March 6, 2008
The Law of Unintended Concequences: Warner Lambert v. Kent
The folks over at Drug and Device Law Blog make an excellent observation about the 4-4 decision in Warner-Lambert v. Kent. Here's the idea:
Pharmaceutical litigation often results in masses of cases being filed. When there are many cases that all raise common issues of fact or law, it may be duplicative for every federal court where such cases are filed to go through the discovery process or motions. For example, should the CEO be deposed in litigation, thousands of times? This would be onerous and wasteful. Therefore there is a special panel of judges (the Multi-District Litigation Panel) which is statutorily empowered to collect all these cases and transfer them to a single court. This panel is created pursuant to 28 US 1407 which states:
When civil actions involving one or more common questions of fact are pending in different districts, such actions may be transferred to any district for coordinated or consolidated pretrial proceedings. Such transfers shall be made by the judicial panel on multidistrict litigation authorized by this section upon its determination that transfers for such proceedings will be for the convenience of parties and witnesses and will promote the just and efficient conduct of such actions.
Beck/Hermann point out that since there is a Circuit split on the issue of whether fraud on the FDA claims can go forward, and since many pharmaceutical tort cases are consolidated under the auspices of the Multi District Litigation Panel, the MDL Panel's choice of transferee court will determine the substantive law applicable. Here is quote from their post:
The court that receives those cases -- the "transferee" court -- will apply local federal circuit precedent to all pretrial rulings. See In re Korean Air Lines Disaster, 829 F.2d 1171 (D.C. Cir. 1987), and its progeny. Thus, if the MDL Panel chooses to centralize the cases in Cleveland, all Michigan plaintiffs automatically lose under controlling circuit law. But if the MDL Panel chooses to centralize those same cases in New York, Michigan plaintiffs do not automatically lose.
When the DC Circuit affirmed the In re Korean Air Lines Disaster ruling, then Judge Ruth Bader Ginsburg gave three reasons for allowing the transferee court's law to apply: (1) "[a]pplying divergent interpretations of the governing federal law to plaintiffs, depending solely upon where they initially filed suit, would surely reduce the efficiencies achievable through consolidated preparatory proceedings"; (2) "because there is ultimately a single proper interpretation of federal law, the attempt to ascertain and apply diverse circuit interpretations simultaneously is inherently self-contradictory"; and (3) the parties could always seek review by the Supreme Court for an authoritative and final interpretation. See 829 F.2d 1171, 1176 (D.C. Cir. 1987). That last condition, of course, is not met because the Supreme Court had the opportunity to decide and gave us a 4-4 non-decision.
But this case is not the last word, nor will it be. Last year around this time, a court held that the law of the transferor court (that is, the court where the case came from) was binding with respect to the question of class certification because class certification is "not merely a pretrial issue" but instead is "inherently enmeshed with considerations of the trial." "Neither party should be prejudiced in preparing for trial because the case was removed and transferred to another district in a different circuit." In re Methyl Tertiary Butyl Ether (MTBE) Products Liability Litigation, 241 F.R.D. 185 (S.D.N.Y. Feb 20, 2007). That court then applied the transferor court's interpretation of the class action rule and certified the class.
This issue really makes one appreciate the incredible importance of pre-trial proceedings and reminds us again of the trickiness of the substance/procedure distinction. (This is why we Civil Procedure professors love to teach Erie). MDL transfer is intended merely to make processing of cases easier, but it does also affect the merits.
What's to be done? Beck/Hermann urge that the MDL Panel "be beyond reproach" and that the Supreme Court decide the issue for good. I don't disagree with their suggestion, but I think the MDL Panel is placed in a terrible situation when the outcome of the case is based on transfer and is already known in advance of the transfer. This leaves them in a position to decide the merits, really, and I don't think that is what the statute creating the MDL intended.
I have another suggestion. When faced with such a scenario, the MDL panel might consider transferring and centralizing the cases to several regional forums. I suggest two forums. Plaintiffs who filed within the regions covered by the preemption precedent would be consolidated in one court, plaintiffs who filed in the regions covered by the non-preemption precedent would be consolidated in another court. This would not lead to duplicative discovery because all the cases in region 1 would be dismissed, and all the cases in region 2 would proceed. This idea violates the principles behind (1) and (2) of then-Judge Ruth Bader Ginsburg's rationale, and raises an important question about the tension between the just and efficient conduct of actions in the federal courts. Centralization is efficient, but is it just to allow the MDL Panel to choose which law applies through their transfer decision, which has to include other factors such as judicial experience, caseload, the spread of cases over the entire system, convenience of the parties in terms of the conduct of discovery and cost of litigation, etc.? If the Supreme Court doesn't like this outcome, as Beck/Hermann point out, they can decide the issue once and for all. But for the moment, it seems to me perhaps we can proceed with multiple centralized forums, rather than just one, and solve the problem without driving Article III judges crazy.
