Buh-Bye

It’s Friday, so it's time to say goodbye to the work week.  And since we're expecting a sunny summer weekend here, it's an emphatic goodbye -- kind of like the buh-bye that David Spade used to give on SNL (if you don’t remember, we’ll remind you).

That's the kind of goodbye that the court gave plaintiffs in Tolliver v. Bristol-Myers Squibb Co., No. 1:12-cv-00745 (N.D. Oh. July 30, 2012) (slip op.), ushering their case right out the courtroom doors.  The plaintiffs brought negligence, negligence per se, breach of warranty, strict liability and defect claims, all related to injuries allegedly suffered because of the use of Plavix.  Slip op. at 2.  But in Ohio, like in many other states, such product liability claims can’t be brought under the common law.  They must be brought under the state Product Liability Act (here, the OPLA).  So “Goodbye,” said the court, to plaintiffs’ negligence, negligence per se, and breach of warranty claims.  Slip op. at 4-5.

Under the OPLA, only four types of claims are allowed: manufacturing defect, design defect, failure to warn, and non-compliance with manufacturer’s representation.  But to properly state any of those claims, plaintiffs must clarify which provision of the OPLA they are invoking.  Plaintiffs didn’t.  In fact, their complaint didn’t even mention the OPLA.  Slip op. at 5.  That could have been more than a “Goodbye.”  It could have been “Gone, Goodbye.” 

But the court cut plaintiffs a break and attempted to construct OPLA claims from the facts that they alleged.  That’s where TwIqbal came in and put an end to it. 

For a manufacturing defect claim, plaintiffs alleged that the defendants failed to manufacturer Plavix in a safe and suitable manner, causing plaintiffs’ injuries.  In other words, they alleged no facts, only legal conclusions.  “Goodbye.”  Slip op. at 5-7.  For a design defect claim, plaintiffs alleged that defendants failed to design Plavix safely and that its risks outweighed its benefits.  More bare legal conclusions.  “Goodbye.”  Slip op. at 7-8.  For failure to warn, plaintiffs alleged that defendants failed to warn of Plavix’s true risks, and for non-compliance with manufacturer’s representation, they alleged that defendants breached representations, injuring plaintiffs.  Not a fact to be found.  “Goodbye,” and “Goodbye.”  Slip op. at 8-9.

So all the claims are gone, and we come to plaintiffs’ request for leave to amend.  Under Sixth Circuit law (and most anywhere), a plaintiff must state with particularity the grounds upon which a request for leave to amend is based.  In other words, you just can’t ask for it and expect to get it.  We bet you see this one coming already.  Here’s plaintiffs’ request: “In the event that the Court finds that the Plaintiffs failed to plead a claim accordingly, Plaintiffs respectfully request leave to amend their Complaint.”  Slip op. at 9. 

Buh-bye.

Shady Grove Gets Better

Sometimes things turn out better than they first seemed.  Myriad examples come to mind:  The wild card in baseball.  Most anything that William Shatner does.  Madonna at the Super Bowl.  Ace Ventura, Pet Detective.  Wrapping figs in bacon (alright, that might’ve sounded good from the start).  You may not agree, but you get the idea. 

These examples popped into our heads (they really did) after we read Leonard v. Abbott Labs., No. 10-CV-4676 (ADS)(WDW), 2012 U.S. Dist. LEXIS 30608 (E.D.N.Y. Mar. 5, 2012), an opinion that addresses, among other things, a state-law restriction on class actions and whether that restriction or FRCP 23 applies in a federal diversity action.

Why does this make us think of things turning out better than they first seemed?  Because the Leonard decision applies the Supreme Court’s reasoning in Shady Grove Orthopedic Assoc. v. Allstate Ins., 130 S. Ct. 1431 (U.S. 2010).   And that decision didn’t seem very good (for us) when it first came out.  It raised the concern that plaintiffs, armed with this decision, would circumvent state limitations on class actions by filing a diversity action in federal court and arguing that the class action criteria of FRCP 23 apply, not the state-law limitation.   

