Sickly Restatement Rationales Persist in Pennsylvania

We’re Pennsylvania lawyers (at least we started that way) so we figure we can be excused for following Pennsylvania law more closely than other states.  One of the key topics our Pennsylvania law posts have covered is the continuing saga of the Third Restatement of Torts − particularly in the federal courts.


Basically, in Phillips v. Cricket Lighters, 841 A.2d 1000 (Pa. 2003), three justices of the Pennsylvania Supreme Court (Saylor, Castile (CJ) and Eakin) joined a concurring opinion stating that Pennsylvania’s old “super-strict” liability regime in place since Azzarello v. Black Brothers Co., 391 A.2d 1020, 1022 (Pa. 1978), was antiquated, unworkable, and should be replaced by the negligence-based standard of Restatement (Third) of Torts, Products Liability §2 (1998).  Only a couple of justices, no longer on the Court, disagreed.  However, since the issue was not before the court directly in Phillips, the opinion was a concurrence only and several justices did not take any position.  Bexis knows.  He wrote the amicus brief for PLAC in Phillips that addressed the Restatement Third issue.

It looked like the Supreme Court was going to resolve the question when it took a case called Bugosh v. I.U. North America.  However, Bugosh was an asbestos case and the only appellants were intermediate sellers − not product manufacturers with which §2 of the Third Restatement (not to mention the Phillips concurrence) is primarily concerned.  After this became clear at oral argument, the Pennsylvania Supreme Court dismissed Bugosh as improvidently granted.  See Bugosh v. I.U. North America, Inc., 942 A.2d 897 (Pa. 2008) (order dismissing appeal).  Again, Bexis knows.  He participated in Bugosh for PLAC, and tried to help defense counsel grapple (unavailingly) with the intermediate seller issue.

Meanwhile the Third Circuit, in Berrier v. Simplicity Manufacturing, Inc., 563 F.3d 38 (3d Cir. 2009), while Bugosh was pending, had the same issue in a case where the plaintiff (a bystander/unintended user) would benefit from the adoption of the Third Restatement.  After first trying, and failing, to get the Pennsylvania Supreme Court to take a certified appeal, the Third Circuit predicted the adoption of the Third Restatement as Pennsylvania law.  We described Berrier here.  Again Bexis participated for PLAC, this time arguing that a federal court should not predict such a momentous change in Pennsylvania law, and that the defendant clearly won under existing law, but that if the court were to reach the issue the Third Restatement was preferable to Azzarello.

Shortly after the Berrier prediction, Bugosh was dismissed.  The defendant unsuccessfully sought reconsideration (technically recall of the mandate, given the timing), but the Third Circuit refused, so its prediction stood, notwithstanding Bugosh.  We described all this here.

There followed a period of chaos in the Pennsylvania federal district courts, described here and here.  Some courts adopted arguments advanced by plaintiffs − since despite the peculiar facts in Berrier, Azzarello super-strict liability generally is more beneficial to the other side − that for one reason or another the Bugosh dismissal somehow undercut the Berrier prediction (even though the Third Circuit had impliedly rejected that in Berrier by refusing to reconsider).  Other district courts, a distinct but not overwhelming majority, respected stare decisis and followed the Third Circuit's prediction in Berrier.

Meanwhile, the Pennsylvania state courts, where Azzarello remained binding, continued on with super-strict liability, which they have to do − again under stare decisis − until the Supreme Court finally grapples with the issue and either outright changes the law, or does not.  That leads to a weird situation, with federal and state courts applying different versions of "Pennsylvania" law (precisely why Bexis took the position he did in Berrier).

We thought the issue was finally put to rest − at least in federal court − by Covell v. Bell Sports, Inc., 651 F.3d 357 (3d Cir. 2011), in which the Third Circuit reaffirmed its Berrier prediction and rejected all the other side's folderol about what Bugosh-related tea leaves might or might mean.  Covell instructed the district courts not to “upset” its precedent:

[Plaintiffs] urge us to hold that the dismissal of Bugosh indicates the Supreme Court of Pennsylvania’s contentment with the Restatement (Second) of Torts.  We will not do so.  Reading the tea leaves of a certiorari or allocatur dismissal is risky business; one could just as reasonably conclude that the dismissal here indicates the Court’s approval of Berrier as much as it indicates its approval of section 402A. . . .  [T]he Bugosh appeal was an intervening event, but not an intervening “authority” sufficient to revisit our holding in Berrier.  Given that Bugosh is of no consequence, we conclude that the state of the law in Pennsylvania is exactly as it was when we decided Berrier.  Absent a change in Pennsylvania’s law, we see no reason to upset our precedent.

