Suspicion Starts the Clock

            Suspicion.  It is the stuff of great movies.  We could name just about any Hitchcock movie here, but why not go with the aptly titled Suspicion starring Cary Grant and Joan Fontaine (who by the way won the Best Lead Actress Oscar for her role in this film).  After a chance meeting on a train, Johnnie Aysgarth, reckless gambler and playboy, and Lina McLaidlaw, shy heiress, have a whirlwind romance and are married.  It is only after the honeymoon that Lina discovers her new husband’s true character and she starts to become suspicious that he is a murderer and she is his next intended victim.  Cue eerie music. 

It is also the stuff of great songs.  And here we could quote any of a number of country hits about cheating spouses and double-crossing gamblers.  But, again, why not go straight for the most obvious.  Suspicious Minds was Elvis Presley’s seventeenth and last number one hit single.  Written and originally recorded by Mark James (who also wrote Grammy-winning “Always on My Mind”), the song is about two people whose suspicions of one another are ruining their relationship.

Which brings us to today’s case – Messina v. Amylin Pharmaceuticals, Inc., 2011 U.S. Dist. LEXIS 153392 (W.D. Pa. Dec. 30, 2011) -- which is all about suspicions.  While we typically don’t spend much time on statute of limitations cases, we liked the message of this case which is rooted less in state law and more in general common sense. 

Plaintiff was prescribed Exenatide, commonly known as Byetta, for treatment of her diabetes.  The Byetta warning label included acute pancreatitis as a possible adverse reaction.  Id. at *3.  Plaintiff was diagnosed with pancreatitis in March 2007 and hospitalized for treatment for almost two months.  Shortly after her discharge in June 2007, she retained her attorney to investigate the matter.  Id. at *2.  Her attorney filed suit against the drug manufacturers on November 18, 2009 – more than two years after being retained.  Id.

Pennsylvania has a two year personal injury statute of limitations.  Like many states, Pennsylvania has also adopted the discovery rule – meaning the “running of the statute is tolled until the injured party is reasonably aware that her injury has been caused by another’s conduct.”  Id. at *5 (citation omitted).  A party must also exercise “due diligence” in becoming aware.  Id. at *7.   To the lay person, the answer to when someone knew something may seem fairly straightforward and due diligence can be as easy as asking your wife “what year did we vacation in the Keys?”  In the legal arena, however, what constitutes “reasonably aware” is the question most often at the heart of drug and device statute of limitations cases.  And, as with the Messina case, plaintiffs often want to argue that their own suspicions are trumped by medical certainty.  Fortunately, this court didn’t agree.

Plaintiff testified “that she believed Byetta caused her injury when she was discharged from the hospital in June, 2007.”  Id. at *7  This would be enough for us and it was enough for the court too:

Given Plaintiff's testimony that she subjectively attributed her injury to Byetta at that time, she was clearly on at least inquiry notice, i.e., her belief was sufficient to trigger running of her two-year statutory period to investigate.

Id.  Plaintiff’s counsel tried to muddy the waters with testimony from plaintiff’s mother that while her daughter was in a coma “her physicians did not tell [plaintiff’s mother] that Byetta did not cause her daughter’s pancreatitis and she did not know if [the doctors] were sure what caused it.  Id. at *8-9.  That’s a lot of double negatives.  Her doctor’s certainty wasn’t the trigger.  Plaintiff’s suspicions were.  Whether that suspicion was specifically that Byetta caused her injury or a more general suspicion that “something went wrong with her care” – the time for plaintiff to investigate started to run.  And because plaintiff had retained counsel, that duty to investigate applied equally (if not more so) to her counsel:

[Plaintiff] and [her] counsel on [her] behalf were obliged to make adequate inquiry during the two (2) year period applicable under Pennsylvania law, to form/substantiate reasonable beliefs as to the cause of Plaintiff's injuries and any resultant potential legal liability, and to file the appropriate actions in the appropriate courts. Counsel's failure to file the Complaint against Defendants within the statutory period leaves this Court no alternative but to hold the action time barred.

Id. at *9.

Pennsylvania actually has a fairly long history of cases that support the proposition that, absent an affirmative diagnosis to the contrary, the plaintiff’s subjective suspicion satisfies the discovery rule.  See Danysh v. Eli Lilly & Co., 2011 U.S. Dist. Lexis 104997 (Mag. M.D. Pa. July 13, 2011) (summary judgment granted on statute of limitations grounds, holding that knowledge of the precise cause of injury is unnecessary to the discovery rule); Debiec v. Cabot Corp., 352 F.3d 117 (3d Cir. 2003) (summary judgment affirmed in one of four consolidated cases; a definitive medical diagnosis is not necessary to start the statute running when a plaintiff suspects he or she has been injured and believes he or she knows the cause of her injury; where plaintiff did not receive a definitive negative diagnosis, he should have investigated his condition further and had additional tests);  Russo v. Cabot Corp., 2002 U.S. Dist. Lexis 12134 (E.D. Pa. Apr. 22, 2002) (summary judgment granted where decedent was suspicious and began collecting newspaper clippings about possible links to beryllium disease; suspicions obligated her to investigate her potential claim); Love v. Raymark Industries, Inc., 633 A.2d 1185 (Pa. Super. 1993) (knowledge of a “dirty lung” and a diagnosis of lung cancer, combined with the plaintiff’s suspicion that both were related to occupational exposure to asbestos, satisfies the discovery rule; even if plaintiff was not informed of the cause by his physicians, it was unreasonable as a matter of law for him not to make inquiry); McD v. Rosen, 621 A.2d 128 (Pa. Super. 1993) (the statute begins to run when the injured party possesses sufficient critical facts to put him on notice that a wrong has been committed and that he need investigate to determine whether he is entitled to redress);  Stauffer v. Ebersole, 560 A.2d 816 (Pa. Super. 1989) (while a speculative diagnosis may have been insufficient in and of itself to satisfy the discovery rule, it activated a duty on plaintiffs’ part to pursue whether the injury was caused by an outside act or otherwise a potential plaintiff with a tentative diagnosis could wait indefinitely).

          While the suspicion of movies and music makes for good entertainment, plaintiffs in products cases (at least in Pennsylvania) should take their suspicions seriously.

Winning isn't Everything

Last night we watched the Academy Awards presentations. We're never sure why we do this. Why do we care about the film preferences of a notoriously unreliable, insular group whom you might meet at Nate n' Al's, but never at Home Depot? Then again, our whole business is built around other peoples' opinions -- judges, juries, clients. (No comment on their reliability or insularity.) We confess to being utterly riveted by the screen shot of the nominees at the moment the winner is announced. It's the image of the losers that is most arresting -- that flash of disappointment shifting seamlessly into a strained smile. We're not supposed to think of winners and losers when it comes to the Oscars. In the old days, the presenters would tear open the envelope and say "And the winner is …." Now they say, "And the Oscar goes to…." The artist will consider the idea of picking winners and losers to be crass. That was the reason given by George C. Scott for declining his Best Actor award for Patton.

We often hear that the real honor is just being nominated. That sounds like a mealy-mouthed rationalization, but it's true. Nominations recognize merit. Who actually wins can seem a matter of happenstance and caprice. To be sure, we're not saying the nominations always get it right. For instance, how is it that Gary Oldman has never been nominated until this year? There's also the embarrassing example of Hoop Dreams, which might have been the best film in 1994, but it wasn't even nominated as Best Documentary. One theory is that, at almost three hours, it was just too long for the voters (median age 62). They needed bathroom breaks.

But what really stands out over the years are winners and losers that make no sense. When you remember that Ordinary People beat out Raging Bull for Best Picture, that Oliver! beat 2001: A Space Odyssey, that How Green Was My Valley beat Citizen Kane, that the same year Hoop Dreams got stiffed Forrest Gump beat Pulp Fiction, and that Hitchcock never won as Best Director, you merely shake your head. Forget about it; it's Chinatown. (A well-deserved winner.)

One of the nominated pictures this year was Moneyball, which is about how the general manager of the Oakland A's adopted new analytical methods and metrics to gain a comparative advantage and win more games than better financed baseball clubs. But it turns out that the comparative advantage could only get the team into the playoffs. Once it all came down to short series, anything could -- and did -- happen. Maybe Derek Jeter would make an unreal defensive play and snuff out a rally. Ultimately, winning and losing has more of a freak-factor than we want to acknowledge. We Phillies fans are pretty certain we were rooting for the best club in the major leagues the last two years, but we ended up running into so-so teams that happened to get hot at exactly the right time. We're not sure what to think about the Buffalo Bills. No other team made it to four straight Super Bowls. It is an incredible accomplishment. But to lose all four of them makes you wonder whether it was bad luck (a missed field goal or missing helmet), some fatal deficiency, or, as suggested in an episode of The X-Files, the result of a vast conspiracy headed by the Cigarette Smoking Man.

