Court Rebuffs Forum Shopping - But Shoppers Get Bargain Anyway?

A federal court recently ordered the transfer of an action involving an allegedly defective pain pump from Minnesota to plaintiffs' home state of North Carolina, in an apparent rebuff of attempted forum-shopping. Powell v. I-Flow Corp., No. 10-1984 (D. Minn. 7/14/10).

This case is one of thousands of product liability actions filed in recent years in the District of Minnesota by plaintiffs who have no connection to Minnesota against defendants who have no connection to Minnesota regarding events that did not occur in Minnesota and that had
no impact within Minnesota.  Here, defendants are  Delaware corporations with their principal places of business in California. Plaintiff underwent shoulder surgery in North Carolina in 2001, and he and his wife sued defendants for damage to his joint that allegedly resulted from the treatment of his post-surgical pain with a pain pump made by the defendants. In short, this case had no discernible connection to Minnesota.

Presumably the plaintiffs did not file this action in North Carolina — where they live,
where the pain pump was implanted, and where plaintiffs' alleged injuries occurred —
because it is too late to sue the defendants there.  Indeed, observed the court, the vast majority of these kinds of unconnected actions have been filed in this district because, if they were filed by the plaintiffs in their home states (or almost anywhere else), they would be dismissed under the applicable statutes of limitations. The Minnesota Legislature has, however, enacted unusually long statutes of limitations, and the state court has applied them to cases such as this.  See Fleeger v. Wyeth, 771 N.W.2d 524, 525 (Minn. 2009).

The federal court noted that such forum shopping imposes heavy burdens on the District Court and
diverts the court’s limited resources away from litigants and cases that have much stronger
connections to the District of Minnesota.

Defendants moved to transfer. Section 1404(a) provides: “For the convenience of parties and
witnesses, in the interest of justice, a district court may transfer any civil action to any other
district or division where it might have been brought.” 28 U.S.C. § 1404(a). Deciding whether
to order a transfer under § 1404(a) requires a case-by-case evaluation of the particular
circumstances at hand and a consideration of all relevant factors. See Terra Int’l, Inc. v. Miss.
Chem. Corp.
, 119 F.3d 688, 691 (8th Cir. 1997). The relevant factors fall generally into three
categories: (1) the convenience of the parties; (2) the convenience of the witnesses; and (3) the
interests of justice.

All these factors, said the court, overwhelmingly favor transfer. Because none of the parties is located in Minnesota, none of the relevant events occurred in Minnesota, none of the alleged injuries has been suffered in Minnesota, and none of the evidence is present in Minnesota, Minnesota does not appear to be convenient for anyone — including the Powells, who live in North Carolina.  In fact, any state with any connection to this lawsuit would be more convenient than Minnesota.  It is true that, as a general rule, courts afford some deference to a plaintiff’s
choice of forum; but this deference “is based on an assumption that the plaintiff’s choice of forum will be a convenient one.” In re Apple, Inc., 602 F.3d 909, 913 (8th Cir. 2010). When that assumption does not hold — when, as here, the plaintiff has chosen an inconvenient forum — the plaintiff’s choice of forum fades in importance.

The plaintiffs also argued that keeping all of the pain-pump cases like this one in Minnesota would further the interests of justice because the cases could be litigated more efficiently if they were all
litigated in the same district. But by this logic, plaintiffs’ lawyers could routinely force a “de facto” MDL on a district simply by filing enough similar cases in that district. This would allow plaintiffs’ lawyers to sidestep the MDL process — the very mechanism that federal courts have implemented for handling mass-tort actions.  In fact, the JPML has twice declined to consolidate pain-pump cases into an MDL. See In re Ambulatory Pain Pump-Chondrolysis Prods. Liab. Litig., MDL No. 2139, 2010 WL 1790214 (JPML May 5, 2010); In re Shoulder Pain Pump-Chondrolysis Prods. Liab. Litig., 571 F. Supp. 2d 1367 (JPML 2008).

One interesting tidbit, even though transferred, because the plaintiffs originally filed suit in Minnesota, the Minnesota statutes of limitations may travel with this case.  That is, if, under Minnesota’s choice-of-law rules, the Powells are entitled to the benefit of Minnesota’s statute of limitations, they may retain that benefit in the Eastern District of North Carolina. See Ferens v. John Deere Co., 494 U.S. 516, 523 (1990) ( § 1404(a) transfer does not change the law applicable in a diversity case); Eggleton v. Plasser & Theurer Export Von Bahnbaumaschinen Gesellschaft, MBH, 495 F.3d 582, 586 (8th Cir. 2007) (after a § 1404(a) transfer, “the transferee court applies the
choice-of-law rules of the state in which the transferor court sits”).  Thus, it may have been a rewarding shopping trip.

