Here is one to watch.  The Pennsylvania Supreme Court has agreed to hear a case on recommendation from the Third Circuit dealing with when state law bars negligent design and strict liability claims related to medical devices. Melissa Ebert v. C.R. Bard Inc., No. 26 EAP 2021 (Pa.).

A little background. Ever since the Tincher case updated Pennsylvania’s product liability doctrine (erasing the old Azzarello doctrine), Tincher v. Omega Flex, Inc., 104 A.3d 328 (Pa. 2014), plaintiffs have attempted to muddy the prescription product waters given the Supreme Court’s decision to leave the precise contours of its rulings to the lower courts.  For example, the federal courts here are split over whether the “unavoidably unsafe product” exception of comment k to Section 402(A) to the Restatement (Second) of Torts, which expressly bars strict liability design defect claims against manufacturers of prescription drugs, also bars those claims against manufacturers of prescription medical devices. This despite the fact there is no principled distinction between prescription drugs and prescription medical devices for purposes of comment k analysis.

The district court in this matter got the comment k question wrong, but did recognize that in a negligent design claim against a prescription device, another contested area, the relevant duty of care is narrow,  A manufacturer breaches the duty only if it introduces a product too dangerous to be used by any patients. Ebert v. C.R. Bard, 2020 WL 2332060 (E.D. Pa. May 11, 2020).  The Third Circuit certified both questions. Petition for Certification of Questions of State Law, Ebert v. C.R. Bard, Inc., 2021 WL 2656690, at *6 (3d Cir. June 24, 2021).

The Court will consider the following issues: (1) Under Pennsylvania law, must a plaintiff bringing a negligent design claim against a prescription medical device manufacturer prove that the device was too harmful to be used by anyone, or may the plaintiff also prevail on other theories of liability where appropriate? (2) Under Pennsylvania law, are prescription implantable medical devices categorically subject to strict liability, categorically immune from strict liability, or immune from strict liability on a case-by-case basis? If they are immune on a case-by-case basis, what test should a court apply to determine whether a particular device is immune?

Stay tuned.

Readers may be interested in the new U.S. Chamber Institute for Legal Reform report, “The Food Court: Developments in Litigation Targeting Food and Beverage Marketing.”  The paper was authored by my colleagues Cary Silverman, Jim Muehlberger, and Adriana Paris.

It can be found online and deals with the increasing number of consumer class actions targeting food and beverage marketing; the rising trend in lawsuits targeting product flavoring or ingredients; the upsurge in “greenwashing” litigation alleging that company claims about eco-friendly practices are overstated; and the shift from California to New York of the dubious distinction of the nation’s most popular “food court” jurisdiction.

Worth a read.

 

The MDL court in the 3M Earplug litigation recently rejected defendant’s motion to delay a bellwether trial.  See In Re: 3M Combat Arms Earplug Products Liab. Lit., Case No. 3:19md2885 (N.D. Fla.).   Bellwether plaintiff Taylor had been set to go to trial in September, but voluntarily dismissed his claims on the eve of trial, after significant trial preparation and costs for this specific matter.  The court then substituted in another plaintiff (Adkins) from the bellwether pool on the same trial date, observing that the new plaintiff alleged similar claims of hearing loss and bilateral tinnitus while using 3M’s combat earplugs. Order.

The court said the parties should have anticipated from the beginning of the bellwether process that there would be instances where a bellwether alternate plaintiff would necessarily take the place of a bellwether plaintiff. “Thus, both sides already have all of the information they need to designate deposition testimony and create exhibit lists, and should have anticipated the possibility that Adkins would go to trial.” Id. at 2.

While the desire of the MDL court to keep the trains running and adhering to the trial schedule is understandable, the “anticipation” cannot reasonably mean that the parties should at all times be prepared to try every bellwether case on the first or next trial date.  It is typical for significant case-specific work be left to finalize, including the time-consuming work of preparing deposition designations, exhibit lists, and a pretrial stipulation.   The defendant argued that a better way to fill the void was to move up the next schedule plaintiff (set for October) with the thought that this case was much closer to ready.

Which brings your humble blogger to a more general point: in MDLs that have adopted the bellwether trial approach, the door is open for strategic manipulation by the PSC, as ultimately each plaintiff has the right to dismiss its case.  While there may, rarely, be valid reasons to dismiss a bellwether case voluntarily, much more common is for plaintiffs to do so to manipulate the takeaways from the bellwether process and avoid adverse outcomes.  Recognize where such a case typically sits.  It was investigated pre-complaint; it was filed in good faith and subject to Rule 11; it had been vetted for consideration of inclusion in the bellwether TRIAL pool; it may have already been subject to case specific motions to dismiss.  And then it was well into discovery, fact and expert.  Simply put, plaintiffs will often dismiss what they view as weak bellwether cases, whether they were originally selected by the court, or are a defense pick, or even a plaintiff mistaken selection.