We're not Citizen Kane or the Buffalo Bills, but we're happy that this blog consistently gets nice nominations for being the best at what it does. We've never played the game of trolling for the popular votes needed to crown the "winner." No Weinstein Company Oscar campaign for us. Some blogs do seem to do that, and that's fine. Honestly, it's an honor just to be nominated. As Justice Hugo Black said, "It is the paradox of life that the way to miss pleasure is to seek it first."

But in our day jobs as litigators, we care about winning. Our clients certainly care. We are the help. Good lawyering definitely makes a difference. Still, nothing guarantees winning. Some of the very best trial lawyers out there have experienced horrendous losses. Stuff happens, and not just at midnight in Paris. Every day, courtrooms set the scene for stealth jurors, batty rulings, and unforeseeable witness implosions that steal defeat from the jaws of victory. Sometimes, too, the facts are simply difficult. For whatever reason, something weird and unexpected is bound to show up at trial, like those dinosaurs in Tree of Life.

We know an in-house counsel who likes to ask outside lawyers to name their biggest loss. His theory -- and it makes a lot of sense -- is that a truly good lawyer has been given some gruesomely tough cases. It’s simply not possible to win them all. When a lawyer brags about an unblemished record, we tend to react with either skepticism or a suspicion that the lawyer shies away from, or isn't trusted with, the hardest cases.

When we worked at the U.S. Attorney's office, we frequently sought advice from the head of the Criminal Division. He had been there for decades and was a brilliant curmudgeon. Real old school. A war horse. On the wall behind his desk was a poster of Winston Churchill pointing at you, with the words "Deserve Victory" writ large across the bottom. It was from World War II, but it was the best possible creed for what we were doing on a day-to-day basis. It's been 20 years since we first stared at that poster, and now we have our own copy of it. We continue to find it inspiring. Winning or losing involves some things you can control and some things you can't. Immerse yourself in the facts, be diligent and creative in arguing the law, and forge an emotional connection with the audience. If need be, get extremely loud and incredibly close with a witness. You might not win, and you certainly won't be handed an Oscar, but you will deserve victory.

(By the way, we thought last night that The Descendants deserved to win, and not just because it involved the Rule Against Perpetuities.)

Warnings and Punitive Damages

In our recent post describing Salvio v. Amgen Inc., 2012 WL 517446 (W.D. Pa. Feb. 15, 2012), we mentioned the standard for punitive damages that the court applied – “punitive damages are unfounded where a manufacturer-defendant warns of the potential danger that resulted in injury to a plaintiff.”  2012 WL 517446, at *8.  Under this view, even if the warning is inadequate in some way, the fact that the defendant gave some warning about the risk defeated the “conscious indifference” (or worse) mental state required for punitive damages:

[E]ven if Plaintiff could show that “[m]ore could have been done or said,” the Defendants did not display indifference toward the public’s safety and therefore punitive damages are not warranted. Defendants’ Motion to Dismiss Plaintiff's claim for punitive damages will be GRANTED.

Id.  The court observed that “Pennsylvania courts have not addressed this issue,” id., and thus relied on several federal court of appeals decisions.

We think the principle is an interesting one, so we’ve decided to examine it in more depth.  One thing we found was that Salvio had overlooked prior Pennsylvania decisions that made more or less the same rulings.  One such decision is Richetta v. Stanley Fastening Systems, L.P., 661 F. Supp.2d 500 (E.D. Pa. 2009), which involved a nail gun, not a prescription medical product.  Like Salvio, Richetta held that the defendant’s efforts to warn precluded the mental state necessary for punitive damages:

[T]he existence of this warning language substantially undercuts Plaintiffs’ argument and indicates that Defendant was, if anything, attempting to minimize the risk of accidents through this warning language.  As the state of mind of the actor is vital in determining whether punitive damages are appropriate, this conduct cannot be considered recklessly indifferent.

661 F. Supp.2d at 514 (citation and quotation marks omitted).

Then there is Ferguson v. Valero Energy Corp., 2009 WL 1676154 (E.D. Pa. June 15, 2009), which wasn’t a products case at all, but involved injuries to an employee of an independent contractor.  A property owner (and other related defendants) could not have been “recklessly indifferent” because “the defendants undertook several steps to warn against the dangers.”  Id. at *14.

The cases Salvio cited are also on point.  Toole v. McClintock, 999 F.2d 1430, 1436 (11th Cir. 1993), was decided under Alabama law.  Alabama follows a “conscious indifference/deliberate” intent standard for punitive damages.  Id. at 1435.  In Toole, a breast implant case, the defendant had warned about the particular injury that the plaintiff experienced.  The warning might not have been adequate, but it demonstrated that the defendant was not acting consciously or deliberately as required for punitive damages:

[T]he issue of punitive damages should not go to the jury when a manufacturer took steps to warn plaintiff of the potential danger that injured him; those facts bar a finding that defendant was “consciously indifferent.”  The [defendant’s] warning describes the main harms that [plaintiff] has actually suffered . . . and the warning forecasted the way she came to suffer these harms. . . .  More could have been done or said, but [defendant] did not exhibit indifference toward safety.  [Defendant’s] conduct shows regard for recipients of its implants and cannot be viewed as “wanton.”  We conclude that there was insufficient evidence of wantonness in this case to permit the jury to award punitive damages.

Id. at 1436 (citation omitted).  Accord Toole v. Baxter Healthcare Corp., 235 F.3d 1307, 1317 (11th Cir. 2000) (“reaffirming” prior decision concerning warnings and punitive damages); Richards v. Michelin Tire Corp., 21 F.3d 1048, 1059 (11th Cir. 1994) (tire manufacturer’s warnings precluded finding of “wantonness”) (applying Alabama law).

Toole relied on an older decision, Kritser v. Beech Aircraft Corp., 479 F.2d 1089 (5th Cir. 1973) (obviously not involving a prescription medical product) of the Fifth Circuit, applying Texas law, that reached the same result.  Texas also defined the mental state required for punitive damages as “conscious indifference.”  Id. at 1097.  Kritser determined that the trial court properly withheld punitive damages from the jury because:

[Defendant] gave [plaintiff] notice of [the risk] under some circumstances and warned him against [it]. The fact that the company took such steps to inform [plaintiff] of potential danger absolved [it] of liability only for punitive but not compensatory damages. The defendant did not exhibit the conscious indifference toward the public which generally typifies gross negligence, and there is no evidence that it committed any willful act or omission.

Id. (citation omitted).

The third case Salvio cited, Dudley v. Bungee International Manufacturing Corp., 1996 WL 36977 (4th Cir. 1996) (in table at 76 F.3d 372), is an unpublished (and therefore non-precedential) decision under Virginia law.  The fact pattern was the same – the defendant gave a warning, albeit inadequate, of the risk involved.  The court held that, while inadequate, that warning precluded a finding of “willful and wanton negligence” sufficient to support punitive damages:

This warning, at least in general terms, warned others of the dangers. . . .  Thus, since [defendant] warned of the potential danger that injured [plaintiff], it exhibited some care for his safety.  Because [defendant]. exercised some care for the safety of others, an award of punitive damages was not warranted under a failure to warn theory

Id. at *3.

Dudley cited another case for this proposition, the Missouri Supreme Court decision in Bhagvandoss v. Beiersdorf, Inc., 723 S.W.2d 392 (Mo. 1987).  Bhagvandoss involved a non-prescription medical device (a bandage).  The defendant’s warnings precluded a conclusion of “complete indifference” or “conscious disregard of the rights of others” needed for punitive damages:

[Defendant] sought to warn users that the product should not be used in sterile intensive procedures.  We have held that the jury might well find that the letter did not give sufficient warning. . . .  But inadequate communication cannot be equated to conscious disregard. . . .  Here the defendant gave serious attention to the problem and issued a warning.  Even if there are grounds for criticizing its procedures, the finding of complete indifference is not supported by the record.

