Friday, July 29, 2011

Illegal Promotion in the Air Can't Defeat the Learned Intermediary Rule

There's not all that much to King v. Pfizer Pharmaceutical Co., 2011 U.S. Dist. Lexis 80952 (D. Md. July 25, 2011).  Basically it's a slam dunk learned intermediary dismissal.  The plaintiff admitted that "she had conversations with her treating physician about possible side effects of [the drug], one of those side effects being leg pain" - which was the adverse effect over which she was suing.  Id. at *7.

On a warning claim, that kind of admission entitles the plaintiff to no-expenses-paid one-way ticket to the exit.  We wouldn't bother telling you about it if that was all there was.

The interesting part was the plaintiff's argument that certain alleged "past violations of FDA guidelines" undercut the ability of the defendant to communicate warnings "adequately" to physicians, and thus (plaintiff argued) "undermin[ed] the role of the learned intermediary."  Id.  We're not 100% sure (and neither was the court), but that looks like a rather inarticulately presented overpromotion claim.

The court threw it out.  Why?  Because alleged illegal promotion had "no discernable relevance to her individual claim."  Id. at *8.  The court's rationale is an endorsement of a seemingly unassailable proposition that, nonetheless, some courts have chosen to ignore - alleged improper promotion must have affected the plaintiff's own prescriber in order to be relevant - and for that reason, we deem it worthy of mention.  The court held:
[Plaintiff] does not even attempt to show how [defendant's] past improper practices affected her own physician's ability to understand the risks and side effects associated with [the drug], nor does it appear that she reasonably could have. . . .  Accordingly, [plaintiff's] apparent attempt to sidestep the "learned intermediary" doctrine must fail.

King, 2011 U.S. Dist. Lexis 80952, at *8 (emphasis original).  Thus, King is one more entry in the string citation we employ when trying to keep out extraneous "evidence" of purportedly improper promotion that the plaintiff can't show ever reached his/her own prescriber.

Thursday, July 28, 2011

Mirapex - Daubert Inapplicable To Toll Statute of Limitations

We don't generally cover statute of limitations-type issues (except for class action tolling) because they tend to be too state-specific and fact-bound to be of much general use.  We're making an exception for today's decision in Gazal v. Boehringer Ingelheim Pharmaceuticals, No. 10-3129, slip op. (8th Cir. July 28, 2011), because it decides a statute question we've seen raised in any number of jurisdictions.  That's whether a plaintiff, knowing full well what he thinks is happening, is allowed to delay suit under until the scientific proof of causation would satisfy the relevant Daubert standard of the jurisdiction.

Gazal provides a resounding "no" to that question, meaning that tardy plaintiffs can't hide behind Daubert to excuse their failure to file suit in a timely fashion.  The plaintiff in Gazal was an Australian national who was prescribed Mirapex in Texas, where he "owned property."  He proceeded to gamble away lots of his money, and he tried to blame Mirapex for not being able to stay out of casinos.

For statute of limitations purposes, the key undisputed fact is this:  "[Plaintiff] admitted that at some point in late 2005, he became aware that Mirapex was linked to, and might cause, compulsive gambling."  Slip op. at 2.  He didn't file suit, however, until June 2009.

Dead to rights under the Texas two-year statute of limitations, plaintiff tried to argue that his claim didn't "accrue" until there was scientific evidence sufficient to satisfy Texas' version of Daubert, which was imposed in Merrell Dow Pharmaceuticals, Inc. v. Havner, 953 S.W.2d 706 (Tex. 1997).  Thus, plaintiff was trying to take pro-defense rule (Havner is relatively strict about causation standards and scientific proof), flip it, and use it to his own advantage.

The Eighth Circuit (Texas is in the Fifth, but due to the marvels of MDL litigation, the Eighth Circuit handled the appeal) said "don't mess with Texas" and affirmed summary judgment.  Accrual for the statute of limitations is based upon consideration of notice, not on issues of ultimate proof:
[O]bjective verification of causation, in the form of an epidemiological study that meets the Havner standard, is not a predicate that must be established for a claim to accrue.  Havner considered what weight ought to be given to particular epidemiological studies in determining whether the plaintiffs’ causation evidence was legally sufficient under the “more likely than not” burden of proof.  It did not speak to the minimum notice a plaintiff must have before a particular claim accrues and does not bear on the particular issue before us.
Gazal, slip op. at 6.  Rather, what mattered for statute of limitations purposes was that the plaintiff admitted his own subjective notice of his allegations concerning Mirapex and compulsive gambling.  Id.

Since we've seen similarly knowingly tardy plaintiffs make the same argument in reliance upon any number of non-notice related elements of proof (from malpractice expert certifications to limited tort injury severity), we're pleased to see an appellate court affirm, in cogent fashion, just what the statute of limitations is all about.  So we thought we'd pass it along.

Wednesday, July 27, 2011

Interesting Post-Dukes Class Action Procedural Ruling

Taking a look at the fairly recent decision denying class action certification in In re: Bisphenol-A (BPA) Polycarbonate Plastic Products Liability Litigation, 2011 WL 2634248 (W.D. Mo. July 5, 2011), we weren’t as much interested in the result (denial of class certification) as in the procedure the court adopted following the Wal-Mart Stores, Inc. v. Dukes, 131 S. Ct. 2541 (2011), decision.  Heck, the plaintiffs were pursuing multi-jurisdictional class certification in Bisphenol-A.  That was pretty much a lost cause for them before Dukes.  Indeed, Dukes might not have been as damaging to multi-jurisdictional class actions as the Court’s other recent opinion in Smith v. Bayer Corp., 131 S. Ct. 2368, 2377 (2011), which made the point that even identically-phrased enactments (rules in Smith, but equally applicable to the UCC or a Restatement section) can be interpreted differently in different jurisdictions, thus creating “different standards.”  Multi-jurisdictional class actions are dead as a doornail (although why a doornail is less animate than, say, a picture frame or a pencil is beyond us).

But we digress.

In Bisphenol-A, the court, after denying certification, adopted some interesting procedures.  One of them was to postpone determining, one way or the other, whether single-state class actions (other than in the court's home jurisdiction) might be certifiable even though the multi-jurisdictional one plainly wasn’t:

There is also the prospect that one or more transferor courts will conclude – without the vagaries of multiple jurisdictions to worry about and a greater familiarity with that state’s law – that a statewide class is appropriate.13

13This should not be taken as suggesting that transferor courts should (or should not) certify statewide classes.
Bisphenol A, 2011 WL 2634248, at *10 & n.13.

This decision to defer single-state class certification until after an MDL remand – when judges with superior knowledge of individual states’ laws would make the decisions – is rather novel.  We can’t think of another instance in which an MDL has left a class certification issue for a transferor court remand, given the Rule 23(c) language about “early practicable time.”  In one sense it could be good for our side, since the class action purveyors will have to litigate, both in the MDL and after remand, for quite a while (and spend their own money) without knowing if there will be any “common fund” at the end of the litigation rainbow.  In another sense it could be adverse for our side, depending on whether the statute of limitations is tolled in the interim.  But it’s certainly a significant procedural wrinkle worth thinking about.

And there’s a second post-Dukes procedural innovation of sorts – one that we advocated vigorously, but not terribly successfully, back when the ALI was considering its Principles of the Law of Aggregate Litigation.  That’s the court’s decision in its “epilogue” to give the eventual MDL transferor courts more than mere pieces of paper, such as trial plans, with which to determine if common issues actually exist or predominate.  Instead, the Bisphenol-A court decided, why not try some actual cases first and let the transferor courts make their class certification decisions based upon real experience?

In order to maximize the assistance provided to transferor courts, the undersigned intends to delay remand until after one or more cases have been litigated through final judgment. . . .  The Court cannot presently assess the propriety of certification. . . .  In addition, the parties should begin preparation for bringing one or more cases to trial.
Bisphenol A, 2011 WL 2634248, at *10.

While there are some epilogues we can’t stand (Ron-Hermione? That pairing would produce a murder-suicide within a year.), we do like this one.  We believe that the numerous individual vagaries in cases involving product-related claims tend to get glossed over by trial plans, which are sterile exercises compared to the nitty-gritty of actual trials.  If more courts were to go this route, and require the trying of cases before deciding class certification, the number of certified classes – already small – would practically vanish as the trials revealed all the multitude of ways in which individual claims actually differ from one another.

Tuesday, July 26, 2011

Remand Denials in Hip Implant MDL

We've just found out about multiple remand denials from the Depuy hip implant MDL.  Legally, they're all pretty much the same, although there are some factual differences.  They all reject, even under the relaxed fraudulent joinder standard, any possibility that a manufacturer's sales representative can be subject to an independent product liability claim where the rep only delivered product (a prescription medical device) from the manufacturer to the prescribing physician.  Looking at these, we'd have to say that Alabama (and the Eleventh Circuit) have just about the most favorable sales representative precedent of any state in the country.

Anyway, here they are:

Harper v. Depuy Orthopaedics, Inc., slip op., No. 1:11 dp 20522 (N.D. Ohio July 25, 2011).
Patterson v. Depuy Orthopaedics, Inc., slip op., No. 1:11 dp 20521 (N.D. Ohio July 25, 2011).

Slay v. Depuy Orthopaedics, Inc., slip op., No. 1:11 dp 20524 (N.D. Ohio July 25, 2011).

Taylor v. Depuy Orthopaedics, Inc., slip op., No. 1:11 dp 20523 (N.D. Ohio July 25, 2011).

Milner v. Depuy Orthopaedics, Inc., slip op., No. 1:11 dp 20529 (N.D. Ohio July 25, 2011).

Thanks to Joe Babington at Helmsing, Leach for passing these on, and congrats to the folks at Tucker Ellis and Drinker Biddle, whom we gather were also involved in these wins.

Keep those wins coming.

Monday, July 25, 2011

Punishment without Guilt

About a month ago we admitted to pilfering an idea from an in-house lawyer friend. We didn't name names, but we described her as "brilliant and exceedingly well-dressed." Since that post appeared, we've received heaps of emails from friends asking us to admit that we were, in fact, talking about them. The same thing must have happened after Carly Simon's "You're So Vain" song hit the Top 40 in 1972-73. She probably got calls from all the most eligible glamour-boys (Hefner, Beatty, Jagger, Bexis) seeking confirmation that they had inspired the lyrics.

