No Discovery From IRBs in California

We’re not comfortable saying much because we have tangential involvement (not on this appeal), but blog readers, particularly in California, might be interested in the recent decision in Pomona Valley Medical Center v. Superior Court, No. B241684, slip op. (Cal. App. Sept. 24, 2012) (for publication).  We haven’t researched it thoroughly, but we believe that Pomona Valley is the first case in California (and maybe the country) to hold an Institutional Review Board ("IRB") exempt from civil discovery under what in most states are considered "peer review" privilege statutes.  As the court in Pomona Valley discussed, however, California’s statute is broader than most such statutes.

Who Needs TwIqbal?: Round II

The following is a guest post by Mollie Benedict and Amanda Villalobos, both of Tucker Ellis, about a recent dismissal they won of one of those all-too-common California "consumer protection" strike suits where nobody's really injured.  They get all the credit for the win, and all the blame for this post.

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In an April 27, 2012 post, “Who Needs TwIqbal?”,  John Sullivan examined a putative class action in New Jersey federal court, Young v. Johnson & Johnson.  Sullivan credited the defendant for putting a standing argument (usually a bench player) into the starting line-up  in the case, and both standing and federal preemption came through in the clutch:  The court dismissed Plaintiff’s claims that he had been misled by representations on the labels of the margarine substitute Benecol Spread, finding both that (1) Plaintiff lacked standing because he had not alleged any injury and (2) his claims were preempted because he sought to impose labeling requirements that were not identical to those imposed by the Federal Food, Drug and Cosmetic Act (FDCA) as amended by the Nutrition Labeling and Education Act (NLEA).

Reid v. Johnson & Johnson, 2012 U.S. Dist. Lexis 133408 (S.D. Cal. Sept, 17, 2012) is a west coast rematch – another putative class action involving Benecol spread, this time in federal court in San Diego.  As in Young, Plaintiff alleged that the defendants made misleading claims regarding Benecol’s trans fat content and the cholesterol-lowering benefits of Benecol’s key ingredient, plant stanol esters.  Plaintiff claimed he purchased the product in reliance on these alleged misrepresentations, asserting causes of action under California’s consumer protection statutes, the Unfair Competition Law, the False Advertising Law,  and the Consumer Legal Remedies Act.

Defendants again brought standing off the bench to lead off, arguing that Plaintiff lacked standing because he suffered no injury in fact and, more significantly, because no reasonable consumer was likely to be deceived by Benecol’s label claims, a standing requirement under all three consumer protection statutes.  Although the court found that Plaintiff had adequately pleaded an injury in fact because he alleged that he “paid more for Benecol, and would have been willing to pay less, or nothing at all, if he had not been misled by the representations and practices”...

[Editorial note:  This proves that California is even more extreme than New Jersey]

...it also found that Plaintiff “has not set forth alleged facts showing that Benecol’s statements may deceive a reasonable consumer.”  Score another win for standing.

But preemption, still waiting on deck, again came to the plate to hog some of the glory.  As mentioned in Sullivan’s Young post, the NLEA contains a broad express preemption provision prohibiting states from establishing labeling requirements that are not identical to federal regulations.

The court concluded that because Benecol’s claims regarding plant stanol esters and their cholesterol-reducing properties were permitted by federal law, Plaintiff’s claims were preempted.  The court based its preemption analysis on an enforcement discretion letter issued by FDA in 2003.  The letter advised that, based on new scientific evidence, the agency would relax the content requirements for products eligible to bear the plant stanol ester health claim codified in 21 C.F.R. §101.83.  While Benecol’s label conformed to the requirements of the 2003 letter, Plaintiff contended the letter did not constitute a final agency action and did not have the force and effect of federal law, so Benecol should be required to, but did not, conform to 21 C.F.R. § 101.83.

The court disagreed, finding that “[t]he [2003] letter reflects the FDA’s position” and that “Plaintiff’s plant [stanol] esters claim essentially … seeks to impose a different, outdated interim rule requirement for  Defendants from that set forth in the 2003 FDA Letter….”  Id. at *21-22.

[Editorial note:  The FDA letter in Reid was not a warning letter, which are different]

The court also found that Plaintiff’s trans fat claims were barred by preemption. According to Plaintiff, Benecol’s “No Trans Fat” and “No Trans Fatty Acids” statements constituted unauthorized nutrient content claims even though the FDA permits the statements “0g trans fat” or “0 grams trans fat” to appear on food labels.  The court, relying on the doctrine of common sense, disagreed with Plaintiff and noted that an attempt to distinguish the statements “No Trans Fat” and “0 grams trans fat” was unreasonable because the two terms are functionally equivalent. 

