Tuesday, July 31, 2012

Chantix Warnings Adequate As a Matter of Law

            Last week we told you about a federal MDL court in Florida that found Accutane warnings adequate as a matter of law.   Ditto says the federal MDL court in Alabama presiding over the Chantix litigation. 
Since we haven’t spent much time talking about the Chantix MDL on this blog, here’s just a brief summary of the litigation.  Chantix is a drug approved by the FDA as a prescription medication to aid in smoking cessation.  In Re: Chantix Products Liability Litigation, 2012 U.S. Dist. LEXIS 101780, *11 (Jul. 23, 2012).  Plaintiffs allege that Chantix causes depression and other psychiatric disorders, including reports of suicide and attempted suicide.  Id. at *11-12.  As is true of all pharmaceuticals, the labeling accompanying Chantix changed over time and in 2009 a black box warning was added specifically warning about “[s]erious neuropsychiatric events, including, but not limited to depression, suicidal ideation, suicide attempt and completed suicide.”  Id. at *21.  In finding this 2009 warning adequate as a matter of law, the court offered some great language about the role of the learned intermediary.
            To start, the court framed the failure to warn question in the context of the doctor’s knowledge: 
Relevant to these arguments is whether the label sufficiently alerted medical professionals that their patients could suffer neuropsychiatric injuries from taking Chantix as prescribed. . . . Thus the court must consider the failure to warn claim in light of the warning's intended audience, medical doctors.
Id. at *24-25 (citations omitted).  The Chantix court also found that where the manufacturer warns of the very injury the plaintiff suffered – the warning is adequate. Id. at *29-30 n.10.
Faced with the law as stated above, plaintiffs couldn’t really argue that the 2009 label didn’t warn about neuropsychiatric injuries – because it did.  Indeed, their own expert’s report said the 2009 label contained a black box which is “the highest level warning possible, prominently displayed at the beginning of a drug's official prescribing information.”  Id. at *22.  So, instead, plaintiffs alleged that the warning was inadequate because it failed to “include a warning to prescribing doctors not to use Chantix as a first line treatment to assist in smoking cessation.”  Id. at *23-24.  The court recognized a novel and unsupported theory when it heard it:
Unlike the majority cases reviewed by this court, the plaintiffs seek to pursue their failure to warn claims post the 2009 black box warning, not for failing to warn of possible complications from Chantix, but for failing to tell physicians when to prescribe it.
Id. at *32.  The court wasn’t having it.  In taking apart plaintiffs’ argument, the decision offers up strong language about where a manufacturer’s duty ends and a physician’s begins.  Such as:
Yet surely the decision as to use a medication as a first-line treatment is uniquely up to the prescribing medical professional and based on a decision concerning his or her individual patient.
Id. at *25.  And:
Rather, as other courts have recognized, it is the responsibility of the physician as a learned intermediary to assess the risks and benefits of a particular course of treatment.
Id. at *31.  Quoting The Restatement (Third) of Torts: Products Liability § 6(d), comment b:
[O]nly health-care professionals are in a position to understand the significance of the risks involved and to assess the relative advantages and disadvantages of a given form of prescription-based therapy. The duty then devolves on the health-care provider to supply to the patient such information as is deemed appropriate under the circumstances so that the patient can make an informed choice as to therapy.
Id. at *31-32.  And finally, the court noted that a physician’s decision to prescribe a medication in the face of warnings is a matter of medical judgment: 
In other words, the label clearly sets forth potential side effects of Chantix. The decision to prescribe the medication anyway, given the severity of those side effects, is solely within the realm of medical judgment. An abuse or misuse of that judgment by a physician is far outside the scope of this action.
Id. at *32, n12.  Told you this was good stuff.         
            Another week, another MDL, another adequate warning.  Here’s hoping the streak continues. 

Monday, July 30, 2012

Reckless Withdrawal

We couldn’t make this stuff up, folks.

Here’s the description of the basis of the lawsuit in Lacognata v. Hospira, Inc., 2012 U.S. Dist. Lexis 102707 (M.D. Fla. July 2, 2012):

Plaintiff . . . brings this action individually and on behalf of all others similarly situated based on [defendant’s] failure to provide Plaintiff [a prescription drug]. . . . Plaintiff alleges that [defendant] is the sole supplier of [the drug]. . . . Plaintiff alleges that prior to November 2010, [defendant] was able to manufacture enough [drug] to meet market demand. But subsequently, [defendant] ceased shipping [drug] to the market. . . . Plaintiff alleges that “[b]y withdrawing access to [the drug], [defendant] through its own negligence and reckless disregard for human life and health created a global shortage which led directly to patients’ otherwise preventable injuries.”

Id. at *1-2 (we’re not 100% sure the product is a “drug” but that’s what the court calls it, so we will, too).

That’s right, the defendant is being sued for negligent withdrawal (there’s no mention of a recall or other adverse FDA action) of a prescription medical product from the market − not by somebody who was injured by any defect in the product, but by somebody who wanted to keep taking it.

Talk about a candidate for Rule 11.

Plaintiff Lacognata alleged:  (1) negligence; (2) negligence per se (for allegedly violating the FDCA); (3) tortious interference with her physician/patient relationship; and (4) breach of an “implied contract.”  Id. at *3.

We’ve never seen this sort of claim before outside of the context of the discontinuation of an FDA-regulated investigational clinical trial.  Even in that context, we’ve argued against setting dangerous precedents that would create some sort of ongoing duty to supply products.

Fortunately, the court threw the Lacognata case out, finding it “simply unprecedented.”  2012 U.S. Dist. Lexis 102707, at *9.  Negligence was the broadest cause of action, and thus the most interesting.  The court analogized to the general proposition that there’s no general duty to rescue:  “that the actor realizes or should realize that action on his part is necessary for another's aid or protection does not of itself impose upon him a duty to take such action.”  Id. at *4-5 (citation and quotation marks omitted).  The court fully recognized that the duty plaintiff was arguing for was both unprecedented and unbounded − citing our favorite Erie v. Tompkins principle:

Plaintiff’s negligence claim fails as a matter of law.  There is no authority that supports Plaintiff's argument that a drug manufacturer, like [defendant], has a duty to continue supplying a patient with a drug that it knows the patient relies upon for his or her medical health.  It is not this Court’s role to dramatically expand Florida law as Plaintiff seeks.

2012 U.S. Dist. Lexis 102707, at *5.  We have to say, this Erie rule comes in handy in all sorts of situations.

With respect to negligence per se, we’re not at all sure how the defendant supposedly violated 21 C.F.R. §314.161 (relating to voluntary drug withdrawals), since as the court observed, a voluntary drug withdrawal does not require FDA approval.  Lacognata, 2012 U.S. Dist. Lexis 102707, at *6.  The court didn’t have to deal with the substance of the plaintiff’s claim because negligence per se went down thanks to a proposition we established in Florida during the Bone Screw litigation − there’s no negligence per se because the legislature (here, Congress) did not intend that the FDCA be privately enforced:

Florida law does not recognize a claim for negligence per se based on an alleged violation of the Food, Drug and Cosmetic Act (“FDCA”), or the FDA’s implementing regulations. . . .  Florida law does not recognize a claim based upon a theory of negligence per se for an alleged violation of this particular federal regulation.

Id. (the oldest supporting citation, Blinn v. Smith & Nephew, is a Bone Screw case).

The court next found that withdrawal of a prescribed drug was not a “tortious interference” with the physician/patient relationship of every patient who was being prescribed that drug at the time of its withdrawal:

[T]here is no authority for the proposition that a manufacturer commits an “intentional and unjustified” interference with the physician/patient relationship by failing to supply sufficient quantities of a medication prescribed during the course of that relationship.

Lacognata, 2012 U.S. Dist. Lexis 102707, at *7.

Last (and probably least) was plaintiff’s “implied contract” claim.  This was based on the defendant’s alleged promise to keep the withdrawn drug “on backorder.”  This supposed promise (on motion to dismiss the court assumed it was made) lacked both specificity (“hardly amounts to a promise with definite terms”) and reliance:

Plaintiff does not allege that she changed her position to her detriment based on the representation. For example, Plaintiff does not allege that she gave up the opportunity to utilize other treatment options in reliance on [defendant’s] alleged promise.

Id. at *9.

Sometimes general propositions stated in weird cases can come in handy in odd ways.  Thus, readers may want to make a note of the Lacognata court’s summary of its position − “[A drug supplier] did not have a duty to supply Plaintiff with the drug and it did not have a duty to supply the market generally.”  Id.

