Report Issued on "New Lawsuit Ecosystem"

The U.S. Chamber of Commerce Institute for Legal Reform has released a report examining the developing lawsuit “ecosystem” and areas of litigation of most concern to the business community. The report examines the trends and players in six key litigation areas, offers insights into new emerging liability threats, and explores the growing alliance between state attorneys general and the plaintiffs’ bar.  One key feature notes how alleged deceptive marketing claims against food and beverage makers are on the rise.  Readers will recall our many posts about the trend for plaintiffs to parse labels and bring putative class actions even when they were not injured by the product. The report is entitled "The New Lawsuit Ecosystem.”

The report delves into the areas of law where entrepreneurial plaintiffs’ lawyers have been prospecting for new liability: Class actions against food makers alleging misleading advertising;
Data privacy suits against businesses over allegations that they inadvertently violated released or misused customer information; Claims against brand-name drug manufacturers for injuries allegedly stemming solely from generic products they did not make or sell; Speculative theories of liability seeking to recover for risks of harm or “economic loss,” not actual injuries.

The report also looks at the increasingly troubling trend of state attorneys general turning over the keys to their offices and litigation powers to private plaintiffs’ lawyers. Plaintiffs’ lawyers often develop the legal theories, decide whom to target, and then “recruit” state attorneys general
to retain them on a contingency fee basis to bring the lawsuits. This process provides significant advantages to plaintiffs’ lawyers: it eliminates the need to represent individuals who were actually injured by a defendants’ product or conduct; avoids any contribution those individuals may have
made to their own injuries; reduces traditional defenses; heightens the plaintiffs’ lawyers’ subpoena power; and gives them the ability to seek fines, not just damages. State attorneys general have these powers because they are to be used sparingly, and only to advance appropriate public policies. They are not to be used to maximize personal profit, which is the goal
of private contingency fee lawyers who are often personal or political allies of the state attorneys general.

Very interesting read.


Among those contributing to the report were my colleagues Mark Behrens, Phil Goldberg, Victor E. Schwartz and Cary Silverman.

EPA Releases Draft Toxicology Assessment of Formaldehyde

The Environmental Protection Agency has released a draft toxicological review of formaldehyde, entitled "Toxicological Review of Formaldehyde Inhalation Assessment: In Support of Summary Information on the Integrated Risk Information System (IRIS).''  (EPA's IRIS is a human health assessment program that evaluates quantitative and qualitative risk information on effects that may result from exposure to chemical substances found in the environment. )

EPA announced a 90-day public comment period and a public listening session for the external review draft human health assessment.  The draft assessment was prepared by the National Center for Environmental Assessment (NCEA) within the EPA Office of Research and Development (ORD). EPA said it was releasing this draft assessment for the purpose of pre-dissemination peer review.  Also, a committee of the National Research Council, acting under the auspices of National Academy of Sciences (NAS), will conduct an independent scientific peer review of the EPA draft human health assessment of formaldehyde. The peer review committee will hold meetings, some of which may involve public sessions. Public sessions will be announced before each meeting on the National Academies Web site.  The public comment period and NAS scientific peer review are separate processes that are supposed to provide opportunities for all interested parties to comment on the assessment.

Formaldehyde is present in a wide variety of products including some plywood adhesives, abrasive materials, insulation, insecticides and embalming fluids. The major sources of anthropogenic emissions of formaldehyde are motor vehicle exhaust, power plants, manufacturing plants that produce or use formaldehyde or substances that contain it (i.e. glues), petroleum refineries, coking operations, incinerating, wood burning, and tobacco smoke, says the EPA.  It is used in industry to manufacture building materials and numerous household products and consumer products, including some soaps, shampoos, and shaving cream. 

Of course, alleged exposure to formaldehyde has been involved in numerous toxic tort suits as well as consumer fraud actions.

The draft assessment found that formaldehyde could be more likely to cause cancer than in previous EPA calculations. In the draft, EPA now estimates there could be up to one case of cancer for every 1,000 people breathing formaldehyde at concentrations of 20 parts per billion over their lifetime.  The draft assessment also provides for the first time an agency estimate of a reference concentration (RfC). Lifelong inhalation of formaldehyde at concentrations up to that RfC would not be expected to cause breathing, immune, reproductive, and other non-cancer health effects.

At Section 4.5.4, the report concludes that human epidemiological evidence is sufficient to conclude there is a causal association between formaldehyde exposure and nasopharyngeal cancer, nasal and paranasal cancer, all leukemias, myeloid leukemia and lymphohematopoietic cancers as a group. But, for example, it is questionable whether there really is a demonstrable link between formaldehyde and leukemia.  And the evidence does not appear to support a causal link between formaldehyde and  upper-respiratory tract cancers. See the critical comments of other federal agencies.