JPML Denies MDL Status to Pain Pump Litigation- Again

For the second time, the JPML has declined to consolidate the federal product liability cases involving pain pumps. In re Ambulatory Pain Pump-Chondrolysis Products Liability Litigation, J.P.M.L., MDL No. 2139 (4/14/10).

In the litigation, plaintiffs allege that they developed chondrolysis, i.e., damage to their joint cartilage, after pumps were used to directly send anesthetic into their shoulder joints following surgery.

In August, 2008 the Panel had denied the motion for centralization in MDL No. 1966, at at time the  docket involved a total of thirteen actions, as well as eighteen potential tag-along actions.  At that point, the panel noted that an indeterminate number of different pain pumps made by different manufacturers were at issue, as were different anesthetic drugs made by different pharmaceutical companies. Moreover, not all of the then-thirteen constituent actions involved pharmaceutical company defendants, and many defendants were sued only in a minority of those actions.

When the litigation grew to 102 actions in 26 districts, and 70 tag-alongs, the plaintiffs tried again. Most defendants opposed the renewed effort. But although the number of related actions had certainly grown, the Panel found that the issues that weighed against centralization in that earlier docket remain. An indeterminate number of different pain pumps made by different manufacturers are still at issue, as are different anesthetics made by different pharmaceutical companies. Most, if not all, defendants are named in only a minority of actions; and several defendants are named in but a handful of actions. Many actions involve no anesthetic manufacturers at all.

In the current litigation, individual issues of causation and liability continue to appear to  predominate, and remain likely to overwhelm any efficiencies that might be gained by centralization. Pain pumps come in different sizes and designs, with differing volume, duration, and flow capacities. The same anesthetic was not used in all surgeries. Plaintiffs have different medical histories (indeed, some have undergone more than one surgery involving a pain pump).

Third, said the Panel, the constituent actions are at widely varying procedural stages. In many, fact
discovery is either over or nearly over. The record showed that expert discovery is underway or has
been completed in a number of actions. It was also noted that while most plaintiffs supported the motion, others requested exclusion on the ground that their cases were too far advanced.

Thus, the Panel was not convinced that centralization would serve the convenience of the parties or promote the just and efficient conduct of the litigation taken as a whole.


 

Summary Judgment for Drug Company in Pain Pump Case

A federal court has granted defendant summary judgment in a case which alleged that cartilage damage sustained by the plaintiff, a former high school athlete, was caused by the post-surgery use of the drug company’s pain medication in an automated pump device. Jensen Meharg, et al. v. I-Flow Corp., et al., No. 1:08-cv-00184 (S.D. Ind. 3/1/10).

The former high school athlete underwent shoulder surgery, after which a pain pump was utilized. The pain pump in question was manufactured and sold by I-Flow Corporation; the local anesthetic–bupivacaine Hcl – was manufactured and sold by defendant AstraZeneca.  AstraZeneca did not in any way promote the use of bupivacaine with pain pumps, and that use was not mentioned in the instructions and warnings provided with the drug -- an off-label use. Several months later, plaintiff began to experience shoulder pain again. An MRI allegedly revealed that plaintiff had developed chondrolysis in her shoulder, which she alleged was caused by the post-surgery administration of the bupivacaine with the pain pump.

The strict liability claim was for alleged failure to warn; a warning defect claim requires that defendant had a duty to warn.  Duty is generally a legal issue.  In the context of a prescription drug manufacturer, the duty to warn does not arise until the manufacturer knows or should know of the risk.  In cases that involve an off-label use of a prescription drug that is not promoted by the manufacturer, the requisite knowledge of the risk, at a minimum, includes that the manufacturer must know (or be charged with knowledge of) both that the off-label use is occurring and that the off-label use carries with it the risk of the harm at issue – in this case, damage to cartilage.

The court found as a matter of law that the information allegedly possessed by defendant was insufficient to trigger AstraZeneca’s duty to warn of the risk of cartilage damage from continuous infusion of bupivacaine into a patient’s joint. Simply put, the plaintiff failed to point to sufficient evidence that demonstrated that at the time of plaintiff’s surgery AstraZeneca knew of that risk or that it should have known of the risk because experts in the relevant field had such knowledge.