Id. at 398 (citations and footnote omitted) (emphasis added).  See Drabik v. Stanley-Bostitch, Inc., 997 F.2d 496, 510 (8th Cir. 1993) (warnings negated intent under Missouri law); Jackson v. Leland Health Care LLC, 2008 WL 6049187, at *4 (Mo. App. Nov. 12, 2008) (“not enough to justify submitting a claim for punitive damages to a jury that a defendant inadequately communicated a warning”), transfer denied (Mo. Dec. 18, 2008); Jone v. Coleman Corp., 183 S.W.3d 600, 610-11 (Mo. App. 2005) (“warning indicate[d] that [defendant] did not willfully or consciously disregard the safety of the consumers”), transfer denied (Mo. Feb. 28, 2006).

We went looking to see if we could find anything else.  We found the Texas Supreme Court ruling (in a non drug/device case) that an inadequate warning precluded a finding of the mental state necessary for punitive damages:

The issue in gross negligence is not whether [defendant] developed and used the best warning imaginable.  We believe this warning, standing alone, does not provide a reasonable basis upon which to infer conscious indifference.  After reviewing the evidence . . . we hold the evidence of conscious indifference is not legally sufficient.

General Motors Corp. v. Sanchez, 997 S.W.2d 584, 597-98 (Tex. 1999).  See Agrium U.S., Inc. v. Clark, 179 S.W.3d 765, 767 (Tex. App. 2005) (“an actor’s failure to pursue the safest course available or provide the best warnings imaginable does not necessarily equate to a want of caring”) (reversing punitive damages award), review denied (Tex. April 21, 2006).

There was also law next-door in Arkansas.  In DeLuryea v. Winthrop Laboratories, 697 F.2d 222 (8th Cir. 1983) (applying Arkansas law), a prescription drug case, the court agreed that the defendant “failed to adequately warn of these dangers.”  However, the “evidence establishe[d]” that because “warnings were given,” “there was no evidence to support punitive damages” and “no indication of malice, wantonness, or reckless indifference to the consequences from which malice could be inferred.”  See Lockley v. Deere & Co., 933 F.2d 1378, 1390 (8th Cir. 1991) (belated addition of warning decals may “very well have supported a finding of negligence” but “even gross negligence is not sufficient to justify punitive damages under Arkansas law”).

The West Virginia Supreme Court made a similar ruling that where a manufacturer warns, even if the warning is inadequate, punitive damages will not lie.  In Ilosky v. Michelin Tire Corp., 307 S.E.2d 603 (W. Va. 1983) the court upheld the trial court’s ruling striking punitive damages, stating:

The trial court correctly struck the appellee's claim for punitive damages.  The evidence showed that [defendant] had taken steps to warn the public about [the risk in question].  These efforts included placing warnings and recommendations against such action in literature distributed to consumers and to individual dealers who carried [defendant's]tires.  The fact that these warnings may have been inadequate to fully warn of the hazards of such use does not obviate the fact that [defendant] made some effort.  This case does not involve a situation where the manufacturer or distributor made no effort to warn about use of the product.  Therefore, the facts do not meet the willfulness, wantonness, or malice standard.

Id. at 619.  Thanks to Tom Hurney at Jackson Kelly for this West Virginia addition.
We also found law in Illinois. In Tyler Enterprises of Elwood, Inc. v. Skiver, 633 N.E.2d 1331 (Ill. App. 1994), the court affirmed dismissal of punitive damages in light of arguably inadequate warnings:

There is a fact question as to the adequacy of the warnings supplied by [defendant]. Nevertheless, [it] did advise [plaintiff] not to [do what the plaintiff did].  In light of the above facts, we cannot conclude that [dft] acted with a conscious disregard for, or indifference to, the safety of [plaintiff].

Id. at 1339.

In a non-precedential decision, the Ninth Circuit, interpreting California law, also held that warnings, “albeit inadequate,” precluded a jury from finding the mental state needed to award punitive damages:

Under California law, punitive damages may be awarded when a plaintiff proves by clear and convincing evidence that a defendant acted with such a conscious and deliberate disregard of the interests of others that his conduct may be called willful or wanton.  Here, [defendant] made efforts, albeit insufficiently, to warn its customers about the risks. . . . While this may amount to negligence, it does not rise to the level willful or wanton conduct.

Heston v. Taser International, Inc., 431 Fed. Appx. 586, 589 (9th Cir. 2011) (applying California law).

Finally, in Turner v. Adaltis U.S.A., Inc., 2005 WL 3335425 (D. Md. Dec. 7, 2005), the court held:

that no reasonable juror could rationally find by clear and convincing evidence that [defendant] acted with “actual malice” such that an award of punitive damages could be sustained . . . because the facts of record, including but not limited to the warning contained in the [product’s] user’s manual, affirmatively undermines any such claim of “actual malice.”

Id. at *4.

There may be more such cases.  Our research was little more than some Shepardizing (tracking cases that cite to one another), and one computer search.  It’s enough, however, to tell us that the defense is a valid one in the punitive damages context and that the Salvio court was on solid ground in making its ruling.

Fifth Circuit Breaks Buckman Tie

Does Buckman v. Plaintiff's Legal Commmittee, 531 U.S. 341 (2001), apply any time that a plaintiff raises a fraud on the FDA allegation in litigation, or is it limited to causes of action denominated "fraud on the FDA?  Most courts have agreed with the Sixth Circuit that Buckman applies across the board.  See , 385 F.3d 961 (6th Cir. 2004).  A persistent minority, however, has limited Buckman to complete "fraud on the FDA" causes of action.  See Desiano v. Warner-Lambert & Co., 467 F.3d 85 (2d Cir. 2006).  The Supreme Court attempted, but failed, to close the split in Desiano, but failed - splitting 4-4.  See Warner Lambert LLC v. Kent, 552 U.S. 440 (2008).
Garcia v. Wyeth-Ayerst Laboratories

Both Garcia and Desiano involved the "fraud on the FDA" exception to a Michigan tort reform statute that imposes a presumption of adequacy on warnings that are FDA approved - that is, just about every warning.  The Michigan statute was essentially dispositive.

Then Texas passed a similar presumption statute that is almost as dispositive in the ordinary case as Michigan's.  It was only a matter of time before the Fifth Circuit would be called upon to decide the same question as in Garcia/Desiano.

Also in the mix is the Supreme Court's later, extremely anti-preemption, decision in Wyeth v. Levine, 555 U.S 555 (2008).

We're pleased to be able to report that, unanimously, the Fifth Circuit has agreed with Garcia and given Buckman a broad reading that can't be avoided by simple pleading strategems.  The rationale of Buckman applies anytime fraud on the FDA is asserted by a civil litigant:

Buckman’s fraud-on-the-FDA analysis is more factually and legally apposite to the interpretation of §82.007(b)(1) [the Texas statute]. Moreover, Levine preserves common law state tort claims that parallel or reinforce the agency’s efforts but do not involve the relationship between the federal regulator and the regulated entity, the dispositive factor for federal preemption in Buckman.  In fact, neither the majority nor dissent in Levine cut back on Buckman or, indeed, found a state law fraud-on-the-agency theory viable in this broader context.  Only by denying that the Texas statute is what it is - a requirement to prove fraud on the FDA - can Levine prevail or Buckman be distinguished.

Lofton v. McNeil Consumer & Specialty Pharmaceuticals, No. 10-10956, slip op. (5th Cir. Feb. 22, 2012).

Nor does the "presumption against preemption" (assuming it survived PLIVA, Inc. v. Mensing, 131 S. Ct. 2567 (2011)) apply where fraud on the FDA is being alleged:

Even with the benefit of Levine and PLIVA, this court is unable to assess the current scope or existence of the presumption against preemption.  We take refuge in the conclusion that because §82.007(b)(1) requires a Texas plaintiff to prove fraud-on-the-FDA to recover for failure to warn, this requirement invokes federal law supremacy according to Buckman.

Lofton, slip op. at 13.

Buckman, of course, found the presumption inapplicable because federal agency fraud is a "uniquely federal" area of the law.  531 U.S. at 347-48.

Thus, Lofton aligned itself with Garcia.  We repeat the Fifth Circuit's excellent analysis in full:

Desiano’s and [plaintiffs'] focus on “traditional” tort duties is unpersuasive when the statute at issue conditions recovery on “establishing” what amounts to fraud on the agency.

Also unpersuasive is the idea that it makes a difference for preemption purposes whether fraud-on-the-FDA has become an “element” of traditional tort claims because of the state statutes, or an item of rebuttal to a defendant’s affirmative defense.  We reject [plaintiffs'] specific argument that §82.007(b)(1) “is merely a legislative means to produce some evidence” of fraud on the FDA to counter the insulation from liability otherwise afforded by §82.007(a)(1).  Either way, under the Texas provision, a plaintiff must “establish” a violation of FDA’s required disclosures.  In so doing, the plaintiff necessarily re-treads the FDA’s administrative ground both to conduct discovery and to persuade a jury.  [Plaintiffs'] artful reasoning overlooks the reality of trial practice and the precise statutory language.

