Mass Tort Litigation Blog

Collective Redress in Europe

The Commission of the European Communities has just released its latest Green Paper on Consumer Collective Redress. It cites several current problems for consumers in Europe, one of which is a weak enforcement framework:

15. As a consequence of the weaknesses of the current redress and enforcement framework in the EU, a significant proportion of consumers who have suffered damage do not obtain redress. In mass claim cases that affect a very large number of consumers, although sometimes the harm may be low for the individual consumer, it can be high for the size of the market. As these markets become more cross-border in nature, effective cross-border access to the mechanisms of redress become necessary. Today, close to 10% of collective redress claims have a cross-border element. For example, a UK company recently distributed scratch cards in Irish newspapers offering "free" holidays, whereas in reality this offer cost each consumer a minimum of EUR 130. With further integration of the markets this percentage is likely to rise.

The Green Paper surveys the existing instruments for collective redress, such as its existing recommendations to facilitate ADR and the Consumer Protection Cooperation Regulation. After finding these inadequate, the Commission proposes several options and invites comment. Briefly, the options include 1) no European Communities action, that is, keep the status quo; 2) cooperation between member states to, for example, create a collective redress network; 3) mix of policy instruments such as improving ADR mechanisms, extending small claims procedures to mass claims, expanding the Consumer Protection Cooperation Regulation's scope, encouraging improvement of businesses handling complaints, and raising consumer awareness; and 4) judicial collective redress procedure, which would create a measure that ensures adequate redress for mass cases through representative actions, group actions, or test cases (it has left open the question of whether the procedure should be opt-in or opt-out).

Here is the call for action and contact information:

With this Green Paper the European Commission calls on the interested persons to express their views by sending in their replies (marked “Response to the Green Paper on Consumer Collective Redress”) no later than 1st March 2009 to:
European Commission
Directorate-General Health and Consumers
Rue de la Loi 200
1049 Brussels
Belgium
Or by e-mail to [email protected] Contributions will be published on the website of the Health and Consumers Directorate-General of the European Commission. It is possible to request that submissions remain confidential. In this case, contributors should expressly state on the first page of their submission that they oppose publication. The Commission will examine the contributions and publish a summary thereof in the first half of 2009. On the basis of the outcome of the consultation, the Commission will present another policy paper in 2009.

ECB

Thanksgiving Humor - The Next Mass Tort Arising out of a Defective Product?

Click here to listen to a brief, quite funny, lawyer joke.  ADL

Erichson Cited in 7th Circuit Opinion

Our own Howard Erichson's article Mass Tort Litigation and Inquisitorial Justice was cited in a forum non conveniens opinion by Judge Posner on October 28, 2008.  See U.S.O. Corp. v. Mizuho Holding Co., --- F.3d ---, 2008 WL 4709846 (7th Cir. 10/28/08).   The article, which was published in the Georgetown Law Journal in 1999, is available on SSRN. 

ADL  

Avandia associated with increased mortality

The New York Times reports today that a new study published in The Archives of Internal Medicine found that Avandia (the drug also known as rosiglitazone) was linked to a higher rate of mortality than a similar drug sold under the brand name Actos (also known as pioglitazone).  This was an observational study, and representatives of GlaxoSmithKlein criticized it for being inconsistent with and not being as rigorous as randomized clinical trials they conducted.  Read more about the study and the reactions of the president of the American Diabetes Association, the consumer watchdog group Public Citizen (which is calling for the drug to be taken off the market) and GlaxoSmithKlein here. 

ADL

Parchomovsky & Stein on Torts and Innovation

Gideon Parchomovsky (Penn) and Alex Stein (Cardozo) have recently posted "Torts and Innovation" on NELLCO.  The article will come out shortly in Michigan Law Review (107 Mich. L. Rev. 205 (2008)).  You can find the link here.  Here is the abstract:

This Essay exposes and analyzes a hitherto overlooked cost of the current design of tort law: its adverse effect on innovation. Tort liability for negligence, defective products, and medical malpractice is determined by reference to custom. We demonstrate that courts’ reliance on custom and conventional technologies as the benchmark of liability chills innovation and distorts its path. Specifically, the recourse to custom taxes innovators and subsidizes replicators of conventional technologies. We explore the causes and consequences of this phenomenon and propose two possible ways to modify tort law in order to make it more welcoming to innovation.

