A Better Look at Preemption in New Jersey

Those of us who practice New Jersey products liability law know McDarby v. Merck, 401 N.J. Super. 10 (App. Div. 2008).  It addressed a provision of New Jersey’s Product Liability Act that both granted manufacturers immunity from punitive damages if their product was approved by the FDA and tried to take that immunity away if the manufacturer made knowing misrepresentations to the FDA. Here’s the language of the statute:

Punitive damages shall not be awarded if a drug or device . . . which caused the claimant's harm was subject to premarket approval . . . by the federal Food and Drug Administration . . . and was approved . . . . However, where the product manufacturer knowingly withheld or misrepresented information required to be submitted under the agency's regulations, which information was material and relevant to the harm in question, punitive damages may be awarded.

N.J.S.A. 2A:58C-5c (emphasis added).  We know what you’re thinking: “Wouldn’t that be preempted under Buckman?”  Yup.  And that’s what McDarby held. 

And, since this decision in 2008, courts applying New Jersey law on this topic generally cite McDarby and apply its holding.  But, last week, the court in Zimmerman v. Novartis Pharm. Corp., 2012 U.S. Dist. LEXIS 126002 (D. Md. Sep. 5, 2012), did something better.  It offered a well-reasoned, thoughtful explanation of the law on preemption and Buckman, along with an effective criticism of decisions that (we believe) get Buckman wrong.  It’s good stuff, and it provides good quotes for future briefing.  In fact, you might want to consider citing McDarby but quoting Zimmerman. 

Now, Buckman, even read narrowly, held that tort claims based on a manufacturer withholding information from or misleading the FDA are impliedly preempted because the FDCA grants the power to enforce its provisions to the United States, not private citizens.  When a federal law such as this creates an inherently federal relationship and exclusive enforcement mechanism, the presumption against implied preemption that ordinarily attaches goes away.  As the Zimmerman court wrote: 

[I]n Buckman, the Court held that there is no presumption against preemption where a jury is asked to decide whether there has been a material fraud on the FDA during the regulatory process.  This is because federal law dictated the Defendant’s interactions with and representations to the FDA. Thus, unlike circumstances that implicate “federalism concerns and the historic primacy of state regulation of matters of health and safety,” the relationship between a regulated entity and the FDA is “inherently federal in character because the relationship originates from, is governed by, and terminates according to federal law.”

Id. at *37 (citations omitted).

The Zimmerman court rejected the reasoning of courts that upheld other state statutes that allowed failure to warn claims to go forward if there was a showing of fraud on the FDA.  One such court reasoned that such statutes “cannot reasonably be characterized as a state’s attempt to police fraud on the FDA” but rather they are a state’s attempt to limit tort claims.  Id. at *38 (quoting Desiano v. Warner-Lambert & Co., 467 F.3d 85, 94 (2d Cir. 2006)).  But the Zimmerman court didn’t lose track of the most important point – it’s different when a state tort claim requires determinations about fraud on the FDA:

Although this Court agrees that the presumption against preemption applies to state tort claims implicating health and safety generally, the Court concludes that such a presumption does not apply to that part of Plaintiff’s claim, which by virtue of New Jersey law, conditions any recovery of punitive damages on a showing that a defendant-drug manufacturer “knowingly withheld or misrepresented information required to be submitted under the [FDA’s] regulations, which information was material and relevant to the harm in question.” [Quoting the N.J. statute]. This conclusion is confirmed by the Court’s analysis in Buckman. There, the Court found that the presumption against preemption did not apply to a specific type of tort claim--a fraud on the FDA claim--even though the presumption against preemption applies to traditional tort claims implicating health and safety matters.

Id. at *39-40 (citation omitted).

This is because the key question is not whether the state tort claim seeks to “police” fraud-on-the-FDA, but whether it is an obstacle to FDA regulation.  Id. at *42.  A state statute that hinges compensatory or, more so, punitive damages on a jury’s – more likely, multiple juries’ – determinations of whether the FDA was defrauded raises obstacle after obstacle.  Companies concerned that juries will see fraud where the FDA doesn’t will understandably respond by providing the FDA with the kitchen sink, causing nothing but greater delay and inefficiency. 

The Zimmerman court went further, holding that even if a presumption against preemption applied, it is rebutted because the statute requires a jury determine something exclusively left to the FDA.  Id. at *41-52.  The court rejected (what we believe is wrong-headed) reasoning by some courts that Buckman preemption applies only to pure fraud-on-the-FDA claims, not claims in which such fraud is an element of, or gateway to, a broader claim:

This distinction is meaningless because it is simply not entirely accurate. In Buckman, the plaintiffs not only had to prove the device maker’s non-compliance with FDCA disclosure requirements, which served as the predicate false representation in a common law fraudulent misrepresentation action, but also other common law elements of a fraudulent misrepresentation action such as injury and proximate cause.  Put another way, the preemption analysis does not change simply because, under New Jersey law, this Plaintiff must prove something in addition to non-compliance with a FDCA disclosure requirement to recover punitive damages.

Id. at *54 (citations omitted). 

The Zimmerman  court was not moved by the argument that the New Jersey statute does not create a fraud-on-the-FDA claim, like in Buckman, but rather only gives plaintiffs the opportunity to rebut a presumption and thereby bring a tort claim under New Jersey common law:

Once New Jersey passed the statutory immunity provision for punitive damages, the traditional cause of action is no more rooted in common law doctrine than the stand-alone claim in Buckman. This is because, in the post-statutory immunity world, a plaintiff’s punitive damages claim hinges on whether the defendant-drug maker made adequate disclosures to the agency and whether, in the face of these inadequate disclosures, the agency would have approved the drug. In this way, New Jersey’s statutory immunity provision makes fraud on the FDA a “critical element” of every punitive damages claim.

Id. at *55-56 (citation omitted).

It really is a simple analysis.  The statute authorizes juries to dig into the details of regulations and New Drug Applications and make independent determinations of what the FDA should have done or would have done, but didn’t do.  In other words, precisely what juries can’t do under federal law:

Simply put, Plaintiff’s claim for punitive damages requires a state fact finder to determine what was required to be submitted to the FDA, whether it was submitted to the FDA and, whether the FDA would have made a different approval decision had it been provided with the correct or missing information. Plaintiff’s claim thus requires a fact finder to make these types of determinations as a matter of state law even though federal law makes such determinations the exclusive province of the FDA. Accordingly, Plaintiff’s claim for punitive damages poses an obstacle to the objectives and purpose of the FDCA, and is therefore preempted by the FDCA.

Id. at *51-52.

It doesn’t, and shouldn’t, matter whether this improper determination is an element of a claim, a gateway to a broader claim, or the entirety of the claim.  Jury after jury deciding what the FDA should have gotten and done about it gets in the way of the FDA doing its job.  The Zimmerman court gave a good quotation for this too:

Allowing state fact finders to second-guess the very decisions that federal law leaves entirely to the agency presents “the same inter-branch-meddling concerns that animated Buckman.” As in Buckman, allowing punitive damages liability here would require applicants to submit a “deluge” of unnecessary information during the approval process, which in turn, delays the approval of new drugs.  In seeking to comply with various statutory immunity provisions, drug manufacturers would “exert an extraneous pull on the scheme established by Congress.”

Id. at *57. 

We told you that the court's discussion was much better than just, "see McDarby."  Keep it handy for future briefs. 

Not A WIn, Not A Loss

The recent decision in Mims v. Wright Medical Technology, Inc., 2012 WL 1681810 (N.D. Ga. May 11, 2012), is really neither a win nor a loss.  Like Gaul, the decision contains three parts, and we have comments as to each.


Very briefly, the case involves a total hip implant constructed from titanium.  After being implanted for over three years, it broke.

Design Defect

The first part of the opinion denied summary judgment on design defect claims.  The plaintiff’s expert, as is common in such cases, alleged that instead of being made out of titanium it should have been made out of cobalt-chrome alloy (“CCA”).  Mims, 2012 WL 1681810, at *2.  Of course, if the defendant had used CCA, the expert would then have alleged it should have been made out of titanium − anything to claim a defect.

