Source: http://newslawonline.blogspot.com/2015/11/
Timestamp: 2019-04-24 18:55:28+00:00

Document:
Occasionally we see plaintiff-side experts attempt to opine, to a reasonable degree of medical certainty (or sometimes probability), that one of our clients’ products was a substantial factor – not in “causing” the purported injury, but in “increasing the risk” of that injury occurring. Such an opinion should be a red flag to any of our defense-side colleagues. It means that the plaintiff’s medical causation evidence is downright lousy.
It also means that a summary judgment motion on causation is probably appropriate. Causation allegations based only on “increased risk” are hallmarks of medical malpractice “lost chance” cases, not product liability. “Lost chance” is a medical malpractice concept derived from certain sections of the Second Restatement (§§321 and 323) applicable only where a pre-existing condition, not diagnosed in a timely fashion, gets significantly worse in the interim, and thereby arguably deprives the plaintiff of a “chance” for a cure. A number of courts have considered that “lost chance” to be a cognizable injury and have relaxed causation standards to permit recovery, because “but for” causation is virtually impossible to prove where the pre-existing condition was progressive to start with.
We have always maintained that, regardless of the validity of “lost chance” causation in medical malpractice, it’s simply not a product liability theory – since in product liability the product must actually have caused whatever injury that the plaintiff claims occurred. We’re thinking about one of our 50-state surveys on this issue, and we invite our readers to chime in on whether they think it would be helpful.
Overall, the “few and isolated references to loss of chance or opportunity are insufficient to conclude that the theory has been accepted in areas other than medical malpractice.” Alice Férot, “The Theory of Loss of Chance: Between Reticence & Acceptance,” 8 Fla. Int’nat’l U.L. Rev. 591, 624 (2013). So, for the time being, we only have time to work up a couple of states. One of these (no surprise) is Pennsylvania, where several of our bloggers practice, and which has recognized lost chance as a malpractice theory for quite some time. Another is California – home to a great deal of product liability litigation (and one of our bloggers). The law in both states is both clear and favorable, and it sets out in some detail the reasons why “lost chance” causation is incompatible with strict liability.
In Pennsylvania this theory of causation is allowed only in a medical malpractice cases where Restatement §323 applies – and requires that a provider of some service increase the risk of harm from a pre-existing condition. Hamil v. Bashline, 481 Pa. 256, 272, 392 A.2d 1280, 1288 (1978).
The doctrine of increased risk of harm is inapplicable absent the undertaking of a service either gratuitously or for consideration. Appellants’ allegations of negligence did not assert that [defendant] undertook to “render services” to [plaintiff], therefore a charge on increased risk of harm was not appropriate. Additionally, the doctrine presupposes an outside injury or source of negligence not concurrent with any alleged negligence by a defendant.
Ettinger v. Triangle-Pacific Corp., 799 A.2d 95, 107-08 (Pa. Super. 2002). See also Myers v. Robert Lewis Seigle, P.C., 751 A.2d 1182, 1185 (Pa. Super. 2000) (“increased risk” theory “limited . . . to cases where the issue is the adequacy of medical services”; legal malpractice case) (citation and quotation marks omitted); Marlin v. W.W. Babcock Co., 21 Phila. Co. Rptr. 383, 384 (C.P. Philadelphia Co. 1990) (an increased risk claim has “no place” in product liability action), aff’d mem., 599 A.2d 707 (Pa. Super. 1991).
Special-duty claims arise most often in the context of the provision of public or commercial services. Converting a company’s marketing into a special undertaking to inform the public about the known risks of its products would subject every manufacturer that advertises its products to liability for a “special duty” created by such marketing, and that duty would be violated by every material omission in such advertising. We are unwilling to so dramatically extend the scope of liability for a state-law cause of action.
Steamfitters Local Union No. 420 Welfare Fund v. Philip Morris, Inc., 171 F.3d 912, 936 (3d Cir. 1999) (applying Pennsylvania law). See also In re Paoli Yard PCB Litigation, 35 F.3d 717, 761 n.31 (3d Cir. 1994) (same theory also not applicable to toxic tort cases) (applying Pennsylvania law).
Increased risk-type theories have also been asserted, and rejected, in Pennslyvania federal district courts. See Lempke v. Osmose Utilities Services, 2012 WL 94497, at *4 (W.D. Pa. Jan. 11, 2012) (courts “have invoked Section 323 in a variety of factual settings, but never in the context of a negligence-based products liability case”; “[d]esigning and producing a [product] is distinct from traditional notions of ‘service’”); Lobianco v. Eckerd Corp., 2004 WL 3009005, at *4 n.23 (E.D. Pa. Dec. 29, 2004) (increased risk “theory is limited to medical malpractice cases [and] is inapplicable to this [product liability] case”).