For the MDL to work properly and fairly, the transferee court has to take steps to deter such manipulation, or mitigate it when it occurs.  Courts — and there is no silver bullet here — have  tried any number of responses.  These include dismissal with prejudice only, see In re FEMA Trailer Formaldehyde Prod. Liab. Litig., 628 F.3d 157 (5th Cir. 2010). Or when a defense pick is dismissed, allowing defendants to strike a plaintiffs’ selection. See In re Mirena IUD Prods. Liab. Litig., No. 13-md-2434, Case Management Order re: Second Disposition Pool Selection Process (S.D.N.Y. Apr. 20, 2015).
Costs and fees is another approach. See In re Zofran, No. 1:15-md-2657-FDS, MDL Order No. 27 (D. Mass. Oct. 9, 2019)(considering motions for fees and expenses for voluntarily dismissed bellwether cases)(note we were involved in that one).

A more far-reaching reaction was found in  In re Cook Filter MDL (amended bellwether), No. 1:14-ml-02570 (MDL S.D. Ind.)(Third Amended CMO #27, 10/26/2020), where the court had granted the defendants’ motion for summary judgment in the first case, based primarily on the statute of repose. Plaintiff voluntarily dismissed the second bellwether, citing rulings on statute of limitations in other IVC Filter cases. And then the MDL court granted a motion to voluntarily dismiss the third bellwether in line, with prejudice (which is essential to help avoid gamesmanship). After discussion, and with due consideration given to the impact of COVID-19 on the ability of the courts to conduct a jury trial in the near term, the MDL court then concluded that the MDL would benefit from a new staged approach to resolving the cases, including enhanced initial screening, hearings on the issue of whether cases in the pool presented a compensable injury, and only then moving to new bellwether trials. To make this happen, the court directed plaintiffs to conduct a thorough review of the pool of cases to determine if they were barred by the applicable statute of repose or statute of limitations, in light of the prior rulings in the litigation. Those cases get taken out of the pool. Then, before further significant pre-trial activity occurs, the court will address general procedural and/or substantive issues raised by the parties that may inform the parties of the merit of certain cases, and with the further goal of reducing the number of new filings, resolving certain sub-groups of cases, and thus avoiding unnecessary trial-related expenses.

Because some of the pool cases implicated the defendant’s position that a certain alleged injury did not constitute a compensable injury as a matter of law, the court would tackle this as the next stage, with dismissals to follow if the court should find that the allegations did not constitute a compensable injury. After that, the parties will designate their entries into a new pool, and the court will use random selection to identify 32 cases from the pool lists constituting the new “Initial Bellwether Discovery Cases.” After an update of records, the parties will get a chance to “strike” 8 cases each from the pool. Interestingly, any case in the pool as to which a party refuses to waive the venue rights recognized under Lexecon, such a refusal will constitute a strike for that side. This is perhaps a kind of unfair penalty or condition on a party exercising its constitutional rights, but may be an effective tactic. Following that, each side will get to submit a single brief on the parties’ positions on why any of the remaining cases should or should not be selected as a bellwether trial case.  Complex, but arguably needed given the dismissals.

MDL courts need to be creative and aggressive in dealing with such tactics which can undermine the bellwether procedures.

 

Personal jurisdiction — the issue of where a defendant can be sued — seems like it should be a straightforward issue.  But of course it is not, as the Supreme Court evolves its understanding of minimum contacts, the notion of doing business over the internet develops, state courts apply and misapply ancient “consent” to do business rules, and various jurisdictions decide as a policy matter to be open or closed to litigation tourism.

Today’s case is one we wished we would see more often. In Kingston v. Angiodynamics, Inc., 2021 WL 3022320 (D. Mass. Jul. 16, 2021), plaintiff sued alleging injuries from an implantable medical device manufactured by defendants, specifically a high-radiopacity catheter, comprised of a polymeric mixture of silicone and barium sulfate.  Barium sulfate is thought to contribute to the reduction of the mechanical integrity of silicone in vivo as the particles of barium sulfate dissociate from the surface of the catheter over time. Plaintiff asserted  that defendants’ manufacturing process involved too high a concentration of barium sulfate particles, leading to the improperly high viscosity of the raw silicone before polymerization and causing improper mixing of barium sulfate particles within the silicone matrix.