Recently another in-house lawyer, who is also brilliant, sartorially splendid, and relentlessly thoughtful, brought something interesting to our attention: the Chamber of Commerce's June 23 letter to the Office of Inspector General about the threatened debarment of the Forest Labs CEO. Here is a link to the Chamber of Commerce letter.

It may have been big news in late 2010 when Forest settled civil and criminal charges relating to the marketing of three drugs, but it was even bigger news in April of this year when the OIG (some say those letters stand for "Orwell-Inspired Government") notified Forest that it was considering excluding the CEO from participation in federal healthcare programs because he is an individual "associated with" Forest Labs.

The OIG's threat is disturbing in the extreme, because at no time during the government's six year investigation of Forest was the CEO ever accused of wrongdoing in connection with the settled matters. If it sounds as if the OIG is being less than fair, it's because it is. The OIG relies on its October 2010 Guidance for Implementing Permissive Exclusion Authority Under Section 1128(b)(15) of the Social Security Act, which says that knowledge by the executive is not required, as "Officers and managing employees ... may be excluded under section 1128(b)(15)(A)(ii) based solely on their position within the entity."

Ah, if only we could issue "guidances" in our lives that would justify our every whim and caprice. Why didn't we empty the dishwasher this morning? Didn't you see our guidance on Kitchen Conduct and Our Right to Perpetual Indolence? When the Drug and Device Law Daughter wonders why she cannot have the car Friday night, we can refer her to our recent guidance on Motor Vehicles and Exclusion of Imbecile Boyfriends Therefrom.

Maybe it's because we are dyed-in-the-wool Anglophiles, but we consider The Economist to be just about the most sensible journal out there. In an article titled "Forest Firing: The government seeks to sack an innocent boss," The Economist lays bare the moral and intellectual poverty of the OIG's position. The OIG is "retroactively ... taking down executives at firms that may have had problems in the past." The OIG says its policy "is intended to deter corporate misconduct. It may simply deter clever people from becoming drug executives." Just as terrifying, the OIG's chief counsel says he might use the threat of executive exclusion to "force companies to get rid of products which they have marketed improperly." There isn't "guidance" enough in the world to justify that abuse of power.

A firestorm of criticism prompted the OIG to issue a "Fact Sheet" defending its position. The Fact Sheet points out that the OIG hasn't yet decided to exclude the CEO, and that the OIG considers the following factors:

* circumstances of the misconduct and seriousness of the offense,
* individual's role in the company,
* individual's actions in response to the misconduct, and
* information about the company.

These factors aren't so much an explanation as a gavotte. (That's the first time in our lives we ever used the word "gavotte." It's in "You're So Vain." We had to look it up.) Notably, the individual's role (or lack of role) in perpetrating the misconduct seems utterly irrelevant. Sorry, but neither these factors nor the Fact Sheet supply comfort to anyone who worries about the limits of government power.

The letter from the Chamber of Commerce is much more persuasive than the OIG's Fact Sheet. The Chamber of Commerce makes several powerful points: (1) it's wrong and unfair to exclude someone from their employment based only on "guilt by association," (2) it is a violation of due process rights to deprive someone of their livelihood without any engagement in, or even knowledge of, any wrongdoing, especially when the OIG's exercise of "discretion" is "not subject to administrative or judicial review." and (3) punishing people who had nothing to do with the alleged fraud cannot possibly deter future wrongdoing. Rather, it will deter "qualified individuals from assuming positions of responsibility in the health care industry for fear of unjust and unjustified sanctions."

We agree with the Chamber's letter, except maybe on one point: we're not so sure that the OIG's exclusion, if carried out, would evade judicial review. We suspect that the OIG might be thinking the same thing. Some of us used to be prosecutors. We know what prosecutorial discretion is. Sometimes justice comes from those things you decide not to do. If the OIG really does apply discretion, it will conclude that following through on its threat in this case would be a very bad idea.

Friday, July 22, 2011

Rehearing Sought In Mensing

The plaintiffs in PLIVA, Inc. v. Mensing, 131 S. Ct. 2567 (2011) (not sure why it’s all-caps, but that’s the way the Supreme Court has it), have sought reargument. Here’s a copy of their petition.

Any Supreme Court rehearing petition is a long shot, but in this case, we’d have to say it’s worse than that.  Mensing is a clear case of “be careful what you ask for, you just might get it.”

That’s, of course, because of the grounds asserted for rehearing.  Plaintiffs now claim that the Court overlooked another supposedly “alternative” theory of liability, specifically:

[T]he Petitioner generic drug companies could have “independently” complied with both state and federal law simply by suspending sales of generic metoclopramide with warnings that they knew or should have known were inadequate.
Mensing rehearing petition at 1.

Okay…. There are just two slight problems with this “take off the market” theory.

First, it doesn’t exist under state law.  A “take off the market” theory is merely a reworded variant of a “duty to recall” claim that has been rejected by the Third Restatement and by state law.  The Restatement states flatly that there’s no common-law duty beyond non-negligently complying with a government-ordered or privately-undertaken product recall.  Restatement (Third) of Torts, Products Liability §11 (1998).  There’s no common-law duty to initiate a product recall in the first instance.  In short, state product liability law is not in the business of banning products (whether or not federally approved) from the market.

As for the case law rejecting this sort of theory, we addressed that in our “Total Recall” post that cites law from twenty-eight states.  Since that post, we’ve added Lance v. Wyeth, 4 A.3d 160 (Pa. Super 2010), and Bartlett v. Mutual Pharmaceutical Co., 2010 WL 3092649 (D.N.H. Aug. 2, 2010), to the list.  Notably, one of the states explicitly rejecting duty to recall is plaintiff Mensing’s home state of Minnesota.  See Kladivo v. Sportsstuff, Inc., 2008 WL 4933951, at *5 (D. Minn. Sept. 2, 2008); Hammes v. Yamaha Motor Corp. U.S.A., Inc., 2006 WL 1195907, at *11 (D. Minn. May 4, 2006); Berczyk v. Emerson Tool Co., 291 F. Supp.2d 1004, 1006 (D. Minn. 2003); McDaniel v. Bieffe USA, Inc., 35 F. Supp.2d 735, 743 (D. Minn. 1999).  The issue never comes up in plaintiff Demahy’s home state of Louisiana, because a statute delineates the only acceptable product liability claims – and duty to recall/not to sell at all sure ain’t one of them.

So the first problem with the plaintiff’s latest theory in Mensing is that it doesn’t exist at all under state law.  In terms of preemption, that also means that it can’t possibly serve as the basis of a “parallel” violation claim (Petition at 3) either, since no “parallel” state law claim actually exists.

The second problem with the Mensing petition is that, since the original Medtronic, Inc. v. Lohr, 518 U.S. 470 (1996), case over a decade and a half ago, we can’t think of a better candidate for preemption – whether asserted against any drug or device maker, branded, generic, or otherwise – than a claim that state law can effectively order a FDA-approved product (or any federally approved product, for that matter) off the market.  Such a claim presents an absolute and total conflict of the “yes/no” variety.  That is, where a federal agency such as the FDA reviews a product and tells its manufacturer, “yes, you can market this,” it’s a pretty raw conflict for state common law to tell the same manufacturer of the same product “you should not have marketed this product in our state.”

It’s hard to come up with a more direct – and thus more conflict preempted – collision between federal and state law.  Forget any need for “independent” FDA pre-approval of this or that warning change.  Indeed, forget labeling altogether.  A “take off the market” claim presents far deeper concerns.  Such a claim strikes at the heart of the federal mission that Congress delegated to the FDA, which is to decide what drugs (and other regulated products) should be available to the public in this country.

In that vein, we note that the Mensing petition (at 2) mentions that the court of appeals in Mensing made a thoughtless comment suggesting that the defendant could simply take its FDA-approved drug off the market in response to state tort suits.  We also note that even the four Supreme Court dissenters in Mensing, who rejected any and all preemption, were unwilling to find that a “take off the market” claim survived preemption:

In its decision below, the Eighth Circuit suggested that the Manufacturers could not show impossibility because federal law merely permitted them to sell generic drugs; it did not require them to do so.  [citing Mensing]  Respondents have not advanced this argument, and I find it unnecessary to consider.
131 S.Ct. 2567, 2587 n.8 (dissenting opinion). We strongly doubt that (having already pointed out plaintiffs’ waiver) all four of the dissenters would be willing to allow state-law litigants to argue that federally-approved products should not be sold at all.  And we doubt even more that any of the majority that found plaintiffs’ other theories preempted would allow that a “take off the market” theory to survive.

We don’t expect the Mensing petition to be granted, as the theory plaintiffs now advance is even more extreme than it is tardy.  That’s why it doesn’t exist, and why, if it did, it would be preempted.

Removal And All That Yaz

Our friends at Sidley have sent along another interesting removal/remand decision out of the Yazmin/Yaz MDL in the Southern District of Illinois.  Since we all get some joy from orders denying remand that come from this district (encompassing some notorious hellholes), they shared it with us, and we’re sharing it with you.  While the order in Taundra Taylor v. Paula Senn Peters, slip op., won’t provide the defense bar with as much mileage as, say Judge Posner’s Walton decision, (this is a rarer situation), it’s still pretty interesting.

To make a long story short, plaintiff Taylor sued defendant Peters in Alabama state court for injuries arising from a car crash.  That case was non-removable since both were citizens of Alabama.  Defendant Peters, represented by the Alabama plaintiffs’ firm Beasley Allen, filed an answer and third-party complaint against Bayer, alleging that Peters’ use of the drug Ocella (we’re hazy on how that ended up in Yazmin/Yaz, but assume there’s good reason) caused her to lose control of her car, and thus collide with Taylor.  We’re only doing removal today, but anyone substantively interested in this sort of theory should read our “Holding the Line on Duty to Warn” post, describing its rejection by Maryland’s highest court.

At this point, removal would still have been tough, particularly since third-party defendants are not generally allowed to remove cases where there’s no diversity between the original parties.  But as the litigation progressed, things got interesting.  The folks at Sidley found out that supposed defendant Peters had settled supposed plaintiff Taylor’s original claim and obtained a release in 2009, before Taylor filed any lawsuit against anybody.  In short, the initial lawsuit was a sham – involving no active case or controversy – and intended solely as a vehicle for keeping the ostensible “third-party” claim against Bayer in state court.