We also disagree with the Second Circuit that statutes like §82.007(b)(1) and the Michigan statute do not pose the same over-disclosure problems that Buckman contemplated.  The Supreme Court was concerned that “disclosures to the FDA, although deemed appropriate by the Administration, will later be judged insufficient in state court.”  Buckman, 531 U.S. at 351.  When the FDA has not found fraud, two sorts of interference arise from these claims.  First, §82.007(b)(1) allows the state court to interject varying views on what disclosures are sufficient.  The resulting uncertainty compels manufacturers to flood the FDA with information to ensure that they retain the §82.007(a)(1) presumption of non-liability.  FDA in turn loses control over its ability, based on scientific expertise, to prescribe – and intelligently limit – the scope of disclosures necessary for its work.  Second, the statutory requirement of proving fraud-on-the-FDA may directly invade the agency’s processes when close questions of “withholding” or “misrepresentation” arise.  These dangers are inherent in Buckman’s concern to preserve the agency’s discretion to police the conduct of regulated entities.

While Desiano strains to evoke distinctions between the claim in Buckman and the Michigan statute, the Sixth Circuit’s approach is more faithful to Buckman.  In cases like this, where the FDA has not found fraud, the threat of imposing state liability on a drug manufacturer for defrauding the FDA intrudes on the competency of the FDA and its relationship with regulated entities.  Under such circumstances Buckman found a violation of the Supremacy Clause.  Thus, §82.007(b)(1), is preempted unless the FDA itself has found fraud.

Lofton, slip op. at 14-16.

Obviously, we agree with with Lofton.  In fact, we said pretty much the same thing way back when when Desiano was first before the Supreme Court in Kent.

Invisibility and the Courts

Being invisible would be cool.  We all know that.  You could do things that you would otherwise be afraid or unable to do.  And no one would see you do it.  You’re hidden from criticism, retaliation and embarrassment.  It’s such an alluring idea that it has shown up in literature for thousands of years.  It’s in The Republic.  There’s H.G. Wells’s The Invisible Man.  The Lord of the Rings and Harry Potter had it.  Wonder Woman had an awesome invisible plane, though we never quite understood the advantage of an invisible plane while everything inside it, including the pilot, was visible.  Maybe it looks like the pilot can fly, which is obviously very cool. 

A theme running through much of the literature, however, is that invisibility can corrupt.  In The Lord of the Rings, putting on the ring makes you invisible but also rots your soul and makes you visible to the evil that is coming for you.  In The Republic, a man with an invisibility ring is used as support for the argument that a person who can do injustice without ramifications will do it.

But the purpose of the Courts is to do justice.  To promote this goal, the public has a strong interest in the courts being an open forum with parties identified by name.  The courts don’t see invisibility as cool.  They see it as an invitation to corruption.  So we see in our everyday practice of law real names on both sides of the “v.”  Now, sometimes there’s a John or a Jane Doe, but we know that those are there as placeholders until the actual party is identified and then named.

This leads us to the recent decision in Doe v. Merck & Co., No. 11-cv-02680-RBJ-KLM (D. Colo. Feb. 17, 2012), a products liability action in which the plaintiff claimed that the drug Propecia, used to treat baldness, caused him significant sexual problems.  Given the “highly sensitive, intimate and personal nature” of the alleged side effects, the plaintiff brought a motion seeking to proceed anonymously.  Slip op. at 3.

Requests to proceed in court anonymously are rare.  We haven’t seen much of it.  The court noted that “[p]roceeding under a pseudonym in federal court is, by all accounts, unusual.”  Slip Op. at 2.  The Federal Rules of Civil Procedure don’t provide for it.  In fact, FRCP 10(a) requires that a complaint “name all the parties,” and FRCP 17(a) requires the action be prosecuted “in the name of the real party in interest.”  Id. at 2.  This is all to say that there is a presumption of open court proceedings and that the public has an interest in knowing the identities of those who use the courts. 

In addressing plaintiff’s motion, the Court, considered the circumstances, including whether the plaintiff was a minor or was threatened with physical harm by proceeding under his name.  Importantly, the court also had to consider whether allowing the plaintiff to proceed anonymously would create “a unique threat of fundamental unfairness to the defendant.”  Id. at 4. 

The plaintiff gave a number of arguments for why he should be allowed to proceed anonymously: (1) there would be no prejudice to the defendant; (2) plaintiff wasn’t seeking an advantage from it; (3) revealing plaintiff’s name would have a chilling effect on others bringing such lawsuits; (4) the plaintiff’s reason for using Propecia had nothing to do with sexual dysfunction; and (5) forcing plaintiff to reveal his name serves no public interest.  Id. at 4.

The court addressed each of these arguments.  As to (2) and (4) – that plaintiff was not seeking an advantage and did not take Propecia for reasons related to sexual dysfunction – the court noted that these arguments, while they may indicate that the plaintiff was proceeding in good faith, are irrelevant.  And argument (3) – the chilling effect – was undercut by the fact that about 100 lawsuits had already been filed.  Id. at 6.

But key to the court’s analysis was its rejection of plaintiff’s first and last arguments – that there would be no prejudice to the defendant, and that revealing plaintiff’s name served no public interest.  As Defendants responded, allowing plaintiff to proceed anonymously would force the defendants “to defend themselves publicly while Plaintiff is permitted to hurl his accusations from behind a cloak of anonymity.”  Id. at 5-6.  A cloak of invisibility in the courts is not a good thing. 

In litigation, accusations and embarrassments run to both sides of the “v.”  Veterans of pharmaceutical and device litigation know full well the accusations often made against defendants and their employees.  They put profits over patient safety.  They marketed the product for improper uses or indications.  They ignored safety signals.  They did not test for safety.  Authors of memos and emails are often skewered publicly on the basis of the plaintiff’s interpretation of them.  These accusations and lawsuits affect the company and employees, who are often doctors, scientists and researchers.  That is the nature of our courts.  And there seems little fairness in allowing one side to be invisible while the other must face the litigation and its accusations publicly.

Certainly we understand that the sexual problems suffered by the plaintiff can be embarrassing when made public.  But this is the stuff of ordinary product liability litigation.  We have seen litigation involving cancer, breast cancer, heart attacks, strokes, breast implants, severe mental illness and more.  Moreover, many of these cases involve loss of consortium claims, which open up an additional area of issues that are personal in nature and can be embarrassing.  Yet these concerns do not provide a basis for one party to become invisible while hurling what can often be hurtful and embarrassing accusations at the companies and people on the other side of the litigation.   

As the court noted in rejecting plaintiff’s last argument, “those using the courts must be prepared to accept the public scrutiny that is an inherent part of public trials.”  Id. at 6.  This applies both to plaintiffs who chose to file lawsuits and the defendants who get sued.  

This was not a case involving, for instance, a minor and potential sexual exploitation.  See Plaintiff B. v. Francis, 631 F.3d 1310 (11^th Cir. 2011).  This is a fairly ordinary products liability case, many of which come with facts that are not always comfortable for both sides.   The court in another Propecia case in New Jersey, involving another plaintiff seeking to proceed anonymously, put it best:

It is well established that lawsuits are public events.  The risk that a plaintiff may suffer some embarrassment is simply not enough to overcome the constitutional presumption in favor of open court proceedings.  This case and the alleged injuries do not present such an unusual situation in which the need for anonymity outweighs the presumption of openness. 

Z.M. v. Merck Sharp & Dohme Corp., ATL-L-9169-11, ALT-L-9166-11; ATL-L-9142-11; ATL-L-9168-11; ATL-L-9157-011, at 3 (N.J. Super. Ct. Feb. 3, 2012).

Guest Post - Pay For Delay, There For The Taking?

This is the first gues post that DDL has had by a law student in its five+ year history.  We weren't sure at first, when the offer to post was made, but once we read it, our concerns vanished.  Heck, it's probably better written than half the stuff we throw out there.

So all of what follows - and all credit or blame therefor - belongs to Brenna Jenny, a Harvard Law 3L whom we now know is a dedicated fan of the blog.