Defendants stood behind the product, and also moved to dismiss based on the absence of personal jurisdiction.  Kingston was a resident of Kentucky; the allegedly defective product was used in Kentucky, and the injury was suffered in Kentucky.  Plaintiff alleged in the complaint that AngioDynamics’ principal place of business and headquarters are in New York, but in seeking remand to state court, asserted that defendants’ core operations were actually in Massachusetts.  However, while there was some indication of some business  done in Massachusetts, this did not indicate Massachusetts was defendants’ principal place of business.  The defendants were a parent and subsidiary company both of which were incorporated in Delaware.  The parent corporation was headquartered in New York where  all significant corporate decisions for both the parent and subsidiary were being made. The court concluded that defendants’ principal place of business is not in Massachusetts. It made no difference which test was used to determine where defendants’ principal place of business was, the so-called  “nerve center test;” “center of corporate activity test;” or “locus of operations test.”  The answer was the same.

Some of these remand observations are on point for the motion to dismiss as well.  In determining whether a non-resident defendant is subject to its jurisdiction, a federal court exercising diversity jurisdiction is the functional equivalent of a state court sitting in the forum state. Daynard v. Ness, Motley, Loadholt, Richardson & Poole, P.A., 290 F.3d 42, 51 (1st Cir. 2002)  Accordingly, this district court could only exercise personal jurisdiction within the limits set by Massachusetts’ long-arm statute and the due process clause of the Constitution.

Kingston argued that the court had jurisdiction over defendants pursuant to a section of the Massachusetts long-arm statute which provides for the exercise of personal jurisdiction over an individual in a cause of action “arising from the person’s … transacting any business in this commonwealth.” Mass. Gen. L. c. 223A, § 3(a).  For jurisdiction to exist under this provision, the facts must satisfy two requirements—the defendant must have transacted business in Massachusetts, and the plaintiff’s claim must have arisen from the transaction of business by the defendant.” Exxon Mobil Corp. v. Attorney Gen., 479 Mass. 312, 317, 94 N.E.3d 786 (2018). The statute’s “arising from” requirement means a claim arises from a defendant’s transaction of business in the forum state if the claim was made possible by, or lies in the wake of, the transaction of business in the forum state.  The inquiry ultimately boils down to a but for causation test which asks, did the defendant’s contacts with the Commonwealth constitute the first step in a train of events that resulted in the personal injury.

On the specific jurisdiction prong, the court noted that plaintiff had adduced some evidence to support the assertion that defendants have a Massachusetts location at which some  employees conduct business, but she failed to support the assertion that “but for” defendants’ activities in Massachusetts, her injury would not have occurred. Defendants’ corporate decisions were made at its global headquarters in New York and their products—including the device at issue in this litigation—were manufactured in New York, which was also AngioDynamics’ sole United States manufacturing location. Plaintiff provided no evidence to support the contention that Defendants’ activities specific to Massachusetts caused the harm.

Even beyond the reach of the statute, under the due process clause, specific jurisdiction “may only be relied upon where the cause of action arises directly out of, or relates to, the defendant’s forum-based contacts.”  Pritzker v. Yari, 42 F.3d 53, 60 (1st Cir. 1994)). “In contrast to general, all-purpose jurisdiction, specific jurisdiction is confined to adjudication of issues deriving from, or connected with, the very controversy that establishes jurisdiction.” Goodyear Dunlop Tires Operations, S.A., 564 U.S. at 919. The specific jurisdiction inquiry is threefold: relatedness, purposeful availment and reasonableness.  Here, plaintiff’s attempt to rely on the Court’s recent decision in Ford Motor Co. v. Montana Eighth Jud. Dist. Ct., ––– U.S. ––––, 141 S. Ct. 1017, 1026, 209 L.Ed.2d 225 (2021) to support her argument was to no avail. Unlike here, the plaintiffs there were residents of the forum states, used the allegedly defective products in the forum states and suffered alleged injuries when those products malfunctioned in the forum states. Id. at 1031.

The court then turned to the general jurisdiction prong, and the due process limitations therein. Even if Kingston had satisfied her showing under the long-arm statute, which she did not, plaintiff  also failed to satisfy the due process analysis. “For jurisdiction to be proper, constitutional requirements of due process must be met.” Shipley Co. v. Clark, 728 F. Supp. 818, 822 (D. Mass 1990). General jurisdiction applies when the defendant’s contacts with the forum state have been “so ‘continuous and systematic’ as to render them essentially at home in the forum State.” Goodyear Dunlop Tires Ops., S.A. v. Brown, 564 U.S. 915, 919 (2011). Neither defendant could be characterized as “at home” in Massachusetts; conducting some business in the Commonwealth was inadequate for general jurisdiction purposes.