Relying on the release (obtained from supposed defendant Peters’ insurer), Bayer filed an “other paper” (one not based on an initial summons or complaint) removal, and simultaneously requested that the court end the sham by realigning Peters as a plaintiff for purposes of diversity jurisdiction.  Further confirming the sham, Peters, the supposed co-defendant represented by a plaintiffs’ firm, took the lead on opposing transfer to the MDL and in moving for remand.  Tellingly, Peters didn’t raise the settlement as a defense in her answer, never tendered defense of the lawsuit to her insurer, never acknowledged (or denied) the existence of a settlement agreement during the remand proceeding, and argued that Taylor’s claims against her were “viable” in an effort to show that their interests were not aligned.

The court had none of it.

In denying remand, Chief Judge Herndon called out “plaintiff” and “defendant” on their prior settlement agreement and their blatant collusion:

Clearly, in light of these agreements, no actual, substantial controversy existed between Ms. Taylor and Ms. Peters when this suit was commenced (nor does an actual, substantial controversy presently exist).  The Court also notes that Ms. Peters’ conduct – failing to tender this action to her insurer for defense, failing to raise the settlement and release agreements as a defense, and forcefully arguing that the claims against her are viable – indicates that Ms. Peters and Ms. Taylor are colluding in this matter; a factor that further supports the conclusion that no actual, substantial controversy exists.
Slip op. at 9.

Because there was “no actual, substantial controversy” between Ms. Taylor and Ms. Peters, Judge Herndon found it appropriate to realign Ms. Peters as a plaintiff, thereby creating complete diversity.  Thus remand was denied.

In this instance the plaintiffs (both the fake and real ones) were too clever by a half.  Too bad a successful removing defendant can't seek to tax its costs in defeating remand.

Thursday, July 21, 2011

Economic Loss Plaintiffs Don't Step Up To The Plate

When we convince a court that an action against one of our clients must be dismissed for failure to state a claim – say, for TwIqbal reasons – under Rule 12, we sometimes say that the plaintiff's case was so poor that s/he couldn’t even get to first base.  A much rarer form of dismissal, however, essentially holds that the plaintiffs can’t even get to the plate, let alone to first base.  That’s when a complaint is dismissed for lack of standing.  A dismissal for lack of standing recently occurred in In re McNeil Consumer Healthcare, Marketing & Sales Practices Litigation, 2011 WL 2802854 (E.D. Pa. July 15, 2011).  When that kind of dismissal occurs, you can bet the complaint is really bogus.

When it happens in an MDL, you can bet that the bogus nature of the complaint is no accident.

Here’s the scoop.  The MCH litigation involves “purported quality control issues affecting certain over-the-counter healthcare products” made by the manufacturer defendant.  2011 WL 2802854, at *1.  It’s typical of much current mass tort litigation (described in our “Anatomy of a Mass Tort” post) in that it stems from “regulatory action” (#2 on our list of litigens) – in this instance various FDA recalls.

All this litigation in the wake of FDA action makes a mockery of the other side’s public chest-beating that product liability litigation somehow increases product safety by uncovering product defects.  In fact, the opposite is true.  The FDA discovered the problem, worked with the defendant to fix it, and only afterwards did the private litigants show up with their hands out.  They didn't improve the safety anything.  All product liability does in this type of situation is increase the price of every product that a defendant makes to everyone who buys it.

But the claims at issue in the recent MCH decision are even worse than that.  They don’t have anything to do with safety.  They’re just ginned up claims for purely economic loss filed by people who really weren’t hurt at all.

That’s why the court found there was no standing.

The biggest problem the court found is that, while the complaint alleged that there were quality control problems involving dozens (“twenty-one different products, and at least seventy-four types,” 2011 WL 2802854, at *9) of products (“subject products”), some of which were recalled (“recalled subject products”), none of the seventeen plaintiffs bothered to allege that s/he had purchased any particular product, sought but did not obtain any particular refund, etc.:

The plaintiffs do not claim that they suffered any physical injury; instead, their claims are based entirely on economic injuries.  The allegations of specific economic injury . . . are sparse.  The plaintiffs do not allege which particular Subject Products or Recalled Subject Products they purchased.  The plaintiffs also do not allege that they availed themselves of any refund offers, and were inadequately compensated thereby.  Instead, the [complaint] sets forth identical allegations with respect to each of the twenty-seven named plaintiffs.
2011 WL 2802854, at *7.

Standing is what gives a plaintiff the right to appear in court in the first place.  Under the constitution, any “case or controversy” can be brought (assuming other jurisdictional requirements are met) in federal court.  But a person doesn’t have standing in the abstract.  A defendant must have hurt a plaintiff in some way.  That’s called the “injury in fact” requirement of standing.  Id. at *8.  The legal definition is, “an invasion of a legally protected interest that is (a) concrete and particularized, and (b) actual or imminent.”  Id.  There’s also a causation element to standing.

In product liability cases that means that the plaintiff had to buy or otherwise come into harmful contact with the product.  A plaintiff can’t come into court seeking to recover for injuries done to other people.  That’s not a “concrete” injury – at least not to that particular plaintiff.
But the MCH complaint was egregiously deficient:

[P]laintiffs do not allege which particular products they purchased.  Instead, each named plaintiff alleges that he or she “purchased Subject Products including some Recalled Subject Products.”  . . .At no point in the [complaint] do the plaintiffs identify a single product that they purchased.
2011 WL 2802854, at *10.  That's pretty bad.

Simple rule #1:  If you didn’t buy the product, you can’t claim economic loss from purchasing it.

But that’s not all.  The complaint also failed to allege what was wrong with the products.

In addition, the plaintiffs do not allege how the unspecified Subject Products they purchased were defective.  Instead, the plaintiffs allege only that each Subject Product suffered from “serious problems.”  . . .Notably, several of the products that appear on the “Subject Products” list are not even alleged to have been recalled or subject to any FDA citations.  Because the plaintiffs do not identify which products were purchased, it is impossible to match the many incidents outlined in the [complaint] with the specific drugs that fall under the Subject Products category.
2011 WL 2802854, at *10.

Simple rule #2:  There has to be something wrong with the product before you can sue over it.

That’s no injury and no defect.  How about the trifecta?  Did the plaintiffs at least allege causation?


The plaintiffs do not, however, allege that they purchased the affected lots of . . . and were not made whole.  The same logic applies to all of the remaining allegations in the [complaint]. . . .  [P]laintiffs cite to approximately eleven recalls . . . and a handful of FDA reports, but do not allege how they were harmed by any of these incidents.  Instead, the plaintiffs only allege, in general terms, that they “suffered damage” as a result of their “out of pocket payments for Subject Products” that were unsafe.
2011 WL 2802854, at *10.  Incredible as it may sound, plaintiffs did a better job alleging injury to other people (people who complained on the defendant’s blog) than they did to themselves.  Id. at *12.

Simple rule #3: What you didn't buy can't cause you any injury from its mere purchase.  See simple rule #1.

Because of the complaint’s pervasive failure to link any of the 17 plaintiffs to any of the many drugs or any of the many allegations of “serious problems,” the court dismissed the entire mess for lack of standing:

[P]laintiffs have not established injury-in-fact with respect to claims involving the Subject Products.  Even if the Court were to read the allegations of “serious problems” generously, . . . the plaintiffs have not alleged that they . . . have suffered injury as a result of said problems. . . .  [P]laintiffs must establish that they themselves have suffered injury.  In the absence of particularized harm, the plaintiffs’ injuries are abstract and hypothetical, rather than distinct and palpable.
2011 WL 2802854, at *10.

As the fundamental problem was plaintiffs’ total failure to establish “injury in fact,” we have added MCH to our no injury scorecard.

The court threw out, for similar reasons, allegations relating to product recalls/refunds and a supposed “phantom recall.”  2011 WL 2802854, at *12-18.  The “phantom recall” claim was particularly egregious because, even assuming everything plaintiffs alleged was true – injury was inherently impossible, because the whole point of the purported exercise was to take the products at issue off the shelves:

It is not clear how the plaintiffs could have been harmed by the removal of products that they contend were defective. Instead, each purportedly defective unit . . . that was removed from store shelves became unavailable for purchase by a consumer. It does not logically follow that the plaintiffs could have been injured by these actions.
Id. at 16.

Simple rule #4:  Don't allege physical impossibilities.

Some of our readers may be asking a simple question of their own – why?  MCH was multi-district litigation. That kind of litigation attracts the best lawyers on both sides.  Good plaintiff lawyers certainly know how to plead the fundamental elements of product identification, causation and injury that were totally lacking from this complaint.  Heck, even bad ones can do that if forced.  So what gives?

We think we know.  The complaint dismissed by MCH was a class action.  Even more after Dukes, but also under abundant prior precedent, the commonality and predominance requirements for certification of class actions place a huge premium on every claim being the same.  What was left out of MCH were the particulars of each plaintiff’s claim – the what, where, and when that establish any individual’s right to sue.

Maybe the vague, generalized pleading that got these MCH plaintiffs thrown out of court can be fixed, at least to the extent that any plaintiff actually bought a product subject to recall (whether they can ever show injury without improper “fraud on the market”-type theories is another matter altogether).  But once those particulars creep in – that plaintiff X bought product Y under circumstances linking it to purported misconduct Z – the individualized nature of each and every claim becomes blatantly obvious, even on the face of the complaint.

So to the extent that the plaintiffs opt to replead in compliance with MCH, they’re only cutting their own throats down the road at the class certification stage.  And without class certification, this sort of pure economic loss claim – even assuming it could state a claim under some bizarre theory – is simply not worth pursuing.

Interesting First Amendment Law Review Note

A recent law review note, Kristie Lasalle, "A Prescription for Change:  Citizens United's Implications for Regulation of Off-Label Promotion of Prescription Pharmaceuticals, 19 J. L. & Pol’y 867 (2011), copy here, puts an interesting twist on the First Amendment arguments against the FDA's ban against truthful promotion of off-label use.  It analogizes between the FDA's vague and discretionarily enforced prohibition and the corporate campaign contribution limitations struck down in Citizens United v. F.E.C., 130 S. Ct. 876 (2010).  While the article was written before the Supreme Court's decision in Sorrell v. IMS Health, Inc., 131 S.Ct. 2653, slip op. (2011), that Sorrell undertook review in a pharmaceutical detailing case that was more rigorous than your usual Central Hudson commercial speech case (something we noted here) provides additional basis for the author's analogy to Citizens United - a non-commercial speech case.