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The most topical constitutional issue implicated by the pharmaceutical industry has been the intersection between off-label promotion and the First Amendment.  While we continue to await the Second Circuit's decision in United States v. Caronia, a new constitutional consideration has been receiving increased attention: the Takings Clause.  In a recent article in Food and Drug Law Journal, Professor Richard Epstein argues that the Biologics Price Competition and Innovation Act of 2009 ("Biosimilars Act") raises Fifth Amendment concerns.  66 Food & Drug L.J. 285 (2011).  Professor Epstein's argument may have force against other legislative fixes Congress would seek to apply to the pharmaceutical industry, such as Representative Bobby Rush's (D-IL) recent proposal (HR 3995) to ban all reverse payment settlements between brand and generic drug manufacturers.

First some background on the Biosimilars Act.  In order to facilitate FDA approval of "biosimilar" biological products (the analogue to generic drugs in the Hatch-Waxman context), the Biosimilars Act allows the FDA to rely on the pioneer's biologics license application (:BLA") when determining whether a new entrant's product is "highly similar" to the existing version.  (The FDA earlier this month released some much-anticipated draft guidance on this, and other, topics).  As under Hatch-Waxman, the second-comer is allowed to introduce far less clinical data than the innovator, and this shortcut allows the copycat product to make it to market sooner, with lower cost.  The Biosimilars Act mirrors the quid pro quo created in the Hatch-Waxman Act:  although innovators lose on one hand (the trade secrets disclosed in their applications are used by the FDA in approving a competitor's products) they gain on the other (the innovator not only is granted a twelve-year period of exclusivity, but the filing of a biosimilar application is considered an artificial act of infringement, allowing the innovator to file suit and litigate any patent claims before the biosimilar reaches the market.)

Companies choosing to file BLAs after the passage of the Biosimilars Act can be seen as "opting in" to this quid pro quo, agreeing to allow the FDA to indirectly use their intellectual property in exchange for the benefits provided by the Act.  But Professor Epstein maintains that applicants who filed BLAs before passage of the Act:

had investment-backed expectations - based in statute, FDA regulations, and longstanding FDA practice - that their data would not be used or relied on by the agency, directly or indirectly, for the purpose of approving competitors.  Taking these trade secrets for the benefit of a competitor thus requires just compensation in order to avoid a constitutional violation.

The term "investment-backed expectations" alludes to the Supreme Court case Penn Central Transportation Co. v. New York, in which the Court held that regulatory interference with the investment-backed expectations of property owners is a critical factor weighing in favor of compensation.  438 U.S. 104 (1978).

Despite universal agreement that patents are property, whether patents fall within the protection of the Takings Clause is actually an unsettled issue.  Although a 2006 Federal Circuit decision held that patent infringement by the government is not a cognizable Fifth Amendment violation, Zoltek Corp. v. United States, 442 F.3d 1345, 1352 (Fed. Cir. 2006), Congress should not feel liberated from the constraints of the Takings Clause when regulating the intellectual property of the pharmaceutical industry.  Just four years prior to Zoltek, the Supreme Court insisted that "courts must be cautious before adopting changes that disrupt the settled expectations of the inventing community," because "[f]undamental alterations ... risk destroying the legitimate expectations of inventors in their property."  Festo v. Shoketsu Kinzoku Kogyo Kabushiki Co., 535 U.S. 722, 739 (2002).  This language directly reflects the Court's discussion of investment-backed expectations in Penn Central.

Therefore, when Congress acts in ways that significantly alter the "legitimate expectations of inventors in their" patents, it does so at least under the shadow of the Fifth Amendment.  A recent legislative proposal regarding reverse payment settlements modifies the ability of patent holders to craft settlements, threatening to trigger the Takings Clause.  Reverse payment settlements have been a hot topic recently, as the FTC and DOJ have found themselves stalled at an utter impasse with the courts over how to treat them.  The FTC in particular has begged Congress to step in and act.

What are these settlements and why do they create such an uproar?  Reverse payment settlements occur when a generic drug company seeks to enter the market before the expiration of a patent.  Citing either patent invalidity or non-infringement, the generic manufacturer, pursuant to the Hatch-Waxman Act, must notify the branded company of its intention to enter.  The branded company then has an opportunity to invoke a thirty-month stay, during which it can litigate the patent claims.  Many of these cases end in settlement, which may involve a payment from the branded company to the generic, with an agreement that the generic will not enter the market until a pre-determined date (prior to the patent's expiration).  The FTC and DOJ have argued that these settlements are nothing but a smoke screen for a branded company to buy off generic competition by sharing a portion of its monopoly profits.

Although the FTC and the DOJ have passionately insisted these settlements violate antitrust laws, and should be deemed presumptively illegal, courts have consistently been unpersuaded.  Both the Federal Circuit and the Second Circuit (and arguably the Eleventh Circuit as well, although its case law is subject to differing interpretations) have granted reverse payment settlements significant room to thrive:  as long as the branded company's suit against the generic is not a "sham," and the resulting settlement meets a few low hurdles, such as allowing other generic companies to subsequently challenge the patent and not restricting the marketing of non-infringing products, the court settlement does not violate antitrust laws.  Arkansas Carpenters Health & Welfare Fund v. Bayer AG, 604 F.3d 98, 106 (2d Cir. 2010). Citing a patent's presumption of validity, courts have tended to view these settlements as falling within the bounds of a patent holder's property rights.

Previous congressional proposals, including one introduced last year by Senator Kohl (S. 27), would have granted the FTC and DOJ's requests and made reverse payment settlements presumptively illegal.  Rep. Bobby Rush's bill goes a step further: any settlement involving a generic drug filer receiving something of value and agreeing not to research, develop, or sell a drug that is the subject of an infringement claim would be an "unfair method of competition," in violation of section 5 of the FTC Act.

This bill takes an arrow out of the proverbial patent holder's quiver of property rights, and a segment of settlement options is now off the table.  When considering reverse payment settlements, several courts have approvingly cited Judge Posner's insistence that a patent holder "is entitled to defend the patent's validity in court, to sue alleged infringers ... whatever its private doubts ... and to settle the suit to avoid risking the loss of the rights.  No one can be certain that he will prevail in a patent suit."  Asahi Glass Co., Ltd. v. Pentech Pharmaceuticals, Inc., 289 F. Supp. 2d 986, 993 (N.D. Ill. 2003).  Some opinions have even gone so far as to say that reverse payment settlements are a "natural consequence" of the Hatch-Waxman Act.  King Drug Co. of Florence, Inc. v. Cephalon, Inc., 702 F. Supp. 2d 514, 529 (E.D. Pa. 2010).  When patent holders filed under the previous regulatory regime, their disclosure provided them with a right to exclude, by settlement if necessary, and courts have recognized this right.  Rep. Rush's bill would alter those expectations.  Given the near infamous expense and uncertainty associated with patent litigation, it is no small change to hamstring a patent holder's terms of settlement when his property is challenged.

To be sure, patent holders certainly cannot have an investment-backed expectation of engaging in monopolization.  But although antitrust law prohibits patent misuse, HR 3995 raises concerns that the government is leveraging antitrust law to take away property rights which patent holders possess under Hatch-Waxman.  Courts that have addressed reverse payment settlements have drawn a line around activities taken within the patent's zone of the right to exclude and segregated them - as valid exercises of a property right - from the reach of antitrust law.  As the Federal Circuit has pointed out, patents are inherently anticompetitive, and there is a certain degree of anticompetitive behavior which antitrust law cannot touch.  In re Ciprofloxacin Hydrochloride Antitrust Litig., 544 F.3d 1323, 1333 (Fed. Cir. 2008).  By redefining "unfair method of competition," HR 3995 seeks to expand the boundary line of what antitrust law can reach, and correspondingly what will no longer fall within the property rights of a patent holder's right to exclude.  If Congress simply changed the scope of the property right, without invoking antitrust, patent holders may have a real claim to a taking under Penn Central.  The question posed by Rep. Rush's bill is not whether it is good policy to redefine an "unfair method of competition," in order to ban reverse payment settlements, but rather whether the government can use antitrust law as an end-run around a takings inquiry.  As Congress continues to contemplate if, and how, it wishes to step in and change courts' treatment of reverse payment settlements, it should be aware that the pharmaceutical industry may have valid constitutional claims to raise about its methods.

Enbrel, Part 2 – A Sequel Within A Sequel

            As promised, we have a second Enbrel case from last week to report on.  So we teased it as a sequel.  And, as it turns out, this case is itself a sequel.  We reported on the first dismissal of plaintiff’s complaint in Salvio v. Amgen Inc., 2011 U.S. Dist. LEXIS 92558 (W.D. Pa. Aug. 18, 2011) here.  The court gave plaintiff a chance to try again and like with so many sequels – plaintiff should have left it alone.  So, that got us thinking about the worst ever movie sequels.  Unlike yesterday’s list, this one could go on for pages.  Generally speaking, sequels are never as good as the original.  For instance, we can start at the same place we started yesterday, The Godfather.  While there is ample ammunition for either side of the debate over whether Godfather 1 or Godfather 2 is better, nobody disputes that Godfather 3 is the quintessential franchise killer.  While most critics like to attack Sofia Coppola, she is far from the worst thing about that movie. 