Plaintiff also sought leave to conduct jurisdictional discovery, but the court found that her allegations, even if proven, were too attenuated to state a valid claim and therefore such discovery would be futile.

Today’s post involves Couturier v. Bard Peripheral Vascular, Inc.,  2021 WL 2885903 (E.D. La. Jul. 8, 2021).  This products liability action was remanded from the MDL In re: Bard IVC Filters Products Liability Litigation, MDL 2641 (D. Az.).  Plaintiff alleged injuries suffered after being implanted with an Inferior Vena Cava (“IVC”) filter medical device manufactured by defendants.  An IVC filter is a device that is designed to filter or “catch” blood clots that may travel from the lower portions of the body to the heart and lungs.  IVC filters have been on the market for decades but were limited to patients who could not manage their DVT/PE with prescribed medications.  Defendants were the first medical device manufacturer to obtain FDA clearance for marketing a “retrievable” IVC filter in July 2003.

Defendants moved for summary judgment on all claims asserting a lack of proof of causation.  Plaintiff’s suit was governed by Louisiana law which means his exclusive cause of action was under the Louisiana Products Liability Act (LPLA).  To prevail under any theory under the LPLA, a plaintiff must establish four elements: (1) defendant manufactured the product at issue; (2) plaintiff’s injury was proximately caused by a characteristic of the product; (3) this characteristic made the product unreasonably dangerous; and (4) plaintiff’s injury arose from a reasonably anticipated use of the product by plaintiff or someone else. Stewart v. Capital Safety USA, 867 F.3d 517, 520 (La. 2017) (citing Stahl v. Novartis Pharm. Corp., 283 F.3d 254, 260-61 (5th Cir. 2002)). A “proximate cause” is generally defined as any cause which, in natural and continuous sequence, unbroken by an efficient, intervening cause, produces the result complained of without which the result would not have occurred. Marable v. Empire Truck Sales of Louisiana, LLC., 221 So. 3d 880, 901 (La. Ct. App. 2017). Under Louisiana law, plaintiff bringing products liability action must prove not only causation-in-fact, but also that product was most probable cause of injury. Wheat v. Pfizer, Inc., 31 F.3d 340, 342 (5th Cir. 1994) (citing Brown v. Parker-Hannifin Corp., 919 F.2d 308, 311 and n.9, 312 (5th Cir. 1990)).

The court first addressed the design defect claim, noting the plaintiff must show that an alternative design existed for the product at the time it left the manufacturer’s control, and the alternative design was capable of preventing the plaintiff’s damage. Bernard v. Ferrellgas, Inc., 689 So. 2d 554, 558 (La. Ct. App. 1997). If there was no alternative way to make the product safer, the defendant could not have prevented plaintiff’s injuries and therefore, the defendant is not liable under a design defect theory.  Louisiana courts have determined whether an alternative design was capable of preventing plaintiff’s damage through a cause-in-fact analysis,  Defendant argued that plaintiff’s experts conceded that all IVC filters can fracture and perforate. As these are known risks, warned about on the label, they cannot constitute design defects.  Because plaintiff failed to provide evidence of a design defect or of an alternative filter that could have prevented his injuries, defendants were entitled to summary judgment on plaintiff’s design defect claims.

Turning to the failure to warn count, the court noted that a manufacturer’s duty to warn is a continuing one; the court concluded that a genuine issue of material fact existed whether the alleged  increased rate of failure of the filter rendered defendants’ warnings inadequate. Therefore, summary judgment was denied on  this question.

Defendants’ motion was granted on the warranty count, as plaintiff failed to provide sufficient evidence that any statements by defendants ever induced the use of the filter. In fact, the prescriber testified that the only factor causing him to use the specific filter was the fact that it was the only IVC filter the hospital had available.  Therefore, plaintiff’s breach of express warranty claim failed.

Finally, the court denied plaintiff’s motion for summary judgment on defendant’s affirmative defenses.

Failure to mitigate and comparative fault-  The plaintiff had failed to seek treatment for five years after the IVC filter was implanted and ignored his physician’s recommendations after the perforation was first discovered.

Comparative fault of non-parties: This defense was supported by adequate evidence to create an issue of fact based on the surgeon’s testimony that he did not follow the manufacturer’s guide in several material ways.  He conceded that he did not measure plaintiff’s inferior vena cava prior to implanting the filter.  And that he could not remember the amount of pressure that was used when injecting the contract medium through the dilator and thus could not confirm if it was more or less than specified.

Assumption of the risk: Plaintiff’s spouse had signed an informed consent form acknowledging  that plaintiff’s surgeon advised him of all known risks and that plaintiff accepted all those risks by undergoing the surgery.