The defendant moved for summary judgment, arguing that merely claiming an alternative design was not enough.  Id. at *3. That struck us as a little odd, since defendants are usually the foremost advocates of a strong alternative design requirement. The court held that since alternative design was essential to design defect litigation, that was enough to survive summary judgment:

One factor consistently recognized as integral to the assessment of the utility of a design is the availability of alternative designs, in that the existence and feasibility of a safer and equally efficacious design diminishes the justification for using a challenged design. The alternative safer design factor reflects the reality that it often is not possible to determine whether a safer design would have averted a particular injury without considering whether an alternative design was feasible. The essential inquiry, therefore, is whether the design chosen was a reasonable one from among the feasible choices of which the manufacturer was aware or should have been aware. Alternative safe design factors include: the feasibility of an alternative design; the availability of an effective substitute for the product which meets the same need but is safer; the financial cost of the improved design; and the adverse effects from the alternative.

Id. at *2.

Frankly, we don’t mind that particular ruling too much.  We could even see using this quote in one of our cases.

The real problem in Mims was that the defendant hadn’t separately moved to exclude the plaintiffs’ expert under Daubert.  The court latched onto that and refused to “consider the reliability” of the expert testimony on summary judgment.  Id. at *3.  This procedural two-step is worrisome in that it allows an expert opinion that may well be inadmissible to defeat summary judgment.  The general rule has been that only admissible evidence counts on summary judgment, and the court’s wielding of a procedural fine-toothed comb undercuts that rule.  One take-away from Mims is to make sure to file Daubert motions separately and in advance of summary judgment, depending of course on the pre-trial schedule in any given case.

Another more unusual suggestion:  We’ve had some success using preemption against this type of claim, see Greenwood v. Pennsylvania Hospital, 1999 WL 1133313, at *2-3 (Pa. C.P. Philadelphia Co. June 9, 1999) (claim that implant should not have been made from stainless steel held preempted), but it depends on the classification regulation.  We’ll explain.  There’s usually no preemption in Class II metallic implants like hip implants under Medtronic, Inc. v. Lohr, 518 U.S. 470 (1996), but there can be − if there’s a “device-specific” regulation, and the plaintiff’s particular claim is “different from or in addition to” something in that regulation under 21 U.S.C. §360k(a).

There are device-specific regulations for essentially all medical devices − but unfortunately they’re usually one-paragraph long and thus don’t cover many aspects of the device.  These are the FDA’s identification and classification regulations.  However, they do frequently say something about the metallic composition of implants. There are several hip implant I&C regs, see 21 C.F.R. §§888.3300-3350, and we don’t know which one applies specifically to Mims.  Most of them mention only “cobalt-chromium-molybdenum,” which was the plaintiff’s proposed design alternative in Mims, so the preemption argument wouldn’t fly.

However, if §888.3310 were applicable to this implant, or if some plaintiff’s expert offered the same opinion against the manufacturer of a §888.3310 implant, there’s a decent preemption argument.  That’s because this section states, as to composition, that such devices are “made of alloys, such as cobalt-chromium-molybdenum and titanium alloys.”  Emphasis added.  In this device-specific regulation, the FDA has expressly stated that “titanium alloys” are okay.  Thus, our preemption argument in such a situation would be that since a device specific regulation specifies “titanium” as acceptable composition, a common-law claim that titanium construction alone is a defect would be preempted even under Lohr.

Warning Defect

The second part of the Mims opinion also denied summary judgment as to the plaintiffs’ warning claim.  2012 WL 1681810, at *4.  The defendant moved based solely on the warning’s adequacy.  That’s hard to do unless the relevant part of the warning is really detailed.  The description of the warnings in Mims suggests otherwise in that case.

We find it much easier to win summary judgment in warning cases on causation − that the prescriber already knew the allegedly omitted information or that the information wouldn’t have changed what the prescriber did or the warnings.  Supporting facts would also include the prescriber continuing to utilize the device, with no change in procedure, after the plaintiff’s injury.

The lesson from Mims is that warning summary judgment motions ideally should have a double-barreled approach of both adequacy and causation.

The court in Mims seemed to assume, without any evidence (at least none was cited) that a different warning might have led to a different outcome.  Maybe the issue simply wasn’t raised in the Mims motion, but again the court’s willingness to rely on less than admissible evidence is troubling, since summary judgment can be sought on the grounds that the plaintiff has no evidence on an essential element where the plaintiff bears the burden of proof.

Punitive Damages

The final third of the Mims opinion dismissed punitive damages claims as a matter of law because the defendant demonstrated that the implant complied with FDA regulations:

[T]he Court concludes that the Plaintiffs would not be able to establish by clear and convincing evidence culpable tortious conduct that would authorize the imposition of punitive damages. Moreover, punitive damages are typically not appropriate where the manufacturer has complied with regulatory standards.

Mims, 2012 WL 1681810, at *5 (citing Stone Man, Inc. v. Green, 263 Ga. 470 (1993); Welch v. General Motors Corp., 949 F.Supp. 843 (N.D.Ga.1996)).

This part of Mims almost makes up for the rest of it.  Preclusion of punitive damages by regulatory compliance is something we’ve advocated before, here.  We prominently mentioned the Stone Man decision that the court followed in Mims.  So we take this opportunity to applaud the third part of Mims.

Is There A Constitutional Right To Punitive Damages?

We recently came across a post on a Bricker & Eckler blog, about a recent Ohio Supreme Court case, Havel v. Villa St. Joseph, 963 N.E.2d 1270 (Ohio 2012), upholding the constitutionality of an Ohio statute imposing mandatory bifurcation in punitive damages cases.  Havel held, after considerable back and forth:

[The statute] does not violate the Ohio Constitution and is constitutional because it is a substantive law that prevails over a procedural rule.  Inherent in our conclusion is rejection of the argument that dicta contained in Sheward [an infamous anti-tort reform decision], which described the former version of [the statute] as governing a procedural matter. . . .  Sheward never considered the bifurcation question we confront in this case.  Thus, we are not required to follow out-of-context dicta as precedent.

Havel, 963 N.E.2d 1279 (quoting and following Arbino v. Johnson & Johnson, 880 N.E.2d 420, 443 (2007)).  That’s an excellent result, but by addressing the issue in this way the Court did not have to pass on a more fundamental question that we’ve been pondering, which is whether a plaintiff has any constitutional right punitive damages in the first place.

In that regard, the Bricker post helped us out.  In discussing Havel, it mentioned that “Ohio’s caps on punitive damages have been upheld as constitutional (in Arbino v. Johnson & Johnson).”  There’s that decision again.  Arbino seemed like a pretty good place to start looking for an answer to the basic constitutional question, so we took a look.  Sure enough, Arbino turned out to be a recent example of what we’ve now come to conclude is a virtually universal rule that, until a judgment in an individual case is actually entered, there is no “vested right” to pursue a claim for punitive damages.  Nor for that matter is elimination of a punitive damages remedy a “taking.”  Basically, punitive damages are a form of punishment, not compensation, to which no constitutional right attaches.  As the Ohio Supreme Court stated in Arbino:

[R]egulation of punitive damages is discretionary and that states may regulate and limit them as a matter of law without violating the right to a trial by jury. . . .  [P]unitive damages are not compensation for injury.  Instead, they are private fines levied by civil juries to punish reprehensible conduct and to deter its future occurrence.  The purpose of punitive damages is not to compensate a plaintiff, but to punish and deter certain conduct.

880 N.E.2d at 441 (citations and quotation marks omitted).

As it turned out, Arbino is hardly alone.  Here’s what some other state supreme courts have said on the issue:

Indiana:

[A] party has no prejudgment property interest in a punitive damages award. . . .  [T]here is no vested property right in an award of punitive damages. . . .  [U]nder either the federal or the [state constitution] Takings Clause, there is no property right in a claim for punitive damages. Rather, consistent with their punitive nature, punitive damages are akin to a fine exacted by the government . . . to deter and punish wrongdoers.

Cheatham v. Pohle, 789 N.E.2d 467, 474 (Ind. 2003) (citations and quotation marks omitted).

Oregon:

[A] plaintiff has no right or entitlement to punitive damages as a remedy . . . and, as a result, the jury has complete discretion not to award punitive damages, even if a plaintiff successfully proves all elements of a claim.  Consequently, before entry of a final judgment, a plaintiff . . . always has had, at most, an expectation of such an award. . . .  A vested right must be something more than a mere expectation based upon the anticipated continuance of existing laws; it must have become a title legal or equitable to the present or future enjoyment of property.  We therefore hold that plaintiffs do not have a vested prejudgment property right in punitive damages.

