of private lawsuits in the U.S., it is not surprising that fraud has crept into the system. One notable example is the fraud that may have  occurred with respect to asbestos bankruptcy trusts. In addition, some lawyers have engaged in questionable tactics to recruit clients – tactics that have encouraged the filing of frivolous or fraudulent claims. The most notorious of these efforts, he observed, have been the massive screening programs undertaken in the silica and welding-fume litigation, both of which resulted in the mass filing of meritless and even fraudulent claims – and forced defendants to spend huge sums of money defending themselves against groundless allegations. In addition, Beisner pointed out, more and more plaintiff lawyers are using the internet to troll for clients and sow dissatisfaction with products in advance, in the hopes of generating large bodies of claims against targeted defendants. "These efforts have contributed to the deluge of meritless lawsuits that clog the civil justice system."

Another troubling development he noted in the American civil justice system has been the rise in
foreign lawsuits with virtually no nexus to the United States. In addition to transnational tort cases, the American civil justice system has also seen an uptick in efforts to enforce foreign judgments in U.S. courts.

Although the enactment of the Class Action Fairness Act of 2005 dramatically reduced class-action abuse, several serious problems remain in the aggregate litigation arena, including (1) state attorney general actions; (2) the routine deprivation of due process in class actions that remain in state courts; and (3) mass joinder actions.

The hearing comes as the Judiciary Committee considers the Lawsuit Abuse Reduction
Act
, which would call for greater sanctions for Rule 11 violations to deal with frivolous claims. 
 

House Holds Hearing on Proposed Toxic Chemicals Safety Act

The Subcommittee on Commerce, Trade, and Consumer Protection  of the House Committee on Energy and Commerce held a hearing on H.R. 5820, the “Toxic Chemicals Safety Act of 2010,” last week.  The proposed legislation would amend the Toxic Substances Control Act of 1976 to deal with potential risks resulting from chemical exposure.

Witnesses included Steve Owens from the EPA; Calvin M. Dooley, President and Chief Executive Officer of the  American Chemistry Council; and Beth Bosley, Society of Chemical Manufacturers and Affiliates, Inc.

Any approach toward updating federal chemical regulation should balance safety issues with the need to preserve the ability of the United States to serve as the innovation engine for the world; and protect the hundreds of thousands of American jobs fueled directly and indirectly by the business of chemistry.  That is, reforming TSCA to enhance the safety assessment of chemicals while maintaining the ability of the U.S. chemical industry to be the international leader in innovation and manufacturing.

It is clear that the standards established in this bill sets an impossibly high hurdle for all chemicals in commerce, and are guaranteed to produce significant technical, bureaucratic and commercial barriers. For example, the bill requires that “aggregate exposure” to a chemical or a mixture meet the “reasonable certainty of no harm” standard. This apparently means that when a chemical or mixture is listed for a safety determination, the manufacturer carries the burden of showing with reasonable certainty not just that the company’s use of the chemical and any resulting exposures from those uses pose no significant risk of harm, but that all other aggregated exposures from all other uses of the chemical pose no harm. It is not clear to MassTortDefense how any company could actually do that in the real world.  TSCA regulates thousands of chemicals, many with hundreds of uses. TSCA chemicals have multiple important industrial applications and consumer product applications. It is totally unclear how industry or even the EPA would be able to gather enough information to meet this aggregate exposure standard for each and every regulated substance.

The proposed bill thus creates a burden that seems far out of proportion to its benefit. The onslaught of new regulations may simply force customers of the industry to relocate their factories and make the products at issue overseas, outside the EPA's jurisdiction.  The bill would also  discourage the introduction of new chemicals, including new greener chemicals, into commerce in the United States.  Congress, keep working at it.
 

Beware of Legislative Moves Over The Gulf Oil Spill

Last week,  U.S. House Judiciary Committee Chairman John Conyers, Jr. (D-Mich.) and Congressman Charlie Melancon (D-LA) introduced H.R. 5503, the “Securing Protections for the Injured from Limitations on Liability Act” (SPILL Act).  This is one of many pending and promised bills addressing legal liability issues arising from the Gulf Coast oil spill, including amendments to the Death on the High Seas Act.

Specifically, H.R. 5503 would:

• Amend the Death on the High Seas Act to permit recovery of non-pecuniary damages (e.g., pain and suffering and loss of care, comfort, and companionship) by the decedent’s family, as well as standardizing the geographic threshold for its application, and permitting surviving family members to bring suit directly rather than through a personal representative.

• Amend the Jones Act to permit recovery of non-pecuniary damages by the families of seamen who are killed.

• Repeal the Limitation on Liability Act to the extent it limits the liability of vessel owners to the value of the vessel and its cargo.

• Amend bankruptcy rules to prevent corporations allegedly responsible for damages under the Oil Pollution Act from certain moves seeking to sever their assets from the legal liabilities.