651 F.3d at 364.

Unfortunately the whack-an-Azzarello game in the District Courts appears to be continuing, notwithstanding the Third Circuit’s seemingly definitive statement in Covell.  In this instance, getting federal judges to follow stare decisis is like herding − or whacking − cats.

The latest plaintiff-side gambit, adopted in Sikkelee v. Precision Airmotive, Corp., ___ F. Supp.2d ___, 2012 WL 2552243 (M.D. Pa. July 3, 2012), claims to find an intervening “change in the law” in the recent Beard v. Johnson & Johnson, Inc., 41 A.3d 823 (Pa. 2012), decision.  We discussed Beard here, because it was a medical device case, and because of the Beard court’s comments on the ongoing Azzarello/Third Restatement controversy.  We pointed out that the court in Beard was careful to avoid any decision of that issue, given that the defendant had only belatedly raised it.  Here's what Beard said:

As in [other cases since Phillips], we again recognize the continuing state of disrepair in the arena of Pennsylvania strict-liability design defect law.  While, as Appellee notes, several Justices have favored review of the foundational questions in past decisions and have expressed their views as to the appropriate remedy, a majority consensus has not yet been attained in any case.  Mr. Chief Justice Castille and this author also have advocated restraint in the acceptance of subsidiary issues, pending remediation of the foundational deficiencies. As has been previously noted, “[o]bviously, all Justices are not of a like mind on this subject, as this appeal involves subsidiary issues.”

41 A.3d 836 (citations and some quotation marks omitted).  The questions that the Pennsylvania Supreme Court actually agreed to hear in Beard are likewise a matter of public record:

The issues, rephrased for clarity, are:

a. To determine whether a product with more than one intended use had a design defect that rendered it defective as a matter of law, should a court undertake a risk-utility analysis relating only to the use that allegedly resulted in harm, or should it consider the risks and benefits of all intended uses?

b. On appeal from a trial court’ legal determination regarding whether a product suffered from a design defect that rendered it defective, is the appellate court bound by the trial court's weight and credibility determinations, and may the appellate court only consider evidence that the trial court took into consideration in rendering its decision?

Beard v. Johnson & Johnson, Inc., 8 A.3d 1263, 1263 (Pa. 2010) (order accepting plaintiff's appeal).

Somehow, in this careful dictum specifically intended by Justice Saylor (who also authored the original Phillips concurrence first advocating the Third Restatement) to avoid deciding the issue one way or another, the Sikkelee opinion finds enough to ignore the two directly on point Berrier and Covell opinions:

In our opinion, this indication was provided in Beard, where the Pennsylvania Supreme Court expressly took notice of “the continuing state of disrepair in the arena of Pennsylvania strict-liability” law and nonetheless declined to take the opportunity to replace the Restatement Second with the Restatement Third. Note 5

FN5. Indeed, Beard makes it abundantly clear that there remains an ideological split within the Pennsylvania Supreme Court relative to adoption of the Restatement Third.  The Third Circuit’s prediction in Covell assumed the formation of a consensus that has not yet crystalized.

Consistent with our rationale in Milesco, we believe that the Pennsylvania Supreme Court, by again declining to take advantage of the opportunity to adopt the Restatement Third, has indicated that the Restatement Second remains the law in Pennsylvania.

2012 WL 2552243, at *9 (Beard citations omitted).

The mind boggles.

Let’s look a little deeper.  First, there was no “opportunity to replace the Restatement Second” in Beard.  That issue was no more before the court in Beard than was the other missing point we pointed out in our post, that strict liability does not apply at all to prescription medical products.  See Hahn v. Richter, 673 A.2d 888 (Pa. 1996), as applied to medical devices by Creazzo v. Medtronic, Inc., 903 A.2d 24 (Pa. Super. 2006).  Neither the Third Restatement nor Hahn (whether by design or by default) was encompassed in the issues the Court had agreed to hear in Beard.  Perhaps the defendant in Beard preserved the issue, we don’t know, but that didn't matter since the defense cross-petition for allocatur in Beard was denied.  Beard v. Johnson & Johnson, Inc., 13 A.3d 473 (Pa. 2010) (table) (denying No. 72 WAL 2010, with the defendant as petitioner).  Because the only appeal that could have raised the Restatement issue was denied, Beard was of no more weight than the non-merits dismissals discussed by the Third Circuit in Covell.

Second, who cares about a “consensus”?  Certainly not Pennsylvania courts, since Azzarello super-strict liability itself is an outlier theory not followed by any other state.  The original Berrier prediction was certainly not predicated on any “consensus,” let alone a “majority consensus” (the actual phrase used in Beard) since it had only the original Phillips concurrence to consider.  Nor is the word “consensus” used anywhere in Covell.  Indeed the only discussion of “conflict” in Covell was the avoidance of “intra-circuit conflict of precedent” − by requiring that the Third Circuit’s prior decisions be followed.  651 F.3d at 363-64.  There is not even a suggestion in Covell or Berrier that some sort of “consensus” on the Pennsylvania Supreme Court is a prerequisite to the Erie prediction that the Third Circuit has twice made.