[W]e decline to establish a more lenient standard of causation. To do so would be contrary to sound logic, legal precedent, and public policy. It would unwisely encourage costly and unreasonable overtesting and overtreatment. . . . The uncertainty fostered by such a ruling would undoubtedly open the proverbial floodgates of our overburdened judicial system. We refuse to expand the circle of liability by abandoning established tort law principles of causation where there is only a mere possibility of detecting the [pre-existing condition].
Id. at 592 (citation and quotation marks omitted). Dumas remains the law. E.g., Uriell v. Regents of the University of California, 184 Cal. Rptr.3d 79, 87 (App. 2015) (recognizing Dumas rule; finding plaintiff met traditional 50%+ probablity requirement). There are numerous recent unpublished California appellate decisions also following Dumas.
[T]he lost chance doctrine, even when recognized, has been limited to medical malpractice cases. . . . [Plaintiff] has provided no authority − and the Court's research reveals no authority − to suggest that the doctrine could conceivably apply in a products liability case where, as here, the plaintiff alleges that a pharmaceutical manufacturer’s failure to warn of risks associated with a prescription drug caused the plaintiff to develop a condition she would not otherwise have developed had she not taken the drug.
Alabama: Williams v. Spring Hill Memorial Hospital, 646 So. 2d 1373, 1374-75 (Ala. 1994) (rejecting lost chance doctrine altogether).
Alaska: Crosby v. United States, 48 F. Supp.2d 924, 931 (D. Alaska 1999) (rejecting lost chance doctrine altogether).
Arkansas: Holt v. Wagner, 43 S.W.3d 128, 132 (Ark. 2001) (rejecting lost chance doctrine altogether).
Connecticut: Boone v. William W. Backus Hospital, 864 A.2d 1, 18 (Conn. 2005) (rejecting lost chance doctrine altogether).
District of Columbia: Grant v. American Nat’l Red Cross, 745 A.2d 316, 322 (D.C. 2000) (refusing to apply lost chance doctrine to “a claim that any provider of supplies or equipment used in medical treatment was negligent in manufacturing or processing the supplies”; “[t]o apply the loss of chance theory to cases such as these would virtually collapse the limitations that our decisions have set to the reach of proximate causation”).
Florida: Gooding v. University Hospital Building, Inc., 445 So. 2d 1015, 1020 (Fla. 1984) (rejecting lost chance doctrine altogether).
Idaho: Manning v. Twin Falls Clinic & Hospital, Inc., 830 P.2d 1185, 1190 (Idaho 1992) (rejecting lost chance doctrine altogether).
Iowa: Wright v. Brooke Group Ltd., 652 N.W.2d 159, 177 (Iowa 2002) (agreeing with Third Circuit Steamfitters decision; only the “render[ing of] services to another” can possibly create §323 liability).
Kentucky: Kemper v. Gordon, 272 S.W.3d 146, 152-53 (Ky. 2008) (rejecting lost chance doctrine altogether).
Maritime Law: Bach v. Trident Steamship Co., 920 F.2d 322, 327 (5th Cir. 1991) (lost chance doctrine is “confined to medical malpractice cases”; rejected in maritime negligence action), vacated on other grounds, 500 U.S. 949 (1991).
Maryland: Fennell v. Southern Maryland Hospital Center, 580 A.2d 206, 214 (Md. 1990) (rejecting lost chance doctrine altogether).
Michigan: Mich. Comp. L. §600.2912a; Weymers v. Khera, 563 N.W.2d 647, 654-55 (Mich. 1997) (both rejecting lost chance doctrine altogether).
Minnesota: Fabio v. Bellomo, 504 N.W.2d 758, 762-63 (Minn. 1993) (rejecting lost chance doctrine altogether).
Mississippi: Ladner v. Campbell, 515 So. 2d 882, 888-89 (Miss. 1987) (rejecting lost chance doctrine altogether).
Nebraska: Rankin v. Stetson, 749 N.W.2d 460, 469 (Neb. 2008) (rejecting lost chance doctrine altogether).
New Hampshire: Pillsbury-Flood v. Portsmouth Hospital, 512 A.2d 1126, 1130 (N.H. 1986) (rejecting lost chance doctrine altogether).
New Jersey: Cipollone v. Liggett Group, Inc., 683 F. Supp. 1487, 1494 (D.N.J. 1988) (“[n]o product liability cases refer to the ‘lost chance’ doctrine”; “New Jersey courts have failed to apply the ‘lost chance’ rule in product liability cases”).
