Source: http://newslawonline.blogspot.com/2016/05/
Timestamp: 2019-04-24 18:57:56+00:00

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As you've probably gathered from our posts this week, the Drug and Device Law blog is going on a brief hiatus as we move to an upgraded platform. We have well over 3000 posts, and it takes our technical people time to move them all and check all the various links. That requires us to go dark on this coming Monday and Tuesday, but we look forward to bringing you our usual updates and analysis on drug and device product liability cases at our new site starting on Wednesday.
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Have a great weekend, everyone, and keep those defense wins coming. We'll see you Wednesday.
Today's guest post is by Adam M. Masin, a partner at Shipman &amp; Goodwin LLP. It's about the most significant general Connecticut product liability decision in almost 20 years. It's not a drug/device case, though. Instead it involves tobacco. But make no mistake about it, this case could affect our sandbox – particular design defect cases involving medical devices.
As always our guest posters deserve all the credit, and any blame, for the contents of their posts.
Finally – be sure to read the repeated IMPORTANT ANNOUNCEMENT at the end of this post. DDLaw blog is getting ready to move, and that means you'll have to resubscribe to continue getting our posts. But don't worry, it's easy.
The Connecticut Supreme Court this month clarified how Connecticut distinguishes between the use of the "ordinary consumer expectation test" and the "modified consumer expectation test" in strict product liability design defect cases. Izzarelli v. R.J. Reynolds Tobacco Co., ___ A.3d ___, 321 Conn. 172 (2016). Not to confuse things from the start, but Court's key holding was that the "modified consumer expectation test" is now the "primary strict liability test." In other words, the prior ordinary test in Connecticut is no longer the ordinary test, and the primary test is the modified test. Just so we are clear. Wordplay aside, this is an unfortunate through probably unsurprising development in a state that still has a ways to go to firm up its product liability law (more on that below).
Some background helps to clarify how a "modified" test supplanted an "ordinary" test. As the Court noted, Connecticut was one of the first states to adopt § 402 of the Restatement (Second) of Torts. (Connecticut was also the first state to adopt a speed limit restriction for cars − a blazing 12 MPH). [Editor's note, both make about the same amount of sense these days.] Connecticut interpreted § 402 to require a plaintiff alleging a strict liability claim to prove, amongst other things, "the product was in a defective condition unreasonably dangerous to the consumer or user." Giglio v. Connecticut Light &amp; Power Co., 180 Conn. 230, 234 (1980). Connecticut interpreted that element to mean, based on comment (i) to § 402, that "the article sold must be dangerous to an extent beyond that which would be contemplated by the ordinary consumer who purchases it, with the ordinary knowledge common to the community as to its characteristics." That became known as the "ordinary consumer expectation test."
In 1997, the Connecticut Supreme Court in Potter v. Chicago Pneumatic Tool Co., 241 Conn. 199 (1997), finally noticed that the "ordinary consumer expectation test" did not adequately address "the problem of complex products for which a consumer might not have informed safety expectations." It of course doesn't make a whole lot of sense to apply a consumer expectations test to a product about which a consumer would not have reasonable expectations.
So the Potter Court's solution was to create a "modified consumer expectation test" whereby the jury would be asked to "weigh the product's risks and utility and then inquire, in light of those factors, whether a 'reasonable consumer would consider the product design unreasonably dangerous.'" The Potter court decided that the "ordinary consumer expectation test" would "when the everyday experience of the particular product's users permits the inference that the product did not meet minimum safety expectations." That required proof of an incident "so bizarre or unusual" that expert testimony would not be required to conclude that the product failed to meet the consumer's expectations. One might imagine what qualified as "so bizarre or unusual." For the most part, one had to imagine because so few Connecticut state courts were faced with deciding that issue in the subsequent years.