A very interesting piece.  Their two proposals are (1) to move to a pure cost-benefit system, rather than looking at custom, or (2) to have special boards of industry experts designate some innovations for privileged status that would be equal to custom.  These review boards would be optional and private.  Whether they would be subject to capture and whether courts would be well placed to trust them (or whether this privileged status would become the subject of dueling experts) remain open questions, noted but not fully resolved by the authors.

ADL

 

Brazil Vacates Tobacco Award

A press release by Souza Cruz, a subsidiary of British American Tobacco, indicates that a Sao Paulo Court of Appeals vacated an award against Souza Cruz and Philip Morris Brasil, a subsidiary of Philip Morris International.  Here's an excerpt:

The 7th Civil Chamber of the Court of Appeals of the State of Sao Paulo vacated yesterday, by unanimous vote, the judgment of the court of 1st instance that had found in favor of the indemnification claim brought by the Association for the Defense of the Health of Smokers ("ADESF") against the Brazilian cigarette manufacturers Souza Cruz (a subsidiary of British American Tobacco) and Philip Morris Brasil (a subsidiary of Philip Morris International). The Court of Appeals granted the appeals of the manufactures on grounds that the lower civil court decision had violated the constitutional principle of due process of law since it had failed to extend to the manufacturers the opportunity of producing any evidence, including expert evidence that had already been ordered by the Court of Appeals itself.

. . .

The main reasoning of the Brazilian Courts for rejecting this type of claim is: consumers have free will to decide (or not) to smoke, since the decision to consume the product or not is a question of free choice, the widespread public knowledge of the diseases associated with cigarette consumption and the absence of defect in the product because it is a product of inherent risk, the manufacture, distribution and sale of which in Brazil is authorized and subject to severe regulations by the State.

ECB

Issacharoff & Miller on Aggregate Litigation in Europe

Samuel Issacharoff (NYU) and Geoffrey Miller (NYU) have posted "Will Aggregate Litigation Come to Europe?" on SSRN.  Here is the abstract:

This paper considers Europe's experiment with aggregate litigation in light of American experience. European thinking on the topic appears to have reached consensus on two points: first, aggregate litigation will soon be the norm for Europe; and second, whatever form European aggregate litigation takes, it will not replicate American class action litigation with its domination by entrepreneurial plaintiffs' attorneys. We first examine four sources of dissatisfaction with the class action to assess which are meritorious, which are ill-founded, and which derive from a deeper debate over whether or not there should be private legal accountability for consumer claims. Drawing on America's long history of collective enforcement, we then ask whether Europe will adopt the incentives and institutional arrangements necessary to make aggregate litigation an effective remedy. Our concern is that Europe's revulsion at accepting the reality of legal enforcement as an entrepreneurial activity may leave the incipient reforms without the necessary agents of implementation.

ADL

FDA Preemption of State Pharmaceutical Suits

Very interesting article in the ABA Journal -- The Pre-emption Prescription, by Terry Carter.  The FDA has been increasingly moving to pre-empt state suits based on its approval of pharmaceutical labeling.  I'm troubled at the prospect of a large, unwieldy regulatory agency trying to assess reasonable care in warning when information on safety changes all the time, one can't even assume that the FDA has all the pertinent information when it decides, and the FDA's assessment of that information may not be correct.  On the flip side, defendants shouldn't be held liable for adhering to any label they are forbidden to change by the FDA.  While the prospect of regulation through juries is sometimes pilloried, one wonders whether individual litigation with well-credentialed expert witnesses and negligence standards incorporating arguments from custom wouldn't be more nimble in adapting legal standards to changing safety information and more effective at incentivizing adequate safety in warning.  One could argue that juries may result in inconsistent decisions, but in a mass tort involving numerous cases and trials, wouldn't one prefer the verdict pattern that emerges (and the deterrence benefits of anticipating such jury accountability) to the rigidity, slowness, and possible regulatory capture affecting the FDA?  I'll take traditional contract and tort  law over FDA attempts at micro-management in both approval and liability.

BGS

WSJ on Asbestos Screenings in Michigan

The Wall Street Journal commented today in an editorial on problems involved with asbestos screenings involving a particular doctor in Michigan State Court.  Here's an excerpt from Michigan Malpractice:

One reason we know about the great silicosis legal scam is that a Texas judge was brave enough to expose doctors who'd been paid by tort lawyers to gin up phony diagnoses. So it is encouraging to see a Michigan judge now helping to expose evidence of similar medical fraud in asbestos claims.