Third, there is no “indicat[ion] in Beard that the Restatement Second remains the law in Pennsylvania.”  2012 WL 2552243, at *9.  The defendant won, on alternative grounds.  To the extent anything at all was said about the Third Restatement by the four-justice majority in Beard it was favorable:

It may be cogently argued that risk-utility balancing is more legitimately assigned to a jury, acting in its role as a voice for the community and with the power to decide facts, rather than to a trial judge acting on a summary record.  Indeed, such is the approach of the Restatement Third,

Beard, 41 A.3d at 838 n.18. As we pointed out in our prior Beard post, three other justices specifically “distanced” themselves from that footnote.  See Id. at 838 (concurring opinion).  But for purposes of the current discussion the important point is that, even in Beard, four justices (at least, the concurrence did not tip its hand either way), a majority, remained favorably inclined towards the Third Restatement.  There’s simply no basis in Beard to reach a diametrically opposite conclusion, as Sikkelee did.

Finally, the “rationale in Milesco” (meaning Milesco v. Norfolk Southern Corp., 2010 WL 55331 (M.D. Pa. Jan. 5, 2010), mentioned previously in Sikkelee), was precisely the Bugosh means something argument (Milesco used the term "clear indication") that the Third Circuit considered and definitively rejected in Covell.

What we see in Sikkelee is extraordinary.  We’re not aware of a minority concurrence ever being used anywhere to overturn two controlling appellant precedents, both of them unanimous and the most recent (at the time) less than a year old.  This is judicial nihilism, pure and simple − a sharp stick in the eye of stare decisis.  We also suspect (we have no involvement in Sikkelee) that employment of a foundationally improper legal standard in that litigation must inevitably so thoroughly taint any trial in Sikkelee that any verdict will not be worth the effort.  Given both Berrier and Covell, we'd find the avenue of seeking an extraordinary writ from the Third Circuit very tempting.

We frankly don’t know whether or not the Pennsylvania Supreme Court will ever adopt the Third Restatement.  We’d like it to (Bexis has been trying to make that happen for the better part of a decade), but that’s hardly a done deal.  However, until that Court decides the question, one way or the other, the lower federal courts in Pennsylvania are required by stare decisis to follow the predictions of the Third Circuit on Pennsylvania law, just as they’re required to follow the Court of Appeals in all other matters.  The alternative is chaos, with each judge goes off on his or her own tangent depending on his or her own (pro-plaintiff or pro-defendant) proclivities.  That’s not the way our judicial system works, or is supposed to work.

TwIqbal, And Moore

We found the decision in Mills v. Bristol-Myers Squibb Co., 2011 WL 4708850 (D. Ariz. Oct. 7, 2011), interesting for at least three reasons.  First of all, it’s another TwIqbal dismissal, so it goes on our TwIqbal cheat sheet.


But what’s even more interesting is precisely what the plaintiff wasn’t able to plead.  The plaintiff claimed injury from an anti-clotting drug because, “‘[u]pon information and belief,’ [plaintiff] is a CYP carrier.”  2011 WL 4708850, at *2.  While TwIqbal doesn’t bar information and belief pleading outright, Mills holds that such pleading can’t be used where the information is equally available to the plaintiff.  That the plaintiff was apparently unwilling to pay for her own genetic testing didn’t cut it under TwIqbal:

This is not a case where the facts are in the sole possession of the defendants.  Plaintiff's genetic makeup is a fact solely within her control. . . .  Neither does her belief that she carries the CYP variant make an inference plausible.  According to plaintiff, approximately thirty percent of Caucasians possess the CYP variant.  This means that about seventy percent do not.

Id. at *2. So TwIqbal forces the plaintiff has to put up or shut up, that it, actually get herself tested.  She can’t plead that she might have a condition, only that she does have it.  Here, here - that's part of (or should be part of) pre-complaint investigation of potential claims.

Plaintiff in Mills also claimed injury due to a purported synergistic effect of the defendant’s drug.  2011 WL 4708850, at *2.  She relied upon a particular medical study to make this claim.  But her pleading showed that she didn’t have either:  (1) a characteristic of the study participants (a stomach ulcer) or (2) the injury the study studied (stomach bleeding).  Id.  Therefore, that “study does not show what may be defective about [the drug].”  Id.  So if a plaintiff is going to assert a study in the complaint, there better be some facts suggesting that the study is relevant to that plaintiff's claim.