The note also discusses the U.S. v. Caronia case pending in the Second Circuit.  That's the criminal case against a doctor - who happened to be working for a manufacturer - convicted of talking to another doctor (a government informant, as it turns out) truthfully about an off-label use.  We've been following Caronia, most recently here, so we thought we'd see what's up.  Turns out that, after oral argument, the Second Circuit ordered supplemental briefing on the Supreme Court decision in Sorrell (in which the Second Circuit was affirmed).  That order was entered on 7/14/11, and the briefing has yet to be filed.

We mentioned in our own post on Sorrell how that decision implicated the FDA's off-label speech ban.  Evidently the Second Circuit also thinks that it might.

Eventually, the Supreme Court will have to decide the First Amendment issues discussed in the note (and here).  Conceivably Caronia could be that vehicle.

If and when it does, we think that the FDA will lose.

Wednesday, July 20, 2011

Ooee Gooey

When we (well, one of us) were little kids, we watched a TV show called the “Popeye Club.”  The host, Officer Don, would put four paper bags on a flat turntable – three of which were “goody bags” and one contained the infamous “ooey gooey” (mixed live on set, we recall).  Officer Don would turn the turntable so blindfolded kids from the live audience who played the game almost always got the goody bags, but when Officer Don was blindfolded, well….

We may not remember much about our early elementary school days, but we still remember the exaggerated expression on Officer Don’s face when he stuck his hand into the ooey gooey (made from stuff like coffee grounds, fresh broken eggs (shells included), Bosco, ketchup, and cottage cheese).  Nobody could look more grossed out than Officer Don.

Reading the recent opinion in DiCosolo v. Janssen Pharmaceuticals, Inc., 2011 WL 2640801, slip op. (Ill. App. June 30, 2011), was a lot like getting the ooey gooey.  Our expressions would have done Officer Don proud.

The decedent in DiCosolo died from some sort of drug overdose.  She “had access to 11 central nervous system (CNS) depressants immediately prior to her death,” including multiple sedatives (Clonazepam, Bextra, Topomax, Gabapentin), antidepressants (Venlafaxine), opiates (Avinza), narcotics (Duragesic), and barbituates (Butalbital).  2011 WL 2640801, at *1.  The coroner tested her blood for some – not all, a bone of contention – of these drugs.  Finding several present, he initially ruled the death a suicide.  Id.

Then the plaintiff (the decedent's husband) received a recall letter for Duragesic – a transdermal (skin) patch with the narcotic fentanyl as its active ingredient.  According to the recall, “a small percentage” of a certain batch “leaked medication” into the adhesive gel that could possibly cause an overdose.  2011 WL 2640801, at *2.  The decedent’s patches came from the batch.  Id.  The coroner’s blood work also indicated a fentanyl overdose.  Id. at *1.

Plaintiff got a lawyer.  The lawyer prevailed on the malleable coroner to “change[] his conclusions . . . from ‘suicide’ to ‘accident’.”  2011 WL 2640801, at *2.

Then the real fun and games began.  Plaintiff's complaint alleged “that the patch that [decedent] was wearing at the time of her death caused her respiratory arrest and death.”  Id.

However, plaintiff soon had a big problem.

He had kept the product.

Since when is keeping the product a problem?  Most plaintiffs cause trouble for themselves by discarding the product.

Not this one.

Because the plaintiff kept the product, it could be tested – and it was.  Turns out that the patch the decedent wore at her death wasn’t one of the “small percentage” of the recalled product that leaked – something plaintiff did not dispute:

On [irrelevant date], the director of process engineering for defendant . . . examined the preserved patch that [decedent] had been wearing at the time of her death and determined that it did not leak and contained no defect.

2011 WL 2640801, at *2.

Rather than contest that determination, the plaintiff filed a new complaint that targeted – not the patch used at the time of death, but – a patch that had been used the day before.  That patch (the so-called “penultimate patch”) could not similarly be proven non-defective as it “was not available because it was discarded by plaintiff."  Id. at *4.  The plaintiff accompanied the complaint with his too-good-to-be true affidavit that he just happened to remember that particular patch having gel issues, after having said nothing about that before.  Id. at *2.

The court let plaintiff get away with this bait-and-switch, and let him proceed – and ultimately recover to the tune of $18 million – on the Illinois equivalent of the “malfunction theory”/res ipsa loquitur, despite no longer having the product.  Actually, it was precisely because plaintiff no longer had the product:

A plaintiff is not required to present expert testimony that the product contained a specific defect. . . .  A prima facie case that a product was defective and that the defect existed when it left the manufacturer’s control is made by proof that in the absence of abnormal use or reasonable secondary causes the product failed ‘to perform in the manner reasonably to be expected in light of [its] nature and intended function.

2011 WL 2640801, at *3 (citation and quotation marks omitted) (emphasis added).


The court allowed the plaintiff, after the most proximate product was conclusively proven non-defective, to switch theories and target as defectively manufactured a product that the plaintiff no longer retained and that could not be tested.  2011 WL 2640801, at *4.  While any resort to circumstantial evidence is questionable in a manufacturing defect (as opposed to design defect) case, since those defects are inherently non-replicable, what really makes us grimace is how this theory actively encourages plaintiffs to destroy or discard the most crucial evidence in a product liability case, that being the product itself.  That’s the big ooey gooey – the precedential equivalent of coffee grounds and broken eggs.

It’s simply wrong as a matter of sound jurisprudence to create incentives for plaintiffs to get rid of allegedly defective products, so that they can’t be tested, and then to proceed on a circumstantial theory that testing could have disproved.  Where, as in DiCosolo, the plaintiff (or perhaps the decedent, we don't think that matters) is responsible (whether intentionally or not) for the product being unavailable, the plaintiff should not be permitted to take advantage of his/her own actions and pursue a purely circumstantial case.  Such theories should only be allowed where the product's absence was caused by a force of nature (such as destruction by fire) or a third party (such as a hospital throwing away something that broke), not by the plaintiff’s/decedent's own conduct.  A party should never profit from his/her own destruction of evidence.

So this ooey gooey is off to to a most messy start.  Now for some cottage cheese.

There really wasn’t any product “malfunction.”  There was no collapsing ladder, nor dead mouse in a soda bottle, nor exploding microwave – just a patch that may or may not have oozed too much of a drug.  Doesn’t matter, held the court.  Even though the plaintiff did “not address[] defendants’ argument,” 2011 WL 2640801, at *5, the court made up a response, relying upon a case where chemotherapy drugs escaped from an IV and ate a hole in the plaintiff’s chest.  Id. at *5-6 (citing Weedon v. Pfizer, Inc., 773 N.E.2d 720 (Ill. App. 2002)).

Well, drugs aren’t supposed to eat holes in peoples’ chests, and IV tubing exists to prevent that.  We look at Weedon as the medical equivalent of the exploding microwave.  If in DiCosolo the missing patch had left a huge burn on the spot where it had been, then Weedon would have been a proper analogy.  The patch, however, didn’t do anything of the sort. It just sat there – and a patient who had been using multiple central-nervous-system depressants died of respiratory failure.  The court conceded that the patch’s “operation” or “performance” is not observable, 2011 WL 2640801, at *6, but failed to draw the obvious conclusion that in such circumstances a malfunction-based theory simply shouldn't be available.  Instead, it pounded an $18 million square peg into a round hole.

The court also mentioned that the coroner’s blood work showed excessive amounts of fentamyl.  2011 WL 2640801, at *8.  That was other evidence of an unobservable malfunction, it held.

That gets us to the ketchup.

Not only wasn’t there a product malfunction in any meaningful sense of the term, there wasn’t proper circumstantial proof either.  Other secondary causes weren’t ruled out by the evidence.  As we alluded to earlier, the coroner failed to test for all the other CNS-depressing drugs that the decedent had been taking.  We didn’t mention why – the plaintiff omitted several of them from the “first call list” of the decedent's medications that he gave the coroner.  2011 WL 2640801, at *9.  The coroner thus didn't know what to test for.  Once again, the plaintiff was responsible for the absence of critical evidence.

Not only that, “plaintiff threw the remaining pills out within the first few months after his wife died.”  Id.

Didn’t matter.  The trial court “exclude[d] all evidence or argument regarding drugs that were not found in [decedent’s] system,” 2011 WL 2640801, at *9 – that is, the drugs that the coroner didn’t test for, mostly due to the plaintiff’s withholding of information.  The DiCosolo court affirmed, saying, in effect, “so what?”

Although admission of evidence related to [other drugs] may have rendered a matter in issue more or less probable, i.e. . . . whether a synergistic combination of CNS depressants, including [that drug], was a cause of [decedent’] death, we do not believe that it would have affected the outcome of the trial.  There was overwhelming evidence regarding the defective . . . skin patch causing [decedent’s] death.

Id. at *11.

Overwhelming evidence?

That’s just pure [something Officer Don wouldn’t be allowed to use in ooey gooey].  The court had just gotten through allowing plaintiff to get away with:  (1) throwing away the product, and (2) proceeding on a malfunction theory in the absence of any obvious malfunction.  Now, all of a sudden this dog of a case becomes “overwhelming evidence”?

Not even the court could have believed what it was writing – or else it wouldn’t have gone on to criticize the defendant for not itself demanding additional “post-mortem” blood tests.  2011 WL 2640801, at *11.  Even putting aside the obvious question of when (Should defendant have demanded exhumation of the corpse?  We’re sure the jury would have loved that.), the defendant had no such obligation.

Under the Illinois malfunction theory, plaintiff retained the burden of proof.  2011 WL 2640801, at *3 (“[a] plaintiff in a product liability case, must prove . . . that in the absence of abnormal use or reasonable secondary causes the product failed to perform in the manner reasonably to be expected”) (citation and quotation marks omitted).

So it wasn’t the defendant’s obligation to prove the secondary cause – that is, the other equally deadly drugs plaintiff had been using – it was the plaintiff’s burden to establish its absence.  Exclusion of the other drugs was plainly prejudicial, since it allowed plaintiff to give the jury a false impression that alternative causes, strongly suggested by the excluded evidence, didn’t exist.

How about some Bosco?

The court permitted the plaintiff to treat the recall – involving a “small percentage” of the recalled product, and definitely not the only patch that could be tested – as evidence of a defect.  Illinois law forbade using a recall as evidence of defect where the problem causing the recall only “might exist in some” of the recalled products.  2011 WL 2640801, at *12 (quoting Millette v. Radosta, 404 N.E.2d 823, 835 (Ill. App. 1980)).