And here's another one.  In re Diet Drugs Products Liability Litigation,  2012 WL 1172164 (E.D. Pa. April 9, 2012).  The plaintiffs in Diet Drugs were "physicians who operated weight-loss clinics or other facilities where they prescribed the diet drugs" and who allegedly lost money when they were withdrawn from the market.  Id. at *1.  They lost, too, for essentially the same reason.  Like the patient in Lacognata, doctors who prescribe drugs "simply have no legally protected interest in [the defendant's] continuing to manufacture and sell the drugs in issue."  Id.

Moreover, in Diet Drug, since the former prescribers could allege no personal injury at all, their lost profit claims were barred by the economic loss rule.  Id. at *2-3.

Since Mensing we’ve had to deal with a flood of overreaching arguments by plaintiffs (and one off-the-reservation court) that this or that defendant had some sort of “duty” to withdraw this or that drug from the market even though the FDA had, in every case, approved the relevant product.  Thus, it’s beyond ironic that a manufacturer might also be sued for doing just that − voluntarily withdrawing a drug from the market.  So far, we’re pleased to say, at least one court has not appreciated the irony.

Friday, July 27, 2012

Off-Label Use And The Hall Of Fame

On the MLB (that’s baseball) website the other day was a story about the threat of various elected members of the Baseball Hall of Fame to boycott Cooperstown (the very location is a phony story cooked up about a century ago) if any of the so-called “dirty” players − those who allegedly used steroids off-label − were also elected.  So far Mark McGwire (of his almost 600 home runs) and Rafael Palmiero (of his 3000+ hit and 500+ home runs) haven’t made it, but next year’s crop includes Barry Bonds (probably the best (and maybe the most) offensive player ever); and Roger Clemens (probably the best pitcher since the advent of the lively ball) are up.  Neither of them ever tested positive for the stuff − and steroids weren’t even against baseball rules when they (mostly) played (why they weren't tested at all).

But off-label use of steroids for the purposes of performance enhancement was against federal law, and both of them were unsuccessfully prosecuted for their alleged use.

Why all the furor over violations of federal law?  How many times did Babe Ruth violate federal law (the Volstead Act − otherwise known as Prohibition), or Jimmie Foxx, or Grover Cleveland Alexander, or others from baseball’s Jim Crow years (a major argument why Bonds was better, in the context of better opposition, than Ruth or Ted Williams)? Nor did Paul Molitor’s admitted cocaine use keep him out of the Hall.

Of course, none of them used banned substances for performance enhancement − althougn nobody can be sure what they would have done if they had the chance.

Wait a minute.

Why is it worse to use a substance, one that’s illegal under federal law, but not (then) banned by baseball, for performance enhancement rather than performance degradation?  Wasn’t there a “best efforts” clause in the standard baseball contract?  There’s a legitimate argument that it’s worse to engage in illegal conduct that makes you play poorly than illegal conduct that makes you play better.  As fans, we know which way we’d go on that.  The players we boo (at least us Philly fans) are those who dog it, not those who give their all to win.

After all, using a substance banned by baseball − but not illegal − for performance enhancement isn’t considered a disqualification for the Hall of Fame.  Just ask Gaylord Perry (spit) … or George Brett (pine tar) … or Whitey Ford (mud − can a belt buckle be considered a substance?).

But breaking the law − especially federal law − to better one’s performance is somehow considered beyond the pale by a significant portion of both the Hall of Fame electorate and membership.  They should look in the mirror, or better yet in the Hall.  What is Adrian Constantine Anson doing in the Hall?  Nobody damaged baseball more than old Cap, who more than any other person was responsible for banning black players from National Agreement baseball in the 1880s.

Preventing maybe 60 Hall of Fame caliber players from ever getting to play − that’s OK for the Hall.  Breaking the law to better one’s performance?  That’s supposedly a no-no.

Sort of reminds us of all the litigation about “illegal” promotion of off-label use.  That’s breaking the law − even if everything that the company allegedly said or did was entirely truthful.  The off-label information may well be very useful, even critical, to physicians trying to save lives and preserve health.  So there’s really no basis for arguing that truthful promotion of off-label use in general degrades the public health, and in many cases it probably enhances it.

But it’s illegal.

So our clients get sued, a lot, for allegedly doing it.

And time and time again, the plaintiffs seek recovery, not because there’s anything wrong with the information itself, but simply because it’s “illegal.”

But off-label promotion, without more − the same sort of “more” that we agree should keep Pete Rose out of the Hall of Fame (at least until he serves every day of his lifetime suspension), but not Bonds or Clemens (or a number of others) − is not a fraud, because it’s not false or misleading.  “Illegal” promotion can be perfectly truthful:

Critically, in order to establish a misdemeanor misbranding violation, the government need not adduce any evidence that the individual or entity that promoted the product off-label did so with an intent to defraud. An article may be misbranded pursuant to the misdemeanor provision without any conscious fraud at all,’ thus creating a form of strict criminal liability.

In re Actimmune Marketing Litigation, 2010 WL 3463491, at *7 (N.D. Cal. Sept. 1, 2010) (citations and quotation marks omitted).  So in honor of the Hall of Fame, and to underscore the distinction between “illegal” and “wrong”, we thought we’d discuss those cases holding that off-label promotion, legal or not, isn’t fraud.

Instead, what such claims amount to is “legally unsupportable attempt[s] to bring a private cause of action . . . for . . . off-label promotion violations of the Federal Food, Drug and Cosmetics Act.”  Central Regional Employees Benefit Fund v. Cephalon, Inc., 2010 WL 1257790, at *6 (D.N.J. March 29, 2010).  “[I]nsofar as Plaintiffs’ claims are based solely on allegations that Defendants promoted [a drug] for off-label purposes, they constitute an impermissible attempt to bring a private suit for violations of the FDCA.”  In re Epogen & Aranesp Off-Label Marketing & Sales Practices Litigation, 590 F. Supp.2d 1282, 1292 (C.D. Cal. 2008).

While off-label marketing is illegal, there is no private right of action to enforce it.  Rather, a plaintiff must base his/her cause of action through some other recognized legal claim.

Clark v. Pfizer, Inc., 990 A.2d 17, 21 n.1 (Pa.Super. 2010) (rejecting fraud claim concerning promotion “for off-label uses for which the effectiveness had not been scientifically demonstrated”).  “[A]s condemnable as [the] flouting of FDA regulations may be, the off-label promotion of a pharmaceutical product in violation of the FDCA simply does not give rise to fraud-based rights of action.”  In re Schering-Plough Corp. Intron/Temodar Consumer Class Action, 2009 WL 2043604, at *10 (D.N.J. July 10, 2009).

Even in the context of FDA criminal prosecutions, it’s been established that “[p]romotion of off-label uses is not inherently misleading simply because the use is off-label.”  United States v. Caronia, 576 F. Supp.2d 385, 397 (E.D.N.Y. 2008); accord United States v. Caputo, 288 F. Supp.2d 912, 921 (N.D. Ill. 2003) (“[g]iven the sophistication of the audience [physicians] to whom the off-label uses were promoted”).  Thus, FDA criminal penalties do not establish anything more than a non-actionable FDCA violation:

[O]ff-label marketing and promotion is not inherently fraudulent, and the plaintiffs may not rely on [defendant’s] alleged past statutory or regulatory violations to state a common law claim for fraud. In the absence of any specific allegations of fraud, as opposed to the mere fact of off-label marketing, the plaintiffs' common law fraud claims must be dismissed.

Central Regional Employees Benefit Fund v. Cephalon, Inc., 2009 WL 3245485, at *4 (D.N.J. Oct. 7, 2009) (footnote concerning “exclusive” federal enforcement omitted).  “Moreover, courts have routinely refused to find promotional marketing of off-label uses fraudulent when they are directed at sophisticated audiences, like physicians.”  In re Actimmune Marketing Litigation, 614 F. Supp.2d 1037, 1055 (N.D. Cal. 2009) (following Caronia, 576 F. Supp.2d at 397-98).

The same phony equivalence between illegal and fraudulent has probably been shot down in federal RICO actions enough times to qualify the courts for “ace” status.  “Promotion of off-label uses is not inherently misleading simply because the use is off-label.”  Epogen/Aranesp, 590 F. Supp.2d at 1289 (citation and quotation marks omitted).

[M]any of plaintiffs’ allegations conflate a false and misleading statement under the FDCA, i.e., one that occurs when the drug label does not match the promoted assertion about the drug, and a false and misleading statement about the drug itself that can give rise to a claim under RICO. The two types of statements are not the same. . . . off-label marketing of an approved drug is itself not inherently fraudulent.

Actimmune, 614 F. Supp.2d at 1051 & n.6 (citations omitted).