            Here is just a short-list (consider it a sampling), in no particular order, of sequels that are so bad, they might even make you forget what you loved about the original (we’re sure you can all add to the list):

The Sting II – with all due deference to Jackie Gleason’s comic genius, he and Mac Davis were no match for Redford and Newman.

The Matrix Reloaded and Revolutions – too long, too tedious, just a complete let down in every way.

Legally Blonde 2:  Red, White and Blonde – In the original a ditzy blonde takes the legal profession by storm in a funny and charming way.  In the sequel she goes looking for her pet Chihuahua's birth mother.  Huh?

Dumb and Dumberer:  When Harry Met Lloyd – only good thing was a fairly spot-on impersonation of Jim Carey.

Jaws the Revenge – The original is one of the best horror movies ever made.   In this one, as if the plot – a shark that has already been blown to bits seeks revenge on the widow of the man who killed it – isn’t bad enough, the shark also roars.   

Dirty Dancing:  Havana Nights – somebody should definitely have put this movie in a corner.

Speed 2: Cruise Control – Isn’t Keanu supposed to be the not too bright one?  So, what was Sandra’s excuse?

Blues Brothers 2000 – Where was Jim?  Not that having a Belushi in it would have saved it.  We are just happy brother John wasn’t around to witness this travesty.

Caddyshack II – who ever thought Jackie Mason and Robert Stack could fill the shoes of Dangerfield, Murray, Chase and Knight?  They headed in the right direction by casting Akroyd, but that’s about it.

Staying Alive – In this sequel to the unforgettable Saturday Night Fever, Sylvester Stallone directs John Travolta in a movie about a Broadway musical featuring the music of his brother Frank Stallone.  Need we say more? 

Now for Salvio II.  Unlike the movies listed above that had their origins in greatness, Salvio II suffers from all the same plot pitfalls as the original.  As described in Scream 2 – there are rules to making a successful sequel (at least a horror sequel) – “Number one: the body count is always bigger. Number two: the death scenes are always much more elaborate - more blood, more gore - carnage candy. And number three: never, ever, under any circumstances, assume the killer is dead.”  Salvio II breaks all the rules.

Plaintiff took Enbrel to treat her rheumatoid arthritis.  She allegedly contracted a fungal infection of the sinuses, brain, and lungs, and died from complications related to her infection.  Salvio v. Amgen, Inc., 2012 U.S. Dist. LEXIS 19009, *2-3 (W.D. Pa. Feb. 15, 2012).  After the dismissal of her first complaint and being afforded an opportunity to amend, plaintiff filed an amended complaint alleging claims for negligent failure to warn, negligent design/manufacture, and punitive damages.  Id. at *4. 

Rule Number 1 – A bigger body count.  In this case, that meant plaintiff needed to identify feasible, safer alternatives to maintain her negligent design claim.  Putting aside our dislike of the fact that Pennsylvania law even allows a negligent design claim in a prescription pharmaceutical case (see prior comments on Lance v. Wyeth, 4 A.3d 160 (Pa. Super. 2010) here), the Salvio II decision correctly identifies the key question for this claim:  whether “an alternative, feasible, safer design would have lessened or eliminated the injury plaintiff suffered.”  Salvio II, 2012 U.S. Dist. LEXIS 19009, *21 (citation omitted).  Plaintiff thought she’d get there by pointing to other antirheumatic drugs that were on the market and which could have been prescribed to plaintiff. 

But other products are just that – other products.  They are not alternative designs of the product at issue.  Pennsylvania hasn’t yet addressed this issue, but the court found plenty of precedent from other federal courts which all agree that “an alternative design must not be an altogether essentially different product.”  Id. (citations omitted).  What plaintiff did here was essentially list a series of other drugs that that the plaintiff could feasibly have taken, “an allegation that is immaterial for the purpose of a negligent design/manufacture claim.”  Id. at *22.  Even if they could be “alternatives,” those products were made by other companies, and thus were not alternatives that this defendant could use.  Id.  So, without the bodies – here the feasible alternative safer designs – the plaintiff’s negligent design claim was dismissed.

Rule Number 2 – More, More More.  In a horror movie, that means more gore.  In a complaint that’s already been dismissed once, it means more facts.  Or any facts, as the case might be.  Salvio II is full of phrases such as:  “Plaintiff does not aver specific facts to show” or “Plaintiff has not pleaded any facts tending to” or “Plaintiff has failed to allege.”  So Salvio II violates the rules for a successful sequel and the rules of Twiqbal.

For instance, in trying once again to state a claim for punitive damages, the plaintiff made a boilerplate allegation that the defendant acted with reckless disregard and then recited the elements of a claim for punitive damages.  Id.at *23.  Plaintiff “again failed to allege any conduct that would rise to the level of seriousness necessary for imposing punitive damages and to satisfy the pleading standard of Twombly, Fowler, and Phillips.”  Id. at *24.  Definitely not more elaborate.  As for punitive damages, the court also went on to state that

claims for punitive damages are unfounded where a manufacturer-defendant warns of the potential danger that resulted in injury to a plaintiff. . . . [E]ven if Plaintiff could show that "[m]ore could have been done or said," the Defendants did not display indifference toward the public's safety and therefore punitive damages are not warranted.” 

Id. at *24-25 (citations omitted).  That’s a good standard to follow.

We now need to depart briefly from our discussion of the sequel rules, because we can’t quite fit a discussion of plaintiff’s failure to warn claim into the formula.  The court recognized that the only failure to warn claim is for failure to warn the prescriber.  Id. at *9.  But Enbrel was accompanied by a large, bold-faced warning of the risk of serious infections, including fatalities.  Id. at *12.  Plaintiff’s first attempt to circumvent the package insert was to argue that “that there is no evidence that [the] prescribing doctors actually received the Enbrel Package Insert.”  Id. at *9.  So, defendant has to prove the doctor did get the warning?  The court didn’t buy it:

This argument is not persuasive. Contrary to Plaintiff's contention, he -- not the Defendants -- has the burden of pleading sufficient factual matter to show that the claim is facially plausible. Plaintiff has not pleaded any facts tending to make it plausible that the particular packages of Enbrel sent to Decedent's doctors did not have a Package Insert, which Plaintiff concedes typically accompanied Enbrel during the period in which Decedent took the drug. To the contrary, he merely alleges that Plaintiff's medical records make no mention of a warning and therefore baldly concludes that Decedent's doctors must not have received such an insert.

Id. at *10.  Thus, plaintiff’s package insert argument is unlikely to warrant a sequel.

            Plaintiff’s next attempt is the more recognizable “the warning wasn’t good enough” argument.  Under Pennsylvania law, “a prescription drug manufacturer has a duty to exercise reasonable care to inform those for whose use the article [was] supplied of the facts which make [the product] likely to be dangerous."  Id. at *13.  So what was unreasonable about defendant’s Enbrel warning?  According to the plaintiff, it was the fact that while the package insert warned about infections generally, it did not warn about fungal infections specifically.  According to the court, such specificity was unnecessary to an adequate warning:

[T]he manufacturers of Enbrel issued a broad warning of the risk of infection and highlighted some specific risks, i.e. sepsis and tuberculosis. Furthermore, the warning specifically informed prescribing doctors of the risk of prescribing Enbrel to patients who, like the Decedent, had diabetes . . . . Therefore, the Court finds that the Enbrel Package Insert in effect when Decedent was prescribed the drug adequately warned doctors of the risk of serious infections, such as the one which allegedly led to Decedent's death.

Id. at *17 (citation omitted).  The court took judicial notice of the warning, and held it adequate as a matter of law.

            Finally, plaintiff argued that the warning was inadequate because five months after plaintiff stopped using Enbrel, the defendant changed the warning to include a "black box" warning for invasive fungal infections.  “However, it is well established that such a revision cannot be relied on to establish the inadequacy of Defendants' warning.”  Id. at *18.  A subsequent remedial measure could not prevent dismissal of the plaintiff’s failure to warn claim. 