Moreover, just pleading “defect” is not enough where state law (Arizona, in the Mills case) also requires that the defect be “unreasonably dangerous.”  2011 WL 4708850, at *2.  Here’s where the second interesting aspect  - something that's not TwIqbal - of the Mills decision comes into play.  The court holds that, in a prescription drug case, Arizona would apply the definition of design defect used by the Third Restatement of Torts §6(c), which is:

A prescription drug or medical device is not reasonably safe due to defective design if the foreseeable risks of harm posed by the drug or medical device are sufficiently great in relation to its foreseeable therapeutic benefits that reasonable health-care providers, knowing of such foreseeable risks and therapeutic benefits, would not prescribe the drug or medical device for any class of patients.

2011 WL 4708850, at *3 (quoting from the Restatement).

In and of itself, that’s notable, since §6(c), as we’ve discussed before, hasn’t met with a very hospitable reception in the courts – particularly in drug (as opposed to medical device) cases.  But Arizona is one of the few jurisdictions where courts have been willing to adopt the limited design defect claim recognized by the Restatement.  Our thinking on whether that’s a good or bad thing varies, depending on whether the claim involves a device (good, since §6(c) is tougher than the usual safer alternative design standard, and devices often have alternative designs) or a drug (bad, since it’s almost impossible for design defect claims against prescription drugs to meet the existing alternative design standard).  Since Mills involves a drug, it would fall on our "bad" side as a theoretical matter.

But anyway, back to Mills.  The court threw out the plaintiff’s design defect claims under the Third Restatement “any class of patients” standard because her allegations were inherently incompatible – those being that the drug was hazardous to a minority of patients who carried a certain “genetic variant allele.” 2011 WL 4708850, at *3.  Where, by definition, the drug was only hazardous to a subgroup, and thus could readily be prescribed to everyone else, a Restatement Third design defect claim could not be stated.  Id.

The plaintiff’s warning claim in Mills was also TwIqballed.  Under the learned intermediary rule, to plead causation in a warning case requires some allegation that “had a proper warning been given, the injury would not have happened.”  2011 WL 4708850, at *3.  Proper case investigation in this context requires that the plaintiff actually contact the prescriber about the case, since a mere “information and belief” allegation that the prescriber would not have prescribed the drug had s/he been properly warned doesn’t cut it:

We noted in our dismissal of the [initial complaint] that plaintiff “could have contacted her physician” to determine facts that were not solely in the control of defendants. Plaintiff has not done so.

Id. This ruling is important, particularly since defendants in many jurisdictions are precluded from informally contacting a plaintiff’s prescribers.  Requiring that plaintiffs plead actual facts suggesting a causal effect of a different warning on their prescribers’ actual treatments is an excellent application of TwIqbal.

So that’s two.

What’s the third interesting thing about Mills?

That would be the nature of the plaintiff's claim itself.  The plaintiff is claiming that a drug is defective, not because of anything inherent in the drug itself, but solely because it is less effective (and therefore has a different risk-benefit profile) due to the plaintiff’s peculiar genetic makeup.  Essentially, the allegations seek to impose a non-FDA-approved contraindication, using state law, based upon human genetic variability.  With advances in computer technology making genetic testing exponentially cheaper and more detailed as times passes (see Moore’s law), more and more genetic variability in the efficacy of prescription drugs is bound to be discovered.  Eventually - certainly within some of our lifetimes - we'll be able to carry our entire individual genetic code around with us on a chip, should we so choose.

We’ve blogged before about the dangers of allowing racially-based “defect” claims against prescription drugs.  But the allegations in Mills are, if anything, worse, since Mills alleges directly what the race-based claims could only get at indirectly.  As we said in that prior post, “[r]acial-ethnic categories are blunt instruments for getting at what seems to be the real issue reported in the labels, genetic susceptibility.”  The complaint in Mills is a bare genetic susceptibility claim, frankly based on an allegation of "variant" genetic characteristics shared by only a minority of the population.

In our view, unless and until – and only to the extent that – the FDA decides to assess drug approvals and contraindications on the basis of genetic subgrouping, this type of tort claim should not be recognized, because it is flatly contrary to the criteria by which the intended uses of drugs are currently determined.  Claims such as in Mills, which are at loggerheads with FDA criteria for drug development, are precisely those with the most potential for making pharmaceutical manufacturers into “sitting ducks” for litigation, in this instance litigation based on extraneous genetic factors.

It may well be that the coming (and to some extent existing) revolution in genetically individualized medical therapy will require changes in how drugs are evaluated, labeled, etc., but this is a singularity-driven issue that needs to be addressed by the policy branches of our government, and not haphazardly in product liability litigation.