Then throw in some warm jello.

The court allowed evidence of fraud on the FDA, and then allowed an “expert” (without any FDA qualifications whatever) to testify that the defendant had committed a “federal offense.”  2011 WL 2640801, at *14.  That’s wrong for so many reasons that we’ll just summarize the ones occurring to us:  (1) the email supposedly referring to "deceiv[ing]" the FDA had nothing to do with this product or this recall; (2) evidence suggesting fraud on the FDA is preempted under Buckman (something we've discussed here); (3) Illinois law does not allow plaintiffs to assert FDCA violations as a basis of state-law liability, Martin v. Ortho Pharmaceutical Corp., 661 N.E.2d 352, 356-57 (Ill. 1996); (4) the email was excludable under the Dead Man’s Act because the author (an employee of the defendant) was dead; (5) the expert was completely unqualified to offer such opinions; (6) the whole subject, having nothing to do with the product, was far more prejudicial than probative.

And let’s top off this unsavory concoction with some turpentine, or linseed oil, or something else smelly and flammable.

The court “disapproved” of the inflammatory closing argument “in which plaintiff's counsel repeatedly accused defendants of ‘killing’ [decedent] and ‘corporate greed run amok,’ [and] also made a comment that defendants presented a ‘frivolous defense’.”  2011 WL 2640801, at *15-16.  Why was this OK?  We can’t even tell.  The opinion just says no abuse of discretion, no new trial.  Id. at *16.

If not from the jury being inflamed, we’d like to know what possibly could be the basis of an $18 million verdict for a middle-aged (38), probably unemployed (the decedent had disabling pain, and no job was mentioned in the opinion), multiple drug user who died (no medical expenses) in her sleep (no pain and suffering).  That’s the kind of number more likely produced by death in a fiery automobile accident, or else by a large lost income claim.

But once again, we come away from DiCosolo with Officer Don’s expression on our faces.  The opinion's entire factual discussion of the remittitur issue consists of two sentences:

We cannot say that the verdict in this case falls outside the range of fair and reasonable compensation or is so large it shocks the judicial conscience.  We therefore deny defendants’ request for a remittitur.

2011 WL 2640801, at *17.


Tuesday, July 19, 2011

More Comments on Personal Jurisdiction

Our recent post on the Supreme Court's two "stream of commerce" personal jurisdiction decisions, produced an email to us from Arthur Fergenson, at Ansa Assuncao, LLP, who argued the J. McIntyre v. Nicastro case to the Supreme Court.  His comments were sufficiently lengthy and astute, that we asked him if we could present them to our readers as a post.  He graciously agreed.  The following are Art's reactions to our analysis of Nicastro:(which he calls J. McIntyre):


I enjoyed reading your recent column on Goodyear and J. McIntyre.  I was counsel of record and argued J. McIntyre for petitioner, and I had the benefit of three terrific amicus briefs, one which came from PLAC.  As far as “stream of commerce” is concerned, I believe that it is more than wounded; rather, it is gone, along with all the jurisprudence that has grown up around it over the last 20 plus years.  I reach that conclusion not only based upon the plurality in J. McIntyre and the absence of any defense of stream of commerce by the dissent, but also the use of the identical term - “metaphor” - in Goodyear at slip op. 9.  The US Supreme Court cases of the 1980s that mentioned stream of commerce did not apply a different standard than the International Shoe test. The lower courts since Asahi have created a separate jurisdictional test out of whole cloth.

You discuss the concurrence’s use of the single act doctrine to reach its conclusion that jurisdiction could not be exercised.  This is, I believe, the first time that the Supreme Court has so ruled.  While it was careful, last in Burger King, to discuss the single act doctrine (now probably known as the “eddy” doctrine), it never concluded that a particular fact pattern fit in it.

There is much else, I believe, that can be derived from the three opinions, plus some language in Goodyear, that will assist in dismissing actions.  As you give an example, the “national contacts” test is dead, as the dissent states.  As Justice Breyer states, specific jurisdiction is a state-centric, defendant-focused analysis compelled by the Constitution.  I also believe that the two-part test is a thing of the past, as we asked for in our briefing, not only because the plurality believed that the general appeal to fairness is wrong (per Burnham), but also because the dissent is silent on the matter when it should have said something about it had it wanted to preserve its use.  Justice Breyer properly rejected the general appeal (relied upon by the NJ Supreme Court in this case, and by other courts, to justify a relaxation of jurisdictional limits) to changed commerce, stating that it has to be proven and be relevant.

In essence, we are, I think, back to the basic dispute: constitutional protections for defendants versus convenience for plaintiffs.  The dissent is, at its core, a restatement of the Brennan dissents in the 1980s:  get rid of minimum contacts, rely on the convenience of the plaintiff and the courts, and place the burden on defendant to prove a hardship of constitutional magnitude.  That was rejected then and has been rejected now.  Indeed, Justice Breyer stated twice that the burden was on plaintiff to prove jurisdiction.

Finally, while the principles of federalism and the competing sovereignties were sufficient for the plurality, Justice Breyer focused at the end of his opinion, on the fundamental unfairness of obliging a non-resident economic actor to become aware, as a condition of conducting business in the US, of the myriad of laws in all US jurisdictions and all the ways that the courts function.  This is particularly a problem for foreign (in the literal sense of outside the US) economic actors.  Only by an act of purposeful availment of a particular state, is it fair to consider that the actor has attorned to the jurisdiction of that state’s court system with its unique practices and makeup.  This is new to the jurisprudence, it is one that we argued for in our briefing, and it gives a new dimension, I think, to the notion of fairness and to why this right has been lodged in the due process clause of the 14th Amendment.

I have a lot of other thoughts about the potential impact of these opinions, but this email has gone on for too long as it is.

Thank you again for your thoughtful column. Although I am sure that I will be responding to others, yours is the first that has prompted me to so write.

Plaintiffs Strike Out Seeking Remand

            We love it when plaintiffs make our job easy – and when plaintiff’s counsel is both clueless and obnoxious – well, that’s cause to celebrate in and of itself.  When the case is also another decision from the Southern District of Illinois denying remand, well we just can’t help sharing our joy. 
It is a well-worn page from plaintiffs’ play book -- to avoid having product liability cases removed to federal court on the basis of diversity jurisdiction, include in the complaint medical malpractice claims against non-diverse treating physicians. In that situation, the removing product manufacturer must convince the federal court to sever (and remand) the malpractice claims, and to retain jurisdiction over the product liability claims.  Not an easy task, but also not insurmountable, as evidenced by the recent decision in In re: Yasmin and Yaz (Drospirenone) Marketing, Sales Practices and Products Liability Litigation (Cooke-Bates), 2011 U.S. Dist. LEXIS 74076 (S.D. Ill. July 10, 2011).
The game started in typical fashion.  First up, plaintiff (a resident of Virginia) sues Bayer (not a Virginia citizen) and her physician (a Virginia resident) in state court.  Bayer comes up to bat and removes the case to federal court based on diversity and argues that the claims against the doctor should be severed under Rule 21 either because of improper joinder or because the doctor was not a necessary and indispensable party. Id. at *3-4.  Not surprisingly, plaintiff’s next play is a motion to remand – and here they go down swinging.   
            It makes us smile when any decision starts off with a reprimand to plaintiff’s counsel about the “combative and discourteous tone” of their briefing.  Id. at *9.  Putting aside the substance of the legal issue for a minute, the court was displeased by plaintiffs’ accusations that defendant made intentional misrepresentations and blatantly disregarded prior orders – especially when those allegations were false and that it was actually plaintiff who made misrepresentations in her filings – including misrepresentations of the court’s own rulings.  Id. at *8-10.   Strike one.
            Now on to the substance.  After having thus completely forfeited any credibility with the court, plaintiff made three arguments in support of remand:  procedural misjoinder is not a proper basis for removal; plaintiff’s physician was properly joined; and severance of a non-diverse defendant is not allowed under Rule 21 absent a finding of fraudulent joinder.  Id. at *3.  Not until oral argument, several months later, did plaintiff argue for the first time that the removal was procedurally defective because the physician had not consented.  Id.  But, as we all know, a procedural defect is waived unless raised within 30 days of removal. See 28 U.S.C.A. § 1447(c).  Strike two.
            Ignoring the procedural defect due to the waiver, the court found that the plaintiff’s doctor was not a necessary party and severed and remanded the claims against him.  In re Yasmin at *6-7.  The case was then transferred to the Yasmin MDL -- after both plaintiff’s request to certify the issue for appeal and petition for writ of mandamus were denied (we’ll call those foul balls) -- where yet again plaintiff again moved to remand the case arguing that the transferor court’s severance of the physician was improper and therefore his citizenship still had to be considered in assessing diversity.  Id. at *7-8. 
Plaintiff tried to distance herself from the transferor court’s decision by styling her new motion as one to remand for lack of subject matter jurisdiction and not for reconsideration and arguing that therefore, the transferor court’s decision was irrelevant. Id. at 15.  But, while plaintiff was looking for low and away, the pitch came in high and tight for Strike three!
The authority of a district judge to reconsider a previous ruling in the same litigation, whether a ruling made by him or by a district judge previously presiding in the case, including (because the case has been transferred) a judge of a different court, is governed by the doctrine of the law of the case.
Id. at *17-18 (citation and quotation marks omitted). 
            Characterized as a motion for reconsideration and applying the law of the case doctrine, plaintiffs would have to have demonstrated a compelling reason for reconsideration “such as a change in, or clarification of, law that makes clear that the earlier ruling was erroneous.”  Id. at *20.  An MDL judge is not free to alter previous rulings of the transferor judge “merely because he has a different view of the law or facts from the first judge.”  Id. (citation and quotation marks omitted).   As we know, courts vary on
(1) whether a physician is a necessary and indispensable party in a product liability action against a drug manufacturer and (2) whether a district court may sever a dispensable non-diverse party to preserve diversity jurisdiction in an action that has been removed.
Id. at *22.  Therefore, at best the transferor court and the MDL court may have had a difference of opinion, but a difference of opinion isn’t enough to warrant reconsideration under the law of the case doctrine.   Without reconsideration, the case pending before the MDL court was completely diverse.   And with that, plaintiff remains in the game but has lost home field advantage.
We’re waiting to see if plaintiff chooses to argue with the ump again.