As the Izzarelli Court noted, Connecticut state courts had limited opportunities to determine what test would be appropriate under what circumstances because actions under Connecticut's product liability act were typically brought in federal court. Those decisions − including a recent federal court case involving combination hormone replacement therapy, Moss v. Wyeth, Inc., 872 F. Supp.2d 162, 166 (D. Conn. 2012) − were all over the map. The Moss decision, for example, predicted that that both tests applied somehow before launching into a discussion of the learned intermediary doctrine. In fact, the reason Izzarelli finally addressed this issue was because it answered a certified question from the Second Circuit, but the Connecticut Supreme Court actually had to expand on Second Circuit's question in order to clear up the confusion.
Fortunately for good lawyering, the Izzarelli Court now makes it clear that the modified consumer expectation test is the primary or "default" test in Connecticut in a strict product liability action based on defective design. The "ordinary consumer expectation test" is reserved for "res ipsa type cases" when the product failed to meet "the ordinary consumer's minimum safety expectations." (the Court's italics, not ours). The Court did not define "minimum" and it later referred to "legitimate, commonly accepted minimum safety expectations," without much indication of what those words meant either. But the Court's italics and the result of the case indicate that the safety bar is set really, really low for purposes of clearing the ordinary consumer expectation test − so low that the Court held that a cigarette that exposes a user to the risk of cancer cannot be said to fail to meet minimum safety expectations.
Don't be tempted to view that as a defense-friendly result. It isn't. It actually means, as the Court stressed at length, that Connecticut will allow strict liability design defect claims to proceed under a "risk-utility" analysis even when the consumer knows about the danger. As the Court put it, a "product might meet the consumer's minimum safety expectations because the product's dangers are known or obvious but nonetheless be defective because it could have been designed to be less dangerous without unreasonably compromising cost or utility." The Court also held that expert testimony on product design is not needed to prove the product's defect. So at least we in Connecticut don't need to argue about "bizarre and unusual" incidents anymore to handle these cases. The bizarre and unusual in our cases will still likely come up, only now only in the context of plaintiffs' expert opinions. Despite the fact that Connecticut does not require experts in this context, as a practical matter we don't expect too many situations in our area of the law when a plaintiff's lawyer won't trot out a bunch of experts.
Izzarelli goes a long way to clarify what needs to be shown in a strict product liability case in Connecticut, so its at least helpful in that regard. It's worth noting, however, that Izzarelli does not clarify many of the pharmaceutical product-specific issues discussed in Moss, so the Connecticut Supreme Court has ample room to develop that law. In addition, as the Izzarelli Court noted, the Connecticut Supreme Court is in the middle of writing a decision that will likely clarify how these principles apply to a product liability claim for negligence and will also clarify Connecticut's law on punitive damages. Stay tuned.
IMPORTANT ANNOUNCEMENT – When we created the Drug and Device Law Blog back in 2008 we frankly didn't know if anything would come of it. So we used the Google Blogger software program because the price was right (it was free). Unfortunately, we got what we paid for. For about six months we've had problems with emails to our loyal subscribers, and Google hasn't been able to fix it. So next week we're moving to an upgraded – and supported − platform. What does that mean for you, our loyal readers?
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Hardly a week goes by without our blogging about accusations of off label promotion. This week is no exception. On Monday, we discussed a nice New York opinion rejecting a plaintiff argument that off label promotion saved a case from preemption. And hardly a week goes by without plaintiff lawyers attempting to inject off label issues into our cases, as though mere mention of the possibility conjured up liability, punitive damages, and settlement-grids. As we have discussed many times before, the demonization of off label use is wrongheaded and counterproductive, given how off label use can be the only thing standing between patients and pain. Today's case, Tangney v. Burwell, Secy of HHS, 2016 U.S. Dist. LEXIS 61724 (D. Mass. May 10, 2016), reminds us of that fact yet again.