Demendoza v. Huffman, 51 P.3d 1232, 1245 (Or. 2002) (citations omitted).

Kansas:

[A]ll of our cases recognized that a plaintiff has no vested right to punitive damages and that no right, cause of action, or remedy existed . . . separate and apart from an action for compensatory damages.  Exemplary damages are in no case a right of the plaintiff, but are assessed at the discretion of the jury for the purpose indicated. . . .  [N]o citizen has a right to recover punitive damages; therefore, there is no life, liberty, or property interest of a plaintiff involved where punitive damages are concerned.

Smith v. Printup, 866 P.2d 985, 997 (Kan. 1993) (citations and quotation marks omitted).

Georgia:

A plaintiff has no vested property right in the amount of punitive damages which can be awarded in any case, and the legislature may lawfully regulate the amount of punitive damages which can be awarded.

Mack Trucks, Inc. v. Conkle, 436 S.E.2d 635, 639 (Ga. 1993) (citations omitted).

Florida:

[Plaintiff] has no cognizable, protectable right to the recovery of punitive damages at all.  Unlike the right to compensatory damages, the allowance of punitive damages is based entirely upon considerations of public policy.  Accordingly, it is clear that the very existence of an inchoate claim for punitive damages is subject to the plenary authority of . . . the legislature.  In the exercise of that discretion, it may place conditions upon such a recovery or even abolish it altogether . . . .  The right to have punitive damages assessed is not property; and it is the general rule that, until a judgment is rendered, there is no vested right in a claim for punitive damages.  It cannot, then, be said that the denial of punitive damages has unconstitutionally impaired any property rights of appellant.

Gordon v. State, 608 So.2d 800, 801-02 (Fla. 1992).

Iowa:

Plaintiff also contends that the punitive damage award constitutes property entitled to constitutional protection under both the federal and [state] constitutions. . . .  [A] plaintiff has no vested right in a particular measure of damages. . . .  [P]unitive damages are remedial and that a plaintiff has no vested right to such damages prior to the entry of a judgment.  Consequently, a statutory provision limiting a punitive damage award may be applied retrospectively without violating due process or equal protection . . . .  [P]unitive damages are not allowed as a matter of right and are discretionary. . . .  [P]unitive damages are not intended to be compensatory and that a plaintiff is a fortuitous beneficiary of a punitive damage award simply because there is no one else to receive it.  Under our view of punitive damages . . ., plaintiff did not have a vested right to punitive damages prior to the entry of a judgment.

Shepherd Components v. Brice Petrides-Donahue & Associates, Inc., 473 N.W.2d 612, 619 (Iowa 1991) (citations and quotation marks omitted).

Missouri:

[P]unitive damages are remedial and a plaintiff has no vested right to such damages prior to the entry of judgment.  Punitive damages are never allowable as a matter of right and their award lies wholly within the discretion of the trier of fact.  The purpose of punitive damages is to inflict punishment and to serve as an example and deterrent to similar conduct. . . .  Such damages being allowed in the interest of society, and not to recompense solely the victim, to deny them cannot be said to deny any constitutional right or to encroach upon any judicial function, or to violate any constitutional guaranty of separation of powers.

Vaughan v. Taft Broadcasting Co., 708 S.W.2d 656, 660 (Mo. 1986) (citations omitted).  See also Rhyne v. K-Mart Corp., 594 S.E.2d 1, 14 (N.C. 2004) (“plaintiffs do not have a vested prejudgment property right in punitive damages”); Evans v. State, 56 P.3d 1046, 1058 (Alaska 2002) (as to “a cap on punitive damages, limiting them before they are awarded to successful plaintiffs, no constitutional problem exists”; punitive damages may be “limited or abolished”); Meech v. Hillhaven West, Inc., 776 P.2d 488, 503 (Mont. 1989) (“no vested right to exemplary damages”); Fust v. Attorney General, 947 S.W.2d 424, 431 (Mo. 1997) (a plaintiff has “no vested property interest” in punitive damages claim); Smith v. Hill, 147 N.E.2d 321, 325 (Ill. 1958) (“a vested right to punitive, exemplary, vindictive or aggravated damages arises only when such damages have been allowed by a judgment); Langford v. Vanderbilt University, 287 S.W.2d 32, 34 (Tenn. 1956) (“[p]unitive damages . . . are allowed as a mere penalty”; “[a] mere penalty never vests but remains executory”); Louisville & Nashville Railroad v. Street, 51 So. 306, 307 (Ala. 1909) (no property right in punitive damages award).

For once, we didn’t have to delve too deeply to find an answer to a legal question (or a subject for a blog post – coming up with ideas daily is no easy matter).  Those are just the state Supreme Court cases that we know about which hold that there is no constitutional right to pursue punitive damages.  Lots of lower court opinions echo these same rulings.  Constitutional challenges have been rejected under due process, taking, jury trial, open courts and various other state constitutional provisions.  It makes sense.  While compensatory damages might present a closer question (depending on issues such as retroactivity), there’s simply no constitutional right for one private party to demand that another private party be punished.

Pain Pump Plaintiff’s Promotion-Based Punitives Precluded

It’s déjà vu all over again.  Taking a rather tattered page from the Bone Screw plaintiffs’ spectacularly unsuccessful playbook of a decade ago, at least some plaintiffs in the every-man-for-himself Pain Pump litigation are trying to turn truthful promotion of off-label use (which the FDA – running roughshod over the First Amendment – regards as illegal) into a tort.


It’s not, and while off-label promotion may be illegal, “[t]he FDCA leaves no doubt that it is the Federal Government rather than private litigants who are authorized to file suit for noncompliance with the medical device provisions.”  Buckman Co. v. Plaintiff’s Legal Committee, 531 U.S. 341, 349 n.4 (2001).  This statute (21 U.S.C. §337(a)) is “clear evidence that Congress intended that the MDA be enforced exclusively by the Federal Government.”  Id. at 352.

We’re pleased to report that, in Healey v. I-Flow, LLC, ___ F. Supp.2d ___, 2012 WL 1185680 (D. Minn. April 10, 2012), the court squashed an FDCA-based illegal promotion claim when masquerading as a claim for punitive damages.  Basically, plaintiff argued that, because the defendants allegedly promoted an “inadequately tested” off-label use, they should be liable for punitive damages.  Id. at *2.  The inadequate testing claim was basically tautological – grounded in the FDA’s refusal to clear the device for the use in question – which is what made it an off-label use in the first place:

Plaintiff . . . seek[s] punitive damages because Defendants . . . market[ed] and promot[ed] the pain pump without researching or testing the safety of its use in intra-articular sites, by disregarding the FDA’s denial of clearance, and by failing to inform doctors and patients of the FDA’s denial.

Id.

So the alleged duties in Healey appear to be:  (1) not researching uses that aren’t cleared by the FDA and thus can’t appear on the label anyway, (2) off-label promotion of a use the FDA declined to clear, and (3) not telling everybody that the FDA declined to clear that use.

Such claims suffer from a couple of existential problems.  First of all, FDA non-clearance doesn’t relate to safety.  The Supreme Court emphatically held in Medtronic, Inc. v. Lohr, 518 U.S. 470 (1996), that the “substantial equivalence” standard for FDA device clearance isn’t safety-related – if it had been, the state-law claim would have been preempted:

The [defendant] exaggerates the importance of the § 510(k) process. . . . [T]he 510(k) process is focused on equivalence, not safety.  As a result, “substantial equivalence determinations provide little protection to the public.  These determinations simply compare [devices] to ascertain whether the later device is no more dangerous and no less effective than the earlier device.  If the earlier device poses a severe risk or is ineffective, then the later device may also be risky or ineffective.

518 U.S. at 493 (emphasis partially original).  Thus, substantially equivalent devices – like the pain pump in Healey – have “never been formally reviewed under the MDA for safety or efficacy.”  Id.

So FDA clearance, yes or no, isn't a reflection on the device's safety.

