Worth our note is a recent preemption decision in  In re Fosamax (Alendronate Sodium) Products Liability Litigation, 2022 WL 855853 (D.N.J. March 23, 2022).  The case is noteworthy because it contains a cogent and well-reasoned exploration of many of the issues flowing from the Supreme Court’s decision in Merck Sharp & Dohme Corp. v. Albrecht, 139 S. Ct. 1668 (U.S. 2019).  Albrecht, of course, clarified some of the language in Wyeth v. Levine, 555 U.S. 555 (2009), particularly with regard to the need in a warnings context that there should be clear evidence that the FDA would have rejected the plaintiff’s proposed alternative label.

Since Wyeth, plaintiffs facing preemption motions have advanced a litany of arguments trying to turn the clear evidence language into an insurmountable hurdle, no matter the procedural posture, and no matter how clear the record before the agency.  When all else failed, plaintiffs argued that there were “fact issues” that had to go to a jury.  Albrecht ended that one, noting preemption is a legal issue for the court, even as to subsidiary fact questions.  Fosamax addresses many of the other typical arguments, including reconfirming the only commonsense reading of Wyeth, that the manufacturer does not have to actually request that the agency adopt plaintiffs’ label, but that preemption may be established by reference to what the FDA would have done if faced with a label change.  Of course, out of  the many decisions since Albrecht, none appears to have agreed with plaintiffs on this point.  The court also confirmed that enough is enough: that is, while plaintiffs argued that the defendant could have, perhaps, theoretically, changed the FDA’s decision had defendant somehow not taken “no” for an answer but went on engaging with the Agency or invoked other procedural mechanisms, that is not required.  Importantly, the possibility of a possibility is not enough to defeat preemption. And there is no need to force these obviously litigation-driven steps.

We also like, in the discussion of whether the FDA was fully informed of the risk that plaintiffs are now complaining about, how the court noted that the FDA alone is the arbiter of which data and information is or is not material to its decision to approve or reject a change to a drug’s label; it is the FDA’s view of the evidence that matters, as opposed to only plaintiffs’ experts’ view.  Typically, plaintiffs will hire a “regulatory expert” who tries to opine about not only what the FDA would have done or said, and what the agency really meant to say, but also what evidence the FDA would have considered relevant or material, regardless of Agency regulations, guidance, and statements about what they considered and what they find important.

When the FDA is fully informed, from whatever source, of the alleged risks, then a huge hurdle exists for plaintiffs trying to show that a manufacturer could have changed the label unilaterally.  It is the inability to do so that sets up the conflict, the impossibility of complying with plaintiffs’ view of state law (requiring a warning) and federal law (dictating the label as is).  A CBE change, the court reiterated, permits a drug manufacturer to unilaterally add a precaution to its label, but only if newly acquired information provides reasonable evidence of a causal association of a clinically significant adverse reaction linked to a drug. If the FDA was fully informed at the relevant time, then there is no newly acquired information.

Another common plaintiff argument has been that the agency must reject the formal request of the kind plaintiff thinks the manufacturer should have made, procedurally.  But the court explained that a rejection of a PAS request subsumes any request under the CBE avenue.  And final agency action, for preemption purposes, can include a “complete response letter” because it reflects the FDA’s complete review of the data submitted.  Importantly, for  preemption purposes, it is mostly irrelevant whether the the FDA letter was of a merely tentative or interlocutory nature or needed some additional FDA action to close out the record, or leave some procedural door open for a party to ask again.

