Mass Tort Litigation Blog

Baker on Insurance, Transparency and the Civil Justice System

Tom Baker (Penn) has published a chapter on SSRN that makes some important points about what we know, and what we don't know, about the civil justice system.  The chapter is entitled Transparency Through Insurance, Mandates Dominate Discretion (you can find it on SSRN at this link).  The abstract is below:

This chapter describes how liability insurance has contributed to the transparency of the civil justice system. The chapter makes three main points. First, much of what we know about the empirics of the civil justice system comes from access to liability insurance data and personnel. Second, as long as access to liability insurance data and personnel depends on the discretion of liability insurance organizations, this knowledge will be incomplete and, most likely, biased in favor of the public policy agenda of the organizations providing discretionary access to the data. Third, although mandatory disclosure of liability insurance data would improve transparency, a reasonably complete understanding of the empirics of the civil justice system also requires mandatory disclosure of the payments and defense expenditures that are not covered by liability insurance.

The first part of this chapter describes existing approaches to transparency through liability insurance in the U.S. The second part analyzes the role of liability insurance in promoting transparency in several discrete civil justice arenas - auto, medical, and products liability - and, for comparison purposes, workers’ compensation. The concluding section addresses objectives to expanding mandatory claims reporting and links the discussion in this chapter to the literature on the relationship between liability and insurance more generally.

ADL

Mass Tort Score Card

The folks over at Drug & Device Law have an interesting post evaluating the trends in their field in the last twenty five years from the defense point of view.  Click on this link to see the post.

Overall, their sense is that things have been moving in the defense's favor.  They give developments in class actions an "A", Expert Witnesses an "A", pleadings an "A-", Learned intermediary rule "A-", Preemption "B", Innovative liability theories "B-", Discovery "D" and Reducing overall litigation "F". 

In my view there are two weaknesses to their evaluation.  First, I am not so sure that innovative liability theories have really risen very much. I'd like to think more about this. But it is true as a general matter that lawyers will always think of innovative theories to move forward, so I can't imagine a world without innovative legal theories. Innovative legal theories are what make the law cool, especially for professors studying this fascinating field.  The question is whether they gain traction or not.

Second, their view on the increase of litigation sound a bit too much like defense side propaganda, not sufficiently grounded in facts.  I think what they mean is the increase in cases filed, but I'd like to see some actual numbers showing that cases have increased relative to the increase in the production and dissemination of medical devices or pharmaceuticals and the development of that market.  After all, if pleadings are tightening, the substantive law is tightening, then how can it be that cases filed are increasing?  Whatever one's opinion of plaintiff-side lawyers, they certainly aren't irrational.  I should note that relative to GDP, Marc Galanter has pretty conclusively proven that filing rates in general have not increased (actually decreased) of late.  Is something different in the products liability or medical device area?  If there is an increase of cases due to lawyer advertising, as they propose, is this necessarily bad?   More litigation is costly for defendants.  And its quite clearly bad for society in general (actually more than bad: terrible horrible no good very bad) in the cases where lawyers commit fraud or file frivolous claims.* But the mere fact that more people are gaining access to justice when they have been harmed doesn't seem to me bad for society. So I'd like to hear more about that too. Although I understand that taking the defense perspective, litigation is always per se bad, irrespective of the merits.

Overall I always learn something from reading their blog, so I would give it a high grade.  Although I would like to see a little more balance.

ADL

*There have been some egregious cases of lawyers filing claims that appear to be fraudulent (intrested readers may want to see Lester Brickman's work on this in the asbestos context, available in SSRN).  Such conduct must be punished, but it is not representative of all plaintiffs lawyers.

First Neurontin Trial: Mark Lanier for Plaintiffs, and Mark Cheffo and William Ohlemeyer for Pfizer

Article in Am Law Litigation Daily -- Mark Lanier Work His Magic in 'Very Tough' Neurontin Test Trial?, by Ben Hallman.  Mark Cheffo (Skadden) and William Ohlemeyer (Boies Schiller) will represent Pfizer.  Here's an excerpt:

Mark Lanier told the Litigation Daily on Friday that he's not expecting any miracles Monday, when he begins the first trial to test claims that Pfizer's antiepilepsy drug Neurontin increases patients' risk of suicide. He'll be lucky, he said, to eke out a win. "I've got a near-impossible case," Lanier told us. "If I lose, it's almost like a focus group educational experiment. If I win, it portends bad things for Pfizer."

