Mass Tort Litigation Blog

The Drug and Device Guys on Prefiling Discovery

Here's what they write, with a link too...

We're not opposed to precomplaint discovery in principle. It exists, for example, in Pennsylvania, which is a fact pleading state. If there's something specific that's critical, precomplaint discovery works OK. But we've also received precomplaint requests that look like somebody just changed a couple of words in the title and filed their usual discovery. We consider that abusive.

We're certainly not going to agree to a fishing expedition for unspecified "FDA violations" either before or after a complaint is filed - but if there's something specific, say an FDA 483 letter, precomplaint discovery to determine whether the particular drug/device that plaintiff used was within the scope of the FDA's complaint would be something we'd be open to considering (sorry, we can't be more definitive in a public forum).

Almost all drug product liability cases, and the majority of device cases, are failure to warn cases. The warning is public information, the alleged risk is public information, and the injury should be known to the plaintiff. Nothing more is needed to plead plausible facts that would support a claim under Twombly, and I don't think you'll find any Twombly cases stating otherwise. It's the multi-defendant and violation claims that draw these objections. As we said, that's where we see old fashioned post-complaint discovery and amendment to complaints as appropriate.

ADL

Transnational Mass Torts: Lawyer Opposes Nigerian Settlement with Pfizer

The AP story is here.  The American Constitution Society reports the following on the case:

West Haven lawyer Richard Altschuler has gone to federal court to block a $75 million Nigerian court settlement between Pfizer and the Nigerian government involving a controversial drug study the pharmaceutical company conducted on Nigerian children during a 1996 meningitis outbreak. During the course of the study, 11 children died and others were paralyzed and blinded. Altschuler, who represents 58 alleged victims in a multi-billion dollar case in U.S. court, argues that the settlement proposed in Nigerian court interferes with his case and would give millions to the Nigerian government while providing relatively little for the victims.  

ADL

Brunet on the Origins of Plausibility as a Pleadings Standard

A lot of people have been writing about the new pleading standards lately.  One very intriguing observation was offered by Prof. Edward Brunet (Lewis & Clark Law School).  Brunet is the author of a treatise on summary judgment and links summary judgment and the new pleadings standards.  The concept of "plausibility," he writes, is imported from substantive law of antitrust, now morphed into pleadings doctrine.  His full analysis is below.  

            I think the origin of a plausible assessment of the nonmovant's case was based in substantive antitrust law. In Matsushita(1986 trilogy) the p word is used 10 times.  However, the context of usage of the word is substantive antitrust law and not Rule 12(remember this was a summary judgment case).  What Matsushita meant is that antitrust is hostile to predation cases, particularly those in which  the plaintiff cannot demonstrate proof  of  recoupment  of  the defendant's costs expended in phase one of a predation case ( the price cutting phase).  The plaintiffs' case was implausible because it was incredible that a monopolist would lose money on its U.S. sales for a lengthy 25 year phase one.

The Matsushita majority also made a substantive point when asserting that "antitrust law limits the range of permissible inferences from ambiguous evidence in a section one case.”  In other words, the term plausible was not intended to be a procedural yardstick in all cases but, instead, had a substantive antitrust meaning.  This reading  was bolstered by Matsushita's citation and quotation from Monsanto (1984) (another antitrust case and one not involving pleading) requiring the antitrust plaintiff who seeks to avoid summary judgment to have proof that "tends to exclude the possibility" of independent conduct.

As early as 1969 in the Cities Service case, the Supreme Court used the p word (plausible) when describing a plaintiff's antitrust theory and its ability to overcome a Rule 56 motion.  So, up to the plate goes Justice Souter who reinterprets "plausible" in a procedural way in Twombly. And Justice Kennedy ignores the substantive antitrust meaning of "plausible" in Iqbal.  My theory is based upon a willingness to have cause of action specific norms and flies in the face of a purely trans-substantive set of motion rules. 

ADL

Products Liability and the New Pleading Era

The folks over at Drug and Device Law Blog have a post about plausibility pleading as applied to products liability cases.  Here is the link.