The reality is that region 1 cases (those that will be dismissed) will not be brought because the law is clear. Beck/Hermann are concerned that the plaintiffs will forum shop and all the new cases will now be region 2 cases. Point taken. I think the idea that the MDL Panel's decision should reflect the disagreement, rather than effect it, is still right.
I have an article coming out in Tulane Law Review making such a proposal, which should be posted on SSRN soon, and would be interested in learning the thoughts of others about it.
March 5, 2008
New Malingerer Pyschological Test Used and Challenged in Personal-Injury Cases
Article in the Wall Street Journal -- Malingerer Test Roils Personal-Injury Law: 'Fake Bad Scale' Bars Real Victims, Its Critics Contend, by David Armstrong. Here's an excerpt:
A test designed to expose fakers is roiling the field of personal-injury law, distressing plaintiffs and strengthening the hand of employers and insurers.
Proponents hail the true-or-false test as a valid way to identify people feigning pain, psychological symptoms or other ills to collect a payout. In hundreds of cases, expert witnesses have testified that the test provided evidence that plaintiffs were lying about their injuries, just as suggested by the test's colorful name: the Fake Bad Scale.
Use of the scale surged last year after publishers of one of the world's most venerable personality tests, the Minnesota Multiphasic Personality Inventory, endorsed the Fake Bad Scale and made it an official subset of the MMPI. According to a survey by St. Louis University, the Fake Bad Scale has been used by 75% of neuropsychologists, who regularly appear in court as expert witnesses.
But now some psychologists say the test is branding as liars too many people who have genuine symptoms. Some say it discriminates against women, too. In May, an American Psychological Association panel said there appeared to be a lack of good research supporting the test.
March 4, 2008
Wither Agent Orange
BNA reports that the Second Circuit is driving the nails in the coffin of the Agent Orange litigation. It held on February 22 that the government contractor defense precludes claims by U.S.
military veterans who allege injuries from exposure to the toxic herbicide Agent
Orange used as a defoliant during the Vietnam War. Twinam v. Dow
Chemical Co. (In re "Agent Orange" Product Liability Litigation),
2d Cir., No. 05-1760-cv, 2/22/08.
The government contractor defense is now coming into play in another area, the use of military contractors in Iraq. There is an excellent blog entry on this issue by Laura Dickinson (UConn Law) on Balkinization, and more is forthcoming in her book Outsourcing War and Peace, which should be out next year. (My very limited post on the subject is here). I predict litigation against government contractors, which crosses lots of boundaries (national, international, contract, tort, etc.) will be significant in the next few years and will present courts and Congress with serious legal and policy challenges. Maybe an Agent Orange litigation for our times.
Second Edition of Mullenix's Mass Tort Litigation Casebook
Professor Linda Mullenix (Texas) is publishing a second edition of her seminal casebook, Mass Tort Litigation: Cases and Materials. The first edition was published in 1996, and a supplement followed in 2000. That's quite a while for such a fast-moving field as mass tort litigation, and those of us who teach with the Mullenix text (myself included) will no doubt be opening the arriving casebook box with a kind of Christmas-morning glee. Indeed, comparing the changes of the two casebooks should provide an interesting history of the development of mass torts -- more on that when it arrives in May. Here's the release from West publishing:
Mullenix's Mass Tort Litigation: Cases and Materials, Second Edition is publishing in May and will be available for Fall 2008 class adoptions. This edition is updated with materials relating to breast implant litigation, tobacco litigation, and medical device and pharmaceutical litigation, in addition to the seminal cases relating to Agent Orange, Dalkon Shield, DES, and asbestos litigation. The materials demonstrate that the core cases and materials relating to mass tort litigation still remain viable precedents after 25 years and that courts are still struggling to find solutions to the resolution of this complex litigation. The casebook is suitable for advanced courses in tort litigation, complex procedure, class action litigation, and dispute resolution offerings.