The plaintiff in Tangney suffered from severe nausea and abdominal pain emanating from gastrointestinal issues, not cancer - facts that, as you will see, possibly become pertinent. It was undisputed that off label use of Dronabinol alleviated these symptoms. The issue was whether Medicare Part D covered the cost of the medicine. Such coverage is available if the drug's use is approved by the FDA (not the case here) or is "supported by one or more citations included or approved for inclusion in any of the [listed] compendia." 42 U.S.C. Section 1396r-8(k)(6). The particular compendium at issue in Tangney was Drugdex, which cited the successful use of Dronabinol to treat nausea resulting ... in a case involving cancer.
Medicare rejected coverage because the plaintiff's nausea was unconnected to cancer. Then a hearing officer reversed that decision and concluded there was coverage, because (1) the title of the Drugdex citation was not limited to cancer, even if the underlying case study was, and (2) the plaintiff's real-world history showed that without coverage of the off-label use of the medicine, the plaintiff would "either have to remain in the hospital indefinitely or possibly die." The Appeals Council then reversed the hearing officer"s decision and concluded there was no coverage, because the underlying case study involved a cancer patient, and there was insufficient evidence to show that efficacy would extend to non-cancer patients. The Appeals Council decision is considered a decision by the Secretary of the U.S. Department of Health and Human Services, Sylvia Burwell, and that is why she is listed as the defendant in the case that subsequently went before a federal judge.
The first decision for that federal judge was whether or how much to defer to the HHS Appeals Council. On this blog, we talk about product liability, not administrative law, so we will not linger on the niceties of Chevron or Skidmore deference to agency decisions. Leave it at this: the court held that the denial of Medicare Part D coverage of this particular off label use was not the sort of precedential, legislative ruling by an agency that required full-blown (and usually dispositive) Chevron deference. Rather, a lower level of deference, called Skidmore deference, came into play. Skidmore deference focuses on consistency and persuasiveness. Even with this lower level deference, the government usually wins.
But it did not win this time. The court held that the hearing officer got it right, and that it made more sense to frame the degree of generality in terms of effective treatment of nausea as opposed to effective treatment of nausea associated with cancer. Palliative care is palliative care. Our favorite part of the D. Mass. opinion is a footnote where the court observes how "Kafkaesque" it was to force the plaintiff to prove that the underlying case study supporting the Drugdex citation to off label use should apply to her, when she herself offered the most compelling case study, "with her having taken Dronabinol to near miraculous effect for three years before switching to Part D and being denied coverage." The plaintiff herself presented a strong instance of challenge, rechallenge, etc. She suffered from severe nausea, the off label drug alleviated the pain, and then the pain returned when she had to go off the drug after coverage was denied.
Try telling this plaintiff, or millions of other patients in this country, that there is something nefarious with off label use of medicines. Try telling doctors. Or try telling judges who pay more attention to reality than rhetoric.
IMPORTANT ANNOUNCEMENT – When we created the Drug and Device Law Blog back in 2008 nobody we frankly didn't know if anything would come of it. So we used the Google Blogger software program because the price was right (it was free). Unfortunately, we got what we paid for. For about six months we've had problems with emails to our loyal subscribers, and Google hasn't been able to fix it. So next week we're moving to an upgraded – and supported − platform. What does that mean for you, our loyal readers?
• We're sorry for the inconvenience, but privacy laws won't let us resubscribe you automatically. But we're making it as easy as we can for you. All you need to do is fill out a new, really short (three things) e-mail sign-up form to continue to receive our blog posts by e-mail. You can fill out the form right now, right here, and you'll continue to get all of our posts at the after we've moved to the new site. As you did the first time you subscribed to DDLaw by email, you'll get a confirmation e-mail to the address you provide, and once you click to confirm your subscription, we're in business.
Guest Post − Implied Certification: An Eradicated Pest or Here to Stay?
Today's guest post is courtesy of Reed Smith's Lindsey Harteis. She's been following the big-deal UHS v. Escobar False Claims Act that the Supreme Court could decide any day now (or could wait until the end of June), which involves the existence and (perhaps) extent of the so-called "implied certification" theory of FCA liability.