Plaintiffs could not predicate RICO and state consumer fraud claims on what are, in essence, misbranding claims, absent allegations that [defendant] made false or deceptive statements. This is because off-label promotion is not inherently fraudulent; truthful off-label promotion of drugs does not violate RICO or state consumer protection laws.

In re Epogen & Aranesp Off-Label Marketing & Sales Practices Litigation, 2009 WL 1703285, at *7 (C.D. Cal. June 17, 2009).  Accord In re Schering Plough Corp. Intron/Temodar Consumer Class Action, 2010 WL 2346624, at *8 n.6 (D.N.J. June 9, 2010) (“[o]ff-label promotion may run afoul of the FDCA, but it does not by itself necessarily constitute fraudulent conduct”), aff’d, 678 F.3d 235, (3d Cir. 2012); Central Regional Employees, 2010 WL 1257790, at *3 (“[o]ff-label marketing activities, including [defendant’s] alleged payment . . . for studies, are not inherently fraudulent”); Schering-Plough, 2009 WL 2043604, at *10 (“[plaintiffs’] theory of injury requires the Court to assume that off-label promotion is, by its very nature, fraudulent conduct. This is not reality.”).

The improper equation of “fraud” with allegedly illegal off-label promotion has, not surprisingly, raised its ugly head in claims that allege fraud or misrepresentation.  In such cases, “it is well-established that off-label marketing of an approved drug is itself not inherently fraudulent.”  Central Regional Employees, 2010 WL 1257790, at *5.  Accord Rohlik v. I-Flow Corp., 2011 WL 2669302, at *3 n.4 (E.D.N.C. July 7, 2011) (“there is nothing inherently fraudulent or misleading about promotion of off-label uses for medical devices”); Central Regional Employees, 2009 WL 3245485, at *4 (“[m]erely alleging that [defendant] marketed the drugs at issue for off-label purposes does not state a claim for fraud”); Hood v. Ortho-McNeil-Janssen Pharmaceuticals, Inc., 2009 WL 561575, at *2 (N.D. Miss. March 4, 2009) (“it is not the act of causing the submission of a claim for a non-medically accepted indication that creates liability under state law causes of action, but rather the act of causing the submission of a false or fraudulent claim”); Pennsylvania v. Elli Lilly & Co., 511 F. Supp.2d 576, 582 (E.D. Pa. 2007) (quoted in Hood).

We’ve also come across repeated holdings that “illegal” doesn’t mean “fraud” in the context of False Claims Act litigation, where it seems that relators can’t get it through their heads that “false” actually means false.”

[T]he mere fact that [defendant] may have been violating FDA regulations [regarding promotion of off-label use] does not translate into liability for causing a false claim to be filed.  Violations of laws, rules, or regulations alone do not create a cause of action under the FCA.  It is the false certification of compliance which creates liability. . . .  Thus, some request for payment containing falsities made with scienter (i.e., with knowledge of the falsity and with intent to deceive) must exist.

U.S. ex rel. Polansky v. Pfizer, Inc., 2009 WL 1456582, at *7 (E.D.N.Y. May 22, 2009) (emphasis original).  Accord U.S. ex rel. Bennett v. Medtronic, Inc., 747 F. Supp.2d 745, 779 (S.D. Tex. 2010) (“relator has alleged a number of unlawful promotional tactics.  The cases recognize that “even if a drug or device manufacturer’s marketing or promotion activities violate FDA regulations, that is insufficient to plead that the manufacturer caused physicians or hospitals to submit false claims.”); U.S. ex rel. Bennett v. Boston Scientific Corp., 2011 WL 1231577, at *29 (S.D. Tex. March 31, 2011) (same court dismissing almost identical claim by same repeat relator against different defendant); Smith v. C.R. Bard, Inc., 730 F. Supp.2d 783, 803 (M.D. Tenn. 2010) (“a violation of a law or a regulation standing alone is not proof of a false claim” because “physicians may prescribe drugs for off-label use”); see U.S. ex rel. Rost v. Pfizer, Inc., 507 F.3d 720, 732-33 (1st Cir. 2007) (off-label promotion “while illegal, [is] not a sufficient basis for an FCA action”; plaintiff must “establish that false claims were submitted”).

Moreover, since off label use is often paid for by the government, its promotion isn’t automatically a false claim for similar reasons:

To state a claim under FCA . . . Relators must sufficiently plead that the Medicaid reimbursement claims filed as a result of [defendant’s] conduct (here, its off-label promotion of [the drug]) were “false or fraudulent.”  [Defendant] contends that if a state Medicaid program chooses to reimburse a claim for a drug prescribed for off-label use, then that claim is not “false or fraudulent,” and liability cannot therefore attach for reimbursement.  The court agrees.

U.S. ex rel. Banignan v. Organon USA, Inc., ___ F. Supp.2d ___, 2012 WL 1997874, at *12 (D. Mass. June 1, 2012) (emphasis added).

Class actions proponents have also been hammered for improperly “assum[ing] that all off-label promotion was fraudulent”:

[T]he Court [has] differentiated between off-label promotion and fraudulent promotion. . . .  [P]laintiffs must show that the defendants’ alleged fraud caused the treating physician to prescribe [a drug] when he or she otherwise would have used alternative treatments.  Thus, in order to differentiate those prescriptions that were caused by fraud from those that were attributable to non-fraudulent off-label marketing or other independent factors, a factfinder would have to perform a granular doctor-by-doctor analysis.  This would be unmanageable.

In re Neurontin Marketing & Sales Practices Litigation, 2011 WL 1882870, at *4-5 (D.Mass. May 17, 2011).  Accord In re Neurontin Marketing & Sales Practices Litigation, 754 F.Supp.2d 293, at 310-11 (D. Mass. 2010) (rejecting class expert for “not . . . demonstrat[ing] the extent of harm caused by the fraud, as opposed to run-of-the-mill off-label detailing”); In re Neurontin Marketing, Sales Practices & Products Liability Litigation, 257 F.R.D. 315, 229-31 (D. Mass. 2009) (rejecting methodology of litigation expert who “has assumed on instruction of counsel that all detailing during the class period was both off-label and fraudulent”).

Finally, we’ve found one instance of a court in a Lanham Act case also pointing out that off-label promotion isn’t enough to establish fraud:

[T]he Court notes that [plaintiff] cannot prove falsity simply by relying on statements made in FDA letters that apply FDA standards.  A Lanham Act plaintiff must do more than assert that the challenged claims are inadequately substantiated under FDA guidelines; the plaintiff must also show that the claims are literally false or misleading to the public.

Bracco Diagnostics, Inc. v. Amersham Health, Inc., 627 F. Supp.2d 384, 471 (D.N.J. 2009) (citation and quotation marks omitted).

All in all, we think it’s pretty clear that the courts understand the distinction between “illegal” and “false” promotion in the off-label context.  Many plaintiffs in various contexts have tried, but failed, to blur that distinction.  Thank goodness we don’t select our judges from the Baseball Writers’ Association.

Thursday, July 26, 2012

News: Dismissal of Pennsylvania Risperdal Suit Affirmed

We've just been informed that the Commonwealth Court (a specialized state-wide appellate court dealing mostly with governmental matters) has unanimously affirmed the dismissal of the "Commonwealth's" (really private contingent fee lawyers masquerading as the government) off-label promption litigation about Risperdal.  See Commonwealth v. Ortho-McNeil-Janssen, No. 802 C.D. 2011, slip op. (Pa. Commw. July 26, 2012).

The grounds:

(1) A drug company isn't a "provider" under the relevant statute (62 Pa. Stat. §1401).  Slip op. at 11-14.
(2) Failure to prove causation.  Id. at 21-22.
(3) No unjust enrichment for failure to "identify any fund retained by the drug manufacrurer to which a common law equitable remedy would apply.  Id. at 23-24.

Wednesday, July 25, 2012

Lyman: Branded Out; Generic Waist Deep In Big Muddy

We’ve just read Lyman v. Pfizer, Inc., 2012 WL 2970627 (D. Vt. July 20, 2012).  Frankly, we expected it to be worse than it was.  Regular readers are no doubt familiar with Kellogg v. Wyeth, 762 F. Supp.2d 694 (D. Vt.  2010), in which the same court (we would say in violation of Erie principles of federalism) predicted that Vermont would follow the controversial holding of Conte v. Wyeth, Inc., 85 Cal.Rptr.3d 299 (Cal. App. 2008), in the absence of any Vermont precedent for doing so.  We were steeling ourselves in Lyman for more of the same.

Didn’t happen.

