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.

Today’s post looks at Rayes v. Novartis Pharms. Corp., No. EDCV21201JGBKKX, 2021 WL 2410677 (C.D. Cal. June 11, 2021), which contains an interesting discussion of an aspect of drug product preemption.  The Supreme Court discussed in Wyeth and later clarified in Merck Sharp & Dohme Corp. v. Albrecht, 139 S. Ct. 1668, 1679 (2019), that the Changes Being Effected (CBE) regulation that allowed a manufacturer under limited circumstances to change a drug label (such as adding warning language), before getting FDA approval, is only triggered when there is “newly acquired evidence” that warrants that CBE step.

Defendant makes a drug—Beovu—that treats an eye disorder (Macular Degeneration).  After the drug was approved in 2019 (the third in its class to receive FDA approval),  there were scattered reports of side effects including retinal vasculitis and retinal vascular occlusion.   On June 9, 2020, Defendant revised the U.S. product label for Beovu to include a new warning regarding the risk of retinal vasculitis and/or retinal vascular occlusion. Plaintiff alleged that Defendant knew of Beovu’s risks before June 2020, and that peer-reviewed medical literature supported a relationship between administration of Beovu and retinal vasculitis and retinal vascular occlusion injuries. Plaintiff alleged he experienced the side effect and that Defendant failed to provide consumers and the medical community adequate data and warnings about the risks. 2021 WL 2410677, at *1–3.  Defendant filed a motion to dismiss on preemption grounds.
The court recognized that in order to bring a failure-to-warn claim that is not preempted by the FDCA, a plaintiff must plead a labeling deficiency that the defendant could have corrected using the “changes being effected” (“CBE”) regulation. Mahnke v. Bayer Corp., 2020 WL 2048622, at *3 (C.D. Cal. Mar. 10, 2020).  (quoting 21 C.F.R. § 314.70(c)(6)(iii)(A)). Newly acquired information is defined as: “[D]ata, analyses, or other information not previously submitted to the [FDA] which may include (but are not limited to) data derived from new clinical studies, reports of adverse events, or new analyses of previously submitted data (e.g., meta-analyses) if the studies, events, or analyses reveal risks of a different type or greater severity or frequency than previously included in submissions to FDA.” McGrath v. Bayer HealthCare Pharms. Inc., 393 F. Supp. 3d 161, 167 (E.D.N.Y. 2019). But, the court noted, the label had to have been inadequate when plaintiff used the drug, after its approval but before the label was changed and before he was injured.  This left a narrow window, and thus the complaint was full of allegations of newly acquired information that did not help his case.  Newly acquired information that postdates the injury cannot establish liability because it is not considered known or reasonably knowable under the circumstances.
The “only genuinely new information” that the plaintiff alleged were a handful of adverse event reports. The court easily concluded that this was not the kind of information which would have reasonably enabled Defendant to unilaterally change its labeling under the applicable regulations.

Claims arising out of Novartis‘ alleged misrepresentation to the FDA were preempted under Buckman.   Private causes of action based on allegations that a sponsor of an FDA-approved product misrepresented information submitted to the FDA are preempted by the FDCA.  Such claims do not rely on traditional state tort law. Accordingly, to the extent Plaintiff’s claims relied on a theory that Defendant misrepresented the safety of Beovu to the FDA, such claims were dismissed also.

 

As we have noted in prior posts, there appears to have been an uptick in the funding of litigation by third parties, a practice that has rightly been questions as opportunistic, overly secretive, contrary to notions of standing and fair play, and as a practice that may lead to increased unnecessary litigation. Back in April 2021, the United States District Court for the District of New Jersey proposed a new local rule, Local Civil Rule 7.1.1, to require  disclosure of certain information regarding third-party litigation funding.

The Proposed Rule would require disclosure of the funder’s identity, including the name, address, and, if applicable, its place of formation; whether the funder’s approval is required for litigation and settlement decisions and, if so, the nature of the terms and conditions of that approval; and a brief description of the nature of the funder’s financial interest.