Finally – be sure to read the IMPORTANT ANNOUNCEMENT at the end of this post. DDLaw blog is getting ready to move, and that means you'll have to resubscribe to continue getting our posts. But don't worry, it's easy.
We spent this past weekend chasing our ten-week old Samoyed puppy around the backyard, where he ventured "down in the weeds" more than a few times. This caused the OCD in us to go over him multiple times with a fine-toothed comb: We reasoned that he was bound to pick up some ticks. Lucky for us, he didn't. But it got us thinking that when courts go down in the weeds like our dog did, they are bound to pick up a few nasty buggers themselves. In the oral argument for the appeal in United Health Services v. Escobar, 780 F. 3d 504 (1st Cir. 2015), the Court definitely took a run through the weeds. (We blogged briefly on the case here). We're taking our fine tooth comb through the oral argument to look for ticks, and we fear we're bound to find in this ruling another "corpus juris festooned with various duties."
That's a quote from a Justice we missed dearly while listening to the oral argument in this case. Justice Scalia used it in his concurring opinion in Skilling v. United States, 561 U.S. 358 (2010), which limited a fraud statute in the criminal context due to vagueness and via the 5th Amendment Due Process route.
Skilling reminds us of United Health Services for a couple of reasons: (1) It dealt with defining the contours of a sort of fraud – honest services fraud – for which the lower courts took an expansive view that wasn't foreseeable based on the plain language in the statute; (2) Scalia was accusing the Courts of Appeals of invention of law rather than interpretation in their rulings on what constituted honest services fraud; and (3) the case involved a fusion of Restatement and black letter law in an unrelated area (Agency and Trusteeship) but was a criminal case.
There are definite parallels. Again, United Health Services presents an opportunity for the high court to define the contours of an actionable sort of fraud, this time fraud in submitting claims for payment to the government. Here, the punitive lever is the False Claims Act ("FCA"). This case also features a situation where Courts of Appeals, beginning with Ab-Tech in 1994 (discussed below) seem to have wielded legislative power instead of judicial restraint. United Health Services also involved, at least in oral argument, the suggestion by more than one justice that the proper standard might invoke principles from an entirely different area of law – and invoked Hornbook contract law when trying to grasp at a standard for liability.
Before we take you much deeper in the weeds, here's how United Health Services came to be before the eight justice court. Beginning with Ab-Tech Cons., Inc. v. United States, 31 Fed. Cl. 429 (1994), federal courts birthed a new theory that expanded FCA liability. The theory is called "implied certification." This theory expanded the scope of FCA liability to allow a claim where a company submitted a claim for payment to the government after making an "implied certification" that it was in compliance with the conditions to participating in a SBA program, namely using third party contractors that are minority owned, to further the interests of the program. In fact, the company did not use any third party contractors that met the criteria for its participation in the program. So, the Federal Circuit held, this was a false claim for payment that violated the FCA.
Over the last twenty years, some federal courts have run amok with this theory, expanding it in every direction. They have created a significant problem of identifying types of regulatory noncompliance which are relevant enough to trigger a finding of a "false or fraudulent claim," whether the certification of regulatory compliance should be explicit (or if a mere failure to disclose noncompliance triggers liability), and even what sense the courts use the word "material," to sort the actionable FCA claims due to a regulatory violation from inactionable ones.
On the United Health Services appeal, the First Circuit had no problem stepping into the shoes of not only the Massachusetts Legislature and Congress, but also those of executive agencies by invoking multiple regulations (some of which contradicted one another about the qualifications a provider should have in order to bill for services), and interpreting the regulations based on a statement by a non-promulgating entity in favor of a finding of fraud. What's more – the First Circuit seemingly usurped the role of counsel and cited a regulation not cited in the Complaint, in any appellate brief and not even in the state government's amicus brief – to make the finding of fraud. To us, this looks like anything but calling balls and strikes.