Nearly a clean sweep.

 

 

 

The Seventh Circuit affirmed the grant of summary judgment to a pet food maker in a putative class action alleging Champion Petfoods USA Inc. misrepresented features of its dog food. Weaver v. Champion Petfoods USA Inc., No. 20-2235, 2021 WL 2678801, at *1 (7th Cir. June 30, 2021).

Plaintiff alleged he purchased purchased Champion dog food from 2008 until August 2017. He purchased two different varieties —Six Fish and Regional Red—for his golden retrievers.  Weaver contended that Champion’s packaging violated the Wisconsin Deceptive Trades Practices Act because its alleged representations that its food is biologically appropriate, made including fresh regional ingredients, and not outsourced, were false or misleading.  Weaver contended  Champion’s food is not made solely from fresh ingredients. It contains frozen ingredients and ingredients that were previously frozen. Second, he alleged that Champion does not source all its ingredients from areas close to its plants in Morinville, Canada and Auburn, Kentucky. It sources some ingredients internationally, including from Europe, New Zealand, Norway, and Latin America. Third, Weaver also argued  that Champion’s packaging is misleading because there is a risk that its food contains Bisphenol A (“BPA”) . BPA is a chemical used primarily to make plastics and resins. Given that plastics and resins are used in food storage containers, humans and animals are regularly exposed to BPA because it can leach from containers into food. They are also exposed to BPA in their environments, as studies have measured levels of BPA in the air, dust, and water. Champion does not add BPA to its food.

Regarding biologically appropriate, the Seventh Circuit found Weaver’s argument  unpersuasive because he failed to provide evidence that the phrase “biologically appropriate” is likely to materially mislead a reasonable consumer into believing that the product was BPA-free. It is undisputed that humans and animals are commonly exposed to BPA, Champion does not add BPA to its food, and the level of BPA purportedly in Champion’s food poses no health risks to dogs. Despite these uncontested facts, Weaver insisted that the mere risk that any small amount of BPA is present in Champion’s foods rendered its representations that its food is biologically appropriate misleading to a reasonable consumer. In support, Weaver relies solely on his own testimony that he would consider no amount of BPA to be biologically appropriate. The court was not persuaded.

Regarding the claim about regionally sourced ingredients, the Seventh Circuit reiterated the near universal view that references to ingredients used do not imply that ingredient is used exclusively. See Kennedy v. Mondelez Glob. LLC, No. 19-cv-302, 2020 WL 4006197, at *4 (E.D.N.Y. July 10, 2020) (noting that graham crackers that were advertised as “made with real honey” were not misleading even though other sweeteners and additives were also used); Sarr v. BEF Foods, Inc., No. 18-cv-6409, 2020 WL 729883, at *4 (E.D.N.Y. Feb. 13, 2020) (determining that a label that states that mashed potatoes are made with “real butter” does not imply that other fats are also not used); Henderson v. Gruma Corp., No. 10-cv-04173, 2011 WL 1362188, at *12 (C.D. Cal. Apr. 11, 2011) (determining that crackers labeled as made “with Garden Vegetables” was not misleading as a matter of law because “the labeling statement does not claim a specific amount of vegetables in the product, but rather speaks to their presence in the product”).

Regarding the claim that “never outsourced” is misleading, plaintiff admitted that he knew defendant did not make or grow all its ingredients– so he knew there was some degree of “outsourcing.” Moreover,  he fell short of introducing sufficient evidence from which a jury could find that reasonable consumers were misled.  A fair reading of the labels show that the dog food labels don’t claim all of the ingredients are 100% locally sourced and fresh and therefore they aren’t misleading.

Weaver’s fraud and negligence claims failed for the same reason as his claims arising under the Act—he failed to provide sufficient evidence from which a reasonable jury could find Champion’s representations false or misleading. He did not provide evidence that a reasonable consumer would be misled by Champion’s representations that its food is biologically appropriate, contains fresh regional ingredients, and is never outsourced.  2021 WL 2678801, at *8.

Finally, as a help to all you drafters of summary judgment motions, is this quote:

Summary judgment is the proverbial “put up or shut up” moment in a lawsuit, and Weaver has failed to offer sufficient evidence to support his claims.

Weaver v. Champion Petfoods USA Inc., No. 20-2235, 2021 WL 2678801, at *8 (7th Cir. June 30, 2021).

 

Our readers interested in Multi-district Litigation may want to check out recent scholarship from Prof. Brian Fitzpatrick of Vanderbilt Law School.