Consistent with caselaw on the issue, the Proposed Rule also provides that the parties may seek additional disclosures of the terms of the agreement after showing that a) the funder does have the right to make material litigation or settlement decisions; b) the interests of the named parties or proposed class are not being protected (such as conflicts of interest); or c) additional discovery is necessary to any issue in the case. E.g.,  In re Valsartan N-Nitrosodimethylamine (NDMA) Contamination Prod. Liab. Litig., 405 F. Supp. 3d 612, 615 (D.N.J. 2019).

Comments were submitted by many last month, including on behalf of the U.S. Chamber Institute for Legal Reform (“ILR”) and New Jersey Civil Justice Institute (“NJCJI”), which noted that at present, much of the third party financing activity in the District of New Jersey is occurring in secrecy because there is generally no procedural or evidentiary rule requiring disclosure of the use of such funding.  The groups noted that by identifying persons/entities with a stake in the outcome of the litigation, the contemplated disclosures would allow courts and counsel to ensure compliance with ethical obligations regarding conflicts. Disclosure may also reduce the likelihood of unethical fee-sharing between lawyers and non-lawyer funders consistent with Model Rule of Professional Responsibility 5.4, which has been adopted in New Jersey and other states.

The proposed amendment would satisfy defendants’ entitlement to know their accusers – i.e., who is really on the other side of an action. Disclosure of such funding – including the nature of the financial interest at stake – would also level the playing field in cases in which a plaintiff seeks to make the size or wealth of a corporate defendant a key theme in the litigation… the misleading David vs. Goliath narrative at trial.

The contemplated disclosures are also highly relevant to the all-important issue of settlement. A party that must pay a third party funding entity a percentage of the proceeds of any recovery may be inclined to reject what might otherwise be a fair settlement offer in the hopes of securing a larger sum of money. Indeed, litigation funding makes it harder and more expensive to settle cases. These disclosures would allow both courts and defendants to more accurately evaluate settlement prospects and to better calibrate settlement initiatives. Further, according to these groups, transparency would allow courts to structure settlement protocols with greater potential to succeed.

The proposed disclosure rule would provide courts and parties information about whether third party finding companies are exercising control or influence over litigation. The companies frequently dismiss such concerns by asserting that they do not control litigation strategy, note the comments. However, the few  agreements that have come to light demonstrate that, unsurprisingly, funding entities actually do exercise various forms of control and influence over the litigation matters in which they invest. E.g., Boling v. Prospect Funding Holdings, LLC, 771 F. App’x 562, 579 (6th Cir. 2019).

The proposed local rule would enable courts to determine whether funding arrangements are running afoul of state-law prohibitions against champerty – the legal doctrine that may bar someone from funding litigation in which he or she is not a party. Some states still have this rule.  The contemplated disclosures are also highly relevant in purported class actions, particularly in evaluating Fed. R. Civ. P. 23(a)(4)’s adequacy-of representation requirement.

The disclosure of such funding arrangements would also be important information to  have on the record in the event that a court determines it should shift costs or impose sanctions or levy costs. The comments note that Federal Rule 26(b)(1) states that the scope of discovery shall be “proportional to the needs of the case, considering . . . the parties’ resources . . . [and] whether the burden or expense of the proposed discovery outweighs its likely
benefit.”  Unlike an average plaintiff, a TPLF entity’s business purpose is to raise funds to prosecute and profit from litigation. Thus, the existence of third party funding is relevant to the proportionality element of the scope of discovery.

Readers may not have seen that former U.S. District Judge Jack B. Weinstein passed away this week at the age of 99.

He sat on the Eastern District of New York bench from 1967 to 2020, having been nominated to the bench by President Lyndon B. Johnson. He presided over a number of landmark and significant matters, but readers of the MassTortDefense blog may know him best for a series of important rulings in the asbestos litigation,  DES cases, tobacco claims, as well as the Agent Orange cases, covering class action issues, choice of law, the intersection with bankruptcy, general and specific causation, the government contractor defense, and more.

He didn’t always get it right (in our view or that of the Second Circuit) but his brilliance, reasoned analysis, and innovative efforts to manage mass tort litigation simply cannot be denied. RIP Judge.

 

The Ninth Circuit affirmed the dismissal of a putative class action accusing Trader Joe’s of mislabeling its chicken packaging.  Webb v. Trader Joe’s Co., No. 19-56389, 2021 WL 2275265 (9th Cir. June 4, 2021).