Here the regs used as the basis of liability not only lacked an explicit indication that, when read together, they created preconditions of payment, but the court had to layer three separate regulations (not all of which clearly cross-referenced one another) on top of each other to conclude this "precondition of payment" was violated. Further, this isn't something either the Massachusetts Government or Federal Government thought they did. They both declined to intervene in the suit altogether.
The regulatory agencies at issue all reviewed the facts in this case, and two of them entered into agreements with the provider to restore compliance. Just one individual was issued a $1,000 civil penalty for holding herself out as a therapist without the appropriate license. It seems to us that if the Government doesn't think a provider has submitted a false claim due to some "implied certification" by the claimant, then a relator shouldn't be able to replace the Government or contracting party and offer a different interpretation of how material the alleged regulatory breach was, or even if there was a breach at all.
Seemingly, the First Circuit believed as long as some court is willing to divine material noncompliance, it doesn't matter if the Government thinks there was noncompliance or if the Government thinks it was material – or even if the Government is willing to pay the claim at all. Indeed, the First Circuit says, even if the Government doesn't lift a finger and intervene in the suit, the relator can play a plaintiff's lawyer game of after-the-fact "gotcha!" and that's precisely what Defense counsel argued before the Supreme Court.
To get a sense of where the Supreme Court is on all this, we listened to the oral argument, which occurred on April 19, 2016. Justice Breyer described the problem as how to distinguish the regulations for which a breach is fraudulent and contains an implicit promise not to breach versus those in a sea of "millions of regulations" – and for which a breach is less than fraudulent. Breyer was grabbing at contract principles of materiality – and suggested that perhaps violations and nondisclosure of violations that would be "material" to the government's decision to pay a claim would be actionable.
The chief problem with such reasoning is that is that FCA cases often don't involve contracts. But that didn't stop the justices from trying to invoke contract law. Chief Justice Roberts approached the idea of phrasing liability in terms of whether the Government might "repudiate" or deny payment of the claim on the basis of the regulatory infraction. A second problem is how anybody could get in the Government's head in a case like this where the Government didn't see fit to intervene. A third and perhaps more significant problem, as counsel for the provider argued, is that materiality is a separate FCA requirement apart from any contract law understanding of that term. It makes no sense that contract-variety materiality is an appropriate substitute for the falsity or mens rea elements of a FCA claim.
Justices Sotomayor and Kagan seemed downright annoyed that the First Circuit ventured into the regulatory weeds in the first place. To them, this case was as simple as the reason the FCA was enacted. Back then, the "Lincoln law" was enacted because government contractors provided cardboard boots, dead mules and guns that didn't shoot for the Civil War. Kagan likened the provision of services by someone who is not a doctor, when the state was charged for a doctor's services, to providing a gun that doesn't shoot and then claiming payment for a gun.
To us, DOJ's primer on what constitutes a FCA violation is instructive: "A person does not violate the False Claims Act by submitting a false claim to the government; to violate the FCA a person must have submitted, or caused the submission of, the false claim (or made a false statement or record) with knowledge of the falsity, knowledge of false information is defined as being (1) actual knowledge, (2) deliberate ignorance of the truth or falsity of the information, or (3) reckless disregard of the truth or falsity of the information." If the United States via DOJ doesn't think a regulatory infraction is a false claim, it seems that should be good enough for the Court. The fact of a regulatory violation shouldn't be confused with the submission of false information.
A regulatory infraction might have happened here. Maybe, although the Government isn't convinced. But that's a different thing from submitting an explicitly false claim to the Government and a thing that has separate regulatory and other remedies. As defense counsel argued, the Government holds all the keys in how it can address regulatory infractions, but the FCA is not one of them. We didn't do the math, but are willing to bet that the majority of implied certification theory-founded FCA claims are products of relators and their counsel and not the United States Government.