More interesting was plaintiff's other theory. Plaintiff's expert also opined that prior to plaintiff’s surgery the defendant supposedly knew that bupivacaine was being used in pain pumps, and that this knowledge triggered an alleged duty to “investigate the nature of that use, determine whether the drug was being promoted in accordance with approved indications, conduct or sponsor those studies necessary to ensure that the promoted use was safe, and to warn physicians that long-term risks to the joint had not been scientifically established but that the risks should be weighed seriously, given that the anticipated use was for elective post-operative pain therapy for which multiple alternatives existed.”  The court noted that such a  “duty” does not exist under relevant (Indiana) law.  The duty to warn does not arise until the manufacturer knows or should know of the risk.  The alleged far broader duty  – a  duty, in essence, to warn physicians that there might be a risk, although we don’t know yet because neither we or the scientific community at large has studied it yet -- doesn't exist.

Such a duty would cause physicians to be inundated with such pseudo-warnings and quasi-risk information distracting them from heeding real warnings of actual risk; and it would add very little to the fact that physicians already know, i.e., that if a use is omitted from a prescription drug’s label, that use has not been tested sufficiently to demonstrate to the FDA that it is safe and effective.

Summary Judgment Granted on Successor Liability Claim

The issue of successor liability is a recurring one in products liability, and the specter of mass tort liability should be an important aspect of due diligence in corporate acquisitions. This point is illustrated by a recent case in which the federal court in Oregon granted summary judgment to alleged successor corporations of a company that manufactured allegedly defective pain pumpsCox v. DJO LLC, Case No. 07-1310 (D. Or. 11/16/09).

Plaintiffs underwent arthroscopic shoulder surgery in which surgeons inserted pain pump devices in their shoulder joints to deliver pain medication via catheter.  Plaintiffs alleged they subsequently developed glenohumeral chondrolysis - a condition involving the deterioration and loss of cartilage in the shoulder joint.  McKinley LLC manufactured the pain pumps devices, part of product lines known commercially as the Accufuser and beeLINE.  Plaintiffs alleged strict products liability and negligence against McKinley LLC as the manufacturer, and against Moog Inc. and Curlin Medical Inc. as successors in interest. Defendants Moog and Curlin moved for summary judgment on plaintiffs' claims that they were liable as the successor corporations, arguing that the acquisition of the Accufuser and beeLINE product lines was nothing more than a purchase of assets that cannot establish successor liability.

Under Oregon law, as is the general rule, when a corporation purchases the assets of another corporation, the purchasing corporation generally does not assume the debts and liabilities of the selling corporation. However, the purchaser may be responsible for the seller's liabilities if: 1) the purchasing corporation expressly or impliedly agrees to assume those liabilities; 2) the transaction
constitutes a consolidation or merger of the corporations; 3) the purchasing corporation is a "mere continuation" of the selling corporation; or 4) the corporations effectuated the transaction for
fraudulent purposes to escape liability.

The court reviewed the possible exceptions. First, Moog and Curlin did not expressly or impliedly agree to assume liability arising from pain pump products manufactured and sold by McKinley LLC prior to the conveyance of assets. To the contrary, the Assignment and Merger Agreement expressly and specifically identified the existing liabilities that were transferred after the merger.

Second, despite plaintiffs' repeated assertions, neither Moog nor Curlin merged or consolidated with McKinley LLC. Instead, it is undisputed that Curlin merged with McKinley Medical Corp., a separate corporation,  and acquired the Accufuser and beeLINE product lines as a result. That is, Moog and its wholly owned subsidiary, Curlin, entered into an agreement to purchase McKinley LLC's Accufuser and beeLINE product lines. Under the terms of the agreement, McKinley LLC transferred these product lines to McKinley Medical Corp., a subsidiary it created solely for purposes of the asset transfer. Curlin then merged with McKinley Medical Corp. and acquired the product lines. Plaintiffs tried to imply that this transaction constituted a de facto merger between McKinley LLC and Moog/Curlin, because it effectively continued the pain pump business of McKinley LLC. Plaintiffs emphasize that the manufacture, distribution, and sales of the Accufuser and beeLINE pain pumps continued uninterrupted. However, Oregon has explicitly rejected a "product line" exception to the general rules governing successor liability.

Third, the evidence did not support a finding that Moog or Curlin is a "mere continuation" of McKinley LLC. "A successor corporation is merely a continuation of the predecessor
corporation, despite a business transformation, if it is substantially the same as the predecessor corporation." Alicki v. Intratec USA, Inc., 769 F. Supp. 336, 340 (D. Or. 1991). Here, importantly, McKinley LLC retained assets after the Assignment and Merger Agreement and distributed the Walkmed pain pumps until 2007. McKinley LLC remains an existing, separate corporate entity and an active defendant in this cases.  Moreover, no continuity of management, directors, or
shareholders exists between McKinley LLC and Curlin or Moog.