Plaintiff claims she purchased “All Natural Boneless Chicken Breasts,” “All Natural Chicken Thighs,” and “All Natural Chicken Wings,” (the Products) from various Trader Joe’s locations. The Products were each marked with a label stating that they contained “[u]p to 5% retained water.” Webb had the Products examined by a food testing lab, which concluded that the Products contained more retained water than claimed by Trader Joe’s labels.

Plaintiff Webb argued that she used a data collection protocol that produced different percentages of retained water than those displayed on Trader Joe’s poultry labels, and thus Trader Joe’s labels were misleading in violation of state law. But there is federal law regulating poultry labeling and retained water measurement protocols. See 21 U.S.C. § 467e.  The federal Poultry Products Inspection Act (PPIA) regulates the retained water data collection process and label production for covered poultry products. Under the PPIA, Trader Joe’s was required to maintain its retained water data collection protocol on file and make it available to the Food Safety and Inspection Service (FSIS) for review. FSIS could require changes to the protocol within 30 days of receiving notice of a new or revised protocol. The retained water claims on the Products’ labels were also inspected by FSIS because the generic retained water claims were affixed alongside special statements and were “required to [be] submit[ed] for evaluation.”  See 78 Fed. Reg. 66826-01, 66827 (Nov. 7, 2013).

Federal law expressly preempts claims relating to regulated labels that would impose requirements “in addition to, or different than those” already required by federal law. Because Webb’s state law claims seek to impose the requirements of her retained water protocol in addition to Trader Joe’s FSIS-required protocol, her claims were preempted.  Specifically, and first, allowing Webb to impose her retained water protocol on Trader Joe’s via state law would require Trader Joe’s to conform to a different data collection process than the protocol that was properly developed and made available to FSIS for review as required by federal law. Second, requiring Trader Joe’s to change its labeling to be consistent with plaintiff’s retained water data would require changes to poultry labels that were already approved by FSIS. Because Webb’s state law claims seek to impose requirements “in addition to” those outlined in the PPIA, her claims are preempted.

Also of note is the affirmance of the district court’s decision to dismiss with prejudice. Here, Webb claimed there was a “narrow gap” through which her claims could survive: she was “suing for conduct that violates” the PPIA but not “because the conduct violates” the PPIA (rather, because it violates applicable state law), so her claims might not be preempted.  But, as discussed, federal law does not allow Webb to impose a different data collection protocol on Trader Joe’s. So the only possible “narrow gap” where Webb’s claims might not be preempted would be if she could plausibly claim she used Trader Joe’s exact data collection protocol and yet obtained different results, thereby evincing that Trader Joe’s is misrepresenting its data to FSIS. But she did not, and the protocol made available to FSIS was not even publicly accessible. Webb thus could not amend her complaint to claim that her retained water data collection protocol was the same as Trader Joe’s protocol without first getting information from Trader Joe’s itself.  The Ninth Circuit accordingly affirmed the district court’s dismissal with prejudice.

Those class action mavens among our readers will want to check out the commentary article by my colleagues James P. Muehlberger, Timothy E. Congrove and Daniel E. Cummings.

The paper is “Class Actions -Will The Supreme Court Finally Resolve The Circuit Split Over Rule 23(C)(4) Issue Class Actions?”

You can find it in the June 4, 2021 issue of Mealey’s Litigation Report: Class Actions.

As Sergeant Joe Friday instructed, just the facts, as Shook was involved.  Those interested in the preemption doctrine will want to read the opinion by Judge Saylor in In Re Zofran, granting summary judgment for defendant and applying the first prong of Wyeth as clarified by Merck v. Albrecht.

In re Zofran (Ondansetron) Prod. Liab. Litig., No. 1:15-MD-2657-FDS, 2021 WL 2209871 (D. Mass. June 1, 2021).

The Eleventh Circuit recently affirmed a jury verdict for defendant in a suit alleging that it sold faulty wood chippers to an equipment rental company.  James v. Terex USA, LLC, No. 20-14553, 2021 WL 2137599 (11th Cir. May 26, 2021).