Finally, and this is a drum we have been banging on for a while, silence can be golden.  That is, the FDA has a statutory obligation to respond to any product-related information it receives, from any source, such as Adverse Event Reports, published studies, etc.  Plaintiffs want the courts facing preemption challenges to simply ignore the FDA’s raison d’etre to regulate drug safety,  and its independent legal duty to notify a manufacturer as soon as it becomes aware of new safety information that the FDA believes should be included in the labeling of a drug, and to initiate discussions about new labeling. Courts should not simply assume that the FDA has not done what the statute requires it to do, as opposed to having done it and come to a conclusion (no action needed) that plaintiffs do not like.  Indeed, said the court, the only valid inference is that the FDA was unconvinced of an issue requiring amendment, here that the Agency did not believe there was reasonable scientific evidence of a causal association between bisphosphonate use and atypical femoral fractures. And related to this, the FDA will not approve a warning simply out of an abundance of caution whenever a manufacturer posits an association between a drug and an adverse event. As the FDA has long recognized, exaggeration of risk, or inclusion of speculative or hypothetical risks, could discourage appropriate use of a beneficial drug. Because labeling that includes theoretical hazards not well-grounded in scientific evidence can cause meaningful risk information to lose its significance, the FDA prohibits a change to labeling, either through the PAS or CBE process, to add a Precautions warning in the absence of sufficient reasonable evidence of an association. This represents a more conservative approach than state tort law, which generally incentivizes a manufacturer to warn about every conceivable hazard to limit liability.

Today’s case involves a New York federal court dismissing a proposed class action alleging that the labeling on  “slightly sweet” chai tea lattes misleads consumers into thinking the drinks are low in sugar. Brown v. Kerry Inc., No. 1:20-cv-09730 (S.D.N.Y. 3/7/22).

Plaintiff asserted claims under the NY General Business law, and common law negligent misrepresentation, fraud, and unjust enrichment.  Relying on the analysis of the magistrate judge, the district court dismissed all claims.

The court noted that above the product’s name are the phrases “Slightly Sweet” and “A Less Sweet Twist on Our Authentic Chai.”  On the back label,
beneath the language “Slightly Sweet Chai Tea Latte,” the label states: “We get it – you have a particular palate. We’ve taken our original recipe . . . and removed some sweetness for those who know exactly what they want.”  Plaintiff claimed that she and other consumers are led to believe – based on the
“Slightly Sweet” language – that the product is low in sugar, when in fact each serving contains eleven grams of sugar, which allegedly exceeds the regulatory definition of low sugar products

Defendant argued that label was  not “materially misleading,” an element, because (1) “Slightly Sweet” describes flavor rather than its ingredients;
(2) “Slightly Sweet” is non-actionable puffery; and/or (3) the packaging – including the nutritional information printed on the side label – dispels any potential confusion regarding the Product’s sugar content. In rejecting plaintiff’s argument that the “Slightly Sweet” language is “materially
misleading,” the court was not required to accept plaintiff’s conclusory allegations that reasonable consumers would construe the allegations as misleading.

The court went on to conclude that the “Slightly Sweet” label language is “mere puffery,” because “it provides no objective measurement or indication of the amount of sugar in the product, and refers instead to a subjective claim about the Product’s level of sweetness that cannot be proven either true or false.” See Sommer v. Snapple Beverage Corp., No. 20-CV-04181-JST, 2021 WL 6754525 (N.D. Cal. Sept. 20, 2021) (tea beverage labeled as “Sorta Sweet”); Mazella v. Coca-Cola Co., 548 F. Supp. 3d 349 (S.D.N.Y. 2021) (tea beverage labeled as “Slightly Sweet”); Salazar v. Honest Tea, Inc., 74 F. Supp. 3d 1304 (E.D. Cal. 2014) (tea beverage labeled as “just a tad sweet”)).

The opinion also notes that the “context of the label as a whole” suggests that “Slightly Sweet” is a representation about the product’s “taste profile, rather than the amount of sugar” it contains. In this regard, the label addresses sweetness in the context of consumers’ “palates.” And the product’s nutritional information – which is also part of the label – “explicitly states the amount of sugar and number of calories” in the product. The nutritional information “dispel[s]” “any ambiguity or confusion regarding the Product’s sugar content.”

Finally, the court found plaintiff’s proffered consumer survey data unpersuasive, noting that the surveys did not actually “demonstrate[e] that consumers understand ‘Slightly Sweet’ to mean ‘low sugar’ or ‘low calorie.’”

Another case in the tug of war between manufacturers wanting to describe their products in both an appealing and accurate way, and the plaintiff bar’s microscopic scrutiny of food and beverage labels.