To give you the background, Shady Grove involved a New York law that prohibited certain class actions “to recover a penalty.”  N.Y. Civ. Prac. Law Ann. §901(b).  The Shady Grove plaintiff sought to avoid this prohibition by filing his class action claims to recover certain penalty amounts in federal court instead of New York state court.  Ultimately, the Supreme Court decided whether this maneuver would work.  And it did.

The Supreme Court’s decision was as complicated as these procedural/substantive questions generally get, but it was made even more so by the fact that the Court’s decision was formed via plurality and partially concurring opinions.  For the plurality, Justice Scalia considered (1) whether FRCP 23 and the New York law actually conflicted, and (2) if so, then FRCP 23, not the New York law, must be applied, unless FRCP 23 is ultra vires (here, meaning non-procedural) of the Rules Enabling Act.  Shady Grove, 130 S. Ct. at 1437 (plurality opinion).  Justice Scalia found a conflict and determined that FRCP 23 was not ultra vires of the Rules Enabling Statute – that is, it was procedural.  Id. at 1437-44.  So FRCP 23 should be applied.  Id.

Justice Kennedy’s partially concurring opinion had a slightly different approach and is the key to the Leonard decision.  Justice Kennedy agreed with the two-step inquiry cited by Justice Scalia.  Id. at 1450-51 (concurring opinion).  But he believed that the second-step must address more than whether the federal rule was procedural.  The Rules Enabling Act also requires that federal rules “not abridge, enlarge or modify any substantive right.”  Id. at 1451.  So the Court must also consider whether applying the federal rule would alter state rights or remedies, even if the state law appears at first look to be only procedural: 

A federal rule, therefore, cannot govern a particular case in which the rule would displace a state law that is procedural in the ordinary use of the terra but is so intertwined with a state right or remedy that it functions to define the scope of the state-created right.

Id. at 1452 (concurring opinion). 

If so, the state law will apply.  Now, despite this additional inquiry, Justice Kennedy still sided with the plurality because he determined that the New York law was in fact procedural, not substantive.  In other words, Justice Kennedy’s and Justice Scalia’s opinions ultimately got to the same conclusion and formed a majority holding that the class action criteria of FRCP 23 should apply, not the limitations of the New York law. 

This brings us back to Leonard.  That decision involves many plaintiffs and claims, but we’re interested in the part of the decision that addresses one plaintiff’s claim under the Ohio Consumer Sales Practices Act (OCSPA).  Like the New York law, the OCSPA had a provision prohibiting certain class actions.  Leonard, 2012 U.S. Dist. LEXIS 30608, at *27.  But it was quite different.  It wasn’t a broad prohibition against any class action seeking to enforce a particular remedy like penalties.  Rather, it prohibited only class actions that were brought under the OCSPA and based on acts or conduct that had not yet been declared deceptive or unconscionable by an Ohio administrative rule or court decision.  Id.

Now, the plaintiff in Leonard conceded that no Ohio administrative rule or court decision had declared the conduct about which he was complaining to be deceptive or unconscionable.  Id. *27-28.  So the defendant moved to dismiss.  The plaintiff, however, invoked Shady Grove, arguing that the OCSPA’s class action prohibition was abrogated by FRCP 23, which governed what claims can be maintained as class actions in federal court.  Id. at *28.

Here’s where Shady Grove gets better than it first seemed.  The Leonard court did not accept plaintiff’s rote application of the plurality reasoning in Shady Grove – that FRCP 23 abrogates all state-law limitations on class actions.  The Leonard court looked closely at the reasoning of both the plurality and concurring opinions in Shady Grove.  It determined, as other courts have, that the proper way to read Shady Grove is to apply the key portions of Justice Kennedy’s reasoning, which enunciates the “position taken by those [Justices] who concurred in the judgment on the narrowest grounds.”  Id. at *32. 

From that point, the decision to apply the OCSPA’s limitation on class actions became easy.  Justice Kennedy’s concurrence requires a review of whether the state law, even if seemingly procedural, so involves state-created rights that it defines their scope.  Well, the OCSPA limitation does just that.  It completely eliminates a plaintiff’s right to bring an OPSCA action based on conduct that has not been addressed by an administrative rule or court decision.   In other words, it is very much “intertwined with a right or remedy” so “that it functions to define the scope of the state-created right.”  Shady Grove, 130 S. Ct. at 1452 (concurring opinion).  This is much different from the New York law, which by its terms could apply to causes of action from jurisdictions other than New York.  As the Leonard court put it, the OCSPA limitation, unlike the New York law limitation:                      

is not a pan-substantive rule that applies to federal claims or to claims based on other state’s laws.  Rather it applies only to a violation of [the OCSPA] – indicating its substantive nature.