ADL

Continuing Debate over "Opt-Out" Collective Redress in England and Wales

The United States isn't the only country experiencing civil reforms (i.e., Iqbal and Twombly).  England and Wales are reevaluating their rules of civil procedure and the debate over class actions or "collective redress" has been brewing for some time.  On May 8, 2009, Lord Justice Jackson released his preliminary report, which reviews civil litigation costs.  The report follows two reports issued by the Civil Justice Council that recommended adopting an opt-out system of collective redress, introducing American style contingency fees, and doing away with the loser-pays English system.  Lord Justice Jackson's preliminary report similarly suggests that abolishing the cost-shifting loser-pays system "merits serious consideration."  Moreover, he raises the idea of one-way cost shifting to collective actions where claimants would be awarded their costs upon winning, but wouldn't bear the risk of taking on the defendant's attorneys' fees and costs if they lost.

As for collective redress, Jackson broaches the subject but ultimately refrains from recommending either the current opt-in procedure or a more encompassing opt-out procedure.  He does, however, note that the current opt-in model discourages these type of enforcement actions.  He invites written comments on the report and requests that they be sent by July 31.  The submission information can be found here.  Lovells LLP has written a brief and helpful overview of the report, which is available here.

ECB

New Blog with Occasional Mass Tort Posts

George Conk - an adjunct professor of law at Fordham and a practicing lawyer - has a blog and occasionally posts on interesting issues related to mass torts.  He has a post on the Vioxx trials in Australia here and a post on the proposed legislation to overrule Reigel v. Medtronic here.  

ADL

The Plausible Pleading Standard

Civil Procedure buffs have been reacting to the Supreme Court decision Ashcroft v. Iqbal, which affirmed that "plausibility" pleading applies to all cases in Federal Court under Rule 8.  Here is a useful post by Scott Dodson on the Civil Procedure Prof Blog.  Howard Wasserman has also reacted to the decision on Prawfsblog with some useful insights, see here. Constitutional law scholar Michael Dorf has a commentary at Findlaw. 

Many are saying that this decision will not affect "run of the mill" contracts and torts cases that judges are used to, meaning that most mass tort cases won't be affected.  I wonder if this is true, or if plaintiffs will need to show more proof for these cases as well when they file.  Any causes of action with an intent element and/or conspiracy causes of action, it seems to me are going to be affected.  It strikes me that this decision imports the summary judgment concept into pleadings.  Negligence cases might pass muster under a kind of "res ipsa" theory, whereas intent cases will require more.  More thoughts on this later.

There will be a lot more writing and thinking on this before it stabilizes, probably many years from now.  In the meantime, the costs of litigation have gotten even higher.  ADL

Merck's New Journal

Concurring Opinions has an interesting post titled "Mercketing," which describes how Merck and Elsevier created their own "journal" in Australia.  Yet, perhaps to make it look, er, less "slanted" the journal is called the Australasian Journal of Bone and Joint Medicine and is "made to look like [a] medical journal[]."  The post and Sergio Sismondo's article "Ghosts in the Machine" is worth a read.

ECB

Plaintiffs' Teflon Class Actions Against Dupont Don't Stick

As Allison Frankel reports at AmLaw Litigation Daily, plaintiffs in the Teflon MDL proceedings have filed a joint motion to drop their consumer-fraud class-action cases.  Dupont understandably has high praise for its outside counsel, Bartlit Beck.  Dupont's General Counsel Thomas Sager noted, "It was like this firm just dropped from heaven."

BGS

WLF's Richard Samp Discusses New D.C. Cir. Decision on Independent Contractors

The Washington Legal Foundation's Richard Samp has an interesting, short paper discussing a recent D.C. Circuit Court of Appeals decision rejecting the right-to-control test to distinguish independent contractors from employees, and instead substituting an extent-of-entrepreneurial-opportunity test.  A company generally is not faced with vicarious liability for independent contractors, but generally has vicarious liability for its employees.

BGS

Skadden Successfully Recruits John Beisner, Stephen Harburg, and Jessica Davidson Miller of O'Melveny

According to this press release from Skadden, John Beisner, Stephen Harburg , and Jessica Davidson Miller will leave O'Melveny and join Skadden's Washington, D.C. office.  John Beisner, chair of O' Melveny's Class Actions, Mass Torts, and Aggregated Litigation Practice, represented Merck in the Vioxx litigation and is a preeminent defense mass tort practitioner.  Most remarkable is the prospect in one firm of both John Beisner and Sheila Birnbaum, founder of Skadden's mass torts department and herself frequently named as the leading defense products liability lawyer.  As someone who worked in New York at Skadden's mass torts department myself while in practice, I would also mention Skadden's depth of talent, including partners Raoul Kennedy, Jeffrey Lichtman, Russell Jackson, Mark Cheffo, and Steven Napolitano.  Quite a group indeed.