A good read on an important topic: my Public Policy Group colleagues Chris Appel and Mark Behrens recently published an article in the latest ABA TIPS section magazine, The Brief, titled “Florida Supreme Court Leads on Apex Doctrine.” Vol. 51, No.2 (Winter 2022), The article discusses a recent amendment to the Florida Rules of Civil Procedure, adopted by the Florida Supreme Court on its own motion, to shield corporate officers from abusive discovery.

Our readers may find  the article to be of interest.

My partner Joe Blum and I recently published an article on Mallory v. Norfolk Southern Railway Co. and the General Jurisdiction Consent Battle.

We discuss that courts have continued to address the theory that a corporate defendant consents to personal jurisdiction in a state’s courts merely by registering to do business in that state. Such cases raise serious issues of Constitutional interpretation.

In the seminal decision International Shoe Co. v. Washington, 326 U.S. 310 (1945), the United States Supreme Court clarified that the Due Process Clause of the Fourteenth Amendment protects the defendant’s liberty interest in not being subject to the binding judgment of a forum with which the defendant has insufficient “contacts, ties, or relations.” International Shoe made it clear that a tribunal’s authority depends upon the defendant’s minimum contacts with the forum state such that the maintenance of the suit “does not offend traditional notions of fair play and substantial justice.”  Recent jurisprudence has made clear that a corporation is at home for general jurisdiction where it is incorporated, or where it has its headquarters, and almost never anywhere else.

The plaintiffs’ bar has increasingly turned to business registration statutes as a vehicle to argue personal jurisdiction by consent, even if the statute provides inadequate notice, and even when a foreign corporation is given no choice, making the waiver of due process rights an unconstitutional condition. We discuss the recent cases and the chances the Supreme Court will take on this issue.

 

 

 

We are approaching the second anniversary of the Covid pandemic, at least measured in the time that many law firms were forced to close offices and have attorneys work from home.  That time has seen saddening numbers on illness and death, amazing scientific breakthroughs by the life sciences industry (including clients of our firm), and challenging legal issues (who knew force majeure would return to conjure up contracts class?).

As important as the physical health challenges of Covid — and here’s hoping all our faithful readers have been taking due care — we worry as well about the mental health of the profession.

ALM’s Mental Health and Substance Abuse Survey was conducted about a year ago and another is starting up.  The survey input from more than 3,200 respondents. lawyers and professional staff at law firms of all sizes across the globe.  It found that more than a third of respondents feel they are depressed, more than two out of three feel they have anxiety, and one in seven feel they have a drug or alcohol problem.

It should be of great concern and greater focus when a majority of legal professionals believe their mental well-being is worse off as a result of their chosen career. And media reports indicate the problem is worsening, not getting better.  Clearly the isolation imposed by the pandemic, lockdown issues, and the disruption of work routines have all contributed.

Some firms have instituted programs to help — and that’s a good thing.  Experts offer other thoughts:

-Share personal experiences with others to help reduce stigma, when appropriate.

-Be open-minded about the experiences and feelings of colleagues. Respond with empathy, offer peer support, and encourage others to seek help.

-Adopt behaviors that promote stress management and mental health.

-Eat healthy, well-balanced meals, exercise regularly, and try to get enough sleep at night.

-Take part in activities that promote stress management and relaxation, such as yoga, meditation, mindfulness, or tai chi. Do what works for you.

-Build and nurture real-life, face-to-face social connections.

-Take the time to reflect on positive experiences.

-Set and work toward personal, wellness, and work-related goals.

-Most of all, ask for help when it is needed.

Hopefully, we see a light at the end of the tunnel, despite variants, but this is a huge issue for the profession that predated Covid and will not go away with boosters.

For those of our readers with access to the Law360 universe, my partner Hildy Sastre and I just published an article on Important Product Liability Practice Trends To Watch In 2022.

In honor of Punxsutawney Phil we venture predictions for the year ahead. The last year has seen several important legal developments relevant to product liability, including in the areas of personal jurisdiction, preemption and class action procedure. This year promises interesting developments in these same subject areas.

 

 

Very pleased to share the news that the Firm’s team  has been named Cybersecurity Group Of The Year by Law360.  My colleague Al Saikali heads a 30-laywer, multi-office team that handles all aspects of data and privacy, with particular emphasis on state and federal data privacy
compliance, privacy litigation matters, and biometric privacy issues.