Ohio: Roberts v. Ohio Permanente Medical Group, Inc., 668 N.E.2d 480, 489 (Ohio 1996) (limiting lost chance to medical malpractice; “we stress that our decision today is limited in its scope and does not alter traditional principles of causation in other areas of tort law”).
Oklahoma: Hardy v. Southwest Bell Telephone Co., 910 P.2d 1024, 1025-26 (Okla. 1996) (“an action for loss of chance of survival may not be expanded to apply in an ordinary negligence action brought against one other than a medical practitioner or a hospital”); Alexander v. Smith & Nephew, P.L.C., 98 F. Supp.2d 1310, 1317 (N.D. Okla. 2000) (rejecting lost chance in product liability case under Hardy).
Oregon: Joshi v. Providence Health System Corp., 149 P.3d 1164, 1170 (Or. 2006) (rejecting lost chance doctrine altogether).
South Carolina: Jones v. Owings, 456 S.E.2d 371, 373-74 (1995) (rejecting lost chance doctrine altogether).
South Dakota: S.D. Cod. L. §20-9-1.1 (2012) (rejecting lost chance doctrine altogether).
Tennessee: Kilpatrick v. Bryant, 868 S.W.2d 594, 603 (Tenn. 1993) (rejecting lost chance doctrine altogether).
Texas: Kramer v. Lewisville Memorial Hospital, 858 S.W.2d 397, 405-06 (Tex. 1993) (rejecting lost chance doctrine altogether); Solis v. Lincoln Electric Co., 2006 WL 1305068, at *7 (N.D. Ohio May 10, 2006) (“internal corporate policies to conduct rigorous testing of the safety of their products, and/or to conduct research on the health effects of their products, . . . do not translate into a §323 voluntary undertaking”) (applying Texas law).
Vermont: Smith v. Parrott, 833 A.2d 843, 848 (Vt. 2003) (rejecting lost chance doctrine altogether).
Virginia: Lowmack v. General Motors Corp., 967 F. Supp. 874, 881-82 (E.D. Va. (refusing to apply lost chance doctrine to product liability case; doctrine limited to medical malpractice), aff’d mem., 139 F.3d 890 (4th Cir. 1998) (“the district court correctly determined that the Virginia courts would not relax the ordinary requirements of proximate causation outside the medical malpractice context”).
Wisconsin: Beacon Bowl, Inc. v. Wisconsin Electric Power Co., 501 N.W.2d 788, 806 (Wis. 1993) (rejecting lost chance in electricity case; extending it “beyond the medical misdiagnosis and medical omission type of case would provide plaintiffs who are unable to produce sufficient evidence of a positive fact with a fallback position”).
had to delete the diary because Rebecca didn't want me to use the Facebook posts.
In case you haven’t noticed, we like preemption. We’ve even called ourselves “obsessed” with it. And with good reason. Preemption, where it’s available, is the most powerful defense around – capable of wiping out an entire MDL with a single motion to dismiss. Preemption is not dependent on the strength of a plaintiff’s underlying case. It doesn’t matter how solid medical causation might be, or how much the prescribing physician has (or has not) been suborned during ex parte chats with the other side. If preemption applies, than it’s bye-bye claim, and often bye-byeplaintiff. No discovery necessary.
Thus, it’s not surprising that plaintiffs’ lawyers fight preemption tooth and nail. That’s their job. They are just as ethically bound to represent their clients zealously within the boundaries of the law as we are. Thus they pick every preemption nit they can find.
That’s what we’re on about today. We’re discussing some recent decisions that address some lesser-known – but equally deadly − preemption arguments.
The first of these cases is Mink v. Smith & Nephew, Inc., ___ F. Supp.3d ___, 2015 WL 7356285 (S.D. Fla. Nov. 19, 2015), and as to Mink we’d like to give a shout out to Dave Walz of Carlton Fields, who sent us the decision, and the rest of the successful defense team, Ed Gerecke (also CFJB) and Doug Moore and Dave O’Quinn at Irwin Fritche. Mink involved PMA medical device preemption under the rubric of Riegel v. Medtronic, Inc., 552 U.S. 312 (2008). Our PMA preemption scorecard now lists over 300 decisions, but Mink is the first one in which the plaintiff was a participant in an FDA-mandated post-approval clinical trial.
The Mink plaintiff’s status as a both a clinical trial participant and a user of a PMA device predictably produced unusual attempts to avoid preemption. Here’s the first: plaintiff “allege[d] that [manufacturer] breached an express or implied warranty by  failing to honor the bargain that [plaintiff] would continue as a [post-approval] Study participant.” 2015 WL 7356285, at *2. Here’s the second: plaintiff brought “claims for breach of contract . . . and negligent misrepresentation,” both of which alleged that the manufacturer “failed to comply with the terms of the Consent to Participate Form by terminating him as a Study participant and declining to transfer [plaintiff] to another approved doctor to continue the Study.” Id.