The court used remote causation to clip Conte’s wings significantly.  We were muttering about the same concept well before we got to the court’s holding.  The facts delved well back into the product liability equivalent of deep time − while the plaintiff only started using the product (metoclopramide) in 2003, the discussion of the branded manufacturer’s conduct went back at least to 1980, when the FDA approved the original Reglan branded version of the product.  Lyman, 2012 WL 2970627, at *4.  Predictably, plaintiff alleged fraud on the FDA with respect to the 1980 approval.  Id. at *5.  The fact that the opinion saw fit to mention these ancient, and blatantly-preempted allegations filled us with foreboding.

Other facts, thankfully, turned out to have more relevance.  These were:  (1) the drug was only approved for gastrointestinal reflux, (2) it was never approved for long-term use; (3) after losing its patent protection, the branded manufacturer sold all of its rights to the drug to an unaffiliated company in 2001; and (4) plaintiff never used the branded version.  Lyman, 2012 WL 2970627, at *2, 4-5.

The branded defendants − the original manufacturer and its 2001 purchaser − sought summary judgment, arguing that even under a Conte rationale, plaintiff didn’t have a case.

They were right.

The most important reason that the Conte theory of causation failed was that it relied upon events that occurred decades before plaintiff’s alleged injury.  The causal chain was simply too remote.  Activity that occurred years, even decades, before the plaintiff ever began taking (a different manufacturer’s version of) the product “ha[d] so far spent itself as to be too small for the law’s notice.”  Lyman, 2012 WL 2970627, at *17. As to warnings:

[Defendant’s] alleged negligent actions are too remote to constitute a proximate cause of [plaintiff’s] injury.  [The] development, testing, labeling and promotional activity had ceased entirely by the end of 2001, long before [plaintiff’s] first consumption of a dose of [the drug].  In fact, much of the misconduct attributed to [defendant’s predecessor] occurred in the 1980s.

Id.  Similar reasoning was also fatal to the plaintiff’s fraud claim − reliance on anything the original branded manufacturer had done years ago, before the labeling had been changed, was simply not justifiable:

[Plaintiff’s prescribers] derived their impressions from a variety of sources.  Those sources could conceivably be traceable back to statements made by [defendant], but from a time well before [plaintiff] began taking [the drug].  [Defendant] stopped manufacturing [the drug] and ceased having responsibility for its label in December 2001, and there is no evidence that it made any statements regarding [the drug] after that time. . . .  [T]he new NDA holder . . . had revised the label three times, and an inquiry into the current information . . . would have revealed . . . that therapy should not exceed twelve weeks. . . .  [A]ny prescriber’s reliance on [earlier] statements . . . was not justifiable.

Id. at *18.  Lyman thus cut off the perpetual tail of liability that Conte (which was willing to look at what a doctor had reviewed while still in training) had permitted.  Thus, the only court ever to follow Conte ultimately couldn’t stomach the temporally-infinite cause of action that Conte had described.  That’s a big deal − especially since Conte involved the same drug and thus identical hisorical facts.  Lyman demonstrates, once again, how radical Conte’s departure from established law actually was.

Legal cause as to the branded defendants in Lyman also failed for another reason − the defendant’s alleged negligence related to another condition, not the off-label use for which the plaintiff was taking the drug:

[Plaintiff] received [the drug] for the off-label use of controlling migraine-related nausea.  [The branded defendants’] development, testing and promotional efforts were directed toward treatment of gastrointestinal conditions, not [plaintiff’s] condition. . . .  Under these circumstances the negligent conduct alleged bears no causal connection to the injury suffered.

Lyman, 2012 WL 2970627, at *17.  This rationale also has potentially broad application to other cases involving disparate off-label uses.

The generic manufacturer in Lyman stayed in the case, notwithstanding preemption under PLIVA v. Mensing, 131 S. Ct. 2567 (2011).  This ruling (which was on the pleadings; not on summary judgment) had two bases, only one of which we find particularly objectionable.  The relatively unobjectionable ground is that the generic defendant didn’t update its labeling after the FDA approved a labeling change.  Lyman, 2012 WL 2970627, at *9.  Assuming that happened, and assuming it was causal (two big ifs), we don’t have a preemption-based beef with that result.  Mensing was based on impossibility, and it was not impossible (indeed it was probably mandatory) to make that particular change.

The preemption ruling in Lyman that we don’t like tried to split warning hairs that we don’t think are splittable under Mensing.  The opinion allows some sort of claim based on an failure to communicate warnings retroactively, instead of on the inadequacy of the existing warnings:

[T]he amended complaint states that the FDA required the addition of the black box warning [in 2009] as a result of the inadequate warnings provided to consumers and the medical community, indicating that it is the failure to communicate the updated warnings adequately or at all, rather than the inadequacy of the updated warnings themselves, that is at the heart of this failure-to-warn claim against the generic manufacturing defendants.

Lyman, 2012 WL 2970627, at *10.  Sorry, we don’t see the distinction.  This claim is still an attack on the adequacy of the generic drug’s FDA-required warnings, which is preempted under Mensing.  Look at it this way − if those pre-2009 warnings hadn’t been inadequate, there wouldn’t have been any need to communicate later warnings.  Plaintiffs are simply using the 2009 warning change (which should be an inadmissible subsequent remedial measure) to impugn the adequacy of the prior warnings, and Mensing says you can’t do that.  The whole warning swamp is off-limits as preempted; plaintiffs should not be allowed into it.

Otherwise, Lyman isn’t bad for the generics either.  The court wasn’t snowed by plaintiff’s novel (meaning desperate) attempt to repackage preempted warning claims as defective packaging claims.  Allegations that the generic defendants “failed to incorporate . . . package designs that would discourage long-term use” were simply a “nonverbal failure-to-warn claim.”  Lyman, 2012 WL 2970627, at *11; see id. (“unit of use packaging” claim preempted because it was a form of “stronger warning” against long term use) . The packaging allegations also failed under TwIqbal:

Subtracting the legal conclusions, it amounts to a suggestion that certain unspecified types of packaging designs might have discouraged long-term use of the drug, which might have prevented the harm to [plaintiff].  This is an example of an allegation that does not permit the court to infer more than the mere possibility of misconduct.


The plaintiff’s “design” claim was also preempted as a disguised warning claim.  After all, the only thing plaintiff claimed was wrong with the design was unsuitability for long term use − exactly what the challenged warning was about:

The only “defect” that arguably can be gleaned from the pleading is that the drug is unsafe for long-term use. This is simply another way of presenting a failure-to-warn claim.

Lyman, 2012 WL 2970627, at *12.

Plaintiff’s warranty claims also failed.  Off-label use of the product − intended to treat gastrointestinal conditions − for “headache-induced nausea” simply couldn’t be considered an “ordinary use” of the product as required by the Vermont UCC.  Id. at *15.  The lack of any communication between plaintiff’s prescriber and the defendant about plaintiff’s treatment similarly doomed a claim for breach of the implied warranty for a particular purpose.  Id. at *16.

Finally, one of the two generic manufacturers was dismissed on medical causation grounds.  Apparently, there is no support for causation where use of the drug is “intermittent.”  The manufacturer, whose product was only consumed intermittently, thus got out.  Id. at *14.

All in all, a much better result than we had anticipated when we first learned of the decision.

Sometimes Almost is Enough to Make Us Smile

            It’s a beautiful day in the Philadelphia area.  The humidity is down, the sun is out, the breeze is delightful.  If we were morning radio jocks, we’d be telling you to drop your briefcases and laptops and pick up your Frisbees, suntan lotion and beach chairs and head for the nearest park, lake or beach.  And so we hope that at least some of you are reading this on a portable device from one of those locations (or even reading it tomorrow when the heat gets dialed back up to sauna-like levels).   On a day like this, we don’t need much more to make us smile. And that’s why we are choosing to view the case of Doughtery v. C.R. Bard, Inc., 2012 U.S. Dist. LEXIS 100374 (E.D Pa. Jul. 18, 2012) as the glass half-full.  Actually, it is probably more like three-quarters full.  So, on this atypically pleasant day in July in the Mid-Atlantic, we envision enjoying an almost full glass of our favorite ice-cold summertime beverage (we’re envisioning an Arnold Palmer since we’re writing this before noon, but the choice is yours).

            The reason Doughtery, is an “almost” for us, is that, like so many cases that look at Pennsylvania medical device/prescription drug product liability law, it strips plaintiff of “almost” all of her claims.  For instance, we don’t think any of our readers would be surprised to learn that plaintiff will be permitted to plead a negligent failure to warn claim.  In fact, this is often the only claim left standing at the motion to dismiss stage under Pennsylvania law.  See post on Kee v. Zimmer, Inc., 2012 U.S. Dist. LEXIS 68862 (E.D. Pa. May 17, 2012).  We say permitted because plaintiff is being given a chance to amend her complaint to see if she can plead facts sufficient to withstand TwIqbal scrutiny.  Doughtery, 2012 U.S. Dist. LEXIS 100374 at *5.  Plaintiff actually included a proposed second amended complaint with her response to the motion to dismiss, but because it still included several claims that the court was dismissing with prejudice, plaintiff was sent back to the drawing board. 