Vioxx Settlement Update
Today’s Wall Street Journal reports that enough claimants have agreed to Merck’s Vioxx settlement proposal to keep the deal alive. Eighty-five percent of eligible claimants had to enroll by Friday and more than ninety-three percent have joined thus far. Here’s an excerpt of the article:
Claimants next are required to provide medical records that third-party administrators will use to assess what payment they might qualify for. Under the settlement plan, a claim must be based on an incidence of heart attack, ischemic stroke or sudden cardiac death. Plaintiffs must provide documentation showing that Vioxx was taken for at least 30 days and show that the injury occurred within 14 days of using the drug. Payouts will be adjusted according to other cardiovascular risk factors.
Plaintiffs lawyers estimate that, depending on age and risk factors, settlement payments will range from $50,000 to $1.5 million, with an average exceeding $200,000. Merck, of Whitehouse Station, N.J., set aside $1.9 billion for litigation costs -- not including any payouts -- and spent $1.2 billion. But plaintiffs had trouble persuading juries that Vioxx, and not other risk factors, had caused injuries. Of the 16 cases that went to trial, Merck prevailed in 11. Some plaintiffs won big, though: At the first Vioxx trial, a jury in August 2005 awarded a Texas widow $253.4 million -- later reduced to $27.2 million, including interest.
ABA Mass Torts Litigation Committee Winter 2008 Newsletter
The ABA Mass Torts Litigation Committee has posted its Winter 2008 newsletter, which includes the following articles:
Let Data Speak Equally to All: The Increasing Importance of Raw Data in Litigation and a Proposal for Principles Governing the Production, Protection, and Use of Raw Data in the Litigation Context, by Laura Ellsworth, Charles Moellenberg, and Neelie Simmons (all of Jones Day);
Don't Step on My Toes -- The Use of The Doctrine of Primary Jurisdiction as a "Defense" in Tort Litigation, by Katherine Winchester (Ice Miller);
Blogging 101: An Interview with Mark Herrmann and James Beck of the "Drug and Device Blog," interviewed by Eric Hudson (Butler Snow) and Harley Ratliff (Shook, Hardy); and
State ex. rel. Johnson & Johnson v. Karl: Is the Learned Intermediary Doctrine Outdated?, by John Camp and Gary Pappas (both of Carlton Fields).
March 3, 2008
Warner Lambert - Opinion Below Affirmed Without Opinion
The no decision decision: BNA reports that an equally divided court affirmed the ruling of the Second Circuit, which had held that the FDCA does not preempt product liability claims under Michigan law against drug manufacturers that allegedly defrauded the Food and Drug Administration. Warner-Lambert v. Kent, No. 06-1498.
Some reactions to the decision: Public Citizen, which litigated the case, issued a press release (available here) yesterday stating that this is a great victory for the 18 plaintiffs in the case, who can now pursue their claims. Drug and Device Law blog, writing from the defense perspective, gives its opinion here. Their predictions: this will lead to forum shopping, as the Circuits are split on the issue, and everything else is up for grabs.
Oral argument in Levine v. Wyeth has yet to be scheduled. The docket is available here.
Baxter International, the manufacturer of heparin, issued an urgent nationwide voluntary recall of its blood-thinner, Heparin. According to the New York Times, there were problems with a Chinese plant that supplied an active ingredient. Here’s a link to the FDA’s recall and an excerpt from the New York Times article:
The Food and Drug Administration said the number of deaths possibly associated with the drug, made from pig intestines, had risen to 21 from 4. But it cautioned that many of those patients were already seriously ill and that the drug might not have caused their deaths.
The F.D.A. emphasized that it had yet to identify the root cause of the problem, and that it had not concluded that the Chinese plant was responsible. The agency also said it was investigating two Chinese wholesalers — also called consolidators — that supplied crude heparin to the Chinese plant, Changzhou SPL, as well as those that sold raw ingredients to the consolidators.
The New York Times reported Thursday that at least one of the consolidators received supplies from small, unregulated family workshops that scraped mucous membrane from pig intestines and cooked it, eventually producing a dry substance known as crude heparin.
The F.D.A. admitted this month that it had violated its own policy by failing to inspect SPL, located west of Shanghai, before the factory began shipping the heparin ingredient to Baxter in 2004. China’s drug agency also did not inspect the plant.
The FDA’s failure is troubling, particularly in light of the Supreme Court’s recent preemption leanings.