BGS

Merck's International Litigation Strategy

An article in the New York Times entitled "Trial Puts Spotlight on Merck" describes Merck's continuing litigation internationally, with a focus on a Vioxx trial currently under way in Australia.  This trial is receiving substantial media coverage in Australia, according to the Times, most of it negative publicity for Merck.  Why continue this litigation strategy even after settling in the US for nearly $5 billion?  The Times reports:

The point of trying the case is to stand behind the company’s conviction that it acted responsibly in developing, marketing, and ultimately withdrawing Vioxx, Bruce N. Kuhlik, Merck’s general counsel, said in an interview this week.

The article notes that plaintiffs lawyers from other countries (Canada in particular) are watching the trial and obtaining information they otherwise lacked.

ADL

An Empirical Assessment of Punitive Damages

Theodore Eisenberg (Cornell), Michael Heise and Martin T. Wells have recently posted "Variability in Punitive Damages: An Empirical Assessment of the U.S. Supreme Court's Decision in Exxon Shipping Co. v. Baker" - available on SSRN.  Here is the abstract:

Exxon Shipping Co. v. Baker acknowledged what virtually all methodologically sound punitive damages research shows. The Supreme Court relied in part on an article by the present authors and others to state that empirical studies undercut the most audible criticism of punitive damages and that no mass of runaway punitive awards existed. Paradoxically, the Court simultaneously expressed concern about jury predictability based on a high mean and standard deviation in the punitive-compensatory ratio published in our article. The Court therefore reduced a $2.5 billion punitive award relating to the Exxon Valdez oil spill to $500 million to implement a 1:1 punitive-compensatory ratio and stated that “the constitutional outer limit may well be 1:1.” This article shows that our empirical findings relied on by the Court do not support the unpredictability concern or widely applying the limiting ratio. The high mean and standard deviation are artifacts of not accounting for the key variable that explains punitive awards - the compensatory award. Stratifying the mean and standard deviation of the punitive-compensatory ratio by the level of the compensatory award shows that the ratio is reasonably stable in high award cases and significantly and explicably more variable in low award cases. Basing doctrine on summary statistics that combine these heterogenous distributions is not statistically supportable. The award reduction in Exxon Shipping may have promoted consistency with other high compensatory award cases but the 1:1 principle the case hints at is not statistically supportable across the broad range of compensatory awards, and could contribute to an inability to tailor punitive awards to the facts and circumstances of particular cases.

ADL

9/11 Statistical Discovery

What's going on with the 9/11 "First Responder" cases these days?

I just saw the following article in NYLJ - "Plan Implemented to Resolve Complex Suits in World Trade Center Cleanup."  The special masters who are creating this plan are two eminent mass tort scholars: Aaron Twerski (formerly dean of Hofstra Law and now back on the faculty at Brooklyn) and James Henderson (on the faculty at Cornell Law).   The plan involves creating a database of all the plaintiffs, and then conducting in depth discovery of a selected number of them to get a sense of how the cases develop, with the ultimate view of either having trials or settling the cases.  Here is a description of the special masters' plan from the NYLJ article:

The plan divides the 9,090 cases into five groups, running from the first wave of cases filed to the last. The first four groups will contain 2,000 cases each. The fifth group will contain the remainder and any after-filed cases.

The special masters and counsel for both sides prepared severity charts that grade a person's condition on a scale from zero to four. They also selected six major disease categories in which to group the illnesses.

The plan kicked off on Jan. 1 and within 40 days, plaintiffs in the first group of 2,000, Group A, completed a subset of the data fields that detailed their disease rankings, duration of exposure at Ground Zero and pre-existing disorders.

Ten days later, the special masters selected from this group the 200 cases ranked most severe, 25 additional cases for diseases that are not necessarily included in the severity chart, and an additional 400 cases at random.

The database for the 200 most severe cases and the 25 additional cases will be completed by April 1. Within five days, both sides and the judge will select the first six sample cases.

Completion of the database for the 400 cases chosen at random is due in late May, after which each party will choose two more cases and the judge picks another two. Those 400 cases will proceed along on discovery only, with no schedule set for motion or trials.