            Nor do we think it comes as any surprise that plaintiff’s breach of implied warranty for fitness for a particular purpose claim and claim under Pennsylvania’s Unfair Trade Practices and Consumer Protection Law were dismissed with prejudice.  Id. at *4, 31-33.  But where this case doesn’t quite reach the point of overflowing our cup is in its discussion of strict liability.  We’ve reported on numerous cases – too many to count – that hold that Pennsylvania’s across-the-board application of Restatement §401A, comment k to drugs and medical devices bars strict liability claims.  See here , here , here, and here.  In fact, some of the cases discussed in these posts are cited in Doughtery recognizing that many courts have read Pennsylvania law “broadly to preclude all strict liability claims.”  Id. at *14.  What Doughtery, however, further recognizes is that that those courts didn’t specifically address a strict liability manufacturing defect claim and therefore weren’t controlling on that issue.  Id.   To our dismay, the court also cited to Schiff v. Hurwitz, 2012 WL 1828035 (E.D. Pa. May 18, 2012) to support the argument that Pennsylvania law recognizes strict liability in drug and device cases for something “more than a failure to warn.”  Doughtery, at *14.  We’ve made our feelings about Schiff well known here.  

            To be honest, we’ve contemplated that strict liability manufacturing defect was a door left open in Pennsylvania.  It is just so rarely pursued by plaintiffs, that it is a really tiny door.  Picture Alice standing before the 15 inch door to Wonderland and pondering how she was going to get through.  Except plaintiff’s don’t often get a magic vial that says “Drink Me” that grants them easy access to a manufacturing defect claim.  Hence, when strict liability failure to warn and design defect claims are tossed out in Pennsylvania, that usually does away with strict liability in its entirety.  Plaintiff Doughtery having expressed the desire to attempt to squeeze through that little door, the court decided Pennsylvania law permitted that opportunity.  The court’s reasoning was twofold:  (1) nothing in the lead Pennsylvania cases “unambiguously precludes all strict-liability claims against a [drug/device] manufacturer, id. at *16-17 (see discussion of cases in footnote 9); and (2) “the fact that the Pennsylvania Supreme Court decided to apply a negligence standard to failure-to-warn claims does not necessarily mean that the court would similarly adopt a negligence standard for manufacturing-defect claims.” Id. at *20.  As to point two, the court noted that the concern behind applying strict liability to drugs/medical devices in the context of failure to warn and design defect is that

if a manufacturer could not count on limiting its liability to risks that were known or knowable at the time of manufacture or distribution, it would be discouraged from developing new and improved products for fear that later significant advances in scientific knowledge would increase its liability.

Id. at *21 (citation and quotation marks omitted).   The court then reasoned that that concern is not an issue for alleged manufacturing defects.  Id. at *23 (strict liability creates proper incentives for manufacturers to adhere to good quality control practices). 

Having decided that Pennsylvania law does not bar a strict liability manufacturing defect claim, the court’s ruling on breach of implied warranty of merchantability should come as no surprise.  The Doughtery court, like many others, took the position that “the theories of strict liability and breach of the implied warranty of merchantability are parallel theories of recovery, one in contract and the other in tort.”  Id. at *29 (citation and quotation marks omitted).  As such, “comment k precludes implied-warranty claims against manufacturers of prescription drugs and devices to the same extent that it precludes strict-liability claims against such manufacturers.”  Id. at *28-29.  If strict liability manufacturing defect claims survive, so too do implied warranty claims based on manufacturing defects – or so says Doughtery.  Id. at *30. 

What’s left?  Negligence, strict liability manufacturing defect, breach of implied warranty of merchantability but only to the extent based on a manufacturing defect, and breach of express warranty.  And we have a plaintiff who has submitted at least three complaints to the court and hasn’t gotten it right yet.   So, to return to where we started, enjoying a sunny day on the East Coast, we leave you with the court’s words of caution to plaintiff and her counsel:

I caution Doughtery that she must allege sufficient facts to support an inference that an express warranty was created, including the specific source of the alleged warranty (e.g., a publication or package insert) and the specific statements made, something that she has not done in either her first amended complaint or her proposed second amended complaint.

Id. at *37, n.15.  And:

The infirmities in Doughtery's first two complaints were due, at least in part, to her counsel's apparent unfamiliarity with the applicable law. I caution Doughtery and her counsel to carefully review the relevant law before drafting and filing her second amended complaint. I am unlikely to allow a third amended complaint should her second amended complaint fail to plead adequate factual allegations or legally proper claims for relief.

Id. at *38.  We like to think of these as the prologue to Doughtery part II -- at which point our cup could well be filled to the brim.

Tuesday, July 24, 2012

Accutane Warnings Adequate as a Matter of Law

This just in.  A federal MDL court in Florida has granted summary judgment in an Accutane case, holding that the drug's warnings with respect to inflammatory bowel disease ("IBD" - the same claims that have produced significant jury awards in certain other venues that shall remain nameless) are adequate as a matter of New York law.  The main holding:

Here, Defendants argue that [defendant's] extensive IBD warnings in place during the time Plaintiff used Accutane (in 2004) were adequate as a matter of law. The Court agrees. The Physician Package Insert plainly and prominently identified inflammatory bowel disease by name as a possible consequence of taking Accutane. This risk information appeared in the “WARNINGS” and “ADVERSE REACTIONS” sections of the insert. It also identified the common symptoms of IBD and instructed what should be done if those symptoms appeared. . . . Both independently and taken together, these formulations communicated the same essential message to prescribing physicians: IBD is a potential risk of Accutane.

In re Accutane Products Liability Litigation, MDL 1626, slip op. at 10 (M.D. Fla. July 24, 2012).  Once an adequate warning is given, the defendant's duty is complete.  "[Defendant] had no duty to warn Plaintiff directly or otherwise ensure that her prescribing physician conveyed appropriate warnings to her."  Id. at 11.

Moreover, under New York's "across the board" application of comment k, the adequate warning precludes design-related claims:
[U]nder New York law, an adequate warning bars design defect liability against the manufacturer. . . .  Although a prescription drug is by its nature an inherently unsafe product and would in the usual case impute strict liability to its manufacturer, a defense is provided against such liability when the drug is properly prepared, and accompanied by proper directions and warning.  Therefore, even though its side effects may cause injury, a prescribed drug, accompanied by adequate warnings, is not defective, nor is it unreasonably dangerous.

Slip op. at 11-12 (emphasis added) (quoting in part NY Court of Appeals decision).

This is why on this Blog we push removal before service and other means of obtaining federal subject matter jurisdiction.  There has yet to be a judicial hellhole in federal court.

Thanks to Mike Imbroscio at Covington for passing this gem along.

N.D. Illinois Shuts Down Plaintiff Expert Shell Game

Pardon the spasm of self-pity, but throughout our legal career we have always felt as if we were on the side that faced higher standards. Not that we're complaining … well, actually we are complaining. When prosecuting cases on behalf of the United States of America (a great client, by the way, and the work was steady because people keep committing crimes), we were required to provide discovery materials of anything that might conceivably be relevant to the accused's defense, and to do so promptly and without question. Some judges insisted that we show up at the first hearing with a shopping cart full of grand jury transcripts, FBI reports (called 302's), etc. Evidence that might help a criminal defendant is called Brady material (after a SCOTUS case), and there is no better way for an AUSA to land in hot water than to fail to produce Brady material. Think of the Ted Stevens debacle. It soon became clear to us that the smart move was to adopt an open file policy. If there were materials that could not possibly help the defendant, who cares? Turn it over. And if the material might help the defendant, then it simply must be produced. We would probably hold back the home address of the confidential informant, but everything else was handed over. Given the usual surplusage of evidence against the crook, er, the accused, the discovery was usually handed over with a grin. By contrast, criminal defense lawyers think they should not have to produce any discovery. They act as if defense discovery is a violation of the right against self-incrimination. And yet, the Fed. R. Crim. Procedure does, indeed, say that criminal defendants must produce discovery, including notice of an alibi defense. Still, on those very rare occasions when criminal defendants actually did deliver any discovery, we felt like climbing to the roof of the federal building and shooting off fireworks.