The bill is supposed to be in response to the Gulf Oil Spill. However, many of its provisions are not limited to the subject matter of oil spills.  For example, Section 5 proposes to amend the Class Action Fairness Act  to exclude from its reach any action brought by a State or subdivision of a State on behalf of its citizens.  Such a provision could have significant effect on CAFA, far beyond the oil spill litigation. For example, it might impact cases like State ex rel. McGraw v. Comcast Corp., 2010 WL 1257639 (E.D. Pa. Mar. 31, 2010). In that case, the state of West Virginia, in its capacity as parens patriae, filed an action in state court alleging that a cable company's requirements concerning cable boxes constituted impermissible tying behavior, in violation of state antitrust and consumer protection laws. On removal, the federal court held that the action was a “class action” under the Class Action Fairness Act, under which the definition of a class action must be “interpreted liberally.”

The bill has been referred to the following committees: House Judiciary, Subcommittee on House Transportation and Infrastructure, Subcommittee on House Transportation and Infrastructure, Subcommittee on Coast Guard and Maritime Transportation.

Earlier this month, the House Subcommittee on Oversight and Investigations held a field hearing In Louisiana on the local impact of the Gulf oil spill.The House Subcommittee heard testimony from experts on the environment and wildlife, some of whom who warned that the full effects of the spill will not be known until the flow of oil is stopped.  But the most emotional testimony came from two widows, whose husbands died when the Deepwater Horizon Rig exploded in April. The widows urged Congress to reform the Death on the High Seas Act, but also noted that they fully support offshore drilling as essential to our nation's economy.

 

UPDATE: the House Judiciary Committee approved H.R. 5503, Securing Protections for the Injured from Limitations on Liability Act (SPILL Act), by a roll call vote of 16-11, with two Republicans, Reps. Lungren (R-Calif.) and Rooney (R-Fla.), joining the rest of the Democratic committee members in voting in favor.

FDA Official Testifies Before Congress on REMS and Sentinel

Last week, the House Energy and Commerce Committee's Health Subcommittee held a hearing on drug safety.  A quick report: Chairman Waxman's opening comments indicated that the committee was eager to hear about FDA’s implementation of the 2007 FDA Amendments Act, giving FDA the authority to require manufacturers to implement “Risk Evaluation and Mitigation Strategies” or “REMS.”

FDA Principal Deputy Commissioner Joshua Sharfstein indicated that using this REMS authority is “a work in progress” and acknowledged a "lack of clarity" in certain provisions of the law with respect to REMS. FDA recognizes that designing and implementing the most comprehensive REMS requires a careful balancing of the need to adequately manage risks and also to maintain patient access to important medications. In the design of REMS with elements to ensure safe use (the most comprehensive REMS programs), FDA is mindful, he said, that the elements to ensure safe use must not be unduly burdensome on patient access to the drug, and be designed to be compatible with established distribution, procurement, and dispensing systems for drugs.

If FDA determines that a REMS is necessary to ensure that the benefits of a drug continue to outweigh the risks of the drug, FDA can require manufacturers to have a REMS in place when a drug comes on the market, or implement one later if FDA becomes aware of new safety data. Most of the REMS with elements to ensure safe use include educating prescribers about the risks and appropriate use of the drug as a condition of certification or enrollment in the REMS program. Some programs require the prescriber to monitor the patient immediately following drug administration and for a period of time afterwards. 

The FDA official also gave a brief update on the Sentinel Initiative. FDAAA requires the HHS Secretary to develop methods to obtain access to disparate data sources and to establish a post-market risk identification and analysis system to link and analyze health care data from multiple sources. On May 22, 2008, FDA officially launched the Sentinel Initiative with the ultimate goal of creating and implementing the Sentinel System—a national, integrated, electronic system for monitoring medical product safety. The Sentinel System, testified the Commissioner, once up and running, will enable FDA to actively gather information about the post-market safety and performance of its regulated products—a significant change from the current, primarily passive safety surveillance systems. The law sets a goal of access to data from 25 million patients by July 1, 2010, and 100 million patients by July 1, 2012.

FDA has gathered public input on issues related to the creation and development of Sentinel, held numerous meetings and a public workshop, and established a working group consisting of representatives of numerous federal agencies to share information and discuss issues related to ongoing efforts that are complementary to Sentinel. FDA has awarded key contracts for a pilot project to gather information that will be essential to fully implementing the Sentinel System. As we posted about before, there is still work to be done to address significant issues with this plan.

One risk is that plaintiffs’ attorneys will find a way to misuse the system, to “find” spurious associations between drugs and effects, to assert a causal link based on the “government approved, government sanctioned” database program, and to blame the drug companies for not having seen that same link sooner. Fundamentally, the system creates a corresponding need to improve the ability to determine as quickly as possible which findings reflect a genuine and health risk. That determination may take epidemiological investigations or clinical trials before any conclusion about whether a product actually caused an event. And the new system doesn’t change the reality that sometimes patients suffer adverse events after receiving drugs because they are sick, not because the drug has any issues. Plaintiffs have no incentive to place the new product information uncovered in a context of the continuing benefits of the product for many patients, the lack of certainty in the findings, the limitations of the data, etc.

 

House Committee to Hold Hearing on FDA

The House Energy and Commerce Committee's Subcommittee on Health will hold a hearing titled, "Drug Safety: An Update from the FDA" -- tomorrow, Wednesday, March 10, 2010.

 At the hearing, the Food and Drug Administration will detail the Agency's views on current challenges and successes in the area of drug safety. Set to testify is Joshua M. Sharfstein, M.D., Principal Deputy Commissioner, Food and Drug Administration.