I haven't seen whether the six sample cases that were to be selected in April actually were selected, but will post then I find out.  Judge Hellerstein, who is overseeing these cases, is quoted in the article as saying of the methodology: ""It allows the parties to get a good sense of the strengths and weaknesses of all the cases."

This approach shares some similarities with the bellwether trials procedure I describe in a recent article.  (See Lahav, Bellwether Trials, available on SSRN).  What is interesting about this form of statistical adjudication is that it addresses the discovery phase and illustrates the extent to which discovery really makes or breaks a litigation, rather than trial. 

ADL

Weinstein: Some Pessimism About Aggregate Litigation

Judge Weinstein has published a short essay on the administration of complex litigations in a new on-line publication of the Cardozo Law Review called De Novo.  The essay, entitled "Preliminary Reflections on the Administration of Complex Litigations" describes a few litigations in which the Judge acted as architecht of a large-scale settlement (what has been described as a quasi-administrative agency).

Judge Weinstein closes on a pessimistic note, arguing that the appellate courts have been so inhospitable to class actions and aggregations that it will now fall to regulators to prevent mass claims rather than the courts to adjudicate them.  He writes: "There is a general hostility, I believe, particularly at the appellate level, to class actions and other devices for efficient administration of mass litigation."  And he ends by writing "In the end, I must reluctantly conclude that the law—and certainly I—have failed to rise sufficiently to meet the challenges of modern litigation.  We have not served the people as well as we should have."

The model for adjudication of mass torts was initially individual litigation, which gave way in the 1980's and 1990's to an administrative model.  (For a great article making this argument see Richard Negareda, From Tort to Adminsitration in the Michigan Law Review - which for some reason the author has not put on SSRN, but when he does I shall link to it).   Today the adminsitrative model still has some traction, but it seems that things are shifting.  Zyprexia and Vioxx are far different than Agent Orange was.  We're seeing a different type of judicial involvement which is geared more towards information gathering than actual adjudication, more private control over settlements, the total failure of the class action device to offer closer and the mechanism for an administrative regime.  So what is next for mass torts?  Can the current developments still be described as an "administrative" regime or is this something closer to an insurance model?

ADL

Supreme Court Ruling Makes Government Recovery More Difficult in Toxic Torts

In Burlington Northern & Santa Fe Railway Co. v. United States, the Supreme Court ruled 8 to 1 to limit corporate liability under Superfund.  Here's an except from Adam Liptak's article in the New York Times:

 The federal government had sought to hold the Shell Oil Company responsible for selling pesticides to the business, where the chemicals routinely leaked and spilled. The distribution business, Brown & Bryant, later became insolvent and ceased operations.
Shell argued that it could not be held responsible for the spills because it did not qualify under the relevant part of the Superfund law, which applies to companies that “arranged for disposal” of hazardous substances. Justice John Paul Stevens, writing for the majority in the 8-to-1 decision, said the statutory language applied only when companies took “intentional steps to dispose of a hazardous substance.”
“Shell’s mere knowledge that spills and leaks continued to occur” with each delivery, Justice Stevens continued, “is insufficient grounds for concluding that Shell ‘arranged for’ the disposal.”
In dissent, Justice Ruth Bader Ginsburg wrote that Shell was “well aware” that its deliveries “directly and routinely” resulted in spills and leaks for more than 20 years. She added that she would have placed the cleanup costs on a company “whose activities contributed to the contamination rather than on the taxpaying public.”

ECB

Cert Granted in Important Class Action Case

The Supreme Court today granted certification in Shady Grove Orthopedic Assoc., P.A. v. Allstate Insurance Co. (docket no. 08-1008). This may be a case that decides the future of the much-maligned procedural rule - the money damages class action. The case concerns allegations against Allstate arising out of payments of claims for auto accidents under New York's no fault auto insurance regime. 

Here is the outline of the case: In cases where a statute creates a penalty or provides for a minimum measure of recovery, New York law prohibits the certification of a class action unless the statute specifically permits the class action device to be used. (NY Civil Practice Law and Rules Sec. 901(b)).  The plaintiffs sought to bring a class action in Federal Court against Allstate for violating provisions in New York's no fault insurance regime. The lower federal courts (district court and 2nd Circuit) dismissed the suit on the theory that the New York legislature had spoken and no class action could be certified.  The plaintiffs argue that the state legislature cannot dictate the procedural rules used in the federal courts. Scotusblog has linked to the petitions for and against cert.