Secondly, these aren’t tort allegations – they’re regulatory.  If there wasn’t an FDA, the concept of off-label promotion (truthful or otherwise) wouldn’t exist.  Ditto for claims based on the FDA declining to clear the device.  These are the sorts of “solely” regulatory claims that Buckman holds do not exist by virtue of exclusive federal FDCA enforcement:

We must also reject [plaintiff’s] attempt to characterize both the claims at issue . . . as “claims arising from violations of FDCA requirements”. . . .  [T]he [Lohr] claims arose from the manufacturer’s alleged failure to use reasonable care in the production of the product, not solely from the violation of FDCA requirements.  In the present case, however, the . . . claims exist solely by virtue of the FDCA disclosure requirements.  Thus, [Lohr] does not and cannot stand for the proposition that any violation of the FDCA will support a state-law claim.

531 U.S. at 352-53 (emphasis added))

Thus, under Lohr claims grounded in whether the FDA cleared or did not clear a particular use of a particular device are simply beside the point in a product liability suit, since that clearance doesn’t even involve safety.  And under Buckman, a private plaintiff has no standing to bring off-label promotion claims in the first place, since such claims have nothing to do with traditional torts and everything to do with alleged FDCA violations.

Thus, in the tort context, while a manufacturer’s promotion of off-label use can violate the FDCA, “off-label marketing of an approved drug is itself not inherently fraudulent.”  In re Actimmune Marketing Litigation, 614 F.Supp.2d 1037, 1051 n.6 (N.D. Cal. 2009), aff’d, ___ Fed. Appx. ___, 2011 WL 6887072 (9th Cir. Dec. 30, 2012) (affirmed “for the reasons set forth in the district court's orders”).  Thus, off label promotion, without more, is not tortious.

[P]romotion of the off-label uses of a FDA-approved drug concerns lawful activity and is not inherently misleading. . . . Promotion of off-label uses is not inherently misleading simply because the use is off-label. . . . [The defendant’s promotion] was directed at physicians who are familiar with the FDA-approval process and able to independently evaluate the validity of their claims. Given the sophistication of the audience to whom the off-label uses were promoted, this Court cannot conclude, at this stage of the proceedings, that [defendant's] speech was inherently misleading.

United States v. Caronia, 576 F. Supp.2d 385, 397 (E.D.N.Y. 2008).  Accord Central Regional Employees Benefit Fund v. Cephalon, 2009 WL 3245485, at *4 (D.N.J. Oct. 7, 2009) (“[m]erely alleging that [defendant] marketed the drugs at issue for off-label purposes does not state a claim for fraud”); In re Schering-Plough Corp. Intron/Temodar Consumer Class Action, 2009 WL 2043604, at *10 (D.N.J. July 10, 2009) (plaintiff’s “theory of injury requires the Court to assume that off-label promotion is, by its very nature, fraudulent conduct.  This is not reality”; theory“is plainly an impermissible attempt by Plaintiffs to turn violations of the FDCA for off-label promotion into a private right of action”).

As the principles of Lohr and Buckman make clear, more than off-label promotion is needed to state a claim under state tort law.  Both falsity and causation are necessary:

[I]nsofar as Plaintiffs' claims are based solely on allegations that Defendants promoted [the drug] for off-label purposes, they constitute an impermissible attempt to bring a private suit for violations of the FDCA . . . .  The Court grants Plaintiffs leave to amend their complaint to allege . . . that Defendants . . . engag[ed] in deceptive advertising that fraudulently misrepresented the safety of off-label uses of [the drug].  To be clear, the Court emphasizes that Plaintiffs may not rely on allegations that Defendants engaged in off-label promotion of [the drug]; instead, Plaintiffs must point to specific misrepresentations.

In re Epogen & Aranesp Off-Label Marketing & Sales Practices Litigation, 590 F.Supp.2d 1282, 1292 (C.D. Cal. 2008), accord In re Epogen & Aranesp Off-Label Marketing & Sales Practices Litigation, 2009 WL 1703285, at *4 (C.D. Cal. June 17, 2009) (dismissing amended complaint for similar reasons)

Which leads us back to Healey.  Forgetting about off-label promotion for a moment, it is of course possible for a plaintiff to base a claim upon a manufacturer’s false statements about its product.  Off-label use is neither here nor there – a misrepresentation might, or might not, relate to that particular aspect of the product.

But there has to be a false statement of some sort.

And when punitive damages are involved, as in Healey, there has to be scienter, that is the defendant has to know whatever it said was false.  “[P]unitive damage laws . . . punish the same type of conduct – conduct that amounts to a deliberate act with knowledge of facts that make harm very likely.”  2012 WL 1185680, at *5.

Healey then examined the regulatory history – §510k clearance, or else the suit would have been preempted under Riegel v. Medtronic, Inc., 552 U.S. 312 (2008) – and concluded, as Lohr makes clear, that the FDA’s refusal to clear pain pumps specifically for “intra-articular” (a fancy word for between the bones of a joint) use, wasn’t any determination that this use was unsafe:

There is nothing . . . to show that the FDA ever concluded that use of the [device] in the intra-articular joint space after orthopedic surgery was not safe and effective.  At most, the FDA was simply saying that . . . it would require additional information to determine the safety and effectiveness of the device [and defendant] had not submitted such information.  Significantly, the FDA did not require any contraindication labeling to warn surgeons about using the pain pump in the intra-articular space.

2012 WL 1185680, at *8.  Thus, the FDA’s not clearing the device did not establish any risk of harm, let alone a “very likely” risk.

Nor, at the time of the defendant’s dealings with the FDA, was there any evidence that the defendant “knew that there was any risk that use of the [device] in the intra-articular space would cause” the harm that the plaintiff alleged.  Id.  The lack of clearance itself wasn’t a safety determination, and the record showed that actual knowledge of this particular risk of harm lay far in the future.  Absence of scienter was to be expected from the FDA’s refusal of “substantial equivalence” clearance:

[N]o infusion pumps of any manufacturer had been cleared with orthopedic indications and . . . a company would be most likely required to submit clinical data [to market for that use].

Healey, 2012 WL 1185680, at *8.  Well, duh.  For “equivalence” to exist, there has to be something for a device to be equivalent to.  No predicate use existed, so the device couldn’t be cleared.  But the same lack of predicate use necessarily defeated guilty knowledge, since without any use, no adverse events would have occurred either.  Non-clearance “does not constitute prima facie evidence that [defendant] had any information from testing or otherwise that [the use] was not safe.  Id. at *9 (emphasis added).

If Carl Sagan had been a judge (and were still alive), he would have added that, “absence of evidence [of safety] is not evidence of absence [of safety].”
So all that’s left in Healey was off-label marketing.  But off-label use itself is 100% legal, 2012 WL 1185680, at *9 (quoting Buckman), and illegal promotion, without more, is not tortious.  To make a tort, the off-label promotion must also be false.  And that’s precisely where the plaintiff’s claim foundered in Healey:

Plaintiff provides no authority for the proposition that it was inappropriate for an . . . sales representative to educate an orthopedic surgeon who chose to use the pain pump in this off-label manner . . . .  But again, Plaintiff provides no evidence that [defendants] withheld [any] information because they knew, or had any reason to know, that . . . use of the [the device] for post-operative pain management after orthopedic surgery would cause [the alleged harm].

2012 WL 1185680, at *10.  The plaintiff simply failed to prove any false statement knowingly made – or indeed any false statement at all.  Off-label promotion is illegal (putting the First Amendment aside), but by itself it sure ain’t a tort.  Accord Prohaska v. Sofamor, S.N.C., 138 F. Supp.2d 422, 446 (W.D.N.Y. 2001) (off-label promotion claim dismissed; “no proof of a specific false statement made by defendants upon which [the prescriber] relied”); Samarah v. Danek Medical, Inc., 70 F. Supp.2d 1196, 1208 (D. Kan. 1999) (same; “even if it were the case that defendants' conduct constitutes a violation of the MDA, that fact, standing alone, would be insufficient to establish plaintiff's entitlement to recovery”); Sita v. Danek Medical, Inc., 43 F. Supp.2d 245, 263-64 (E.D.N.Y. 1999) (same; “no reasonable juror would find that [the prescriber’s] decision . . . was the result of [defendant’s] alleged illegal marketing scheme”); Parks v. Danek Medical, Inc., 1999 WL 1129706, at *8 n.17 (N.D. Ind. June 17, 1999) (same; “there is no legal duty, enforceable in tort, requiring [defendant] to refrain from [acts constituting off-label promotion]); Bradley v. Danek Medical, Inc., 1999 WL 1866401, at *5-6 (W.D. Tenn. March 26, 1999) (same; prescriber “never decided to utilize [the] devices based on FDA approval status”) (sixteen similar decisions authored by same judge); Leigh v. Danek Medical, Inc., 28 F. Supp.2d 401, 406 (N.D. Tex. 1998) (same; “there is no evidence that plaintiff's surgeon . . . was in any way defrauded”); Moses v. Danek Medical, Inc., 1998 WL 1041279, at *6 (D. Nev. Dec. 11, 1998) (same; “[a]ssuming arguendo that Defendants promotion . . . was illegal, there is no indication that Defendants’ actions were the proximate cause”).