Plaintiff contends that . . . [defendant] made negligent misrepresentations regarding the clinical study he was enrolled in. But, he offers no facts in support of this assertion to establish a violation. Instead, Plaintiff sets forth a laundry list of general regulations . . . that [defendant] allegedly violated. These conclusory allegations amount to the same type of “magic words” or blanket claims that [applicable precedent] expressly prohibits. These assertions . . . seek to impose requirements that are different from, or in addition to, the requirements imposed by the FDA. As a result, the Court must hold that these claims are expressly preempted.
Id. at *6 (citations omitted).
The contract and misrepresentation claims based on the defendant’s alleged promise of free follow-up care to the plaintiff as a study participant fared no better. The consent form allegedly constituting the contract was presented by the implanting physician.
[Plaintiff] cites no facts showing that . . . in obtaining Plaintiff's informed consent, [the surgeon] “was acting as [defendant’s] agent”. . . . Plaintiff’s breach of contract claim is both insufficient under state law and also preempted by federal post-approval study requirements, which obligate the physician “investigator,” not the manufacturer, to obtain the patient's informed consent.
[T]his Study was dictated by federal statute. Because this claim attempts to create requirements not imposed by federal law, it is expressly preempted. . . . Even if federal requirements prohibited Plaintiff’s termination from the study due to relocation of his physician, a termination does not violate a Florida state law tort duty, as would be necessary to sufficiently allege a “genuinely equivalent” parallel claim. Plaintiff does not cite to, and the Court is unaware of, any Florida law that requires a manufacturer to pay for postsurgical monitoring.
Id. at *7 (citing 21 C.F.R. §814.82(a)(2)). Thus, it didn’t matter if plaintiff’s reading of the extensive federal regulations concerning clinical trials was right or not. The claim fell because of the state-law side of the “parallel violation” track – where there wasn’t any pre-existing state-law duty for the alleged violation to be parallel to. Mink stands for the proposition that participation in post-approval clinical trials doesn’t provide any extra basis for a plaintiff avoiding Riegel preemption.
In case anyone’s interested, Mink also addressed more widely seen, non-study-related claims, which were also preempted. Id. at *8.
The second unusual preemption case was Allen v. Zimmer Holdings, Inc., 2015 WL 6637232 (D. Nev. Oct. 30, 2015), also involving PMA medical devices. The outstanding feature of Allen was the regulatory pedigree of “one of the products at issue here, [which] was developed prior to the MDA and went through the FDA’s New Drug Application (“NDA”) process.” Id. at *2. The Medical Device Amendments were enacted in 1976. After “the MDA came into effect, devices [that] had been treated as drugs prior to the amendments . . ., were automatically reclassified as Class III medical devices. The MDA provided that these devices were deemed to have PMA approval if they had gone through the NDA approval process.” Id. (citing 21 U.S.C. §§360j(l)(1), 360j(l)(3)(A).
Allen thus involved a device that had been used for decades. Given its prolonged, successful use, it is not surprising that, after a while, “the FDA re-classified [it] as a Class II medical device.” Id.
Thus, the preemption analysis in Allen involved two unusual aspects: first, that the device was what’s called a “transitional device,” that is, dating from before 1976; and second, that the device had been downclassified from Class III to Class II.
The first issue, the device’s status as a pre-1976 transitional device, required little additional explication beyond what the Medical Device Amendments provided – that they are treated as PMA. “Because the products at issue are deemed to have PMA approval, requirements are imposed under the MDA, and the first prong of the Riegel test is met.” Id. at *4. From there on out, standard preemption analysis applied – vague allegations and failure to flesh out any “parallel” claim doomed the plaintiff’s allegations. Id. Although Allen didn’t cite any cases for that result, it’s squarely in the mainstream, as a prior post of ours collecting transitional device preemption caselaw points out.
This change does not affect the analysis here because preemption analysis focuses on how the product came to market, not its current classification. Preemption necessarily looks backward (to the time of PMA) rather than forward because retroactive second-guessing on the FDA’s decision-making would interfere with the PMA process. Thus, [the device] is still treated as having PMA approval for the purposes of MDA preemption analysis.
Allen, 2015 WL 6637232, at *2 (citations and quotation marks omitted). That’s also the right result. When we looked at downclassification a few years ago, every case to address it had found no effect on preemption.