At stake are the uniformity of the federal rules in diversity cases, as well as the right of states to regulate (or limit regulation) of business through statutory penalties.   It provides the court with an opportunity to revisit the intersection between the Erie doctrine and the federal rules.

The class action is in some ways a special case because it illustrates in an obvious way the uneasy relationship between substance and procedure.  For example, consider a law that creates a statutory penalty of $1000 for the selling of private information by telecom companies. A single person bringing a claim cannot justify the cost of suit.  In that case, the law has no bite.  But if the suit is brought as a class action on behalf of all telecom customers, one million customers means a one billion dollar statutory penalty for the company.  Some opponents of the class action argue that class actions violate due process because it can lead to the distortion of individual claims.  Others argue that class actions are a form of "blackmail" for this reason - even if the claims are weak, the risk of loss is too high and requires settlement.  Even those that think class actions are a good idea because they permit private parties to regulate misconduct that would otherwise go unpunished must admit that the class action device changes the nature of litigation - they just think it changes it in a beneficial way for society.

But anyone who was once a first year law student will remember that all procedural rules to some extent share this quality.  For example, consider a rule that requires individual service of process on the defendant in some cases, but permits service of process to any responsible adult in other cases.  This rule can alter the outcome of the case and is therefore substantive in some sense, but the Supreme Court in Hanna v. Plumer held that this is fundamentally a procedural rule.  In that case, the Federal Rule (which did not require service on individual defendant) trumped the state rule (which did).

The last time something like this came up was in Gasperini v. Center for the Humanities.  In that case, the Supreme Court held that a New York statute dictating a more stringent standard for remittitur should be followed in the federal courts.  If the Court requires the federal courts to apply the New York ban on class actions, this would result in a further fragmentation of the FRCP and perhaps eventually lead to a regime where state procedure is applied in diversity cases. 

I have not even addressed the question of whether the New York statute is a good idea - that is, whether the class action should be a default rule available in all cases or be specially required by legislatures.  I am sure that this will be to some extent the focus of the Supreme Court.  But since the federal rules are structured to be trans-substantive (that is, to apply the same to all cases), a policy-based ruling that the New York legislature is right to carve out the class action will mean a significant change to the Court's approach to the federal rules.  This  change that has already been signaled in the Court's recent pleadings jurisprudence. We'll find out more when Ashcroft v. Iqbal (this link is to Scotusblog on that case) comes down later this term.

ADL

Plaintiffs' Attorneys Feuding Over Fees

Judge Faith Hochberg of the District of New Jersey urged plaintiffs' lawyers to cooperate and coordinate discovery rather than devolve into a feeding frenzy for attorneys' fees.  The case isn't a mass tort; rather, it is a putative health insurance class action involving Aetna, Cigna, Oxford, WellPoint and Horizon Blue Cross of New Jersey for underpaid out-of-network claims.  Still, it demonstrates that judges continue to exercise significant oversight over multi-district litigation even before certification.  To the extent that issue reaches attorneys' fees, Charlie Silver and Geoffrey Miller have an interesting paper on the court's authority to control the fee issue absent certification.  It is titled, "The Quasi-Class Action Method of Managing Multidistrict Litigations: Problems and a Proposal."

As for the putative health insurance class action, here's a brief excerpt from the New Jersey Law Journal:

"I wasn't born yesterday," the judge said at an April 7 status conference in Newark attended by almost two dozen plaintiffs lawyers. "I understand everybody's interest in this room, and I'm not going to tolerate this becoming an attorney feeding frenzy for fees. My overriding principle will be to get this settled reasonably early, fairly, with the vast bulk of the proceeds going to the policyholders, not the attorneys."

ECB

Justice Souter Retiring

Justice David Souter plans to retire from the Supreme Court when the term ends in June, according to new accounts.  In the field of mass torts, Justice Souter authored the majority opinion in Ortiz v. Fibreboard Corp., the 1999 decision rejecting a Rule 23(b)(1)(B) limited fund settlement class action in asbestos litigation.  After Ortiz, non-opt-out settlement class actions -- which in the 1990s had some appeal as a potential mechanism for resolving future claims in high liability mass torts -- are both difficult and unappealing to use as a mass tort settlement mechanism.  For the tenth anniversary of Ortiz, the University of Kansas is planning a symposium in October, organized by mass torts prof Laura Hines.

HME