Defendants also argued that Plaintiff’s claims should be dismissed based on primary jurisdiction and its closely related cousin, judicial abstention.  While the court found application of primary jurisdiction to be inappropriate in this case, it declined to rule on the issue of judicial abstention, leaving open the possibility that it too may have been a basis to bar Plaintiff’s claims.

Breaking Up is Easy to Do

We all know how easy it is to complain about bad decisions. Right now, sports pundits and fans are holding a gripeathon about the National Football League 's replacement referees. There has been more talk about the officiating mistakes than about the athletic performances. A sense of perspective is in order.　 The comparison baseline is not perfection. It is not as if the regular referees got all their calls right. Does anybody remember Ed Hochuli (actually a very good ref who is also a Phoenix attorney) incorrectly calling a deadball? 　And who stared at the Steelers-Seahawks Super Bowl in disbelief a couple of years ago, as every call of consequence went against Seattle? Still, there is no denying that the replacement refs have authored an amazing number of egregious errors already in only three weeks of football. The blown call at the end of the Monday night game (it benefitted the Seahawks, so some are saying Karma is at work, though it is hard to see why Karma would hose the Packers) is prompting some fans to call for a boycott. If either Obama or Romney could step up and do something about the referee lockout, he'd probably help his election campaign big time. He would certainly get Wisconsin's electoral votes.

One of the most interesting things about the replacement referee situation is the substitute teacher syndrome. Did you ever have a substitute teacher in elementary school who seemed sort of weak or clueless?　 Wouldn't the class end up becoming incredibly disruptive? Even the kids who were ordinarily well-behaved started acting like delinquents. We remember back in seventh grade one of the star students hoodwinking a substitute teacher into thinking that his name was Billy Paul. Billy Paul was an R&B singer .　 More specifically, he was a practitioner of 　TSOP -The Sound of Philadelphia. Billy Paul’s big hit was "Me and Mrs. Jones." The teacher was puzzled at how the rest of us howled in laughter when she would scream in exasperation, "Billy Paul, get back in your seat!" "Billy Paul, you leave that girl alone!"　 After NFL week one, it seemed that many players had sized up the replacement refs as being like bad substitute teachers -- tentative and insecure.　 Just like 'Billy Paul,' the players took advantage.　 By 'took advantage,' we mean that the players started perpetrating all sorts of mayhem on their opponents.　 Things got chippy.　 One especially devious Ram delivered a nasty shot to a Redskins receiver after a play was over.　 The aggrieved receiver responded by throwing the ball at the offender.　　 Bad idea.　 As so often happens, the ref saw the reaction, not the instigation.　 The receiver drew a penalty and backed his team up.　 The team's field goal attempt missed.　 Game over.　　　　

The substitute teacher syndrome is like the "broken glass" theory of policing. One of the most brilliant minds on governance and policing was James Q. Wilson, who died earlier this year. Some of us were lucky enough to take classes with Wilson, who was a dynamic speaker with an even more dynamic mind.　 Some labeled Wilson a neocon, but he was really a policy skeptic.　 He was a political scientist who liked to get his fingernails dirty with data.　 He wrote about groundbreaking analyses of poverty and bureaucracy.　 With all that, he was most famous for his writings on crime.　 Wilson was brilliant on that topic, and he managed to make a difference.　 Wilson wondered why people commit crimes.　 Crime is a disease in the body politic.　 It is an odd disease, because it is a product of human choice.　 Most people do not choose crime.　 Some do, they do so repeatedly, and they betray the social contract.　 Wilson found that people are far more likely to make that destructive choice if they are in an environment that welcomes destruction.　 If a window was broken in a neighborhood, and was not repaired, that appearance of disorder sent a message that disorder was okay. Crime rates would be higher in such areas. Wilson recommended that cops arrest people for quality-of-life crimes (disorderly conduct, etc.) and help create an appearance of order in the community. That approach, plus a relentless use of statistics (CrimeStat), seemed to play a significant role in reducing crime rates in American cities.　 (Yes, we know there are other theories about that as well, including the controversial Freakonomics argument that increasing abortions led to decreasing crime.　 We are not touching that one.)　