Leonard, 2012 U.S. Dist. LEXIS 30608, at *35.

So, in practice, Shady Grove might not be so bad, at least when it comes to state-law limitations on class actions.  In fact, depending on the language of the state-law limitation, it could be another tool to prevent plaintiffs from forum shopping a class action that they otherwise might not have. 

Not Health Insurance

The class action lawyers must be getting desperate, if Reeves v. Pharmajet, Inc., 2012 WL 380186 (N.D. Ohio Feb. 3, 2012), is any indication.  In one fell swoop, this plaintiff sought:  (1) to take over enforcement of the Food, Drug and Cosmetic Act (“FDCA”) from the FDA, and (2) turn product liability into a form of health insurance with attorneys’ fees.

A bit of background – the defendant’s product is a really cool way of injecting vaccines without the need for needles (millions of little kids, and their parents, will be eternally grateful), and also without the infection potential inherent in needles.  See Riley v. Becton Dickinson Vascular Access, Inc., 913 F. Supp. 879 (E.D. Pa. 1995) (one of Bexis’ first medical device cases).  We don’t claim to understand all the technology, but the device uses some sort of spring-loaded form of jet injection to push vaccines and other medicines directly through the skin.  Anyway here’s a background article, if anyone’s interested.
The injector was FDA-cleared, but unfortunately most vaccines (other entities' products) were labeled only for needle injection.  Thus, using the defendant’s product was a different “method of administration,” making it – GASP! – an off-label use.  In October, 2011, the FDA issued two “communications” – only the “updated” one is still on the website, here – stating that the manufacturers of the vaccines had not studied this new form of injection.  See 2012 WL 380186, at * 2 (discussing FDA communique).  It was typical FDA-speak . The Agency did not suggest that there was anything wrong with the new technology, only that “[d]ata to support the safety or effectiveness of inactivated influenza vaccines delivered by jet injector have not been submitted to FDA.”  Indeed, the FDA specifically stated (twice) that there was no reason for anybody to get vaccinated a second time:

Based on limited information from recent publications using currently licensed inactivated influenza vaccines, FDA and the Centers for Disease Control and Prevention (CDC) believe that it is not necessary for people who received their influenza vaccine via jet injector to be re-vaccinated.

Doctors, of course, are perfectly free to use any medical device they want off-label.  21 U.S.C. §396.  The FDA admitted that what studies there were showed “comparable” effectiveness – but those studies were, of course, limited.

As far as we can tell from the opinion (since none is mentioned), the defendant never received so much as a warning letter from the FDA.

Didn't matter.  Within days, a putative class action gets filed under – of course – the local consumer protection statute (this time, Ohio’s).  Reeves, 2012 WL 380186, at *2.  The plaintiff alleged he got a flu shot with jet injection.  The class itself was far more ambitious – seeking to apply the Ohio statute extraterritorially, to every person in the country who got any medication (not just a flu shot) through jet injection.  The would-be class consisted of:

all other persons similarly situated, throughout the United States, who are domociled [sic] in one of the fifty states, including Ohio, and who are consumers who received ANY vaccine or drug with a PharmaJet injector device where the specific vaccine or specific drug does not have the stated approval by the FDA for administration with a “needleless injector” or “needle-free injector,” also know [sic] as “jet injectors”.

2012 WL 380186, at *1 (N.D. Ohio Feb. 3, 2012) (emphasis added).

The relief sought was not quite as impressive – but equally overreaching.  “Plaintiff seeks the establishment of a national prospective clinical study of all people who received a flu shot via jet injection.”  Id. at *2. Anybody who caught the flu (other vaccines/drugs seemed to fall by the wayside) would receive medical monitoring monthly (the Ohio Supreme Court has never recognized medical monitoring in any context – let alone as a remedy for consumer fraud).  Essentially, the plaintiffs demanded free insurance, from the injector manufacturer, even though the vaccines themselves are nowhere near 100% effective – 75% at best, according to the Centers for Disease Control.