Monday, July 18, 2011


Last Friday, we put up a bare bones post about some expert rulings in HT (bareboned because our involvement in the litigation limits what we can say).  We've now learned that the third order has been - not exactly modified but supplemented - and we don't want any readers not getting fully accurate information.  None of the prior rulings of #3 were changed, but some FDA-related testimony, not ruled on in order #3, was allowed.

Here's a copy of the supplemental order.

The Proper Care and Feeding of Experts

There's usually a moment in a trial, just before the first expert testifies, when the judge tells the jury how experts are different from other witnesses. Experts don't have percipient, first-hand knowledge of the facts. Instead, they possess education, training, or experience that permits them to share helpful opinions with the jury. Such an instruction sounds like build-up. But based on what we hear from jurors once a case is over, that build-up is usually a prelude to disappointment. Maybe it's like when somebody introduces you to new people and tells them how funny you are. Your new friends stare at you, awaiting a thunderous witticism. They expect Oscar Wilde -- or at least Adam Carolla. But you stammer and come up with zero chuckle-bait. You're not only not funny, you're guilty of false advertising.

It's remarkable how often jurors say that they paid less attention to the experts than anyone else in the case. How was such a wonderful opportunity squandered? Usually the jurors report disgust at how obvious it was that the experts would say whatever they were paid to say. Experts emerge as jukeboxes -- insert a quarter (or more like $25,000) and play a tinny song. Maybe it's simply the amount of money paid that feeds juror cynicism. More often it's more than that. The expert comes across as an advocate, not a neutral opinion-giver. The expert is free and jocular on direct, and then on cross-examination turns furtive and combative. Moreover, the expert relies uncritically on whatever facts and interpretations his or her side's lawyer served up on a platter.

If the expert dance is all for naught, what's the point? Well, there are ways to use experts effectively. Today you probably received five-plus emails advertising CLE programs on precisely that topic. At least some of those classes would be useful. When in doubt, choose the one in Maui. And then, after hearing about how to find and develop experts, how to work with them collaboratively, treat them with respect, and help them frame opinions that are honestly held and fully-owned by them and that are clear and persuasive to the fact-finder because they make sense and show the reasoning process, you can don a flowery shirt, have a mai-tai under the banyan tree, and briefly rediscover tiny bubbles of unadulterated joy.

... Where were we? Hmmm, looking out the window to the West, we see a section of Philadelphia that doesn't look a tiny bit like the South Pacific. In any event, if an expert is unlikely to win a case for you, lack of an expert can certainly lose a case for you, or even prevent you from getting to a jury. And preparing an expert badly can result in not being able to use that expert, which, can, in turn, launch your case into the dumpster. Try explaining that to a client some enchanted evening.

That's what happened in Huerta v. Bioscrip Pharmacy Services, Inc., No. 10-2203 (10th Cir. July 12, 2011). The plaintiff received a kidney transplant in 2003, when she was seven years old. As part of her medication regime, she took immunosuppressants, including tacrolimus, to help prevent her body from rejecting the transplanted kidney. In 2006, the plaintiff suffered pneumonias and other symptoms and went through a serious kidney rejection episode. The plaintiff's doctors were concerned that her tacrolimus level was too high, though they didn't measure it, and so they reduced it. The plaintiff partially recovered from the 2006 rejection episode, but suffered another episode in 2007. The treatment notes from the 2007 episode showed that the plaintiff had "undetectable levels" of tacrolimus and her doctors were concerned "that her mother wasn't dosing her properly." Just prior to the 2006 rejection, a distributor of tacrolimus issued a recall for tacrolimus because it was subpotent. But the tacrolimus that the plaintiff had taken was not subject to the recall.

The plaintiff filed claims under New Mexico law for strict liability, negligence, misrepresentation, breach if warranties, etc. All of the claims were premised on the theory that the defendant had dispensed subpotent tacrolimus to her, resulting in the kidney rejection. The district court granted summary judgment to the defendant after throwing out the plaintiff's medical causation expert opinions. The Tenth Circuit affirmed those rulings.

After seeing what the plaintiff's experts relied upon, it is easy to see why.

The district court held that the plaintiff's experts were qualified to testify that the plaintiff's rejection was most likely caused by insufficient levels of tacrolimus. The problem was that they had no reliable basis for opining as to the "cause of the insufficient tacrolimus level." Put another way, the district court found the experts qualified to opine on general causation, or what might cause a kidney rejection. But the district court held that the experts could not render specific causation opinions that the defendant's tacrolimus suspension was subpotent.

What was unreliable about the plaintiff expert opinions? Pretty much everything:

-- One expert assumed that the plaintiff had taken the recalled tacrolimus. She had not.
-- Some of the experts also relied on plaintiff attorneys' erroneous representations that test results showed that the defendant's tacrolimus suspension was subpotent. Such test results did not exist.
-- One expert based his opinion that the defendant's tacrolimus suspension was subpotent on the erroneous assumption that "other physicians had definitively established that the tacrolimus suspension was subpotent when they had not." Oops.
-- That expert also assumed that other likely causes of the kidney rejection had been ruled out because of their absence from the medical records. That is not exactly a rigorous "differential diagnosis."
-- Several of the experts acknowledged that the plaintiff's (really the plaintiff's family's) noncompliance with the medication regime could have caused the kidney rejection, but they ruled that possibility out based on "knowing" the plaintiff's family. Huh? Yeah, exactly. The court didn't buy that as the stuff of expert testimony -- especially when the plaintiff's treating doctors worried about noncompliance.
-- One of the plaintiff experts, Dr. Tackett (maybe you've heard of him), was found to have inconsistencies in his testimony while "dodg[ing] the issue" of the plaintiff's 2007 kidney rejection where noncompliance was suspected.

It's easy to berate the experts for sloppy work. But when four of them suffer from the same methodological deficits, one starts to suspect another source for the problem. Plainly, it is the lawyer's responsibility to supply the expert with a full, or at least representative, evidentiary record. There's always the issue of who's choosing the reliance materials, the expert or the lawyer. Sometimes it's possible to make it look like the other side's choice -- look at everything they relied upon. At least make it clear to the expert that the expert is free to ask for more, or more types, of reliance materials. And for heaven's sake, don't have the expert rely on something that isn't supported by the record.

Even though this is a defense-oriented blog, and even though the result in Huerta is a defense win for which we are heartily glad, there is something depressing about having to type that last sentence in the previous paragraph.

Friday, July 15, 2011


The last couple days' dialogue with our subscribers suggests that the blog's email outage was uneven.  Some subscribers may have lost email transmission of our post for more than a month.  We've already apologized, but we think we should do more.  Here's a list of what we posted about - with links - between June 1 2011 (the earliest date reported to us) and July 12, 2011 (when we finally got the problem fixed):

July 12, 2011:  Third Circuit Reaffirms Berrier - Third Restatement Applies in Pennsylvania Federal Court - New Covell opinion - Link.
July 12, 2011:  Fosamax and the Risk/Benefit Analysis - Interlocutory appeal of risk/benefit design defect theory - Link.
July 11, 2011:  ProDisc Dismissal for Want of Indispensable Parties - Unusual procedural issue - Link.
July 8, 2011:  Industry Tries Again For Clarity Concerning Off-Label Promotion - Reviewing FDA citizen petition for clearer regulation - Link.
July 7, 2011:  No Stand Up Comity In New York - Forman (new), Desiano, and Buckman with respect to preemption of NJ fraud on the FDA based punitive damages statute - Link.
July 6, 2011:  Of Treating Physicians And Manufacturing Defects - New Mast opinion on what is, and is not, lay opinion testimony from a plaintiff's treating physicians - Link.
July 5, 2011:  An Easy Case Makes Good Learned Intermediary Law - New Legard warning causation decision - Link.
July 4, 2011:  Happy Independence Day - Link.
July 1, 2011:  Another Reason To Like TwIqbal - New McFarland opinion on pleading product identification - Link.
June 30, 2011:  Applied American Exceptionalism - Exclusion of experts on foreign business behavior and foreign regulatory standards - Link.
June 29, 2011:  Give Us A T For Tennessee - New Tennessee Supreme Court (Nye) ruling reaffirming learned intermediary rule but limiting it to prescription medical products - Link.
June 28, 2011:  A Little Rain In The Desert - New Trasylol decision holding that New Mexico would recognize learned intermediary rule - Link.
June 28, 2011:  The Supreme Court Reins in “Stream of Commerce” Personal Jurisdiction - Description of new Brown and Nicastro stream of commerce decisions - Link.
June 27, 2011:  Embracing Compliance - More on what makes jurors angry and what to do about it - Link.
June 24, 2011:  What Other People Are Saying About Mensing - Since we can't say much about Mensing, what else is out there? - Link.
June 23, 2011:  Two More From The Supreme Court - Mention of Mensing, which we can't talk much about because of our litigation involvement, and full description of Sorrell pharmaceutical detailing First Amendment decision - Link.
June 22, 2011:  Medicare . . . Yep It Is Still Boring - New Humana decision that Medicare third-party providers can't recover under secondary payor statute - Link.
June 21, 2011:  What's In Them For Us? - A review of the new Dukes and AEP (global warming) Supreme Court decisions for how they might apply to drug/device product liability litigation - Link.
June 20, 2011:  Phony Choices - New Zicam decision distinguishing prescription drug and toxic tort cases with respect to need for dosage information in Daubert causation opinions - Link.
June 17, 2011:  E-Discovery Fee Shifting? - New EDPA case requiring unsuccessful plaintiff to pay as costs  part of cost of complying with its ediscovery demands - Link.
June 16, 2011:  It Should Be An Interesting Couple Of Weeks - Analysis of new Supreme Court Smith v. Bayer class action/collateral estoppel decision and review of interesting cases yet to be decided - Link.
June 15, 2011:  To Retain or Not to Retain - Discussing situation (in-house experts) in which expert correspondence may still be discoverable after latest changes to Rule 26 - Link.
June 14, 2011:  Denture Cream Myelopathy Claims Found Toothless - New Daubert win in Denture Cream - Link.
June 13, 2011:  Some Good News On SSRI Preemption - New Dobbs decision finding that SSRI facts (Effexor) satisfied Levine "clear evidence" standard and preempting suicide warning claims - Link.
June 13, 2011:  Getting Better - Discussing new Pucey decision on recalls and investigations as subsequent remedial measures - Link.
June 10, 2011:  An Oldie But Goodie - Discovering favorable MDL precedent (Aredia/Zometa) from two years ago that informal interview with treating physicians save time and are to be allowed - Link.
June 9, 2011:  When It’s The Plaintiff, Not The Doctor - Winning warning causation when there's no learned intermediary defense, and the plaintiff's conduct is at issue - Link.
June 8, 2011:  Utah Preemption Split Deepens - New case (Pierce) holding that Utah fraud on the FDA punitive damages statute is preempted - Link.
June 7, 2011:  Defendant Didn’t Buy The Love - New case (Shaw) on impact of prescriber/manufacturer financial ties on applicability of learned intermediary rule - Link.
June 6, 2011:  Anger Management - What makes jurors angry and what to do about it - Link.
June 3, 2011:  Opening Salvo In New FDA Attack On Off-Label Use? - New FDA draft guidance that would change "intended use" based upon mere knowledge of off-label use - Link.
June 2, 2011:  The Closing Of The Learned Intermediary Frontier - Updated 50-state learned intermediary rule survey occasioned by first Rhode Island precedent on rule - Link.
June 1, 2011:  While Plaintiff Slept, Learned Intermediary Got a Re-affirming Wake Up - New (Dykes) decision where lazy plaintiff lost a learned intermediary motion - Link.