            Rule Number 3 – never assume the killer is dead.  In a horror movie this is what allows for the type of jump-out-of-your seat moment like when Glenn Close pops out of the tub at the end of Fatal Attraction.  Or, it is what leaves open the option for movies such as Halloween 2, 4 and 5 (Michael Myers isn’t the killer in Halloween 3 so we’ll leave that one out).   But, again that rule doesn’t apply to Salvio II, because having given plaintiff two tries to get it right, the court didn’t allow a third.  Plaintiff’s motion to again amend her complaint was denied.  Id. at *26-27.  

            If Salvio II broke all the rules for making a successful sequel, it adhered to the one rule for making a horrible sequel – do a follow-up to a movie that was bad to begin with (hmmm, Wrath of the Titans is due out next month).

Enbrel, Part 1: Bride of a Mad New Hope Toy Story Dies Harder

Last week two Enbrel cases rolled in. We're going to discuss one of them, the earlier one, today: Deese v. Immunex Corp., 2012 U.S. Dist. LEXIS 17342 (S.D. Miss. February 13, 2012). We'll do the later one later. Both cases are favorable for the defense. Truth be told, the second case -- the one we're not addressing today -- is a tad more interesting.

And naturally, we started thinking of instances where the sequel was better than the original, though the original was good. We were going to offer our top-ten-sequel-movies-that-outdid-the-original, but we could come up with only nine, and one of them is questionable. The questionable one is Godfather 2. Sometimes we like it better than the original. But the Michael Corleone arc in the first one is so perfect. And then there's Brando. So call that one a push. Now we're down to eight:

1. The Empire Strikes Back is better than Star Wars (A New Hope). If you disagree with that, well, we really don't have much to say to each other, do we? We simply occupy different moral and aesthetic universes.

2. Superman 2 is better than Superman.

3. The Wrath of Khan is much better than the rather leaden first Star Trek film

4. Die Hard 2: Die Harder is more fun than Die Hard. (Though it's a close call as to whether Alan Rickman or Jeremy Irons was the better villain.)

5. The Road Warrior is a fully sustained thrill ride, whereas Mad Max is somewhat indecipherable. The folks in the original are allegedly speaking English, but we need subtitles.

6. Aliens is better than Alien. You can't get too much of a creepy thing.

7. Toy Story 2 (originally conceived to go straight to video) is better than Toy Story.

8. This one is the oldest example, and our personal favorite: Bride of Frankenstein is better than Frankenstein. Elsa Lanchester has an amazing dual role as Mary Shelley and The Bride. Here are some of the greatest lines in cinema history: "She's alive! Alive!" "We belong dead." The scene where the Monster is befriended by a blind hermit is the basis of the most hilarious scene in Young Frankenstein. In fact, we'll say that Bride of Frankenstein is the greatest horror movie ever made. The sequel, not the original, is James Whale's masterpiece.

And now on to the legal masterpiece of the day.

In the Deese case, the plaintiff claimed that Enbrel caused him to suffer lymphoma in his heart. The causes of action were negligence, breach of warranty, and products liability claims -- including design defect, manufacturing defect, and failure to warn. The court began by tackling the design defect and manufacturing defect claims. Here is what the Complaint said: Defendants "designed and manufactured" and "marketed and distributed, an unreasonably dangerous pharmaceutical product" that was "unsafe and harmful to Plaintiff." Got it? But wait, there's more: "As a direct and proximate result of Defendants' wrongful design, manufacture and distribution of this unreasonably dangerous pharmaceutical product" Deese allegedly suffered serious injuries. Under Iqbal (and really under pre-Twombly/Iqbal), such conclusory allegations don't cut it. The court points out that the plaintiff never alleged what was defective about the design, or how the manufacturing deviated from what it was supposed to be. In the end, it became obvious to the court and, apparently, even the plaintiff, that this was just a failure to warn case. That's sort of predictable isn't it? We've seen this movie before. In any event, the design and manufacturing defect claims were dismissed with prejudice. Deese, 2012 U.S. Dist. LEXIS 17342 at *8.

The failure to warn claim had a little more to it. A little. The Complaint challenges the nature and location of certain warnings. But Mississippi recognizes the learned intermediary doctrine, and the Complaint "falls short of alleging that an adequate warning would have kept his physician from prescribing Enbrel. Id. at * 15. Thus, the court dismissed the failure-to-warn claim, but the plaintiff is given leave to amend the Complaint. Presumably, the issue will be whether there is any adequate basis to allege warning causation.

The negligence claim concerns breaches of duties "to design, adequately test, manufacture, market and/or distribute Enbrel. The court isn't sure that Mississippi law imposes a duty to test (we don't think it does), but it doesn't matter, because, as with the design defect and manufacturing claims, there was no there there. To the extent the negligence claim asserts a negligent failure to warn, the plaintiff can try to amend. Otherwise, the negligence claims hit the cutting-room floor.

The court addresses both express and implied warranty claims. The problem with the former is that the plaintiff identified no factual representation that the defendants allegedly breached. The problem with the latter is that any implied warranty claim necessarily rehashes the failure to warn claims. Goodbye, Mr. Bond! (One could say that From Russia with Love was better than Dr. No, but the James Bond franchise seems too big to talk about sequels. For the same reason, we are rejecing Bexis's suggestion that we include on our list the superior successors of the first Harry Potter film.)

Finally, the plaintiff sought alternative relief -- to place the dispositive motion on hold while the parties could "complete basic formal discovery." But the whole point of Iqbal is that Rule 8 does not "unlock the doors of discovery for a plaintiff armed with nothing more than conclusions." Deese, 2012 U.S. Dist. LEXIS 17342 at *21 (quoting Iqbal, 129 S. Ct. at 1950. The plaintiff's request was denied.

We love happy endings. Except, of course, the Deese case is not over until it's over. We have a feeling that attempts at amendment will be futile -- straight to video. Dismissal will be the final destination. (Wait a minute -- isn't Final Destination 2 better than the original?)

The Deese case is pretty good. But it's no Godfather.

Why Agency Fraud Is Like Fraud On The FDA

In our rather terse (due to firm involvement) post on Monday concerning Merck & Co. v. Ratliff, ___ S.W.3d ___, 2012 WL 413522 (Ky. App. Feb. 10, 2012) – beating both BNA and 360 by two days, BTW – we mentioned the “interesting” aspects of that case.  Having noodled it a bit more, we’ve concluded that one of these deserves a little more attention.


We noted that, in Ratliff, the court recognized similarities between “fraud on the market” and agency fraud theories such as fraud on the FDA.  Id. at *7.  We agree, and we’d like to explain a bit why this is so.

“Fraud on the market” as our posts on that subject have discussed, is a legal doctrine, so far (thankfully) unique to securities litigation, that waters down the traditionally rather stringent standards for proving fraud by creating a “presumption” of reliance in certain limited circumstances.  See Basic, Inc. v. Levinson, 485 U.S. 224 (1988) (4 justice majority of 7-justice court).  “Fraud on the market” isn’t a state-law claim.  Neither the Supreme Court nor any state high court has extended the “fraud on the market” presumption to any state-law action, even in the securities realm.  That proposition was what our 50-state fraud on the market post was intended to (and we think, did) establish.

In Basic, Inc., the Supreme Court bought a questionable proposition – that securities markets are uniquely “efficient” and “developed.”  In other words, because there are so many participants in national stock markets, and those participants have such a voracious appetite for information, then anything about a particular stock is essentially instantaneously reflected in that stock’s price.  Because of that (rather questionable) conclusion, any plaintiff in a securities fraud suit is “presumed” to rely on any material disinformation.

Even assuming that’s true in the securities arena – a proposition we don’t really accept – it’s certainly not true where prescription medical products are concerned.  Prescription products, being available only by prescription, necessarily require medical approval before their use.  Doctors’ knowledge and attitudes span a vast spectrum. We see that all the time in making causation motions under the learned intermediary rule.  We can beat causation in a prescription medical product case by:  (1) showing that the highly educated and motivated prescriber knew all about the risk from independent continuing review of relevant literature, or conversely, (2) that the prescriber isolated him or herself from the influence of our client by not reading warnings at all and not paying attention to pharmaceutical detailing.

Thus, there’s absolutely no basis for a Basic, Inc. presumption of reliance on any different information that might have been disseminated by a pharmaceutical or medical device manufacturer.  Any given prescriber might already know it – or might never rely on that source – or even both at the same time.

[T]here is no prescription drug “market,” at least as that term is understood in the securities context. . . .  [T]he only “market” for a prescription drug is the potential group of patients who will be prescribed it by their physician, and if the side effects of the drug make it overly risky to ingest, the doctor will either not prescribe it or the patients will decide not to take it. . . .  [T]he decision to take a particular drug is a medical one, not one based on an comparative analysis of risk versus price.