Component parts, like the [device], are considered to have the same PMA approval as the device of which they are a component. Thus both [devices at issue] are considered to have PMA approval for the purposes of MDA preemption analysis.
As with Mink, Allen also contains more mundane preemption analysis – pleading and a discussion of express warranties – for those interested in yet another citation on those points.
Finally, because not everything is skittles and beer, here’s a new and unfortunate twist on the generic drug preemption concept of “duty to update.” PLIVA, Inc. v. Dement, ___ S.E.2d ___, 2015 WL 7431346 (Ga. App. Nov. 20, 2015).
Similarly, Mensing does not require dismissal of [plaintiff’s] claims based on the generic drug manufacturers’ failure to suspend or withdraw sales of a “misbranded” drug. [Plaintiff] alleged that the generic drug was misbranded because the generic drug manufacturers failed to, inter alia, include information that they were required to include, namely the 2004 update. She alleged that Georgia law prohibits drug manufacturers from selling misbranded drugs, and that state law parallels federal law in that regard.
2015 WL 7431346, at *3. Supposedly, this tying of misbranding to updating means that it “not impossible for the generic drug manufacturers to simultaneously comply with both state and federal law.” Id. This rationale is an attempt to fix at least the warning causation problems with duty-to-update claims, since if the very presence of the product on the market is the tort, then a learned intermediary’s reliance on its warnings doesn’t matter.
However, the court in Dement provided neither a rationale nor precedent for that statement, because there is none. The plaintiff-side’s simultaneous compliance argument in an ordinary duty-to-update argument is decent, as long as one ignores that “updating” is an FDCA requirement that can’t be privately enforced under Buckman Co. v. Plaintiffs Legal Committee, 531 U.S. 341 (2001). But, putting Buckman aside, the update-based claim described above isn’t a demand to change warnings, but a demand to “suspend or withdraw sales.” That’s barred under Mutual Pharmaceutical Co. v. Bartlett, 133 S. Ct. 2466 (2013), not because of simultaneous compliance issues, but because the so-called “stop-selling” argument simply proves too much – it would do away with preemption altogether. “[A]dopting [a] stop-selling rationale would render impossibility pre-emption a dead letter and work a revolution in this Court's pre-emption case law.” Id. at 2470.
We reject this “stop-selling” rationale as incompatible with our pre-emption jurisprudence. Our pre-emption cases presume that an actor seeking to satisfy both his federal- and state-law obligations is not required to cease acting altogether in order to avoid liability. Indeed, if the option of ceasing to act defeated a claim of impossibility, impossibility pre-emption would be all but meaningless. . . . Adopting the . . . stop-selling rationale would mean that not only [Mensing], but also the vast majority—if not all—of the cases in which the Court has found impossibility pre-emption, were wrongly decided. Just as the prospect that a regulated actor could avoid liability under both state and federal law by simply leaving the market did not undermine the impossibility analysis in [Mensing], so it is irrelevant to our analysis here.
Id. at 2477-78 (citations and quotation marks omitted).
So Dement took the rationale for one type of duty-to-update claim (warning-based), and applied it to a new and completely different type of claim (misbranding/stop-selling based), while totally ignoring the real reason why the Supreme Court broadly rejected the stop-selling argument as “revolutionary” in Bartlett. It’s like adding two plus a brick and getting moldy Thanksgiving leftovers – the novel duty to update equation in Dement simply doesn’t add up.
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We have been riding the Philly subway for years, but only recently realized how much the ads on the car walls have changed. Not so long ago there were lots of ads for vocational schools, inducing today's un- or underemployed to become tomorrow's truck drivers and beauticians. But nowadays at least three quarters of the ads are from plaintiff lawyers hawking their ability to wring cash out of slip-and-falls or the latest mass tort. Mass transit advertising space that formerly advised riders to get skills is now dedicated to pleas to get paid. The same is true for daytime television advertising. Perhaps we are not alone in seeing this evolution as further proof, along with Keeping up with the Kardashians and the ascendancy of kale salad, that our culture is headed to Hell in a handbasket.
You won't be surprised to hear defendants and their lawyers bemoan plaintiff lawyer advertising. But we are not alone. Recently, we heard a MDL judge express frustration about how plaintiff lawyer advertising was a blatant attempt to extend the tail of an over-mature mass tort. Some plaintiff lawyer advertising is naked poaching of other plaintiff lawyer inventories - e.g., why pay a 40% contingency fee if you can pay only 20%? But the most obvious aim and effect of such advertising is stirring up litigation. What might not be so obvious is the extent to which plaintiff lawyer adverting causes adverse health outcomes. A recent law review article looks into this issue and it is well worth reading. The article is by Elizabeth Tippett, a professor at the University of Oregon School of Law. The title is "Medical Advice from Lawyers: A Content Analysis of Advertising for Drug Injury Lawsuits," 41 Am. J. L. & Med. 7 (2015).