Any regulatory decision on this important chemical based on incomplete information could cause significant harm to the economy, as many products critical to the home and commercial building, automotive and aerospace industries, as well as defense-related applications and vaccines used worldwide to prevent polio, cholera, diphtheria, and other major diseases, all use it.  All living things — including people — produce and process formaldehyde. It occurs naturally in the air we breathe and does not accumulate in the environment or in plants, animals or people.

Rep. Henry A. Waxman (D-Calif.) has stated that the draft report is another reason to reform the Toxic Substances Control Act.  He plans to introduce such a bill this Summer. Also, legislation that would amend TSCA to set formaldehyde emissions limits for plywood and other composite wood products was reported out last month by the House Energy and Commerce Committee.  See H.R. 4805, The Formaldehyde Standards for Composite Wood Products Act.

Update: and an alert reader points out that the Senate just this week passed its own version, S.1660, the Formaldehyde Standards for Composite Wood Products Act.  The Senate bill would make the formaldehyde emission standard contained in the California Code of Regulations (relating to an airborne toxic control measure to reduce formaldehyde emissions from composite wood products, as in effect on July 28, 2009) applicable to certain hardwood plywood, medium-density fiberboard, and particleboard sold, supplied, offered for sale, or manufactured in the United States, with certain exemptions, including for composite wood products used inside new vehicles, rail cars, boats, aerospace craft, or aircraft.

State Court Affirms Exclusion of Expert Evidence in Accutane Case

A New Jersey appellate court recently affirmed a trial court's decision that an Accutane plaintiff's expert's study must be excluded as unreliable. See Palazzolo v. Hoffmann La Roche Inc., 2010 WL 363834 (N.J. Super. Ct., 2/3/10).

Plaintiffs filed a product liability and consumer fraud complaint against defendants claiming that Accutane, a drug used to treat acne, caused their family member to develop depression which led to his suicide. They contended that at the time of his death in 1997, Accutane should have carried a warning label concerning the possibility that the drug could cause depression and suicide.

As one element of their product liability cause of action, plaintiffs needed to establish “general causation,” by showing that Accutane can cause depression and suicide. See Kemp v. State, 174 N.J. 412, 417 (2002); Coffman v. Keene Corp., 133 N.J. 581, 594 (1993). On that issue, plaintiffs retained Dr. James Bremner, as an expert.  Plaintiffs paid Bremner to undertake a study of the issue; there was no dispute that the study was commissioned specifically for use in this litigation.

In the study at issue, Bremner and a team of other scientists used positron emission tomography (PET) technology to compare changes in brain metabolism between two groups of subjects being treated for acne. One group was receiving antibiotic treatment and the other group was being treated with Accutane.  According to Bremner, the PET study demonstrated that the subjects treated with Accutane showed decreased metabolism in the orbital frontal cortex, a portion of the brain associated with depression. He published an article about the study in a scientific journal, describing his methodology and his conclusions. Based largely but not entirely on the PET study, he issued an expert report opining that Accutane can cause depression and suicide.

Defendants challenged the evidence. In deposition and at a hearing, Bremner was repeatedly confronted with potential problems in the PET study, including missing data, inaccurate data, and deviations from the methodology he claimed to have followed. As a result, in the middle of the Rule 104 hearing, the court permitted Bremner to re-work his study data and issue a supplemental expert report and allowed defendant to re-depose him. The trial court then excluded the evidence.

The court of appeals affirmed. First, Bremner did not actually use the methodology he claimed to have used. Although his PET scan article was peer-reviewed, he admitted that he did not in fact follow the steps described in the article. Significantly, contrary to representations made in the article, he did not get before-and-after questionnaires from many of the subjects.  Those questionnaires were designed to elicit the extent to which the subjects might be worried about their acne. This was relevant because some scientists were of the view that worrying, as well as depression, could affect activity in the orbital frontal cortex.

Secondly, Bremner also could not document much of the data on which his published results were based. Third, he admitted that some of the statistical analysis was inaccurate. For example, in the hearing session, Bremner admitted that, for each study participant, comparing the activity in the orbital frontal cortex with the activity in the whole brain revealed no difference between the subjects who took Accutane and those who took antibiotics.

The court noted that an expert's scientific peers cannot fairly judge the expert's written work, including whether it is worthy of publication, if his article does not accurately represent either the underlying data or what the author did to produce his results. In essence, Bremner's study was not  soundly and reliably generated.

There also was no error in precluding Bremner from providing supplemental reports or information after the Rule 104 hearing record closed. The judge allowed Bremner multiple opportunities to correct errors in his study before the record closed. The orderly conduct of litigation demands that expert opinions reach closure. See Miller v. Pfizer, Inc., 356 F.3d 1326, 1334 (10th Cir.), cert. denied, 543 U.S. 917 (2004).

The court of appeals remanded the case for consideration whether, even without the PET study, Dr. Bremner can still offer an opinion that Accutane can affect the brain and produce depression.