Heindel v. Pfizer, Inc., 381 F. Supp.2d 364, 380 (D.N.J. 2004).  For these reasons, differing degrees of physician reliance have consistently defeated any presumption of reliance in learned intermediary situations.  See De Bouse v. Bayer, 922 N.E.2d 309, 319 (Ill. 2009) (rejecting “market theory” of causation; plaintiff “fails to allege that her particular doctor was actually deceived by any of [defendant’s] advertisements or statements”); International Union of Operating Engineers Local No. 68 Welfare Fund v. Merck & Co., 929 A.2d 1076, 1087-88 (N.J. 2007) (“to the extent that plaintiff seeks to prove only that the price charged for [the drug] was higher than it should have been as a result of defendant’s fraudulent marketing campaign, and seeks thereby to be relieved of the usual requirements that plaintiff prove an ascertainable loss, the theory must fail”); Clark v. Pfizer, 990 A.2d 17, 27 (Pa. Super. 2010) (“statistical probability does not substitute for actual inquiry, as a general showing of percentages does not tend to prove that the class members’ specific doctors relied upon Defendants’ statements or that Defendants’ statements were the proximate cause of an injury”); New Jersey Citizen Action v. Schering-Plough Corp., 842 A.2d 174, 177-78 (N.J. Super. A.D. 2003) (“the intervention by a physician in the decision-making process necessitated by his or her exercise of judgment whether or not to prescribe a particular medication protects consumers in ways respecting efficacy that are lacking in advertising campaigns for other products”); Commonwealth v. Ortho-McNeil-Janssen Pharmaceuticals Inc., 2010 WL 3548474 (Pa. C.P. June 25, 2010) (“application of the fraud on the market theory was rejected”; citing “evidence that doctors . . . prescribed off-label use of [the drug] to class members for reasons wholly unrelated to defendants’ alleged fraudulent marketing”); UFCW Local 1776 v. Eli Lilly & Co., 620 F.3d 121, 133-34 (2d Cir. 2010) (“prescribing doctors do not generally consider the price of a medication when deciding what to prescribe for an individual patient”); In re St. Jude Medical, Inc., 522 F.3d 836, 839-40 (8th Cir. 2008) (“evidence concerning the reliance or non-reliance of individual physicians and patients” defeats generalized proof of causation); Zafarana v. Pfizer, Inc., 724 F. Supp.2d 545, 558 (E.D. Pa. 2010) (“there could be no justifiable reliance in general due to the operation of the learned intermediary doctrine”); In re Zyprexa Products Liability Litigation, 671 F. Supp.2d 397, 453-54 (E.D.N.Y. 2009) (“almost one million [drug] prescriptions, or . . . over one hundred thousand ‘episodes of care’ would necessarily require individualized consideration of the circumstances of each case”); In re Neurontin Marketing, Sales Practices & Products Liability Litigation, 257 F.R.D. 315, 326 (D. Mass. 2009) (given “individualized requirements for approval or reimbursement imposed on various plans' members and, to some extent, their prescribing physicians,” “questions . . . regarding individual doctor's exposure to defendants’ misrepresentations and the causal nexus between those misrepresentations and plaintiffs’ injuries” involved “millions of disparate and varied human interactions”).

So how does this precedent relate to fraud on the FDA?  There isn’t as much law because Buckman Co. v. Plaintiff’s Legal Committee, 531 U.S. 341 (2001), held such claims preempted and thereby eliminated the need to come up with other defenses, but when one thinks about it, the theories bear considerable resemblance.

The fraud on the FDA theory in Buckman was typical. It alleged that “but for” the defendant’s “fraud” committed on the agency, the product in question would not have been granted approval and therefore could not have been sold:

Plaintiffs say petitioner made fraudulent representations to the Food and Drug Administration (FDA or Administration) in the course of obtaining approval to market the [devices]. Plaintiffs further claim that such representations were at least a “but for” cause of injuries that plaintiffs sustained from the implantation of these devices:  Had the representations not been made, the FDA would not have approved the devices, and plaintiffs would not have been injured.

531 U.S. at 343.  Note the resemblance to the fraud on the market cases – no mention whatever of the intervening medical decisions of the prescribing/implanting physicians.

Just as “fraud on the market,” through the imposition of a “presumption” of reliance, seeks to take the “learned intermediaries” out of the causation picture, so does fraud on the FDA.  Instead of presuming reliance, fraud on the FDA presumes that the FDA would not have taken the regulatory step it was purportedly fraudulently induced to take – in most cases approval of a product.  By so presuming that the FDA would have acted differently than it actually did (also why such claims inherently conflict with government decisions and must be preempted), fraud on the FDA would take the learned intermediary physicians out of the causal chain.  If the product could not be legally marketed, then it would never have been available to the doctors in the first place.

Both fraud on the market and fraud on the FDA thus seek to bypass the individualized decision-making of prescribing physicians through use of generalized presumptions that don’t correspond to the way things really work.  Just as physicians have varied reactions to allegedly withheld information, so does the FDA.  Revocation of approval of a drug or device is a serious step that the FDA rarely takes.  It never revoked approval of any of the bone screws involved in Buckman.  Not even a recall constitutes the revocation of approval:

[T]he argument is predicated on the faulty assumption that the recall invalidated the [products’] PMA [pre-market approval].  Plaintiffs have cited no authority for that proposition, and [defendant] correctly notes that the PMA process is governed by a completely separate statutory and regulatory regime than that governing withdrawal of a PMA – a process to which the [products] have never been subjected.

In re Medtronic, Inc. Sprint Fidelis Leads Products Liability Litigation, 592 F. Supp.2d 1147, 1155 (D. Minn. 2009), aff’d, 623 F.3d 1200, 1205 n.4 (8th Cir. 2010) (affirming for reasons stated by district court).  Accord Blanco v. Baxter Healthcare Corp., 70 Cal. Rptr.3d 566, 579 (Cal. App. 2008) (“The fact the FDA implemented a Class I recall of the [product] does not alter our conclusion. . . . we have found no evidence in the record to support the conclusion the FDA revoked the [product’s] PMA”); Erickson v. Boston Scientific Corp., 2011 WL 7036060, at *6 (C.D.Cal. Dec. 12, 2011) (recall not equivalent to revocation of approval); Theofanis v. Boston Scientific Corp., 2003 WL 24049229, at *2 ¶16 (S.D. Ind. 2003) (same). Thus, even if the FDA did determine that it had been defrauded, there’s no reason to assume that revocation of approval would be the responsive action of the Agency.

Thus, no presumption of revocation is valid in fraud on the FDA cases.  What happens when that presumption is eliminated?  The same as with fraud on the market, that’s what.  Fraud on the FDA plaintiffs face exactly the same conundrum – non-reliance of most prescribing physicians on information directed to the FDA but not to them.  That, too, arose in Bone Screw cases prior to Buckman.  For example, a dozen or more opinions in Tennessee refused to apply any fraud on the FDA presumption, and threw out the claims on causation grounds, citing that state’s rejection of fraud on the market presumptions:

[E]ven Tennessee did recognize “third party” fraud, [plaintiff] cannot prove several necessary elements of his claim – reliance and proximate cause.  Similar to negligent misrepresentation, reliance is an essential element of any action for fraudulent misrepresentation. Carter had provided no evidence that his physician . . . relied upon any misrepresentations to the FDA in deciding whether to use the . . . device in his spinal fusion surgery.

Carter v. Danek Medical, Inc., 1999 WL 33537317, 5 (W.D. Tenn. June 3, 1999) (citing In re Sofamor Danek Group, Inc., 123 F.3d 394 (6th Cir. 1997), and analogizing to Tennessee’s refusal to dispense with “actual reliance” through “a fraud-on-the-market theory of fraud”); accord, e.g., Ponthieux v. Danek Medical, Inc., 1999 WL 33486689, at *8 (W.D. Tenn. May 28, 1999) (same).  There are another half-dozen or more cases cases decided by the same judge employing he same rationale.

Thus, we think that the court in Ratliff was indeed onto something when it analogized between fraud on the market and fraud on the FDA.  Both are theories that seek to avoid the disparate medical decisions made by numerous treating physicians.  Both do so by invoking presumptions that don’t reflect what actually happens in the real world (at least in the world of drug and device litigation).  Thus, if Buckman had never happened, many of the same reasons why courts reject fraud on the market in prescription medical product litigation would also apply to bar fraud on the FDA claims as well.