Thus the plaintiff’s illegal-promotion-based punitive damages claim crashed and burned in Healey. We’re not surprised in the least.  Pain Pump plaintiffs are making the same shopworn arguments about “illegal” off-label use in the context of §510k-cleared medical devices that were tried and found wanting over a decade ago in Bone Screw litigation.

There’s no reason to linger any longer at the accident scene. Move along, nothing to see here.

Through the Past, Darkly

We’ve been reading the Keith Richards autobiography, Life, and it made us think about the past. The Rolling Stones were formed 50 years ago, in April 1962. We were Beatles fans in the 1960's. (Still are). When the Rolling Stones showed up on The Ed Sullivan Show they seemed sort of terrifying. (Still are.) Time is no longer on their side. Or ours.

The Stones have been around long enough that their songs constitute the soundtrack of the Babyboomers. Maybe that is why Martin Scorsese repeatedly uses Stones tunes in his films. "Jumping Jack Flash" was recorded in 1968, an annus horribilis (Tet offensive, assassinations, Nixon election) if ever there was one. But the song that best captures the feel of 1968 -- "Gimme Shelter" -- came out the following year. In 1971, we pilfered Sticky Fingers (an album with the scandalous zipper -- try doing that with a cd or an iTune) from our sister's room. The 1980's was not a terrific decade for the Stones, though Steel Wheels at the end was a redemption.

We were listening to Voodoo Lounge while preparing for a Ninth Circuit oral argument. The issue was whether the district court erred in admitting evidence of prior bad acts. The panel was less than happy with our prosecutorial zeal back then. ‘Mr. AUSA, what percentage of cases does your office win? More than 95%, right? So why did you need to gild the lily and parade in front of the jury another heroin deal that took place ten years earlier?’ Well, gulp, because the defendant was guilty as Hell, always followed the same playbook, probably played a role in murdering a federal agent, and needed to go away with an LWOP (life without parole). Why the sympathy for the devil? Further, Federal Rule of Evidence 404(b) permits introduction of “crimes wrongs, or other acts” to prove “motive, opportunity, intent, preparation, plan, knowledge, identity, absence of mistake, or lack of accident.” One of the judges said something like, ‘The past is not always prologue.” Yeah, but sometimes it is. Anyway, evidence of prior acts is hot stuff. Appellate courts play close attention. It can clinch a conviction or it can be the biggest mistake in a trial. For a prosecutor to introduce prior acts is to play with fire.

Nowadays we usually argue against introduction of prior acts. Does that make us hypocritical? We (naturally) demur. Most of the time, when plaintiffs seek to drag in evidence of prior injuries, accidents, etc., there is little purpose beyond prejudice. The prior acts are not really similar. Or it is not even clear that they happened at all, or that they happened the way the plaintiffs want to argue they happened. Plus, a product liability plaintiff does not have to prove liability of a corporate defendant beyond a reasonable doubt. Tell you what: if plaintiff lawyers shoulder the reasonable doubt burden, then we defense hacks won’t file so many in limine motions seeking to preclude other acts evidence. Okay? No? We didn’t think so.

A court recently did a pretty careful job of going through the other acts analysis in the product liability case of Hershberger v. Ethicon Endo Surgery, Inc., 2012 U.S. Dist. Lexis 45220 (S.D. W.Va. March 30, 2012). Some of the analysis is sound. But we view the overall outcome with mixed emotions. The defendants moved to prevent introduction of investigative reports related to Ethicon stapler performance, as well as allegations of other incidents concerning stapler performance and litigation related to Ethicon staplers. The defendants’ motion was premised on arguments that that the evidence was: (1) irrelevant under Rules 401 and 402 of the Federal Rules of Evidence and the substantial similarity test; (2) far outweighed by undue prejudice under Rule 403; and (3) inadmissible hearsay.

Rule 404 was not discussed by the Hershberger court. Now discuss among yourselves why that is so.

The plaintiff argued that the prior incidents, which came from the defendants’ adverse event files, were relevant. The plaintiff proffered a summary of forty-five incidents and offered to produce to the Court the investigative files in full. Then, following the usual path, the defendants produced a chart of their own in reply to the plaintiff’s chart, setting forth the “inherent differences” between the allegations in this case and the forty-five incident files. Hershberger, 2012 U.S. Dist. LEXIS 45220 at *3. As is the case with adverse event reports, all the information was “necessarily derived second-or third-hand from medical personnel reporting an incident directly to Ethicon or through regional sales representatives.” Id. The main issue is whether the prior events were sufficiently similar so as to prove negligence, design defect, notice of defect, or causation.

The court reasoned that substantial similarity requires a showing that “(1) the products are similar; (2) the alleged defect is similar; (3) causation related to the defect in the other incidents; and (4) exclusion of all reasonable secondary explanations for the cause of the other incidents.” Id. at *5. Crucially, “nowhere in the incident files is there any indication that reasonable secondary explanations for the other incidents were eliminated. The most obvious reasonable secondary explanation, which to the Court’s knowledge was not ruled out in any of the forty-five other incidents, is surgical team error. Put simply, the forty-five other incidents are not clearly the result of a faulty Ethicon stapler, and thus, they are not substantially similar so as to permit their admission as direct evidence of negligence or a defect.” Id. at *7. So far so good. But “the threshold for admissibility is significantly lower if the other incidents are used to prove Ethicon’s notice or knowledge of a product issue.” Id. The court then came up with different rulings for different claims:

• Negligence – The similar incidents evidence was relevant to “show that Ethicon had notice or knowledge or other staplers that reportedly malfunctioned, and Ethicon was therefore better positioned to foresee the injury that is the subject of this litigation.” Id. at *9. Yet while the similar acts are relevant to notice, they cannot constitute “direct proof negligence in this case-that is, arguing that Ethicon was negligent in marketing defective staplers in the past and it therefore was negligent in this case-is strictly prohibited in light of the Court’s above ruling regarding the (dis)similarity of the incidents.” Id.
• Product defect – “[E]vidence of similar incidents is wholly inadmissible pursuant to the Court’s similarity finding. In a strict liability cause of action, Ethicon’s knowledge or notice of a potential defect in its product is irrelevant.” Id.
• Breach of warranty – “The Court perceives no relevant use of the other incident evidence to Plaintiff’s breach of warranty claim. Presenting other incidents evidence to demonstrate that Ethicon’s stapler was not fit for its intended foreseeable uses is impermissible under the Court’s similarity ruling.” Id. at *10.
• Punitive damages – “Such evidence is directly relevant to the jury’s determination of whether Ethicon acted in a wanton, willful, or reckless manner.” Id. [Ouch.]

Thus, the court deemed the evidence of prior adverse events relevant only for notice/negligence and punitive damages. But still remaining is whether, under Rule 403, the probative value of the prior acts is substantially outweighed by the danger of prejudice or jury confusion. Once again, the court applied that analysis differently to the different claims. As to the negligence claim, the court found “that introduction of other similar incidents is likely to waste time and confuse the jury. The applicability of other incidents to the negligence claim is somewhat obscure, and there is significant danger that the jury will consider the other incidents as direct evidence of negligence. Further, the probative value of the other events is minor-these records amount to uncorroborated and incomplete customer complaints constituting approximately 0.003% of Ethicon’s sales during the relevant time period.” Id. at *11.

No surprise, but that ruling gives us satisfaction. We’ve argued in the past that it is a very unfair and dangerous thing to permit plaintiffs to argue, and juries to deduce, that adverse events show negligence or product defects. For one thing, adverse events are not probative of causation. For another, in more and more litigation the adverse event process becomes tainted by litigation. Lawyer ads (that ain’t too proud to beg) can inflate adverse event reporting. Lawsuits themselves become adverse events. Some people complain about data-mining. Data-planting is just as bad. Accordingly, to the extent the Hershberger court rules that the adverse events are irrelevant or prejudicial, it's all right by us.