Finally, plaintiffs presented no persuasive evidence that the corporate forms of McKinley LLC, Curlin, or Moog were improperly manipulated for purposes of fraud, or that the Assignment and
Merger Agreement left McKinley LLC insolvent or otherwise unable to answer for its debts.

Summary Judgment For Manufacturer in Pain Pump Litigation

In what appears to be the first substantive decision to come out of the multiple suits alleging that a pain pump medical device damages patients, a federal court has granted summary judgment to the defendant. Kilpatrick v. Breg, Inc., No. 4:08-cv-10052 (S.D. Fla. 6/26/09). Judge Michael Moore ruled in favor of medical device manufacturer Breg, finding that the plaintiff, who alleged damage to his shoulder cartilage, did not provide enough reliable expert evidence to link the condition to the defendant's shoulder pain pump.

Plaintiff Kilpatrick underwent arthroscopic shoulder surgery in 2004 after an orthopedic specialist discovered a tear in his shoulder socket.  To help with post-operative pain, the surgeon inserted a pain pump into plaintiff's shoulder, which would allow the doctor to administer an anesthetic via a catheter in the patient's arm. The surgeon injected bupivacaine into the pump's attached catheter and further filled it with 100 cc's of anesthetic, which was to be delivered into Kilpatrick's shoulder over the next 48 hours.  Plaintiff alleges that he began experiencing severe pain in his shoulder in 2006. An orthopedic surgeon diagnosed the pain as glenohumeral chondrolysis, a deterioration of the cartilage, and Kilpatrick underwent shoulder replacement surgery. He then brought suit, alleging negligence, strict products liability, and violations of Florida's Deceptive and Unfair Trade Practices Act.  Kilpatrick claimed that using the Breg pain pump to administer local anesthetic directly into his shoulder joint caused him to develop post-arthroscopic glenohumeral chondrolysis.

The reliability prong of the Rule 702 analysis was the central issue.  Breg argued, and plaintiff apparently did not contest, that the case should be treated like a toxic tort case for purposes of the Daubert inquiry, in that plaintiff had to offer proof of both general and specific causation. “If anything, determining causation in this case requires an even more complex logical chain than the typical toxic tort case, because the key issue is not merely whether a chemical compound could and did cause injury, but whether that compound as delivered via a particular medical device inserted in a particular location (within Kilpatrick's shoulder joint) could and did cause injury,” the court found.

The summary judgment motion focused first on general causation, and the ability of plaintiff's expert to opine adequately under Daubert that the device can cause this type of injury.  The causes of chondrolysis remain disputed, and experts in the medical community have pointed to autoimmune deficiencies, certain kinds of sutures, thermal energy procedures and contrast dyes made from gentian violets as possible risk factors.  Plaintiff's expert admitted it was a still developing science.

Plaintiff's expert relied on several published studies to attempt to show causation, which were not directly on point, and the Court found that his extrapolations from the studies were not warranted either.  None of the articles were based on controlled, randomized epidemiological studies of human beings, which are the best evidence. “Significantly, none of the articles explains the mechanism by which bupivacaine damages cartilage, each has important limitations that Poehling does not take into account, and none of them offers an ultimate conclusion as to the general causation of glenohumeral chondrolysis,” the court noted. At most they suggest a possible association.  Association is not causation.  As for the animal studies, the expert did not explain the possible differences in dose-response relationship between humans and rabbits, an important factor to consider in evaluating whether an alleged exposure caused an adverse effect. 

As to specific causation, as is typical of many plaintiff experts, Poehling described a process of so-called "differential diagnosis," trying to rule out other suspected causes such as thermal energy and gentian violet, the contrast dye sometimes used during arthroscopic surgery. This approach cannot, observed the court, make up for a fundamental lack of adequate proof about the general toxicity of the substance.  To "rule in" one cause, even while ruling out other causes, requires a sufficient general causation proof.  At its base, however, the conclusion on specific causation still would be unreliable, the court said, as it was "ultimately rooted in nothing more than temporal relationship.”   That before/after focus is not the basis of good science, the court said, “and Poehling's dependence upon it further weakens the reliability of his methodology.”  Significantly, the expert had not offered a sufficient explanation of the background risk for genohumeral chondrolysis, casting further doubt on the reliability of the chosen method. He admitted that not only the pain pump — as a kind of drug delivery system — could have caused the injury, but also the anesthetic delivered via the pain pump.  Poehling's concession that the current state of medical literature is still unsettled about the cause of the plaintiff's condition seriously undermines the reliability of his methodology, the court concluded.  His methodology had no known rate of error, and thus all he had was a hypothesis that “may be exactly right,” but that currently is “merely plausible, not proven.”

It will be interesting to see what impact the approximately 300 suits pending against pain pump manufacturers in state and federal courts.