 

Congratulations to this team!

 

Cases out of New York involving food products catch our eye these days, as NY threatens to become the new “food court.”  Today’s post involves Eric Parham  v. ALDI, Inc., No. 19 CIV. 8975 (PGG), 2021 WL 4296432 (S.D.N.Y. Sept. 21, 2021).

Plaintiff asserted false advertising claims under New York General Business Law (“GBL”) §§ 349 & 350 against defendant pertaining to an unsweetened vanilla almond milk product.  The complaint was dismissed without leave to file a second amended complaint.

Plaintiff claimed he purchased an organic unsweetened almond milk purporting to be flavored only with vanilla at various Aldi stores, including an Aldi store in the Bronx.   Plaintiff alleged he purchased “the Product because he liked the product type for its intended use and expected its vanilla flavor to not to be enhanced by artificial flavors….” The front label of the Product contains the brand name “Friendly Farms” at the top, along with a banner that says “Organic.”  Under the banner is the word “Almond” in larger font, below which the words “unsweetened” and “vanilla” appear. Plaintiff contended that the label’s representations were misleading because although the characterizing flavor is represented as vanilla, its flavor is  not derived exclusively from vanilla beans, contains non-vanilla artificial flavors that are not disclosed to consumers on the front label or ingredients list.

To survive a motion to dismiss, a complaint must contain sufficient factual matter, accepted as true, to state a claim to relief that is plausible on its face. Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007)).  A complaint is inadequately pled if it tenders naked assertions devoid of ‘further factual enhancement, Iqbal, 556 U.S. at 678 (quoting Twombly, 550 U.S. at 557), and does not provide factual allegations sufficient to give the defendant fair notice of what the claim is and the grounds upon which it rests. Port Dock & Stone Corp. v. Oldcastle Northeast, Inc., 507 F.3d 117, 121 (2d Cir. 2007).

To successfully assert a claim under either GBL §§ 349 or 350, a plaintiff must allege that a defendant has engaged in (1) consumer-oriented conduct that is (2) materially misleading and that (3) plaintiff suffered injury as a result of the allegedly deceptive act or practice. Beck v. Manhattan Coll., 20 Civ. 3229 (XLS), 2021 WL 1840864, at *5 (S.D.N.Y. May 7, 2021), An act is deceptive within the meaning of the New York statute only if it is likely to mislead a reasonable consumer. Id.  Additionally, under either provision, it is well settled that a court may determine as a matter of law that an allegedly deceptive advertisement would not have misled a reasonable consumer. Chufen Chen v. Dunkin’ Brands, Inc., 954 F.3d 492, 500 (2d Cir. 2020) (citation, quotation marks, and alteration marks omitted).

Here the magistrate judge recommended and the district court agreed that Defendant’s labeling was not misleading, because a reasonable consumer would understand that the word vanilla on the front of the carton describes how the Product tastes, not what it contains, especially in circumstances where the ingredients listed on the Product container do not mention vanilla at all.  See, e.g., Twohig v. Shop-Rite Supermarkets, Inc., 519 F. Supp. 3d 154, 158-61 (S.D.N.Y. 2021).

The most interesting part of the opinion, perhaps, was the discussion of the request for leave to amend; often complaints are dismissed with or without prejudice and the opinions offer little discussion why,  Although Rule 15(a) of the Federal Rules of Civil Procedure provides that leave to amend shall be freely given when justice so requires, it is within the sound discretion of the district court to grant or deny leave to amend. A district court has discretion to deny leave for good reason, including futility, bad faith, undue delay, or undue prejudice to the opposing party. McCarthy v. Dun & Bradstreet Corp., 482 F.3d 184, 200 (2d Cir. 2007) (citing Foman v. Davis, 371 U.S. 178, 182 (1962)). An amendment is futile if the proposed claim could not withstand a motion to dismiss pursuant to Fed. R. Civ. P. 12(b)(6). Lucente v. Int’l Bus. Machs. Corp., 310 F.3d 243, 258 (2d Cir. 2002).