But you can't always get what you want. Are the good bits in Hershberger shattered by the ruling on punitive damages? The court held that “[a]s the punitive damages claim however, the risk of confusion is diminished-Ethicon’s knowledge and notice of other product complaints is directly relevant to punitive damages.” Id. at *12. (By the way, since the adverse events are admitted for knowledge and notice, the court holds that the hearsay objection fails.) That ruling leaves us scratching our heads. If the adverse events are unduly prejudicial with respect to the negligence claim, they are probably also prejudicial on punitive damages. We do not know whether or how the punitive damages issue would be staged at trial, but if the adverse events come in during the main liability phase, and if the plaintiff can argue that knowledge of such adverse events shows that the company was wanton or reckless, isn’t the prejudice nearly complete? Would a jury instruction really solve the problem? Would a defendant even ask for such a limiting instruction? Moreover, “to the extent Plaintiff may wish to cross-examine a defense witness regarding the general subject matter of the other incidents, i.e. the existence of reports of faulty staplers, such use may well be permissible.” Id. at *13. So not only will the adverse events come in, they might come in at a particularly dramatic time, and it might look like the defense was trying to hide them.

To be sure, we’re not trying to take a mostly good ruling and paint it black. But we wonder how this ruling will play out at trial. Predicting the future is harder than replaying a past that will not fade away.

Is There A Constitutional Right To Punitive Damages?

We recently came across a post on a Bricker & Eckler blog, about a slightly less recent Ohio Supreme Court case, Havel v. Villa St. Joseph, 963 N.E.2d 1270 (Ohio 2012), upholding the constitutionality of Ohio’s statute imposing mandatory bifurcation in punitive damages cases.  Havel held, after considerable back and forth:

[The statute] does not violate the Ohio Constitution and is constitutional because it is a substantive law that prevails over a procedural rule.  Inherent in our conclusion is rejection of the argument that dicta contained in Sheward [an infamous anti-tort reform decision], which described the former version of [the statute] as governing a procedural matter. . . . Sheward never considered the bifurcation question we confront in this case. Thus, we are not required to follow out-of-context dicta as precedent.

Havel, 963 N.E.2d 1279 (quoting and following Arbino v. Johnson & Johnson, 880 N.E.2d 420, 443 (2007)).  That’s an excellent result, but by addressing the constitutional issue in this way the Court did not have to pass on a more fundamental question that we’ve been pondering, which is whether a plaintiff has any constitutional right punitive damages in the first place.

In that regard, the Bricker post helped us out.  In discussing Havel, it mentioned that “Ohio’s caps on punitive damages have been upheld as constitutional (in Arbino v. Johnson & Johnson).”

There’s that case again.

Arbino seemed like a pretty good place to begin seeking an answer to the basic constitutional question, so we took a look. Sure enough, Arbino turned out to be a recent example of what we’ve come to conclude is a virtually universal rule that, until a judgment in an individual case is actually entered, there is no “vested right” to pursue a claim for punitive damages.  Nor for that matter is elimination of a punitive damages remedy a “taking.”  Basically, punitive damages are a form of punishment, not compensation, to which no constitutional right attaches.  As the Ohio Supreme Court stated in Arbino:

[R]egulation of punitive damages is discretionary and that states may regulate and limit them as a matter of law without violating the right to a trial by jury. . . .  [P]unitive damages are not compensation for injury.  Instead, they are private fines levied by civil juries to punish reprehensible conduct and to deter its future occurrence.  The purpose of punitive damages is not to compensate a plaintiff, but to punish and deter certain conduct.

880 N.E.2d at 441 (citations and quotation marks omitted).

As it turned out, Arbino is hardly alone. Here’s what some other state supreme courts have said on the issue:

Indiana:

[A] party has no prejudgment property interest in a punitive damages award. . . .  [T]here is no vested property right in an award of punitive damages. . . .  [U]nder either the federal or the [state constitution] Takings Clause, there is no property right in a claim for punitive damages.  Rather, consistent with their punitive nature, punitive damages are akin to a fine exacted by the government . . . to deter and punish wrongdoers.

Cheatham v. Pohle, 789 N.E.2d 467, 474 (Ind. 2003) (citations and quotation marks omitted).

Oregon:

[A] plaintiff has no right or entitlement to punitive damages as a remedy . . . and, as a result, the jury has complete discretion not to award punitive damages, even if a plaintiff successfully proves all elements of a claim.  Consequently, before entry of a final judgment, a plaintiff . . . always has had, at most, an expectation of such an award. . . .  A vested right must be something more than a mere expectation based upon the anticipated continuance of existing laws; it must have become a title legal or equitable to the present or future enjoyment of property.  We therefore hold that plaintiffs do not have a vested prejudgment property right in punitive damages.

Demendoza v. Huffman, 51 P.3d 1232, 1245 (Or. 2002) (citations omitted).

Kansas:

[A]ll of our cases recognized that a plaintiff has no vested right to punitive damages and that no right, cause of action, or remedy existed . . . separate and apart from an action for compensatory damages.  Exemplary damages are in no case a right of the plaintiff, but are assessed at the discretion of the jury for the purpose indicated. . . .  [N]o citizen has a right to recover punitive damages; therefore, there is no life, liberty, or property interest of a plaintiff involved where punitive damages are concerned.

Smith v. Printup, 866 P.2d 985, 997 (Kan. 1993) (citations and quotation marks omitted).

Georgia:

A plaintiff has no vested property right in the amount of punitive damages which can be awarded in any case, and the legislature may lawfully regulate the amount of punitive damages which can be awarded.

Mack Trucks, Inc. v. Conkle, 436 S.E.2d 635, 639 (Ga. 1993) (citations omitted).

Florida:

[Plaintiff] has no cognizable, protectable right to the recovery of punitive damages at all.  Unlike the right to compensatory damages, the allowance of punitive damages is based entirely upon considerations of public policy.  Accordingly, it is clear that the very existence of an inchoate claim for punitive damages is subject to the plenary authority of . . . the legislature.  In the exercise of that discretion, it may place conditions upon such a recovery or even abolish it altogether. . . .  The right to have punitive damages assessed is not property; and it is the general rule that, until a judgment is rendered, there is no vested right in a claim for punitive damages.  It cannot, then, be said that the denial of punitive damages has unconstitutionally impaired any property rights of appellant.

Gordon v. State, 608 So.2d 800, 801-02 (Fla. 1992).

Iowa:

Plaintiff also contends that the punitive damage award constitutes property entitled to constitutional protection under both the federal and [state] constitutions. . . .  [A] plaintiff has no vested right in a particular measure of damages. . . .  [P]unitive damages are remedial and that a plaintiff has no vested right to such damages prior to the entry of a judgment.  Consequently, a statutory provision limiting a punitive damage award may be applied retrospectively without violating due process or equal protection . . . .  [P]unitive damages are not allowed as a matter of right and are discretionary. . . .  [P]unitive damages are not intended to be compensatory and that a plaintiff is a fortuitous beneficiary of a punitive damage award simply because there is no one else to receive it.  Under our view of punitive damages . . ., plaintiff did not have a vested right to punitive damages prior to the entry of a judgment.

Shepherd Components v. Brice Petrides-Donahue & Associates, Inc., 473 N.W.2d 612, 619 (Iowa 1991) (citations and quotation marks omitted).

Missouri:

[P]unitive damages are remedial and a plaintiff has no vested right to such damages prior to the entry of judgment.  Punitive damages are never allowable as a matter of right and their award lies wholly within the discretion of the trier of fact. The purpose of punitive damages is to inflict punishment and to serve as an example and deterrent to similar conduct. . . .  Such damages being allowed in the interest of society, and not to recompense solely the victim, to deny them cannot be said to deny any constitutional right or to encroach upon any judicial function, or to violate any constitutional guaranty of separation of powers.