On top of all that, nothing in the complaint alleged that the purported class representative ever came down with the flu. 2012 WL 380186, at *1.  Can you say "atypical" (the court didn't, as it never had to reach certification issues)?

Fortunately, this monstrosity never made it past the starting gate.  The court granted the defendant’s motion to dismiss.

First, the court saw the action for what it was – a prohibited attempt by private plaintiffs to enforce the FDCA:

The FDCA, however, does not provide a private right of action for violation of federal regulations. As set forth in the FDCA. . . .  [T]he absence of a private right of action to enforce the FDCA means not only is a private party precluded from bringing suit to enforce the provisions of the FDCA, they also may not use other federal statutes or state unfair competition laws as a vehicle to bring a private cause of action that is based on violations of the FDCA.  Thus, a private litigant cannot bring a state-law claim against a defendant when the state-law claim is in substance (even if not in form) a claim for violating the FDCA – that is, when the state claim would not exist if the FDCA did not exist.

2012 WL 380186, at *4 (citations and quotation marks omitted).  This is as fine a statement of the no private enforcement principle as we’ve seen anywhere.

Despite the FDA’s lack of any enforcement activity (or even a revaccination recommendation), plaintiff claimed to be bringing a “parallel” claim under Medtronic, Inc. v. Lohr, 518 U.S. 470 (1996).  The court held otherwise, finding the claims to be “squarely within the parameters” of Buckman Co. v. Plaintiff’s Legal Committee, 531 U.S. 341 (2001), because the claims were 100% dependent upon the alleged FDCA violations, and thus impliedly preempted.  2012 WL 380186, at *4.

Sometimes really bad cases (defining “bad” as “meritless”) can make really good law.

And there’s more.

Reeves also found no valid claim under state law.

Plaintiff tried to package his FDCA claim as a consumer protection action – but not very effectively.  For one thing, the Ohio statute (like many others) has a reliance/causation component to it.  The purported off-label promotion statements were on the defendant’s website – that the plaintiff never visited.  Of course, the plaintiff didn’t plead any sort of reliance, because that would tank any chance of class certification.

So the plaintiff ended up tanking his substantive claim instead:

Whether it be termed an issue of reliance or an issue of proximate cause, an appropriate rule is that where the defendant is alleged to have made material representations or misstatements, there must be a cause and effect relationship between the defendant's acts and the plaintiff's injuries.

Reeves, 2012 WL 380186, at *5 (citation and quotation marks omitted).  The only advertising concerning jet injection that the plaintiff actually saw before getting vaccinated was by the store where the vaccine was offered, not by the defendant.  Id. at *6.

As the coup de grace, the court also held that prescription medical devices were not “consumer goods” as required by the statute.  “[Defendant’s] prescription medical device is not a good for personal, family or household use and thus is not a consumer good as defined by the [Ohio Act].”  Id. at *6 n.2.

This last proposition is of particular interest, as many other (but not all) consumer protection statutes contain a similar “consumer” limitation.  Reeves thus adds to this list of cases finding prescription drugs or devices not to be “consumer” goods covered by such statutes:  Williams v. Purdue Pharma Co., 297 F. Supp.2d 171, 174-175 (D.D.C. 2003); Herzog v. Arthrocare Corp., 2003 WL 1785795, at *10 (D. Me. 2003); In re Minnesota Breast Implant Litigation, 36 F. Supp.2d 863, 876 (D. Minn. 1998); Goldsmith v. Mentor Corp., 913 F. Supp. 56, 63 (D.N.H. 1995); Kemp v. Pfizer, Inc., 835 F. Supp. 1015, 1024 (E.D. Mich. 1993) (applying Minnesota law); Kanter v. Warner-Lambert Co., 122 Cal. Rptr.2d 72, 86 (Cal. App. 2002); Stein v. Sonus USA, Inc., 2005 WL 6198234 (Ariz. Super. Sep. 8, 2005), aff’d, 150 P.3d 773 (Ariz. App. 2007).

Thanks to Dustin Rawlin of Tucker, Ellis & West for both winning the case and tipping us off.