Plaintiffs’ proposed new allegations addressed the results of a consumer survey concerning Defendant’s “vanilla” labelling and “the labeling of the Product in the marketplace vis-à-vis its competitors’ products.  Plaintiff argued that the survey showed that like himself, the vast majority of  consumers surveyed understood the “Vanilla” representation as not being solely about the flavor of the Product.  The court concluded that the survey commissioned by Plaintiffs’ counsel does not salvage their claim.  The survey did not demonstrate that the respondents believed the flavor in Defendant’s product came predominantly or exclusively from vanilla beans – which is what Plaintiffs alleged. In actuality, the way the questions were worded did not clearly address the issue.  Plaintiffs constructed the survey, noted the court. If they wanted to ascertain whether respondents thought the flavor came 100% from the vanilla plant, that would have been an easy enough response to draft. The survey seemingly presumed that the label conveyed something about that origin, and asked what it conveyed; it did not give participants the option of stating that they believed that the label conveyed nothing about the origin of the vanilla taste.  So the survey here – designed at the behest of counsel who apparently has brought nearly 100 similar lawsuits challenging the labeling of vanilla flavored products and presumably has given significant thought to the questions, observed the court – was sufficiently flawed that it did not contribute enough to render the claims plausible. See Procter & Gamble Co. v. Ultreo, Inc., 574 F. Supp. 2d 339, 352 (S.D.N.Y. 2008) (“A survey is not credible if it relies on leading questions which are inherently suggestive and invite guessing by those who did not get any clear message at all.”).

Plaintiff also asserted that his understanding of Defendant’s representation was reasonable in light of marketplace practice. Plaintiff pointed to federal regulations, arguing these regulations “effectively establish custom and practice in the industry,”  But even if Plaintiffs were correct about what the federal regulations require – a point Defendants disputed – the complaint did not allege that reasonable consumers are aware of these complex regulations, much less that they incorporate the regulations into their day-to-day marketplace expectations. There is no extrinsic evidence that the perceptions of ordinary consumers align with these various complicated labeling standards. See also Twohig, 519 F. Supp. 3d at 164 (quoting Wynn v. Topco Associates, LLC, No. 19-CV-11104, 2021 WL 168541, at *3 (S.D.N.Y. Jan. 19, 2021)); see also Clark v. Westbrae Nat., Inc., No. 20-cv-3221-JSC, 2020 WL 7043879, at *1, 4 (N.D. Cal. Dec. 1, 2020).  In sum, Plaintiff’s argument in the proposed SAC about the federal regulations also provided no basis for granting leave to amend, which would have been futile.

The Class Action Fairness Act has had a noticeable effect on class action practice.  One aspect of CAFA involves the need to assert jurisdictional minimums, as recently reaffirmed by the Eighth Circuit in Penrod v. K&N Eng’g, Inc., No. 20-1355, 2021 WL 4177761 (8th Cir. Sept. 15, 2021). The appeals court concluded that the plaintiffs failed to plausibly allege damages in excess of $5 million, as required for jurisdiction under the Class Action Fairness Act.

Plaintiffs are three individuals who purchased oil filters designed by defendant. They sought to represent a nationwide class of all purchasers of three styles of  oil filters that they alleged share a common defect that can cause these oil filters to suddenly separate or fracture. According to plaintiffs, the defect made the oil filters susceptible to failure and increased the risk of catastrophic failure such that, had defendant disclosed the defect, purchasers would have found the risk unacceptable, and not purchased.

Plaintiffs asserted a number of different claims, including breach of warranty, fraud, negligence, and strict liability. Each claim was dependent upon CAFA as the source of federal jurisdiction. The district court found that plaintiffs’ reliance on CAFA was ineffectual because they failed to plausibly plead an aggregate amount in controversy exceeding $5 million. Plaintiffs appealed, arguing they plausibly pleaded an amount in controversy in excess of $5 million.

Under CAFA, federal courts have jurisdiction over class actions in which the amount in controversy plausibly exceeds $5 million in the aggregate. 28 U.S.C. § 1332(d)(6); see also Raskas v. Johnson & Johnson, 719 F.3d 884, 888 (8th Cir. 2013). The district court found that most of plaintiffs’ proposed class members did not have a filter failure and thus did suffer any cognizable injuries or damages, and that the remaining class members did not plausibly allege total damages in excess of $5 million. Plaintiffs contended the district court erred in its analysis because the proper measure of damages here was the monetary difference between what the proposed class members should have paid for the potentially defective oil filters, in light of the alleged design defect and increased risk of catastrophic failure, and what they actually paid for them.