At trial, the plaintiff  sought to introduce lay testimony from a Shane Dinkins about his experience with a different model of wood chipper that he bought from Terex. Plaintiff argued Dinkins’s testimony about his experience with his own wood chipper was necessary to impeach Terex’s opening statement that it “stood behind all its products.” The district court found to the contrary — that Dinkins’s experience with his own wood chipper would be prejudicial because he purchased a completely different model of chipper and so his experience was not similar enough to that of plaintiff.  And even if Dinkins experienced the same type of problem with his different model of wood chipper, the district court deemed that testimony unnecessarily cumulative under Rule 403.  Plaintiff had many opportunities to introduce evidence that undermined Terex’s theme that it responded to every claim for repair and made the repair.  A number of employees testified about their frustrations with Terex’s chippers and what, in their view, was an insufficient response from Terex. Plaintiff offered no reason why the omission of testimony about similar experiences with a dissimilar product substantially prejudiced its ability to impeach Terex’s “theme” presented during its opening statement.

Plaintiff also made the obligatory and hard to show argument that the jury verdict went against the weight of the evidence.  There was no dispute that the chippers had some problems. So the only conflicting testimony was about whether Terex appropriately responded when  informed of these problems. On that point, the jury was presented with evidence sufficient to support its defense verdict.  A number of Terex employees testified that they responded to each of the reported problems with both chippers and, at times, even went above and beyond by providing repairs that were not technically covered by the warranty.  2021 WL 2137599, at *3.

The Tenth Circuit recently affirmed the dismissal of a suit seeking to hold a gunmaker n liable for injuries a woman alleged she suffered when a rifle fired spontaneously.  Harris v. Remington Arms Co., LLC, 997 F.3d 1107 (10th Cir. 2021). The case turned on the admissibility of plaintiff’s expert evidence.

Roughly two years after buying the rifle, Ms. Harris took it to hunt. As she climbed to a tree stand, the rifle got tangled in mesh. Ms. Harris alleged that when she had tried to free the rifle from the mesh, the safety moved to the “off” position and the rifle fired into her hand without anyone pulling the trigger. Ordinarily, a rifle has two separate safeguards preventing an unintentional shot. The first is the safety mechanism. When the safety is on, the rifle can’t fire. The second is the trigger mechanism. Remington puts space between the mechanisms for the safety and trigger so that a user must pull the trigger to fire the rifle.

Plaintiff’s expert first opined that a bond had formed between the two separate mechanisms after the Harrises engaged the safety and stored the rifle in a cold room, causing a liquid bonding agent to solidify. But there was a logic issue here. Remington argued that if a bond had formed from the cold, the rifle would have improperly fired when Mr. Harris turned the safety off at least a year earlier in order to clean the rifle. There was nothing to suggest that the rifle had misfired before Ms. Harris went to hunt. And once the bond broke, the liquid bonding agent wouldn’t solidify again. Confronted with Remington’s argument, the expert changed his explanation, opining for the first time that the bond had formed when a lubricant (called “Molykote”) moved between the safety and trigger mechanisms and caused the liquid bonding agent to solidify.

This raises an important question.  Is expert discovery like a tennis match, with volley responding to volley?  Most courts say it is not. Here, the Harrises did not timely disclose Mr. Powell’s opinion testimony about the movement of Molykote. This opinion did not appear in Mr. Powell’s expert report or deposition testimony, and the Harrises did not disclose this opinion until more than two months after the deadline for expert reports. Id. at 1112.

In deciding whether the delay was harmless, the court considered four factors:

1. the prejudice or surprise to Remington if Mr. Powell could present his new opinion testimony about the movement of the Molykote,
2. the opportunity for Remington to cure the prejudice,
3. the potential for the new opinion testimony to disrupt the trial, and
4. the Harrises’ bad faith or willfulness.
See Jacobsen v. Deseret Book Co., 287 F.3d 936, 953 (10th Cir. 2002).

Here, the district court properly found that

The district court explained that:
• the introduction of the new Molykote opinion would have delayed the trial,
• the case had lingered longer than most of the cases on the court’s docket, and
• the Harrises could have learned earlier about the effect of the Molykote.

Lacking an expert opinion on these issues of defect and causation, summary judgment was granted. And the court of appeals affirmed.