It's not so different in the mass tort world. As defense lawyers, we are expected to hand the keys to the company over to the other side. We end up producing files, emails, databases, etc, all at costs of millions of dollars, and without our client being found liable for anything. But plaintiff lawyers tend to think that once they execute the medical record authorizations, they are done. It is woefully asymmetrical discovery. It is unfair, it becomes a settlement pressure point, and it distorts the whole civil justice process. We have heard some plaintiff lawyers say that anything beyond medical records and some bare bones depositions would be an undue hardship. And if plaintiff discovery is considered a rude intrusion, summary judgment is considered an affront to the cosmos, or, at minimum, a violation of the constitutional right to a jury trial. That, of course, is utter rubbish. The system of discovery, whatever else one might say about it, is designed to avoid trial by ambush. But plaintiff lawyers are quite happy to engage in as much ambushing as they can get away with, especially with their expert witnesses. The issue is whether the court will let them get away with it.

In a recent case, Baldonado v. Wyeth, 2012 U.S. Dist. LEXIS 98859 (N.D. Ill. July 17, 2012), the court did not allow the plaintiffs to get away with it. The plaintiff appeared to be playing a shell game with her expert witnesses, delaying as long as possible revealing which expert would testify as to what. That maneuver is not so rare. In those jurisdictions (including federal courts) where parties must supply expert reports and submit to expert depositions, there is often very little match among the expert report, the expert deposition, and the expert's trial testimony. (Our home jurisdiction of Pennsylvania is an exception. It does not provide for expert depositions, and the courts require that the expert's trial testimony come from within the four corners of the expert report.) We are cynical enough to think that the 'evolution' in an expert's opinion is by design, though it might also arise from sloppy expert work, where the original report was thrown together with only a tiny bit of thought and time (and, needless to say, expense), with the opinions being reshaped to fit the inconvenient facts. Nevertheless, there has to be a moment when the plaintiff must once and for all declare what exactly her experts are saying. Certainly all cards should be on the table for summary judgment.

In Baldonado, the defendant filed a motion for summary judgment arguing that a product liability design defect claim should be dismissed because the plaintiff had not adduced evidence of a safer alternative design. The plaintiff opposed the motion and cited the opinions of two experts, Drs. Austin and Tilley. Importantly, the plaintiff's summary judgment opposition did not rely upon or discuss the opinions of another of her experts, the ubiquitous Dr. Suzanne Parisian. After the summary judgment motion was fully briefed, the plaintiff withdrew Drs. Austin and Tilley as experts. That is interesting. We had nothing to do with the case, but if we did, we would have read that withdrawal as the raising of a white flag on the design defect issue. That is clearly the way the federal judge read things. As the judge observed, where the alleged defect is complex (as it was in that case) there must be expert testimony to get a case to the jury. Baldonado, 2012 U.S. Dist. LEXIS 98859 at *4. The judge ordered the plaintiff to state whether, in light of the absence of expert evidence, the plaintiff still intended to pursue her design defect claim. Why yes, responded the plaintiff, because Dr. Parisian could testify about safer alternatives. Wait a minute, said the defendant, the plaintiff waived reliance on Dr. Parisian for the purposes of defeating summary judgment.

Most of you have probably heard of Dr. Parisian before. It hardly feels like a genuine mass tort case without Dr. Parisian lurking within it somewhere. Earlier, we referred to Dr. Parisian as ubiquitous. She is apparently also omniscient, as she has offered opinions in a myriad of cases on a myriad of issues involving drugs and devices. A Parisian expert report is usually a magnum opus. It will be thick and dense. Some Parisian expert reports have had a mass so great as not to permit light to escape from them. They are expert opinion black holes. And yet with all that length, density, and just plain old stuff, there is a better than even chance that at trial Dr. Parisian will sit down in the witness box, smile, and render testimony that has very little relation to what is in the expert report. Some people just love surprises. Or think of Chekhov's gun. We would like to think that more of you have heard of the great Russian playwright Anton Chekhov than the great plaintiff expert Dr. Suzanne Parisian. The possibility that such is not so grieves us. Anyway, Chekhov once said that if a playwright mentions a gun in the first act, that gun must be fired in the last act. Maybe it's like that with Dr. Parisian. Once she is mentioned in the case, she has to be used later in the case, preferably at trial in front of a woozy jury. Call her Chekhov's expert.

In Baldonado, the plaintiff argued that simply naming Dr. Parisian as an expert should have kept her in the game to talk about a safer alternative (or, presumably, any topic that might come up), and it should not matter that the plaintiff had not mentioned Dr. Parisian in her summary judgment opposition papers. Mercifully, the federal judge rejected the plaintiff's arguments. Seventh Circuit law stresses that summary judgment "is not a dress rehearsal or practice run; it is the put up or shut up moment in a lawsuit , when a party must show what evidence it has that would convince a trier of fact to accept its version of the events. Id. at *6 (quoting another N.D. Ill. case quoting the Seventh Circuit - so if you can use this case, maybe you can provoke a court into quoting a quote of a quote of a quote. Aim high!). A party opposing summary judgment does not have the right to withhold evidence until trial, or until a surreply. Id. at *8. Not surprisingly, the plaintiff headed for the last resort of someone who violated a clear rule, and argued lack of prejudice to the other side. After all, Dr. Parisian had been mentioned, and everybody knows that Dr. Parisian can opine on everything. Like Chekhov's gun, by now we all know that the Dr. Parisian trigger will be pulled before the curtain falls. But a trial is not a play, or at least it is not supposed to be. The court saw through the gamesmanship, and apparently did not like it one bit. The case had been pending for eight years, and the plaintiff made a strategic decision about which experts to name, which experts to rely upon to oppose summary judgment, and which experts to withdraw. "Plaintiff's manner of proceeding in this case has included a 'pattern of withdrawing expert witnesses shortly before their scheduled hearing dates [resulting in] a waste of unnecessary resources in preparing for the hearings.'" Id. at *9, quoting an earlier order in the case. The plaintiff might gripe about unfairness, but "any perceived unfairness was of Plaintiff's own making." Id. Without the belatedly-offered Dr. Parisian expert testimony, the plaintiff lacked any admissible expert testimony on safer alternative design. Accordingly, the court granted partial summary judgment and dismissed the design defect claim.

We are happy to see a court shut down the plaintiff's expert shell game. Just like in those shell games on Manhattan street corners, the expert shell game is a cheat.

Monday, July 23, 2012

Bad Parallel Violation Decision, But Plaintiff May Have Nowhere to Go

When we first read Steiden v. Genzyme BioSurgery, 2012 U.S. Dist. LEXIS 99689 (July 18, 2012), we didn’t know which bothered us more: the court’s parallel violation ruling or its TwIqbal ruling.  It’s still a close call, but TwIqbal might have won in a photo finish.  It’s not all doom and gloom, however.  There may be an upside. 

There was nothing distinct about the plaintiff’s claim.  He alleged that he had a serious adverse reaction to a knee injection of Synvisc-One®, which is regulated as a medical device.  Id. at *1-2.  He brought product liability claims.  The defendant moved to dismiss on the basis of preemption under the Medical Device Amendments to the Food, Drug and Cosmetics Act.  The plaintiff then conceded that his product liability claims were preempted.  Id. at *4. 

Routine enough so far.  Here’s where parallel violation claims came into play.  Plaintiff asked to amend his complaint to add the following allegations:

(1) Genzyme failed to comply with the FDA’s premarket approval requirements in the continued manufacture, distribution and sale of Synvisc-One®;
(2) Genzyme manufactured, held, sold, and delivered an adulterated dose of Synvisc-One®;
(3) Genzyme did not meet the FDA's Current Good Manufacturing Practices (“cGMPs”) in the manufacture, distribution and sale of Synvisc-One®; and
(4) Genzyme violated KRS 217.175 by manufacturing, holding, selling and delivering an adulterated dose of Synvisc-One®, the violation of which constitutes negligence per se.

Id. at *5.  The upshot is that plaintiff wanted to allege that the defendant didn’t follow PMA approval and cGMP requirements and parlay those alleged failures into a parallel violation claim under Kentucky’s negligence per se statute. 

The court allowed this claim to go forward.  The problem is that there is no private right of action under the FDCA.  The FDCA itself says so: “all such proceedings for the enforcement, or to restrain violations, of this chapter shall be by and in the name of the United States.”  21 U.S.C. §337(a).  Accordingly, as we’ve discussed before here, the FDCA should not be a proper candidate for private negligence per se enforcement.  But there’s no reason to get worked up about it here again. 

It’s harder, though, with the TwIqbal ruling.  The totality of the plaintiff’s factual allegations in his proposed amended complaint is as follows:

William L. Steiden, a patient of Dr. Edward Tillett, an orthopedic surgeon who practices in Jefferson County, Kentucky, had both of his knees injected with Synvisc-One® (HYLAN G-F 20) on July 22, 2010. The plaintiff suffered an immediate adverse reaction after the injection of Synvisc-One® (HYLAN G-F 20) in his right knee.