The court concluded that plaintiffs’ contention was unavailing as contrary to the long-standing rule that no tort claim for economic damages lies when a product is merely at risk of failing. Briehl v. General Motors Corp., 172 F.3d 623 (8th Cir. 1999).  Under 8th Circuit precedent, a cognizable tort claim arises when a defective product has actually malfunctioned or failed, not merely when a defect poses a risk or possibility of injury or damage.
According to its plain language, plaintiffs’ complaint alleged a defect in the oil filters makes them “susceptible” or at “risk” to fail.  Oil filters being susceptible to fail, or at risk of failing, is not the same thing as having failed, or being sure to fail. Cf. In re Zurn Pex Plumbing Prod. Liab. Litig., 644 F.3d 604, 617 (8th Cir. 2011).

Here, the determinative issue was whether the plaintiffs had alleged an aggregate injury sufficient to confer jurisdiction.  Plaintiffs tried to rely on various contract theories to argue that the uninjured class members did, in fact, have cognizable injuries. The plaintiffs, however, did not allege a claim for breach of contract in their complaint. They in essence tried to recast their product liability claim into a non-existent breach of contract claim. Plaintiffs also referred to an alleged economic injury that was suffered based on the difference in the price between the defective oil filter and a non-defective one. The court noted that unless/until the product fails or causes injury, the purchasers have received the benefit of their bargain. See
In Re: Polaris Marketing, Sales Practices and Products Liab, Litig., 2021 WL 3612758, at *3 (8th Cir. Aug. 16, 2021).

In this case, most of the oil filters at issue never failed. Plaintiffs could not simply “recast their product liability claim in the language of contract” to state a claim. Rivera v. Wyeth-Ayerst Lab’ys., 283 F.3d 315, 320 (5th Cir. 2002); see also Wallace v. ConAgra Foods, Inc., 747 F.3d 1025, 1030 (8th Cir. 2014).  Excluding the “no-injury” proposed class members, and even accepting as plausible plaintiffs’ estimation of the oil filters at issue that actually were defective and failed, they simply could not meet the jurisdictional threshold for damages. Of the three named class members, only one sustained engine failure that cost $10,000. The filter failure on the other two motorcycles resulted simply in oil leaking onto their rear tires. The math just didn’t work for plaintiffs with so many non-defective, non-failing filters.

We want to point out the cogent Comments by Lawyers for Civil Justice to the Advisory Committee on Evidence Rules in response to the Request for Comments on the Committee’s proposed amendment to Federal Rule of Evidence 702. Readers may know that LCJ is a national coalition of corporations, law firms, and defense trial lawyer organizations that promotes excellence and fairness in the civil justice system to secure the just, speedy, and inexpensive determination of civil cases. For over 30 years, LCJ has been closely engaged in reforming federal procedural rules in order to: (1) promote balance and fairness in the civil justice system; (2) reduce costs and burdens associated with litigation; and (3) advance predictability and efficiency in litigation.

Many courts have held that the critical questions of the sufficiency of an expert’s basis, and the application of the expert’s methodology, are questions of weight and not admissibility, but these rulings are an incorrect application of Rules 702 and 104(a).  The misunderstanding that underlies these rulings persists because Rule 702 clearly assumes, but does not explicitly state, that the court should apply Rule 104(a)’s preponderance standard to the question of whether proffered evidence is admissible before allowing the jury to determine what weight to give that evidence. The caselaw is replete with decisions based on this misunderstanding which in turn result in courts’ failure to exercise their “gatekeeping” responsibility. The Proposed Amendment, which would clarify that the proponent of expert opinion testimony must demonstrate the admissibility requirements “by a preponderance of the evidence,” is a much-needed and appropriate solution for this serious and widespread confusion.

Worth a read. LCJ Public Comment on Rule 702 Amendment Sept 1 2021.