Tippett and her team looked at plaintiff lawyer advertising in Boston and Atlanta where the purpose of the ads was to recruit consumers for lawsuits against drug manufacturers. About half the lawyers behind the advertising actually litigated cases, while the other half appeared to be referral or settlement mills. Many of the ads obscured the fact, or at least delayed disclosure, that the ads were taken out by lawyers. Some ads did a snazzy job of looking like public service announcements. Reference to the FDA was often highlighted. ("FDA Warning" "Consumer Alert"). The ads must work in terms of recruiting clients, given that there are so many of them. Regulation by the relevant state bar appears to be de minimis. The issue is whether such advertising affects consumer medical decisions.
There is a rich twist at work here. Plaintiff lawyers harp on allegations that pharmaceutical direct-to-consumer advertising distorts patient risk perceptions and is so pernicious as to call off the learned intermediary rule and open the door for massive liability. But it turns out that plaintiff lawyer advertising might well have a more profound effect on risk perceptions. At least if a manufacturer's ad inspires a patient to seek out a specific medicine, that patient must go through a doctor -- a learned intermediary -- who will make an informed medical decision. By contrast, if a plaintiff lawyer ad terrifies a consumer into avoiding or ceasing a treatment, that consumer can make a very bad decision without ever consulting a doctor. Few of the plaintiff lawyer ads advise consumers to talk with their doctors, and when they do it is typically in the fine print. Much better to talk to a lawyer, right?
And it turns out that plaintiff lawyer advertising really does distort risks. Adverse events are described in the most alarming language: "fatal," "life-threatening," "disfiguring." There is seldom any reference to the absolute risk rate, which is usually quite low. There is usually no reference to the relative risk or background risk rate. There is usually no reference to relevant subpopulations (e.g., long-term users). If a product recall is specific to one manufacturer, the plaintiff lawyer ad will likely elide past that fact and pretend that any problem is industry-wide. There is almost never a reference to the benefits of the drug. Forget about fair balance. And forget about everything the FDA requires to be included in manufacturer DTC advertising.
As is typical with law review articles, the portion describing the issue is more interesting and useful than the portion proposing a solution. State bars are skittish about regulating the advertising of their members, and there is first amendment jurisprudence supporting such skittishness. Still, the first amendment should not prevent the powers that be from reeling in speech that is as ridiculously misleading as so many of these plaintiff lawyer ads seem to be. Model Rule 7.2 says that lawyer ads omitting material facts are misleading and forbidden.
The article is fascinating. It has the marvelous effect of confirming our prejudices and adding firepower to our arguments. On this day before Thanksgiving, this thoughtful law review article gives us yet another reason for gratitude.
This being the week of Thanksgiving, we would be remiss to fail to weave in something about the great American (or ‘merican) holiday of giving thanks, eating turkey, watching football, and pondering the influence of the Pilgrims on our culture (beyond the obvious lasting fashion impact). In the past, we offered our readers a “fun” word search for food and drink terms in a post on express preemption. (Yes, the terms “fun” and “express preemption” are rarely linked in a single sentence, although “Today was no fun because I had to write a brief on express preemption” has probably been uttered.) We have offered other posts at this time of year that featured food to different degrees, like this and this. We have talked about reasons for being thankful, how football analogizes to law, and even how shopping has become a big part of this particular holiday. Surely, we have given our readers many reasons to ponder deeply on important issues in their lives. Why is stuffing called dressing in the South? Why did some combination of the Civil War, Restoration, and carpetbaggers not force a gastro-linguistic solidarity? Do elementary school depictions of Native Americans (f/k/a Indians; a/k/a indigenous peoples of North America, pre-Colombians, Amerinds, descendants of those who migrated across Beringea) send the right message? Should second graders learn about smallpox blankets? Was the choking risk with that third plate of food, after more than a few adult beverages, an acceptable one? We would like to think that we have contributed to such meaningful introspection with our purportedly clever posts during this week every year since the blog started being purportedly clever.