In Many Minds, Many MDL Judges, 84 J. L. & Contemporary Prob. (2021, Forthcoming), the Professor asserts that the federal MDL statute may concentrate more power in the hands of a single person than any other part of our judicial system. A single judge can end up resolving hundreds, thousands, or even hundreds of thousands of individual cases. This has benefits—most notably efficient case processing, uniformity of results, and the facilitation of global peace—but it also has potential costs. In this essay , he argues that one of these costs could be less accurate adjudication of legal claims and defenses. Drawing on the “many-minds” literature that proceeds from the Condorcet Jury Theorem, he posits that the legal decision-making in MDLs could be improved if the cases were transferred to a panel of judges instead of just one judge. In large MDLs, the cost of increased judicial time could be outweighed by the benefit of increased accuracy. No law reform is needed to implement panels: it is already authorized by the current statute.  He concludes that the MDL system has focused too single-mindedly on efficiency to the detriment of other procedural values.

Here at MassTortDefense, we are of the view that a number of procedural reforms would greatly improve the MDL system, including expanded appellate review opportunities and proper vetting of claims, reforming misuse of master pleadings and requiring disclosure of third party litigation funding.

 

The Fifth Circuit late last year certified the question whether the operator of  an on-line marketplace is a seller” under Texas products liability law. McMillan v. Amazon.com, Inc., 983 F.3d 194 (5th Cir. 2020).

The Texas Supreme Court in response determined that Amazon.com Inc. isn’t considered a “seller” under Texas product liability law.  No. 20-0979, 2021 WL 2605885 (Tex. June 25, 2021)(certified question answered).  Today, third-party e-commerce platforms—such as Amazon, eBay, Etsy, and Alibaba—provide many of the services traditionally performed by distributors and retailers, enabling merchants from all over the world to reach consumers directly. But are such online marketplaces strictly liable for defective products manufactured and owned by third parties? The Fifth Circuit asked specifically whether Amazon.com is a “seller” under Texas law when it does not hold title to third-party products sold on its website but controls the process of the transaction and delivery.

The Supreme Court answers “no”. The Texas Legislature’s definition of “seller” in Chapter 82 of the state’s  Civil Practice and Remedies Code is consistent with and does not expand the common-law definition. Under that definition, when the ultimate consumer obtains a defective product through an ordinary sale, the potentially liable sellers are limited to those who relinquished title to the product at some point in the distribution chain. Therefore, Amazon is not a “seller” of third-party products under Texas law.

Although the extent of seller liability is different under the common law and Chapter 82, the definition of who constitutes a seller is similar. The statute defines a seller as “a person who is engaged in the business of distributing or otherwise placing, for any commercial purpose, in the stream of commerce for use or consumption a product or any component part thereof.” Id. § 82.001(3). To decide whether Amazon is a seller under Chapter 82, the Court said it must determine whether Amazon’s role in the distribution chain amounts to “distributing or otherwise placing” a product in the stream of commerce.  2021 WL 2605885, at *3.  The Court has refused to extend liability to all persons or entities involved in the distribution chain, however. For example, those that provide both goods and services are not sellers if the provision of products is incidental to the provision of services.  Likewise, those that merely assist or facilitate sales—such as auctioneers, advertising agencies, newspapers, internet providers, and shipment companies—are not sellers. See RESTATEMENT (THIRD) OF TORTS: PROD. LIAB. § 20 cmt. g (1998), which provides that “[p]ersons assisting or providing services to product distributors, while indirectly facilitating the commercial distribution of products, are not subject to liability”).

Given that Chapter 82 is more restrictive than the common law, the Court saw no indication that the Legislature intended its language to include commercial behavior beyond ordinary sales and previously qualifying non-sale commercial transactions. Accordingly, the necessary qualities of those transactions provide the limits of “seller” status under Chapter 82. The cases show that both sales and non-sale commercial transactions, at a minimum, involve sellers that hold or relinquish title in a product’s distribution chain.  Considering title to determine seller status is also consistent with the approach taken by other jurisdictions that follow the Restatement’s framework for strict products liability. Using this approach, many courts have concluded that Amazon is not a seller when it does not hold or relinquish title to the product. See, e.g., State Farm Fire & Cas. Co. v. Amazon.com, Inc., 835 F. App’x 213, 216 (9th Cir. 2020) (holding that Amazon was not a “seller” under Arizona’s common-law Restatement-based multi-factor test, under which holding title is a factor); Erie Ins. Co. v. Amazon.com, Inc., 925 F.3d 135, 144 (4th Cir. 2019) (concluding that Amazon did not hold title and thus was not a “seller” under Maryland law, which is based on Restatement section 402A); Eberhart v. Amazon.com, Inc., 325 F. Supp. 3d 393, 397–98 (S.D.N.Y. 2018) (concluding that “regardless of what attributes are necessary to place an entity within the chain of distribution, the failure to take title to a product places that entity on the outside,” and such a requirement is reinforced by the Restatement (Third) of Torts: Products Liability).