Vaughan v. Taft Broadcasting Co., 708 S.W.2d 656, 660 (Mo. 1986) (citations omitted).  See also Rhyne v. K-Mart Corp., 594 S.E.2d 1, 14 (N.C. 2004) (“plaintiffs do not have a vested prejudgment property right in punitive damages”); Evans v. State, 56 P.3d 1046, 1058 (Alaska 2002) (as to “a cap on punitive damages, limiting them before they are awarded to successful plaintiffs, no constitutional problem exists”; punitive damages may be “limited or abolished”); Meech v. Hillhaven West, Inc., 776 P.2d 488, 503 (Mont. 1989) (“no vested right to exemplary damages”); Fust v. Attorney General, 947 S.W.2d 424, 431 (Mo. 1997) (a plaintiff has “no vested property interest” in punitive damages claim); Smith v. Hill, 147 N.E.2d 321, 325 (Ill. 1958) (“a vested right to punitive, exemplary, vindictive or aggravated damages arises only when such damages have been allowed by a judgment); Langford v. Vanderbilt University, 287 S.W.2d 32, 34 (Tenn. 1956) (“[p]unitive damages . . . are allowed as a mere penalty”; “[a] mere penalty never vests but remains executory”); Louisville & Nashville Railroad v. Street, 51 So. 306, 307 (Ala. 1909) (no property right in punitive damages award).

For once, we didn’t have to delve too deeply to find an answer to a legal question (or a subject for a blog post – coming up with ideas daily is no easy matter).  Those are just the state Supreme Court cases that we know about which hold that there is no constitutional right to pursue punitive damages.  Lots of lower court opinions echo these same rulings.  Constitutional challenges have been rejected under due process, taking, jury trial, open courts and various other state constitutional provisions.  It makes sense.  While compensatory damages restrictions might present a closer question (depending on issues such as retroactivity), there’s simply no constitutional basis for one private party having an absoute right to demand that another private party be punished.

Aredia/Zometa – The Punitive Dance Continues

            When last we wrote of punitive damages in the Aredia/Zometa litigation, we predicted the parties were entangled in a dance that would involve back and forth on both sides and that wasn’t likely to end anytime soon.  See prior post.   We were right on both accounts. 

Then we brought you a favorable decision by the New Jersey Superior Court that New Jersey punitive damages law applied to a case brought by a Virginia resident against a New Jersey company in New Jersey.  See Irby v. Novartis Pharmaceuticals Corp., 2011 WL 5835414 (N.J. Super. Nov. 18, 2011).  Change the plaintiff to a California resident and the forum to California and you get the exact opposite result.  Or so said the court in Hill v. Novartis Pharmaceutical Corp., 2012 U.S. Dist. LEXIS 38516 (E.D. Cal. Mar. 20, 2012).  

This is a pro-defense blog and we don’t pretend be otherwise.  Our regular readers are fully aware of our feelings on preemption, Twiqbal and personal injury class actions.  Choice of law, however, is one of those legal issues that is difficult to take a firm position on.  Primarily because as good lawyers, we naturally want whatever law is more favorable for our clients.  Plaintiffs control where a lawsuit is brought.  While defendants can’t control what law is applied, at least we can be heard.  And, where the issue is punitive damages, our clients rightfully demand we be very vocal.    The reason is as clear as comparing the punitive damages law of the two states at issue in Hill.

In prescription drug cases, New Jersey has three limits on punitive damages.  First, the New Jersey Punitive Damages Act caps punitive damages at five times compensatory damages.  N.J. Stat. Ann. §2A:15-5.14(b).  Second, the New Jersey Product Liability Act prohibits punitive damages

if a drug . . . which caused the claimant’s harm was subject to premarket approval or licensure by the [FDA] . . . and was approved or licensed. . .  [except] where the product manufacturer knowingly withheld or misrepresented information required to be submitted under the agency’s regulations, which information was material and relevant to the harm in question.

N.J. Stat. Ann. §2A:58C-5.  Third, the New Jersey appellate courts have held that the fraud on the FDA exception in the statute is preempted.  See McDarby v. Merck & Co., 949 A.2d 223, 272 (N.J. Super. A.D. 2008).  So, where a product is FDA approved, application of New Jersey law is tantamount to a dismissal of the punitive damages claim.

On the west coast, things are a bit different.  Punitive damages are available in California “in any action for breach of a non-contractual obligation – including products liability actions” and “punitive damages awards in products liability actions are not statutorily limited.”  Hill, 2012 U.S. Dist. LEXIS 38516 at *7.  Pretty much a night and day situation.  But what to do about it?

California applies the governmental interest analysis to determine choice of law.  Id. at *3.    Three steps – 1.  Do the laws of the competing states differ such that there is a true conflict?  2.  If yes, does each state have an interest in having its own law applied?  3.  If yes, which state has the greater interest (or which state would be more significantly impaired if its law was not applied)?  Id. at *4-5. 

The first two are easy.  The law is different.  And, both states have an interest in the case.  Plaintiff is a California resident and alleges she was injured in California.  Id. at *14.  Defendant is headquartered in New Jersey.  So, the crux of the case comes down to which state has the greater interest.  This is where plaintiff’s choice of forum becomes difficult to overcome.  As this court said:

[W]hen the forum state undertakes its search to find the proper law to apply based upon the interests of the litigants and the involved states, it is understood that normally, even in cases involving foreign elements, the court should be expected, as a matter of course, to apply the rule of decision found in the law of the forum. The law of the forum, will be displaced only if there is a compelling reason for doing so.  It is applicable unless either the plaintiff or the defendant has been forced into a forum devoid of any such contact as would justify application of its own law. . . . Thus, California law presumptively applies unless Defendant can present a compelling reason why it should not.

Id. at *25-27 (quotation marks and citations omitted).   Unless there is no connection to the forum, a local court wants to apply its own laws.  We get that and the Hill court had some reasons why New Jersey law should cede to California law in this case.  They are what they are – all else being equal, we’ll apply our own law.  That’s not to say that the defendants didn’t have some good arguments – they did and they made them.  But asking a local court to apply foreign law to a local plaintiff is almost always going to be an uphill battle.  (Uphill, but not impossible.  See Deutsch v. Novartis Pharmaceutical Corp., 723 F. Supp.2d 521 (E.D.N.Y. 2010) (federal court in NY willing to apply NJ punitive damages law in an Aredia/Zometa case, discussed here).

Maybe that is the more significant difference between Hill and the earlier mentioned Irby v. Novartis case from New Jersey.  In Irby a Virginia resident sued a New Jersey based company in New Jersey, while in Hill, a California resident sued a New Jersey based company in California. So, in Irby, the New Jersey court placed greater emphasis on the fact that the alleged punitive conduct would have occurred in the defendant’s New Jersey corporate headquarters and “stem[med] from [defendant’s] New Jersey business activities.”  Irby, 2011 WL 5835414, slip op. at 8-10.  And with respect to conduct outside of New Jersey, the Irby court found that the drug (Zometa) “was widely distributed throughout the United States,” and “nothing in [defendant’s] sales, marketing, or distribution practices suggests that the alleged injury was more likely to occur in Virginia than in any other state.”  Id. at 7. 

In Hill, the California court was less persuaded by the location of corporate conduct argument and more focused on activity that occurred within its borders.  

Some of Defendant's misconduct undoubtedly occurred in New Jersey. Whether the misconduct occurred primarily in New Jersey, however, is not discernible from the pleadings or the competent and admissible evidence submitted by the parties. What is discernible is the misconduct extends into California. Plaintiff alleges Defendant "markets Zometa to physicians in California," "distributes and sells Zometa . . . in California," "compensates agents who pitch the drug to doctors . . . in California" and "sends instructional materials about the drug . . . to patients and physicians in California." Plaintiff further alleges Defendant failed to communicate the known risks of Zometa to doctors and patients in California. Under these circumstances, Defendant's misconduct arguably occurred as much in California as in New Jersey, if not more so.

Hill, 2012 U.S. Dist. LEXIS 38516 at *27-28.  Same drug, same general marketing activities.  Change the forum, change the result.

            Ultimately, the Hill court boiled the issue down to one of pure economics when, ignoring McDarby v. Merck, it concluded that

applying California's punitive damages  law would not impose an entirely new rule of punitive liability on Defendant. Its effect would be to raise the upper limit on any potential award of punitive damages. But this increased economic exposure . . . is nothing more than the cost of doing business.

Id. at *34-35.    And so the dance continues  . . . .

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.