This year, we highlight a truly American tradition: trying to make as much money as possible by suing a deep pocket defendant with as little proof as possible. Recently, this has often involved combining three things. First, use remedial federal or state statutes that are really for another purpose entirely, but allow for big damages and even fines (e.g., the False Claims Act was enacted against war profiteering, RICO was enacted to combat organized crime). Second, seek to proceed on behalf of a class and/or some subset of the “public” to maximize the claims at issue. Third, use only generalized proof of injury, causation, and damages, which is required for a class but does not require a class. We could add in piggybacking on an issue with a product that has gotten attention because of other litigation or regulatory actions and outsource the work to contingency lawyers. Such cases have been the subject of many posts, often addressing how generalized proof of causation makes no sense in the context of drugs prescribed to specific patients by specific doctors based on, hopefully, individualized clinical judgment. High on the list of opinions that got it wrong are Kaiser Foundation Health Plan, Inc. v. Pfizer, Inc., 712 F.3d 21 (1st Cir. 2013), and the rest of the First Circuit’s Neurontin trilogy, which took the top spot in our list of worst decisions of 2013. High on the list of opinions that got it right is the Second Circuit’s Zyprexa decision, UFCW Local 1776 & Participating Health & Welfare Fund v. Eli Lilly & Co., 620 F.3d 121 (2d Cir. 2010), which took home best decision in 2010 by reversing the second worst decision of 2008. The Second Circuit’s in Sergeants Benevolent Assoc. Health & Welfare Fund v. Sanofi-Aventis U.S. LLP, No. 14-2319-cv, 2015 U.S. App. LEXIS 19797 (2d Cir. Nov. 13, 2015), adds to the weight of the good cases rejecting the misuse of generalized proof of causation by affirming class certification denial and summary judgment in a RICO (and state consumer protection) case over the antibiotic Ketek.
The basic facts underlying the various claims was that defendant’s antibiotic was approved to treat acute bacterial sinusitis, acute exacerbation of chronic bronchitis, and community-acquired pneumonia, after FDA required a further clinical study in rejecting the initial New Drug Application. Plaintiff claimed there was a conspiracy in relation to this further study, which was itself saddled with misconduct by multiple investigators, and defendant misrepresented the results of the study to FDA. Thereafter, defendants allegedly marketed the drug off-label, there was a FDA public health advisory and labeling change about a risk of liver failure, FDA withdrew the sinusitis and bronchitis indications, and the defendant stopped promoting the drug in the U.S. Within this relatively short period of time, the plaintiff Funds and Louisiana each claim they paid extra for their members’ antibiotics, although they have different methods of determining what drugs they cover and how they pay for them. The plaintiffs, of course, do not decide whether a member should be prescribed a drug or which drug should be prescribed. 2014 U.S. Dist. LEXIS 65714, *11.
Unlike the district court, which did not even mention Neurontin, the Second Circuit spent a fair amount of time looking at the issue of whether a RICO case could ever be based on just generalized proof of causation, even though it agreed that the proof offered here was insufficient to either certify a class or get past summary judgment.
RICO requires proof of proximate causation between the alleged fraud and the alleged injury, a showing of direct or indirect reliance for each plaintiff/claim will typically be required. Because class actions require the predominance of common issues and generalized proof of causation, “it is quite difficult, though not impossible to certify a class in a RICO mail-fraud case.” 2015 U.S. App. LEXIS 1979, *40. In addition to Zyprexa, the court pointed to the purchasing decisions of light cigarette smokers allegedly mislead by health claims and the decision to gamble at a particular casino based on allegedly misleading claims about odds as the sort of individualized decisions that are not amenable to class certification. Id. at **41-43. Rather than ending there with the conclusion that there is no way that proving why a particular prescription was written would be a less individualized inquiry—there are many soundbites about “the individualized nature of physicians’ prescribing decisions”—the court kept open the possibility of proof that “the class members all faced ‘the same more-or-less one-dimensional decisionmaking process,’ such that the alleged misrepresentation would have been ‘essentially determinative’ for each plaintiff.” Id. at *43 (citing a law review article). We think this is description of a null set when it comes to a prescription drug RICO case and the type of evidence suggested that might fill it in unusual cases poses other problems. Cases predicated on why drugs cases were prescribed to individual patients are not like the “fraudulent overbilling” cases where “payment may constitute circumstantial proof of reliance based on the reasonable inference that customers who pay the amount specified in an inflated invoice would not have done so absent reliance upon the implicit representation that the invoiced amount was honestly owed.” Id. at *44 (quoting In re U.S. Foodservice Inc. Pricing Litig., 729 F.3d 108, 120 (2d Cir. 2013)). The evidence offered in Sergeants, like the evidence offered in Zyprexa, was nowhere near what would allow an inference of reliance for every decision to prescribe the drug to each class member.