Id. at *5-6.  That’s it.  In fact, the court acknowledged that the allege facts were sparse: “There are indeed precious few facts alleged.”  Id. at *12.  The rest of the complaint consists of the type of conclusory incantations mentioned above as to unspecified violations of cGMPs and PMA requirements.  Yet the court let the complaint stand, a decision that may ultimately serve as an invitation to fill-in-the-blank parallel violation complaints: name the device, allege a reaction, and allege violations of unnamed GMPs and PMA approval requirements.  Voilį¼!  You’re in federal court, and on to discovery.  Frankly, the court all but admitted that that’s all it required:

[W]e find that the allegation of adulteration based on the occurrence of an immediate adverse reaction in one knee to the injection of Synvisc-One® contains sufficient specificity to satisfy Iqbal and Twombly.

(Practitioner’s note: the importance that this court seemed to place on the immediacy of the reaction in the knee may be a basis to distinguish this case, if the argument that this decision was badly decided won’t work.)  Nonetheless, to simply allege a reaction to a device (or drug) doesn’t equate to a violation of a cGMP, adulteration or even to a defect.  Nor does adding to that the factually devoid allegation that an unnamed FDA requirement was violated in some unnamed way.  There’s no substance to the claim, nothing on which to judge its plausibility under Twiqbal: no identification of the supposed manufacturing or design defect; no specific PMA approval or cGMP requirement that was violated; no allegation on how that requirement was violated; and no connection between those things and plaintiff’s injury. 

While TwIqbal certainly doesn’t require a plaintiff to prove his claim in a complaint, he must state facts that make it plausible.  Other than the general notion (for which plaintiff’s complaint wasn’t necessary) that parallel violation claims are possible, plaintiff’s complaint provided nothing to make his claim plausible.  It’s boilerplate pleading, which is precisely what TwIqbal does not allow. 

But, again, we’ll try not to get worked up about this. 

There may be some good news.  All the product liability claims are gone.  The court dismissed them (after the plaintiff conceded them).  Id. at *14.  What’s left – plaintiff’s parallel violation claim – may be difficult for plaintiff to establish. 

The plaintiff will have to prove that the defendant violated a PMA approval or cGMP requirement, and that this violation caused his injury.  Moreover, we believe that he must also show that the FDA found or would have found such a violation.  His claim must truly be “parallel” to the FDA’s position.  It cannot be, as the MDA prohibits, “different from” or “in addition to” the FDA’s findings.  This further limits the proof that the plaintiff must show to make his claim.  So we very well may see the Steiden case back here on a motion for summary judgment, one with a much more favorable holding.

"New" Massachusetts Device Preemption Decision

We’ve just been informed of Phillips v. Medtronic, Inc., SUCV2009-05286-A, slip op. (Mass. Super. July 10, 2012), granting a preemption motion under Riegel v. Medtronic, Inc., 552 U.S. 312 (2008), in a case involving a pain pump (it's over a week old, so it's only "new" by non-blogging standards).  Unlike many pain pump cases, the device in Phillips was a Class III FDA pre-market approved (PMA) device.

The device in Phillips was labeled for intrathecal (spinal) use (also unlike most pain pump cases, which involve the shoulder joint). It was the subject of a recall in 2008, four years after the plaintiff’s surgery. Slip op. at 2.

The plaintiff in Phillips alleged “parallel” violation claims that parroted statements in two FDA warning letters.  Slip op. at 3-6 (quoting large chunks of the letters − this is one thorough judge).  The amended complaint, filed after the court warned plaintiff about preemption, alleged violations of no fewer than fourteen provisions of the FDCA or FDA regulations.  Id. at 6-7.

None of regulatory mud that plaintiff threw against the wall stuck.  The amended Phillips complaint was dismissed under the Massachusetts equivalent of Rule 12 and the Massachusetts equivalent of TwIqbal.

The claimed regulatory violations were simply not causal.  Although the court let the plaintiffs slide on both the vagueness of the GMPs and the vagueness of her pleadings (slip op. at 11-16), she could not escape the FDA’s warning letters.  They did not involve what plaintiff claimed had happened.

It is clear from the [warning letters] that all of these [GMP] violations relate to tip bonding manufacturing procedures. . . . Insofar as catheter tip detachment is not the manufacturing defect alleged to have caused [plaintiff’s] injuries, the plaintiffs fail to state a plausible claim on the cited [GMP] violations, even under an indulgent reading of the complaint.

Slip op. at 17.

Plaintiff also alleged violations of medical device reporting obligations owed to the FDA.  Slip op. at 17-18.  Forget express preemption; claims based on failure to provide information to the FDA are barred under Buckman Co. v. Plaintiffs Legal Committee, 531 U.S. 341 (2001), since the Supreme Court there held that only the FDA can enforce reporting obligations owed to it:

[A] parallel claim based on failure to report adverse events, corrections, removals, and failure to submit supplemental reports to the FDA is impliedly preempted because it is premised solely on a duty created by the MDA [Medical Device Amendments] which did not exist in the common law: the duty to provide information to a regulatory agency to enable it to determine whether to take enforcement action.

Slip op. at 21. The judge was admittedly “reluctant” to reach this result, but the plaintiff’s allegations left no doubt that these were Buckman-preempted claims.  Id.

Thus we add another favorable outcome to our medical device preemption scorecard.

Friday, July 20, 2012

Notes on Settlement Classes

This month, we’ve seen a couple of cases dealing with class action settlements and neither of them, frankly, leaves us with much confidence in the process.  We’re referring to Dennis v. Kellogg Co., ___ F.3d ___, 2012 WL 2870128 (9th Cir. July 13, 2012), and In re Budeprion XL Marketing & Sales Litigation, 2012 WL 2527021 (E.D. Pa. July 2, 2012).

The Ninth Circuit Dennis (we’d add “the Menace” to the name) case involved food, not drugs. It is a poster child for the abuse of “cy pres” distribution in a class action settlement − so much so that even the Ninth Circuit, notoriously liberal on such things, couldn’t stomach it.  California has become a center of food class action litigation, and in this particular instance the charge was that the defendant advertised certain cereals as “scientifically proven to improve children's cognitive functions for several hours after breakfast.”  2012 WL 2870128, at *1.  For present purposes it doesn’t matter whether the allegation has any merit or not, since the action was settled.

But what a settlement:
  • A “claims-made” fund of $2.75 million where class members able to prove their purchases could get up to $15 (three boxtops) in refunds.  Anything left over would be distributed cy pres to “charities chosen by the parties and approved by the court.”  Id. at *2.
  • An in-kind cy pres distribution of “$5 million worth” of the defendant’s food “to charities that feed the indigent,” with valuation apparently left to the defendant (although this is not clear).  Id.
  • The defendant would refrain from making the challenged claim for three years, but would be allowed to make a related claim of “11% better attentiveness” proven by “clinical studies.”  Id.
  • Counsel fees for class counsel of $2 million.  Id.

According to class counsel, the total amount of refunds paid from the claims-made fund was $800,000.  Id. at *2 n.1.  Even though this figure was unverified and counsel had every incentive to overstate the payout, we’ll take it as face value.

Thus, of the nominal $9.75 million in value that purportedly changed hands (we’ll pass over the interesting discussion of the “value” of $5 million in-kind contribution, its tax deductibility, and whether the donation would have been made in any event, see id. at *7), all of $800,000 went to the supposed class.  That’s a little more than 8%.

The attorneys for the class took home two and a half times more dollars than did the entire class.  Divided by the hours the class attorneys spent, they received an hourly rate of $2100 − that’s right, over two-thousand dollars an hour.  2012 WL 2870128, at *1.

On top of that, the injunctive relief was worthless to the class, since membership in the class was defined as past purchasers (during the time of the challenged ads) and the injunction only governed future conduct.  Any overlap between past and future cereal purchasers was entirely coincidental and had nothing to do with the structure of the class settlement.

Notice was by publication only − with the usual excuse that it would be too expensive to let class members actually know that most of their supposed recovery was going to other people.

How could money supposedly owed to a class be given away to others not involved in the litigation in any way (putting aside the $2100 per hour fee)?  Welcome to the wonderful world of cy pres.

Cy pres is a doctrine of convenience, made up by courts to give away money theoretically owed to unwitting members of questionable classes to others who have the advantage of not costing anything to identify.  Its real purpose is, as in Dennis, is to inflate the denominator of a class action settlement to justify a higher fee, even though the litigation itself is incapable of benefiting the purportedly injured class directly.  As stated in Dennis:
Used in lieu of direct distribution of damages to silent class members, this [cy pres] alternative allows for aggregate calculation of damages, the use of summary claim procedures, and distribution of unclaimed funds to indirectly benefit the entire class.