At least three and maybe even all the justices think fraud occurred on the facts here. But it remains to be seen if they agree about which of those facts made for the fraud, which of those regulations they might be willing to invoke to make a finding of fraud, and whether they need or can agree to invoke the implied certification theory to get there. We're still hoping for a deus ex machina here. The Court should avoid the regulatory weeds – and the implied certification theory – whatever it decides. And on our next walk, we too will avoid the weeds. Stay tuned and we'll be sure to announce the fate of the theory – and this case – as soon as it drops from the high Court.
This post comes from the Cozen O'Connor side of the blog.
Last week, the New York Appellate Division upheld a preemption decision in a medical device case involving alleged off-label promotion. Pitkow v. Lautin, 2016 WL 2746469 (N.Y. App. Div. May 12, 2016). While the Appellate Division's opinion was only three-paragraphs long, it affirmed the trial court's ruling in every respect, making the trial court's lengthier opinion that much more important. We obtained a copy, and here it is.
The plaintiff's claims were based on complications that arose after her use of an injectable product, Sculptra, for cosmetic purposes, which was an off-label use. Plaintiff sued the doctors who injected her and the manufacturers of Sculptra. Among other things, she alleged that the manufacturers had improperly promoted off-label use of Sculptra.
After discovery, the manufacturers moved for summary judgment, arguing that all of plaintiff's claims were preempted. The trial court agreed and, quite effectively, walked through the manner in which both Riegel and Buckman preempted plaintiff's claims as well as the deficiencies of plaintiff's attempts at parallel violation claims.
Sculptra is a Class III medical device that was undeniably approved through the PMA process. What is more, all of the plaintiff's claims against the [manufacturers] regard the safety and effectiveness of the device or require a finding that Sculptra's design, labeling, and/or manufacturing process should have differed from that approved by the FDA via the PMA process . . . . Thus, the claims are preempted by the federal law.
The trial court had at least as much to say about plaintiff's parallel violation claims. Plaintiff alleged "that the defendants promoted an off-label use of Sculptra that was contrary to the representations of the [manufacturers] made to the FDA during the PMA process." Id. at 9. The court, however, found that plaintiff pointed to no violation of an FDA requirement or state law that paralleled that requirement: "plaintiff has failed to cite a specific federal regulation that was violated, or an obligation existing under state law that was 'identical' or 'generally equivalent' to a specific obligation imposed by federal law." Id.
What is more, any claims based on alleged off-label promotion and/or misrepresentations to the FDA during the PMA process are barred by Buckman Co. v. Plaintiffs' Legal Comm., 531 U.S. 341 (2001). The Supreme Court there indicated that only the FDA, and not private litigants, may sue based on alleged noncompliance with the Medical Device Amendments, stating (at 347) that the FDA is "amply empower[ed] to police fraud against the Administration, and policing the fraud is not a field the States have traditionally occupied." The Court explained that while the doctrine may be read to allow for some state-law claims that are parallel to the requirements under the MDA, "it does not and cannot stand for the proposition that any violation of the FDCA will support a state law claim." Id. at 353.
The Court rejects plaintiff's claim here (at ¶42) that Buckman should not be applied because the fraud on the FDA allegedly committed by the Sculptra Defendants was of greater magnitude than usual. Buckman makes no such distinction. What is more, the plaintiff in Riegel had alleged that the medical device was used in an off-label and contra-indicated manner, similar to plaintiff's claims here, but those claims did not escape preemption.
Id. at 9-10. Given plaintiff's arguments, the trial court also had to explain, very quickly, why Wyeth v. Levine (prescription drugs, no Medical Device Amendments' preemption clause) and Medtronic v. Lohr (§510k process, not PMA process) did not apply.
With that, the trial court, now with a stamp of approval from the Appellate Division, made it much more difficult for New York plaintiffs to state parallel violation claims based on off-label promotion. New York plaintiffs face a significant challenge in identifying an FDA requirement that would be violated by such off-label promotion and, more important, a parallel New York law that also prohibits it.

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