Plaintiffs contended in Sergeants that “safety is the preeminent consideration in prescribing an antibiotic, so that had physicians known about Ketek’s ‘true’ risks, none of them would have prescribed it.” Id. at *50. This sounds quite a bit like one of the formulations of strict liability design defect. Unlike in product liability cases where what physicians think matters to a decision to prescribe a particular drug will come from the mouth of a physician, the plaintiffs in Sergeants tried to prove their proposition through three other types of evidence: 1) the analysis of their frequent flyer statistician that drops in the number of prescriptions after additional liver warnings indicated that prior prescriptions must have been written in reliance on misrepresentations on safety; 2) the FDA’s subsequent decision to withdraw two of three indications for the drug; and 3) a study they contended showed a higher risk of liver toxicity than another antibiotic. Each was rejected based on its merits. The statistical analysis could not “support an inference that all pre-disclosure Ketek prescriptions were written in reliance on Aventis’s alleged fraud” because it failed to consider “significant larger changes in the market for anti-infectives” and that company stopped promoting it. Id. at **52-54. As such, the mere correlation to lower prescription volume was insufficient to show causation for each prescription. FDA’s decision to withdraw two of the drug’s indication did not support plaintiff’s causation theory because it was not tied solely to safety, let alone to hepatic risks. (It also was not a decision that the drug should be withdrawn or that the prior decision to approve the withdrawn indications had been wrong.) The study did not support plaintiff’s causation theory mostly because it was viewed as being non-informative based on investigator fraud. Moreover, the drug’s overall risk profile was generally in line with those of other antibiotics. So, the plaintiffs could not prove causation for purposes of class certification or avoiding summary judgment—as they did not bother to generate individualized prove of causation for even the named plaintiffs. That is well and good and we suspect that most RICO cases by payors for prescriptions drugs would do no better.
Not to appear unthankful, but we find the court’s discussion of how some other case might prove causation through theoretical generalized evidence to be problematic. First, the touchstone of plaintiffs’ case was that the manufacturer withheld material information on the drug’s safety and efficacy from FDA, “rendering Aventis’s marketing materials for Ketek misleading to the extent that those materials suggested that Ketek had ‘valid’ regulatory approval.” Id. at **50-51. While the court pointed out that the plaintiffs’ version of facts was off, it missed the larger point that this sort of fraud on the FDA should not be the basis of a claim. For the state claims, this walks right into Buckman preemption. For RICO—remember, preemption is based on the Supremacy Clause so it does not apply to conflicts between federal law—there should be a primary jurisdiction issue. Second, setting aside fraud on the FDA, the court’s formulation that causation might be inferred for all prescriptions for “a drug so dangerous that no physician would ever prescribe it to treat a non-fatal condition if that physician were aware of its true risks” also invites the jury to second guess FDA’s decisions to approve the drug and not withdraw it. The flip side of FDA’s unusual decision to withdraw two of Ketek’s indications is that it decided to the drug on the market based on a weighing of its risks and benefits.
Third, whereas plaintiff’s statistician did a “simplistic” analysis in this case, the court pointed out that she had done a more rigorous regression analysis for the plaintiffs in Neurontin in trying to suggest that off-label prescriptions were due to off-label promotion. The court stated that physician reliance on misrepresentations “can be proved to a jury with sufficiently powerful aggregate evidence, as opposed to individualized inquiries as to each prescribing physician’s actual decisionmaking.” Id. at **68-69. Statistics are ill-suited to answer questions of why each of thousands of prescriptions for a drug was made. While a thorough regression analysis might quantify the impact of one variable against specific other variables, it is unlikely to consider every variable that impacts the decision to prescribe a particular drug and will never be able to identify which particular prescriptions were written because of reliance on the misrepresentation. Even if the analysis suggested that, for example, 70% of the prescriptions were due to a misrepresentation and 30% were not, then class certification seems inappropriate. The percentage of injury cannot be blurred across the class. Relatedly, we do not see how “it may be possible to demonstrate classwide RICO causation in a case such as this one by adducing generalized proof from which a reasonable jury could conclude that only some prescription paid for by each class member were written based on the defendant’s alleged misrepresentations.” Id. at *61 (emphasis in original). The RICO requirement of an “actual quantifiable injury” to each plaintiff—or class member—makes insufficient proof that just some prescriptions were caused by the misrepresentation. For an individual plaintiff, how many prescriptions were caused by a misrepresentation would surely turn on direct evidence about those prescriptions including some evidence from the physicians who wrote them. The expediency of the class action mechanism should not reduce the proof needed to make out a substantive claim. Particularly when the potential damages are so high—even without statutory trebling or fines—this can quickly become an issue of due process. We could try to draw some link between the Pilgrims and due process, but they burned suspected witches based on proceedings that bore no hallmarks of due process. So, we will leave it at that.

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