Plaintiff HT Experts Excluded

We can’t provide any commentary or analysis, because of our firm’s involvement in the litigation.  But we thought our readers would benefit from knowing about three recent opinions excluding certain plaintiff experts in an HT case.

Just the holdings, then:

Opinion #1:  Hines v. Wyeth, 2011 WL 2680814 (S.D.W. Va. July 8, 2011).  Experts:  Drs. Wayne Tilley and Donald Austin.  Opinions:  Oral micronized progesterone as an alternative safer design.  Result: Excluded.  Reasons:  Reliance on statistically insignificant evidence.  Reliance on animal studies.

Opinion #2:  Hines v. Wyeth, 2011 WL 2680834 (S.D.W. Va. July 8, 2011).  Expert:  Dr. Matthew Hollon (Dr. Adriane Fugh-Berman withdrawn).  Opinions:  Negligent promotional activities.  Result:  Excluded.  Reasons:  Irrelevance – no evidence that promotion influenced conduct of prescribing physician.

Opinion #3:  Hines v. Wyeth, 2011 WL 2680842 (S.D.W. Va. July 8, 2011).  Experts:  Drs. Suzanne Parisian and Cheryl Blume (Dr. Donald Austin withdrawn).  Opinions:  Numerous, mostly concerning compliance with FDA or industry standards.  Result:  Excluded.  Reasons:  Conclusory nature of opinions.  Personal beliefs/failure to identify standard of care.  Corporate motive/state of mind not a proper subject/not within expert qualifications.  Narrative not helpful to jury.

We’d like to say more, but our first obligation is to our client.  Nonetheless we hope our readers find these summaries useful.

Thursday, July 14, 2011

Personal Jurisdiction 2.0

We gave you our quickie analysis of Goodyear Dunlop Tires Operations, S.A. v. Brown, ___ U.S. ___, 2011 WL 2518815 (U.S. June 27, 2011); and J. McIntyre Machinery, Ltd. v. Nicastro, ___ U.S. ___, 2011 WL 2518811 (U.S. June 27, 2011), here, the day after those cases were decided.  We weren’t alone.  Our partner, Sean Wajert, analyzed these cases on his blog the day after. The Prawfs’ network  was even quicker out of the blocks than we were, and later posted an even more interesting followup here.  SCOTUSblog posted an article about the two cases here.  There’s lots more, see here, here, here, here, and here.

This post, however, is “2.0.”  We’re not going to rehash (much) the facts of Brown and Nicastro or offer detailed point-by-point analysis of the reasoning.  We already did that.  Today we're thinking in terms of what the Court did, and how that affects what we do going forward.

Initially, as we pointed out back when the Court first granted certiorari, both Brown and Nicastro were relative outliers.  Both of them pushed the jurisdictional envelope pretty hard.

Brown held that there could be general personal jurisdiction – where a defendant could be sued about anything, such as a Korean business deal gone awry – based solely on a “stream of commerce” test if a few of its products (a few thousand tires (or as they say in Europe, “tyres”) out of millions sold) ended up in the jurisdiction.  Under that rationale, the plaintiff in Brown, an in-state resident injured abroad, could probably have brought the same suit in most, if not all, the states in the country, since some tires were probably shipped to each state.  That ruling easily lended itself to apocalyptic “what if” hyoptheticals of remote and overlapping jurisdiction.  It was in our minds, a “cert. granted with intent to reverse” waiting to happen.

Nicastro was almost as bad.  A product passed through several hands and ended up injuring a plaintiff in New Jersey.  The New Jersey Supreme Court – a state court deciding a state-law claim – pitched more than two centuries of constitutional federalism into the dustbin of history and instead looked to any and all stream of commerce in the entire country as a basis for augmenting state jurisdiction.  We felt that poking a stick in the eye of federalism like that would upset the federalist wing of the Court, and it did.  It was also a case that we expected to win.

There’s one problem, however, with using outlier cases where a bedrock issue like personal jurisdiction is at stake. There are so many ways to reverse that kind of result, that what the Court most needs to decide might ultimately escape decision.  That’s not a good thing when the issue – finally revisited after a twenty-year snooze by the Court – is the “stream of commerce” theory of personal jurisdiction.

That also happened.  “Stream of commerce” jurisdiction as a concept is not dead – just badly wounded.  Only four justices voted to kill it outright in all applications.  Two others determined that the Nicastro facts were so poor for the plaintiff that it wasn’t necessary to wipe out stream of commerce to set down any hard and fast rules, although they agreed that the dissent’s foreseeability-run-amok theory (the original Brennan half of Asahi) was wrong.

But we’re getting ahead of ourselves, because we want to deal with Brown first, since a unanimous opinion is easier to analyze.

Because Brown was a great parade-of-horribles case, what we’re looking for is a sense of the Court’s general hostility to expansive “general” personal jurisdiction.  After Brown nobody’s going to be advancing stream of commerce as a basis for general jurisdiction. “[E]ven regularly occurring sales of a product in a State do not justify the exercise of jurisdiction over a claim unrelated to those sales.”  2011 WL 2518815, at *10 n.6; see id. at *8 (flatly rejecting “stream of commerce” as a basis for general jurisdiction, regardless of its effect on case-specific jurisdiction), at *9-10 (similar rejection of “sporadic” product sales).  We're not interested in beating that dead horse, so we’re focusing on the opinion’s overall scope.

We want to know, first, what did the Court say about the quantity and quality of the contacts necessary for general jurisdiction?  Second, what did that Court say about the problems that arise when general jurisdiction is recognized too loosely?

On the first point, the Court gave us a new and interesting formulation of “continuous and substantial” contacts – one unencrusted with the usual string of quotes and citations to prior Supreme Court opinions:

For an individual, the paradigm forum for the exercise of general jurisdiction is the individual’s domicile; for a corporation, it is an equivalent place, one in which the corporation is fairly regarded as at home.  See Brilmayer 728 (identifying domicile, place of incorporation, and principal place of business as “paradig[m]” bases for the exercise of general jurisdiction).

2011 WL 2518815, at *6 (citing no case, just a book).  We can live with that definition.  A corporation selects its state of incorporation and its principal place of business through conscious actions.  It should do so with the understanding that those places will be the fora for its litigation generally.

Turning to the second issue, the Court indicated distaste for “sprawling” theories of general jurisdiction that allow suits about anything in any place a defendant’s products are sold:

Under the sprawling view of general jurisdiction urged by respondents . . ., any substantial manufacturer or seller of goods would be amenable to suit, on any claim for relief, wherever its products are distributed.

Id.  General jurisdiction requires a defendant to be “at home” in the jurisdiction.  Id. at *10.  The relationship of the plaintiff to the jurisdiction is irrelevant – it doesn’t matter that the plaintiff lives there.  General (as opposed to specific) jurisdiction depends solely on the quality of the defendant’s ties.  “[G]eneral jurisdiction to adjudicate has in [United States] practice never been based on the plaintiff's relationship to the forum.”  Id. at *10 n.5.

The Brown Court declined to decide some sort of mass piercing of the corporate veil alternative to stream of commerce that was belatedly advanced as an excuse for asserting general jurisdiction.  2011 WL 2518815, at *10.  Based on the tenor of the opinion, however, we’d have to say that theory is toast as well.  To the extent that theory would permit general jurisdiction – we reiterate, the ability to hear any suit about anything pertaining to the defendant – in a state where none of the corporate entities is incorporated/has a principal place of business, the “single enterprise” concept falls short of the activity test enunciated in Brown.  Similarly, to the extent it would produce a result indistinguishable (and equally “sprawling”) from the stream of commerce theory, it flies in the face of the Court’s jurisprudential caution against casting the jurisdictional net too broadly.

In any event, we may not be waiting long for an answer.  In Bauman v. DaimlerChrysler Corp., ___ F.3d ___, 2011 WL 1879210 (9th Cir. May 18, 2011), the Supreme Court’s bête noir, the Ninth Circuit, allowed the exercise of general jurisdiction over a foreign corporation on a dumbed-down agency test based solely on the defendant’s “right to control” its wholly-owned American subsidiary.  Id. at *11-12.  The result in Bauman is little different than what the Supreme Court rejected in Brown, in that a defendant doing no business in a jurisdiction is exposed to suit there over anything and everything, and would be equally exposed to litigation anywhere its subsidiary operates, which is everywhere it sells products.

If the unanimous Court in Brown meant what it said about general personal jurisdiction, then Bauman is wrongly – badly wrongly – decided.  We expect a certiorari petition in Bauman.  We won’t give odds on the Court’s accepting the appea, as another long snooze may be in the offing, but if it does, our money would be on reversal.

That’s what we think of Brown.  The general (not specific) jurisdictional test appears now to be something akin to citizenship for purposes diversity jurisdiction.  Defendants essentially get to select their general jurisdiction forum(s).  In some situations, involving corporations domiciled abroad, the result will undoubtedly be identical to Brown – that no jurisdiction in the United States has general jurisdiction over the defendant, and personal jurisdiction may be asserted (if at all) only on the basis of case specific – “minimum contacts” theories.

Nice segue to Nicastro, if we do say so ourselves.