New Important Appeal Grant in Pennsylvania

We can't discuss the substance, because Dechert's involved, but recently, the Pennsylvania Supreme Court accepted an appeal in a prescription drug product liability case, Daniel M. v. Wyeth Pharmaceuticals, Inc., (order here) to decide the following issue:

Whether the Superior Court erred in reversing the trial court’s grant of JNOV for [defendant] on [Respondents’] punitive damages claim under Pennsylvania law, where (a) the FDA extensively reviewed and approved the prescription drug at issue, the sufficiency of the testing for that drug, and the drug’s label warnings of the risk of breast cancer, (b) there was no evidence that [defendant] concealed information from or misled the FDA or knew that the risk of breast cancer was greater than disclosed in its warnings, and (c) the drug was extensively tested and studied by [defendant] and independent researchers?

Aredia/Zometa – One Step Forward, One Step Back

On November 18, 2011, the defense scored a victory in the New Jersey Zometa/Aredia mass tort program, when the court granted a motion to apply New Jersey punitive damages law.  The plaintiff was a Virginia litigation tourist who brought suit in New Jersey state court despite his treatment having nothing to do with the state.  See Irby v. Novartis Pharmaceuticals Corp., 2011 WL 5835414, slip op. (N.J. Super. Nov. 18, 2011).  Both sides had agreed on Virginia substantive law governing the plaintiff’s causes of action, but they scuffled over choice of law in punitive damages.


Why?  This isn’t the first time we’ve considered choice of law in punitive damages.  New Jersey has a statute that precludes punitive damages against FDA approved drugs.  N.J.S.A. 2A:58C-5(c).  Not only that, but the New Jersey appellate courts have held that the only significant statutory loophole – fraud on the FDA – is preempted.  See McDarby v. Merck & Co., 949 A.2d 223, 272 (N.J. Super. A.D. 2008).  So, where a product is FDA approved, application of New Jersey law is tantamount to a dismissal of the punitive damages claim.

The defense even had to overcome a presumption that the law of the place of injury (Virginia, in Irby) governs.  The court considered the various factors laid out by Restatement (Second) of Torts §145 (1965), to find that the presumption was defeated.  The court held that New Jersey had a more significant relationship than Virginia to the issue of punitive damages.  The location of plaintiff’s injury was “‘fortuitous’ because the place of injury bears little relation to [defendant’s] alleged punitive conduct,” given that it “is headquartered in New Jersey,” that the drug (Zometa) “was widely distributed throughout the United States,” and “nothing in NPC’s sales, marketing, or distribution practices suggests that the alleged injury was more likely to occur in Virginia than in any other state.” Slip op. at 7.

The court also held that the next §145 factor, location of the allegedly injurious conduct, favored New Jersey because conduct at issue for punitive damages would have occurred in the defendant’s New Jersey corporate headquarters.  Id. at 8-9.  The plaintiff failed to prove that the conduct occurred in the company’s international Swiss headquarters.  Id. at 9 & n.4.  Irby also held that the relationship between plaintiff and defendant was centered on New Jersey because plaintiff’s punitive damages claims “stem from [defendant’s] New Jersey business activities.”  Id. at 10.

A serious comity issue also popped up, since “punitive damages are generally intended to regulate conduct within the bounds of an interested state” and, based on the finding that the alleged misconduct occurred in New Jersey, “interstate comity would be least offended by the application of New Jersey law to the issue of punitive damages.”  Id. at 12.  That's a bit of a bootstrap, but it worked.  More importantly, New Jersey has decided to limit punitive damages by statute when FDA-approved drugs are involved, and plaintiff, having chosen to come to New Jersey when she could have filed suit in Virginia, was not really in a position to assert comity.  Id. at 15-16.  Finally, the court held that prior law was basically split concerning the punitive choice of law question.  Id. at 17.

Thanks to Joe Hollingsworth, of Hollingsworth LLP, both for winning the motion and passing it along.

Why there’s such a fierce fight over choice of law in punitive damages in the Aredia/Zometa litigation is demonstrated by another recent decision that’s not so favorable to our side.  In Fussman v. Novartis Pharmaceuticals Corp., 2011 WL 5836928 (M.D.N.C. Nov. 21, 2011), the court denied post-trial motions – most of them – in a case that had produced a verdict of $287,000 in compensatory damages, and $12,600,000 in punitive damages.  Id. at *1. When you’ve got runaway juries awarding blatantly unconstitutional punitives that run almost 44 times compensatories, there’s good reason to fight such claims tooth and nail.

Fortunately, North Carolina has a statute (N.C.G.S. §1D-25) that limits punitives to three times the compensatory award, so that post-trial motion, at least, was granted in Fussman.  Id.

The other motions were denied.  As to the motions for judgment, it’s hard to say exactly why, except that the court was not about to reverse the jury’s verdict.  Fussman, 2011 WL 5836928, at *3-4.  Where's the beef?

There’s not much more meat to the discussion of punitive damages in Fussman.  The court finds those claims unpreempted in light of Wyeth v. Levine, but doesn’t really explain itself.  Fussman, 2011 WL 5836928, at *4 (still where's the beef). But we did find an interesting footnote about fraud on the FDA, which states, in pertinent part:

[T]he claim presented in the present case was not based on alleged fraud on the FDA or alleged violation of any federal laws or regulations. . . .  Thus, while it is undisputed that “fraud on the FDA” claims are preempted by federal law, the present case does not involve “fraud on the FDA” claims.  Instead, the willful and wanton conduct alleged . . . involved . . . investigating side effects and communicating with medical professionals.

Id. at *4 n.6. On one hand, Fussman sheds some light on Irby – since it doesn’t look like the plaintiffs could muster a case under the New Jersey fraud on the FDA exception, even if it wasn’t preempted under McDarby.  On the other hand, since plaintiff was not claiming a violation in Fussman, we’re a bit surprised not to see anything about N.C.G.S. §99B-6(b)(4), which specifically requires consideration of “[t]he extent to which the labeling for a prescription . . . drug approved by the United States Food and Drug Administration conformed to any applicable government . . . standard that was in effect when the product left the control of its manufacturer.” We’ve already posted on the effect of governmental compliance on punitive damages.

In another interesting, and more disturbing, footnote, Fussman essentially nullifies the “reasonable likelihood” statutory (N.C.G.S. §1D-35) standard for risk of harm in punitive damages claims out of existence.  2011 WL 5836928, at *7.  The court holds that no particular percentage likelihood is required for a prima facie case of punitive damages to exist, only that there be an unspecified “connection.” That seems pretty shaky to us, since it would theoretically allow an increased risk from one in a bazillion to two in a bazillion to support a punitive award, notwithstanding the inclusion of a “likelihood” of harm element in the statute.  Nor is the cited precedent particularly persuasive.  Everhart v. O’Charley's Inc., 683 S.E.2d 728, 738 (N.C. App. 2009), discussed an entirely different statute – “related to” as used in N.C.G.S. §1D–15 – and so is not at all on point.  Benedi v. McNeil-P.P.C., Inc., 66 F.3d 1378, 1389 (4th Cir. 1995), was decided under Virginia common law, and thus has no conceivable relevance to the interpretation of a North Carolina statute.

It’s hard to say, given the vagueness of other parts of the Fussman opinion, but the likelihood point looks like a good appellate issue to us.  Maybe we’ll look into it in some future post

The evidentiary rulings in Fussman are more of "where's the beef?"  If the defendant actually did open the door to subsequent remedial measures by asserting them affirmatively, then we can’t fault that ruling.  See 2011 WL 5836928, at *7.

We can’t be as charitable to the court’s hearsay ruling, though.  The facts aren’t particularly important, but we don’t see how use of hearsay “to establish what information [defendant’s] employees had received from [its] consultants, and the actions [those] officials took in response,” id., can possibly be anything other than relying upon such evidence for “the truth” of what it states.  Id. Unless the information is considered to be true, then it’s not capable of proving any of those things.

The decision on admission of “national sales figures” to prove anything “related to” the plaintiff doesn’t make any sense.  How national sales could be relevant to one individual is beyond us.  Id. at *8. We’ve heard of this kind of thing being admitted in punitive damages cases on various reprehensibility grounds, but never on the rationale offered in Fussman.

So within three days of one another, each side won one in Aredia/Zometa.  That dance seems unlikely to end anytime soon.