We wonder whether the substitute teacher or broken glass theory applies to litigation. If courts permit sloppy, absurd practices, they ineluctably invite more. Our home turf, the Philadelphia Court of Common Please, has been taking a beating for its pro-plaintiff, anti-business court system. We do not agree with all of the criticisms, but it is undeniable that when a judge explicitly invites plaintiffs to engage in litigation tourism, when the court as a matter of course makes nutty venue/forum non conveniens rulings, and when it allows plaintiff lawyers to cobble together multi-plaintiff cases that maximize prejudice against corporate defendants -- well, as Wilson showed, chaos begets chaos.　 Pretty soon, Philadelphia's City Hall (which houses the Court of Common Pleas civil cases) rang out a clickety-clack of cowboy boots, and if you yelled 　"Roll Tide!" in the hallways, you'd probably get at least a couple of high-fives.　 Nevertheless, as an article in Monday's Wall Street Journal showed, there's a new sheriff in town.　 Judge Herron has implemented many changes in the Philly courts, including a rule against consolidating plaintiffs in tort cases.　 That is a welcome reform and it is a big deal.　 We get how plaintiffs are supposed to be the master of the complaint, but the plaintiff lawyer is not supposed to be the master of the court docket.　 When plaintiff lawyers self-consolidate multiple plaintiffs into a tort action, they create an artificial case with a perfect plaintiff who gets in every piece of corporate conduct and other evidence -- an array of awfulness that would not come in with a single plaintiff.　 It stacks the deck and is unfair to defendants.　 It is also unfair to the courts.　 The consolidated cases are not only a method of beating defendants into settlements, they are also a method of beating the court out of the extra filing fees for separately filing plaintiff.　 Courts are noticing all this.

So today's post is not a complaint at all.　 Instead, we celebrate how courts are starting to get things right on joinder and severance issues.　 Philly has taken a step in the right direction.　 Other courts are taking similar steps.　 We offer a tip of the cyber cap to Mike Imbroscio for sending us a recent severance victory in the Accutane MDL.　 The particular case is called Aranda v. Hoffman-Laroche, Inc., No. 8:12-cv-1426-T-30TBM (M.D. Fla. Sept. 20, 2012), and we have written about it before.　 It has, to say the least, a peculiar history.　 The case was originally filed on behalf of 69 plaintiffs alleging injuries from Accutane.　 It was filed in a state court with a hellholish reputation as bad as Philly.　 But after a little fact-checking made clear that the plaintiffs’ effort to stymie diversity was phony, the case ended up in federal court.　 Post MDL, the defendant moved to sever the plaintiffs.　 In a refreshing and straightforward opinion, the court granted the motion and severed the cases.

First, the plaintiffs’ joinder was flat-out inappropriate under Fed. R. Civ. P. 20(a).　 The plaintiffs resided in different states, allegedly ingested Accutane at different times, and were allegedly diagnosed with different adverse reactions to Accutane.　 (Note the word "allegedly."　 Based on the discovery provided by the plaintiffs, their Accutane use and adverse reactions was by no means established.)　　　 Thus, the plaintiffs' claims did not arise "out of the same transaction, occurrence, or series of transactions or occurrences."　 Fed. R. Civ. P. 20(a).　 There were different Accutane warnings at different times, which would necessarily have a profound effect on liability issues, and could potentially confuse juries confronted with multiple plaintiffs.　 Second, the Aranda court emphasized that "[m]any federal courts hold that product liability cases are generally inappropriate for multi-plaintiff joinder because such cases involve highly individualized facts and '[l]iability, causation, and damages will ... be different with each individual plaintiff.'" Aranda, slip op. at 1, quoting In re Prempro Prods. Liab. Litig., 417 F. Supp. 2d 1048, 1059-60 (E.D. Ark. 2006).　 The Aranda court also cites supporting precedent from the Silica, Diet Drug, Baycol, and Rezulin litigations.　　 Third, the cobbling together of different plaintiffs with different claims and, no matter how much the plaintiff lawyers pretend otherwise, different legal theories, would "likely hamper the orderly, efficient, and expeditious handling of the plaintiffs' claims as the litigation progresses."　 Tesfaye Abebe v. Takeda Pharmaceuticals (In re Actos Prod. Liab. Litig.), No. 6:11-md-02299 (W.D. La. May 3, 2012　 The motion to sever in Aranda was brought under Rule 21, which relates to misjoinder of parties.　 That rule makes clear that severance can be granted "[o]n motion or on its own, the court may at any time, on just terms add or drop a party."　 Fed. R. Civ. P. 21.　 The Aranda court cited both Rule 21 "and the Court's inherent authority to control its own docket."　 Aranda, slip op. at 2.　　 Fourth, the court ordered that each "severed plaintiff shall also pay a filing fee to the Clerk of the Court." 　Id. At 3.　 For some plaintiff lawyers, that last bit hurts the most.　 　　

　

The Aranda severance adds to a growing list of courts that are putting a stop to improper mass tort self-consolidations.　 As we said earlier, it is easy to complain about bad decisions.　 It turns out that it is even easier to praise good ones.