This action is taking place in the courthouse of Wayne County Circuit Court Judge Robert Colombo, Jr. Asbestos defendants have been attempting to disqualify Michael Kelly, a physician who appears to have falsely diagnosed thousands of people with asbestos-related disease. Judge Colombo recently gave them an opening, which is already having a dramatic effect on state asbestos claims.

BGS

Second Circuit Reinstates Bhopal Disaster Case Based on Water Pollution

Article on Reuters -- U.S. court reinstates Bhopal water pollution case, by Martha Graybow.  Here's an excerpt:

A lawsuit contending that thousands of people in India were exposed to polluted drinking water after the 1984 Union Carbide toxic-gas disaster in Bhopal was reinstated on Monday by a U.S. appeals court, which said a lower court improperly threw out the case.

The U.S. Court of Appeals for the Second Circuit in New York sent the lawsuit back to a Manhattan federal court judge for further proceedings.

A three-judge panel of the appeals court found that the lower court had erred by granting the defendants' request for summary judgment in the case before giving the plaintiffs the opportunity to gain access to certain pretrial documents and other information they had sought.

***

The lawsuit was brought on behalf of people who lived or worked near the Bhopal plant who say they suffered ailments including cancer and neurological damage caused by contaminated groundwater. The legal claims were first brought in 1999 after a study by environmental group Greenpeace found widespread water contamination in the area, said Richard Lewis, one of the lawyers for the plaintiffs.

BGS

News from Wyeth v. Levine's Oral Argument

Legal commentators have already begun speculating about the upcoming Supreme Court decision in Wyeth v. Levine.  After yesterday's oral argument, Tony Mauro of the Legal Times reports that "the case could be decided narrowly, giving little guidance about a broader pre-emption issues beyond the area of drug labeling."  Here's an excerpt:

Appearing for Wyeth, former Solicitor General Seth Waxman told the justices that the FDA took into account the possibility of gangrene as a result of that kind of injection, but balanced it with the benefits of the drug. That produced a sharp response from Justice Samuel Alito Jr., who asked, "How could the FDA conclude that IV-push was safe and effective" when the benefit was relief of nausea while the risk was gangrene?

Justice Ruth Bader Ginsburg also asked incredulously, "No matter what benefit there was, how could the benefit outweigh that substantial risk?"

Waxman, a partner at Wilmer Cutler Pickering Hale and Dorr, answered that the label provided "ample, lavish warning" about the IV method, but the FDA determined that the method could be medically warranted in some circumstances -- the kind of considered judgment that a jury, looking at a single case, would not make. Justice David Souter also took Wyeth to task for not, on its own, going back to the FDA to urge changes in the label to prohibit IV-push administration: "Wyeth could have done that at any time, and it simply didn't do it."

Waxman pointed out that Wyeth in fact did ask for stronger language, but the FDA rejected it.

David Frederick of Kellogg, Huber, Hansen, Todd, Evans & Figel, representing Levine, picked up on Souter's point and said the law would have allowed Wyeth to make a unilateral change in its label. The FDA, he said, never weighed the comparative risks of different types of IV administration of Phenergan.

"The idea that a label is set in stone for all time misunderstands the way the process works," argued Frederick. "No reasonable person could have made this balance."

"If you're telling me the FDA acted irresponsibly, then sue the FDA," said Justice Antonin Scalia. Scalia and several other justices seemed to have been persuaded that Wyeth had acted responsibly in informing the FDA about the risks and should not be punished for doing what the agency ordered it to do.

"You're saying FDA approval doesn't give you any protection at all?" asked Scalia. Frederick responded that it gives a company "a basis for marketing" a product but does not end the company's duty to reveal problems that arise with that product.

Here's a link to the Wall Street Journal Law Blog on Wyeth.   

ECB

Wyeth v. Levine Argument Was Heard Monday

Oral argument in the big preemption case of the Supreme Court Term, Wyeth v. Levine (06-1249) is scheduled for Monday, Nov. 3, 2008.  The case concerns whether federal law preempts state torts claims imposing liability on drug labeling that the FDA had previously approved.

Edited to add: the transcript is available on the Supreme Court website here. 

 

Documents related to the case are available on Scotusblog.  The Scotusblog coverage is very good.  Readers might also be interested in the anti preemption point of view, which can be found (among other places) in the linked ACS publication by Law Professor David Vladeck.  The pro-preemption point of view can be found at Drug and Device Law blog and the links therein. 

ADL