2012 WL 2870128, at *4.  That's "indirectly" as in "not at all."

Cy pres started out with residual − so-called “unclaimed” − funds, such as the remaining $1.95 million in the “refund” pot in Dennis.  But the doctrine has metastisized to include the practice of simply giving class funds to charities from the get-go (in Dennis the $5 million in in-kind food) without any pretense of it ever belonging to the supposed plaintiffs in the class.

One major reason for both the creation and metastisis of cy pres is, of course, unduly permissive substantive law.  When the law is interpreted in such a way as to allow minuscule claims by unidentifiable plaintiffs − as the California consumer protection statutes have been − such rulings will inevitably create pressure for corresponding distortions of procedural law.  But even cy pres is supposed to have some limits.  One is that the charities have something to do with the class:
Not just any worthy recipient can qualify as an appropriate cy pres beneficiary. To avoid the many nascent dangers to the fairness of the distribution process, we require that there be a driving nexus between the plaintiff class and the cy pres beneficiaries.

2012 WL 2870128, at *4 (citations and quotation marks omitted).

What was the supposed nexus between cereal buyers and feeding the indigent?

According to class counsel food is food is food.  That was too much, even for the liberal Ninth Circuit:
[C]ounsel frequently asserted that donating food to charities who feed the indigent relates to the underlying class claims because this case is about “the nutritional value of food.”  With respect, that is simply not true, and saying it repeatedly does not make it so.  The complaint nowhere alleged that the cereal was unhealthy or lacked nutritional value.  And no law allows a consumer to sue a company for selling cereal that does not improve attentiveness.

Id. at *6.

That was good as far as it went, but then what?  Did the court shut down the litigation by pointing out its bogus nature since the supposedly injured persons could never be identified?  Did the court hold that this kind of claim was ill-suited to litigation at all and should be pursued, if at all, by the responsible government agencies?

No, of course not.  This is the Ninth Circuit.

Dennis simply suggests that different charities would have been more appropriate:
Thus, appropriate cy pres recipients are not charities that feed the needy, but organizations dedicated to protecting consumers from, or redressing injuries caused by, false advertising.

2012 WL 2870128, at *6.

Amazing.  What the court suggests as “appropriate” is that class action lawyers divert client funds to supposed charities “dedicated to . . . redressing injuries caused by false advertising.”  Heck, in the rest of the country class action lawyers at least have to pay for their own advertising.  After Dennis they can found non-profits and use money ostensibly belonging to their purported clients to bring in more business − a self-perpetuating litigation machine.

Cy pres is one of a number of purely utilitarian things that courts have done over the years to encourage the proliferation of mass litigation.  There’s no basis in any statute or common-law tort doctrine for it.  Its source is murky at best − an analogy to equitable powers involving trusts and estates (that is, voluntary bequests, as opposed to damages extracted through litigation):
Although the cy pres doctrine originated in the area of wills as a way to effectuate the testator’s intent in making charitable gifts, federal courts now frequently apply it in the settlement of class actions where the proof of individual claims would be burdensome or distribution of damages costly.

Dennis, 2012 WL 2870128, at *4.  "Frequently."  But as Dennis pointed out "saying it repeatedly does not make it so."

The alternative, of course, would be for courts to admit that some disputes simply do not belong in the judicial system, at least as private suits.  That’s what we have regulators for − to step in for the public as a whole and fine wrongdoers in cases of prohibited conduct, regardless of injury.  But that result would mean no attorneys fees, and also no sycophantic charities knocking at the door and awarding “honors” to their patrons, those being the lawyers and judges.

We’d love to see one of these cy pres cases get to the Supreme Court.  We think cy pres could be the Lexecon (that is the Lexecon, Inc. v. Milberg Weiss Bershad Hynes & Lerach, 523 U.S. 26 (1998), decision reining in another form of ultra vires judicial action) of the Twenty-First Century, that is if another of our pet peeves (cost assessment orders against non-parties) doesn't make it there first.

The second recent class action settlement case that caught our eye is In re Budeprion Xl Marketing & Sales Litigation, 2012 WL 2527021 (E.D. Pa. July 2, 2012).  This one does involve drugs − generic drugs − and for that reason it shouldn’t have been settled at all, but rather dismissed.  The claims (allegations of failure to warn that the generic version of a drug supposedly wasn’t really as safe or effective as the original branded version) were flat out preempted by PLIVA, Inc. v. Mensing, 131 S. Ct. 2567 (2011) − indeed the Budeprion claims were if anything worse than Mensing, because they implicitly challenged the validity of the drug’s ANDA approval ab initio (that’s legal Latin for “from the beginning”).  Since Mensing held that discrepant warnings were preemptive conflicts, challenging the very existence of the generic drug is a lot bigger conflict justifying preemption even more strongly.

It so happens that Mensing came down in the middle of the lengthy Budeprion litigation.  2012 WL 2527021, at *4.  We won’t characterize the ensuing negotiations, because we weren’t there, but the result was a another class action settlement that, like Dennis, leaves us scratching our heads.

In Budeprion it’s a mandatory Rule 23(b)(2) class action settlement of economic loss claims under the same California consumer fraud statute at issue in Dennis.  But….

First, the class definition appears “unascertainable” − that’s legal lingo for a class being defined in such a way that simply to determine who the members are involves an individualized inquiry into each class member’s circumstances.  The litigation involves “a class of individuals who had taken [the generic drug] and whose conditions had worsened after switching to the drug.”  Id. at *3 (emphasis added).  The problem in Budeprion is that, while only consumer fraud (economic loss) claims were pursued, it’s still a personal injury case in disguise − to determine class membership, one has to determine whether any given purchaser’s medical condition “worsened” − that’s an individualized inquiry.

Second, the nature of the claims being settled is unclear and perhaps illusory.  Budeprion purports to be a nationwide class settlement, 2012 WL 2527021, at *5 (“[a]ll individuals in the United States”), but it also appears to be brought entirely under California consumer protection statute.  Id. at *7 (“in violation of California consumer protection laws”), *8 (“Plaintiffs sought to bring this litigation as a nationwide class action applying California law.”).  However, the California consumer protection statute can’t be used that way − it doesn’t have extraterritorial application beyond the boundaries of that state.  See Sullivan v. Oracle Corp., 254 P.3d 237, 248 (Cal. 2011) (“[n]either the language of the UCL nor its legislative history provides any basis for concluding the Legislature intended the UCL to operate extraterritorially”).  So to the extent that the class extends beyond California (which it certainly is presented as doing), it settles claims that the non-California members of the putative class can’t have (under California law), while possibly (we’re not sure) precluding claims that the other class members might actually have (under analogous statutes of states where the members live).

Third, exactly zero dollars changes hands.  The mandatory class ((b)(2) plaintiffs have no opt out rights) gets nothing except “injunctive relief.”  See 2012 WL 2527021, at *5 (points a-g).  Here we see the impact of Wal-Mart v. Dukes, 131 S. Ct. 2541 (2011), which essentially prohibits the use of (b)(2) mandatory classes for awarding money.  The case for any injunctive relief sounds pretty thin, since the defendant was apparently doing these things anyway.  Budeprion, 2012 WL 2527021, at *19.

Moreover, the Budeprion settlement suffers from the same fundamental incongruity between the class and the relief that we mentioned with respect to Dennis − the injunction doesn’t benefit the class because while the class consists of past buyers, the injunction restrains only future conduct.  Any benefit that the class members receive from the injunction is purely coincidental.  We blogged not too long ago about Haggard v. Endogastric Solutions, Inc., 2012 U.S. Dist. Lexis 89767 (W.D. Pa. June 28, 2012), where we think the court got it right about (b)(2) “injunctive” classes:
Even more essentially fatal to his motion for certification under (b)(2) is that Plaintiff only seeks to enjoin Defendant from making representations to future potential [product using] patients; i.e., to individuals who are not members of the class as defined.

Id. at *20 (emphasis original).

So in Budeprion the class gets nothing from the settlement.  We’re not sure what the defendant gets either, since it’s unclear from the opinion whether the same claims brought under the consumer fraud claims of the 49 states that aren’t California are or are not barred.  But as in Dennis, somebody does walk away with a lot of cold, hard cash:
For their efforts, Class counsel seek $4.5 million in attorneys' fees, costs, and incentive awards to certain class representatives.  Specifically, Class counsel request $3.2 million in fees, $1.3 million in costs, and $55,000 in incentive awards to nine named Class representatives.

2012 U.S. Dist. Lexis 89767, at *20.

There are plenty of reasons we don’t like class actions − litigated or settled − Dennis and Budeprion are two of them.  These settlements are worse than the coupon gimmicks banned by CAFA.