With respect to the Nicastro’s treatment of the stream of commerce concept in connection with specific/minimum contacts personal jurisdiction, we have to say that the New Jersey Supreme Court’s blatant disregard for federalism drew an equal and opposite reaction.  Unlike the rather woolly “fairness” reasoning that we’ve seen in other cases of this ilk, the Nicastro plurality opinion is firmly based upon a foundation of power and authority – what states can and cannot do, given their roles in our constitutional structure.  Heck, the plurality opinion reads rather like “federalism’s greatest hits”:

  • Due process protects the defendant’s “right not to be coerced except by lawful judicial power.”  Nicastro, 2011 WL 2518811, at *4 (plurality opinion).
  • The case implicates “the power of a sovereign to resolve disputes through judicial process.”  Id. at *5.
  • “Where a defendant purposefully avails itself of the privilege of conducting activities within the forum State, thus invoking the benefits and protections of its laws, it submits to the judicial power of an otherwise foreign sovereign to the extent that power is exercised in connection with the defendant's activities touching on the State.”  Id. at *6.
  • “The principal inquiry in cases of this sort is whether the defendant's activities manifest an intention to submit to the power of a sovereign.”  Id.
  • Stream of commerce jurisdiction “discard[s] the central concept of sovereign authority in favor of considerations of fairness and foreseeability.”  Id. at *7.
  • Stream of commerce jurisdiction “is inconsistent with the premises of lawful judicial power.”  Id.
  • “[J]urisdiction is in the first instance a question of authority rather than fairness.”  Id. at *8.
  • “[T]he view developed early that each State had the power to hale before its courts any individual who could be found within its borders.”  Id.
  • “[P]ersonal jurisdiction requires a forum-by-forum, or sovereign-by-sovereign, analysis . . . so that the sovereign has the power to subject the defendant to judgment concerning that conduct.”  Id.
  • “[W]hether a judicial judgment is lawful depends on whether the sovereign has authority to render it.”  Id.
  • “Because the United States is a distinct sovereign, a defendant may in principle be subject to the jurisdiction of the courts of the United States but not of any particular State. . . .  Ours is a legal system . . . establishing two orders of government, each with its own direct relationship, its own privity, its own set of mutual rights and obligations to the people who sustain it and are governed by it.”  Id.
  • “[I]f another State were to assert jurisdiction in an inappropriate case, it would upset the federal balance, which posits that each State has a sovereignty that is not subject to unlawful intrusion by other States.”  Id.
  • It would take an act of Congress for state jurisdiction to be based upon actions beyond that state’s borders.  Id. at *9.
  • “Here the question concerns the authority of a New Jersey state court to exercise jurisdiction, so it is [defendant’s] purposeful contacts with New Jersey, not with the United States, that alone are relevant.”  Id.
  • The New Jersey Supreme Court also cited “significant policy reasons” to justify its holding . . ., but the Constitution commands restraint before discarding liberty in the name of expediency.  Due process protects [defendant’s] right to be subject only to lawful authority.”  Id. at *9-10.
Since the New Jersey court below had completely disregarded federalism, which is how sovereign authority is distributed in the United States, the Supreme Court’s forcible reminder comes as no great surprise.

While we're happy to see federalism replace squishier concepts, Nicastro had been expected to choose between the two competing views expressed in Asahi Metal Industry Co. v. Superior Court, 480 U.S. 102 (1987):  Justice O’Connor’s “purposeful availment” test, or Justice Brennan’s pure foreseeability test.  We didn’t get all the way there.  While it’s pretty clear that pure foreseeability is dead – only three Justices accepted it – whether something short of personal availment might suffice remains an open question.

Justice Kennedy’s 4-justice plurality, ironically the same number of votes as in Asahi, laid down a strict purposeful availment test:
This Court has stated that a defendant’s placing goods into the stream of commerce with the expectation that they will be purchased by consumers within the forum State may indicate purposeful availment.  But that statement does not amend the general rule of personal jurisdiction. . . .  The principal inquiry in cases of this sort is whether the defendant’s activities manifest an intention to submit to the power of a sovereign.  In other words, the defendant must purposefully avail itself of the privilege of conducting activities within the forum State. . . .  [I]t is not enough that the defendant might have predicted that its goods will reach the forum State.

2011 WL 2518811, at *6.

Under this rule, the overseas pharma defendant in Tobin v. Astra Pharmaceutical Products, Inc., 993 F.2d 528 (6th Cir. 1993), would never have been subjected to a pro-plaintiff court that allowed a jury to second-guess the FDA’s risk/benefit analysis that approved the drug.  Id. at 536-37.  The jurisdictional rationale in Tobin was no different to what the plurality rejected in Nicastro – that “by licensing [a distributor] to distribute [the drug] in all fifty states [the defendant] employed the distribution system that brought [drug] to [the forum].”  993 F.2d at 544.  This any-state-equals-all-states rationale is precisely what the plurality rejected.

As we mentioned before, the lower court’s overreaching was so blatant in Nicastro that its decision could be reversed without necessarily resolving the Asahi split.  Indeed the Asahi split came about in the context of an equally blatant judicial power grab – both opinions in Asahi reached the same result that there was no jurisdiction in that case.

So we have to deal with the two-justice concurring opinion by Justices Breyer and Alito.  They found that the facts didn’t establish purposeful availment.  Those facts were: (1) having an independent U.S. distributor, (2) the distributor’s shipping one machine to the state; and (3) attending out-of-state trade shows.  2011 WL 2518811, at *19 (concurrence).  A “single isolated sale” simply wasn’t enough.  Id.  There had to be a “something more” – relating specifically to the state in question – to permit the exercise of jurisdiction.  Id. at *11.  The plaintiff didn’t show any effort peculiar to New Jersey, and since the plaintiff had the burden of proof, plaintiff lost.  Id.

Given that the plaintiff in Tobin didn’t show any marketing specific to that state (Kentucky) either, 993 F.2d at 543-44, today, the defense should win that type of case as well.

The Nicastro concurrence does make one thing perfectly clear – the requisite “something more” isn’t foreseeability.  Justice Breyer explicitly rejected such a test:
Under that view, a producer is subject to jurisdiction for a products-liability action so long as it knows or reasonably should know that its products are distributed through a nationwide distribution system that might lead to those products being sold in any of the fifty states.  In the context of this case, I cannot agree.

Id. at *12 (concurring opinion) (emphasis original).  Pure foreseeability would “abandon” the “accepted inquiry” focused on “the defendant’s contacts with that forum” – that is, with the state in question.  Id. (emphasis original).  The concurrence “reject[ed] the notion that a defendant’s amenability to suit travels with the chattel.”  Id.  Foreseeability “cannot” be “reconcile[d]” with either minimum contacts or purposeful availment.”  Id.

Significantly, the concurrence’s unwillingness to embrace the plurality’s federalism-driven rationale did not stem from fundamental disagreement, but rather from concerns about its application in other cases:
The plurality seems to state strict rules that limit jurisdiction. . . .  But what do those standards mean when a company targets the world [other e-commerce related questions omitted]?  Those issues have serious commercial consequences but are totally absent in this case.

2011 WL 2518811, at *12.  So it agreed, in less sweeping terms, that there was no jurisdiction.
Thus, it seems pretty clear that these are two more votes against the dissent’s – and the Brennan Asahi concurrence’s – reliance on pure foreseeability as sufficient for stream of commerce personal jurisdiction.  That issue seems dead.

More than that, we can’t say.  How much of a “something extra” the concurring justices would require is unclear.  There are four votes for strict purposeful availment and two votes for what we’ll call “stream of commerce plus” – which might end up also being purposeful availment, depending on the case.  We’ll have to wait (we hope not for two more decades) for a product liability case involving e-commerce.

As far as practical considerations go, Nicastro dealt with a relatively common fact pattern – the foreign defendant did not sell products directly in the United States at all, but only through an exclusive distributor operating independently of the defendant’s control.  2011 WL 2518811, at *5.  The defendant’s selling of all its products through an independent U.S. distributor (in that case, from Ohio) resulted in its avoiding litigation in New Jersey.  To what extent do companies now have the ability to pick and choose (à la Brown) in specific personal jurisdiction cases?

Note that we said “companies” with no adjective.  Although Nicastro dealt with a foreign (UK) company, its principles are equally applicable, under our federal system, to one sovereign state’s power over the citizens of other states.  2011 WL 2518811, at *8 (“the undesirable consequences of [the stream of commerce] approach are no less significant for domestic producers”).  So the rejection of foreseeability as a basis for personal jurisdiction extends to all cases.

We’ve litigated a number of these cases under Asahi, and where the stricter (O’Connor) half of Asahi was applied, the result was no amenability to suit except (usually – sometimes even that’s thrown out) in the state where the independent distributor is incorporated/has a principal place of business.  We’d recommend that defendants concerned about mass torts consider the structure of their distribution chains.  This isn’t a choice-of-law rule, so a New Jersey plaintiff suing in Ohio (what might be allowed in Nicastro) would still apply New Jersey law, but it gives our side a valuable tool to combat the other side’s forum shopping that attempts to corral cases into aggregated proceedings in their preferred (hellhole) jurisdictions.

And for that reason – since the other side seems perfectly happy with rules that keep cases in jurisdictions having nothing to do with where injuries happen, as long as they like the jurisdiction – we don’t find the Nicastro dissent’s policy arguments very convincing.  They look rather like crocodile tears to us.  In any event, if there are serious problems with personal jurisdiction after Nicastro, Congress (or maybe even the FDA) could address them, within its own constitutional limits – but such a compromise might also entail substantive restrictions on liability.

Anyway, after Nicastro a defendant with a skillfully designed product distribution system may well be able to restrict personal jurisdiction to a select state or two.  Such defendants must also take care to respect that system in practice, and not take state-specific actions that target jurisdictions that they are otherwise trying to avoid.  Defendants who cheat their own distribution systems are likely to end up with the worst of both rules – and to make bad law for the rest of us.

Organizing a jurisdiction-restrictive distribution system might be an easier task for component part suppliers (such as in Asahi) that don’t sell to the public at large.  Conversely, however, component part suppliers will have to take care to avoid adverse jurisdictional provisions in their contracts with their customers.

That’s as far as our crystal ball goes. We’re limiting ourselves to product distribution networks of the sort involved in Nicastro.  We have no idea what the Court might do with a purely e-commerce case.  But as to the Internet, we frankly don’t think that it should be the Court’s job to sort this out in the first instance.  The intersection between e-commerce and personal jurisdiction seems to us an issue more appropriately addressed by Congress than by the Courts.