 

In reviewing the grant of summary judgment to a medical device manufacturer, the Third Circuit has certified two legal issues to the Pennsylvania Supreme Court for possible guidance.  MELISSA EBERT, Appellant v. C.R. BARD, INC.; BARD PERIPHERAL VASCULAR INC., a subsidiary &/or division of Defendant C.R. Bard, Inc., No. 20-2139, 2021 WL 2656690, at *1 (3d Cir. June 24, 2021).

In the decision below, Ebert v. C.R. Bard, Inc., 459 F. Supp. 3d 637, 641 (E.D. Pa. 2020), the district court analyzed the claims involving  a filter implanted to deal with plaintiff’s deep vein thrombosis before the clot could reach Ebert’s heart or lungs. Plaintiff argued that defendant was  liable for harms allegedly caused by the filter under both a negligent design theory and a strict liability theory. Both claims, said the Third Circuit on appeal, hinge on “unresolved questions of Pennsylvania law.”  First, with regard to negligent design, it was unclear to the panel what standard of care should be applied to implantable medical devices like the under the Supreme Court’s decision in Lance v. Wyeth, 85 A.3d 434 (Pa. 2014). Second, with regard to strict liability, it was unclear to the panel whether and in what circumstances an implantable medical device like the filter is subject to strict liability under Hahn v. Richter, 673 A.2d 888 (Pa. 1996), and Tincher v. Omega Flex, Inc., 104 A.3d 328 (Pa. 2014).

Lance, of course, relied on § 6(c) of the Restatement (Third) of Torts—that “pharmaceutical companies violate their duty of care if they introduce a drug into the marketplace, or continue a previous tender, with actual or constructive knowledge that the drug is too harmful to be used by anyone.” 85 A.3d at 459, 461 (citing Restatement (Third) of Torts: Prods. Liab. 6(c) (1998).   Similarly, a plaintiff may prevail in a negligent design claim against a medical device manufacturer only by showing that the device was “too harmful to be used by anyone,” id. at 461.  See Keen v. C.R. Bard, Inc., 480 F. Supp. 3d 624, 637–39 (E.D. Pa. 2020); see also Pa. Suggested Standard Civil Jury Instructions § 23.40 (5th ed. 2020) (“A … [medical device] [company] … that supplies a … [medical device] that it knew or reasonably should have known is too dangerous to be used by anyone, violates its duty of care.” (brackets in original) (citing Lance, 85 A.3d 434)). But see Crockett v. Luitpold Pharms., Inc., 2020 WL 433367, at *11 (E.D. Pa. Jan. 28, 2020).

On the strict liability question, in Hahn, the Supreme Court applied comment k of the Restatement (Second) of Torts § 402A to hold that prescription drugs are categorically immune from strict liability because they are “[u]navoidably unsafe” but are nonetheless justified for some patients. 673 A.2d at 889–91. Prescription medical devices are similarly categorically immune from strict liability under Pennsylvania law. See Creazzo v. Medtronic, Inc., 903 A.2d 24, 31 (Pa. Super. Ct. 2006); Lawrence v. Synthes Inc., No. 94-07627, 2003 WL 23914540, at *5 (Pa. C.P. Aug. 15, 2003); see also Rosenberg v. C.R. Bard, Inc., 387 F. Supp. 3d 572, 576–78 (E.D. Pa. 2019). But see  Gross v. Coloplast Corp., 434 F. Supp. 3d 245, 248, 250–52 (E.D. Pa. 2020).

PLAC submitted a cogent amicus brief on these issues. See 2020 WL 7260732. They note that Plaintiff’s arguments disregarded the broader policy pronouncements by the Pennsylvania Supreme Court around “product[s] whose distribution is limited precisely because its benefits and risks are to be assessed only by licensed physicians acting on behalf of particular patients whose individual physical condition and circumstances are known to them.” Coyle ex rel. Coyle v. Richardson Merrill, Inc., 584 A.2d 1383, 1386-87 (Pa. 1991). Limiting a plaintiff to recovery only if she can demonstrate “negligence or fault” is consistent with–and is the only result consistent with–the Pennsylvania Supreme Court’s repeated recognition that “medical uncertainties exist because each patient is unique, and undesirable results occur even when the diagnosis is correct and treatment is properly administered.” Toogood v. Rogal, 824 A.2d 1140, 1151 (Pa. 2003).

Today’s post looks at standing and the recent US Supreme Court decision in Transunion v. Ramirez, No. 20–297 (U.S. Decided June 25, 2021). The case arose out of the Fair Credit Reporting Act which regulates the consumer reporting agencies and also creates a cause of action for consumers to sue and recover damages for certain violations.  Defendant below is a credit reporting agency that in 2002 began offering an add-on product called
Name Screen Alert. When a business subscribed, TransUnion would conduct its ordinary credit check of the consumer, and it would also use third-party software to compare the consumer’s name against a list maintained by the federal government of terrorists, drug traffickers, and other serious criminals. If the consumer’s first and last name matched the first and last name of an individual on OFAC’s list, the Court noted that TransUnion would place an alert on the credit report.  The company did not compare information other than names, and would indicate that the consumer’s name was only  a “potential match.”

A putative class sued alleging the company failed to use reasonable procedures to ensure the accuracy of their credit files because of this Screen Alert.  The class included members whose information was given to third parties and members whose credit reports were not given to others.  The District Court ruled that all class members had Article III standing on each of the  statutory claims. The jury returned a verdict for the plaintiffs and awarded each class member statutory damages and punitive damages. A divided panel of the Ninth Circuit affirmed in relevant part.

The standing issue loomed large.  Article III confines the federal judicial power to the resolution of “Cases” and “Controversies” in which a plaintiff has a “personal stake.” Raines v. Byrd, 521 U. S. 811, 819–820. To have Article III standing to sue in federal court, a plaintiff must show, among other things, that the plaintiff suffered concrete injury in fact. Lujan v. Defenders of Wildlife, 504 U. S. 555, 560–561. And in a discussion of potentially great significance, the Court offered some guidance on what injury counts as a “concrete harm.” Central to assessing concreteness is whether the asserted harm has a “close relationship” to a harm “traditionally” recognized as providing a basis for a lawsuit in American courts. Spokeo, Inc. v. Robins, 578 U. S. 330, 340. That inquiry asks whether plaintiffs have identified a close historical or common-law analogue for their asserted injury. Physical or monetary harms readily qualify as concrete injuries under Article III, and various intangible harms—like reputational harms—can also be concrete.

Importantly, the Court noted that Article III standing requires a concrete injury even in the context of an alleged statutory violation.  The Court thus again rejected the proposition that a plaintiff automatically satisfies the injury-in-fact requirement whenever a statute grants a person a statutory right and purports to authorize that person to sue to vindicate that right. The majority thus rejected Justice Thomas’ view (seen in a sprinkling of lower court opinions) that injury in law is an injury in fact. The Court recognized a difference between a statutory cause of action to sue a defendant over the defendant’s alleged violation of federal law, and the plaintiff’s suffering concrete harm because of the defendant’s violation of federal law. Article III grants federal courts the power to redress harms that defendants cause plaintiffs, not a freewheeling power to hold defendants accountable for legal infractions.

Applying that reasoning to the class claims, the Court had no trouble concluding that the 1,853 class members whose credit reports were given to others suffered a concrete harm that qualifies as an injury in fact.  As to the other 6332 class members, the mere existence of inaccurate information, absent dissemination, traditionally has not provided the basis for a lawsuit in American courts. The plaintiffs cannot demonstrate that the misleading information in the internal credit files itself constitutes a concrete harm.  As to the “risk” that the information could be disseminated in the future, while material risk of future harm can satisfy the concrete-harm requirement in the context of a claim for injunctive relief to prevent the harm from occurring, at least so long as the risk of harm is sufficiently imminent and substantial, see Spokeo, 578 U. S., at 341–342, here the mere risk of future harm, without more, cannot qualify as a concrete harm in a suit for damages. The 6,332 plaintiffs did not demonstrate that the risk of future harm materialized. Nor did those plaintiffs present evidence that the class members were independently harmed by their exposure to the risk itself. The risk of future harm did not supply the basis for standing.

The Court had no occasion to address whether and when such plaintiffs may sue in state courts, and also declined to address typicality under Rule 23, noting that, “In light of our conclusion about Article III standing, we need not decide whether Ramirez’s claims were typical of the claims of the class under Rule 23.” However, the Court did direct that on remand, the Ninth Circuit may consider in the first instance whether class certification is appropriate in light of  the conclusion about standing.  And it clearly is not appropriate.  The majority has made clear that every class member needs to establish Article III standing for every claim made and every remedy sought. Mere risks of future injuries may not be concrete enough for Article III standing for damages claims. And these have clear implications for typicality and for the predominance of individual issues.