The case, the first of some 1,200 Neurontin suits in the pipeline, was brought by the family of Susan Bulger, a 39-year-old who took the drug before hanging herself in 2004. The suit, in federal district court in Boston, claims Bulger was taking Neurontin to treat epilepsy, as well as mood swings and arthritis pain (for which the drug was not approved but was allegedly marketed). "Our argument is that the drug company took advantage of fragile and unfortunately situated [patients] by marketing a drug illegally," Lanier said. "They made Neurontin a snake oil to treat everything, when the FDA had not approved the drug for much of anything." (Sounds like Lanier was trying out his opening statement on us!)

UPDATE -- Here's a separate link to the detailed related article in Bloomberg -- Pfizer Faces First Trial on Neurontin Suicide Claim, by Margaret Cronin Fisk, Jef Feeley and Cary O’Reilly.

BGS

The Advance and Retreat of Pre-emption

Was going through some old issues of the ABA Journal and found this interesting article from the May issue -- Business Downturn: As the market tumbles, so does the corporate pre-emption defense, by David G. Savage.  Here's an excerpt:

For much of the decade, business lawyers and the Bush administration insisted state liability laws and state regulation amounted to a costly nuisance and a drag on the economy. They said uniform national regulation of business made more sense, and they urged the Supreme Court to limit lawsuits and to pre-empt state regulations.

For years those arguments were winners. Last year, Riegel v. Medtronic barred most lawsuits against the makers of medical devices. Lawyers for the Bush administration and device makers said state jurors should not be permitted to second-guess Food and Drug Administration regulators once they have approved a device as safe and effective.

BGS

More on Iqbal

Adam Liptak of the New York Times has an article in yesterday's Times on how Iqbal has affected pleading thus far.  He notes that the decision has already been cited over 500 times in the last 2 months.  Here's an excerpt with a quote from Steve Burbank: 

The Iqbal decision now requires plaintiffs to come forward with concrete facts at the outset, and it instructs lower court judges to dismiss lawsuits that strike them as implausible.

“Determining whether a complaint states a plausible claim for relief,” Justice Anthony M. Kennedy wrote for the five-justice majority, “requires the reviewing court to draw on its judicial experience and common sense.”

Note those words: Plausible. Common sense.

The old world was mechanical. A lawsuit that mouthed the required words was off and running. As the Supreme Court said in 1957 in Conley v. Gibson, a lawsuit should be allowed to go forward “unless it appears beyond doubt that the plaintiff can prove no set of facts in support of his claim which would entitle him to relief.” Things started to change two years ago, when the Supreme Court found a complaint in an antitrust suit implausible.

In the new world, after Iqbal, a lawsuit has to satisfy a skeptical judicial gatekeeper.

“It obviously licenses highly subjective judgments,” said Stephen B. Burbank, an authority on civil procedure at the University of Pennsylvania Law School. “This is a blank check for federal judges to get rid of cases they disfavor.”

Courts applying Iqbal have been busy. A federal judge in Connecticut dismissed a disability discrimination suit this month, saying that Iqbal required her to treat the plaintiff’s assertions as implausible. A few days later, the federal appeals court in New York dismissed a breach of contract and securities fraud suit after concluding that its account of the defendants’ asserted wrongdoing was too speculative.

Steve Burbank has an article titled Pleading and the Dilemmas of 'General Rules,' which discusses both Iqbal and Twombly.  The Article is available here through SSRN.

ECB

Subprime Public Nuisance Case Rejected by Northern District of Ohio

Brian P. Brooks (O'Melveny & Myers) has published his article, Public Nuisance Litigation Against Subprime Industry Hits Roadblock in Cleveland, in the July Issue of the Federalist Society's Engage.

BGS

Plaintiffs' Expert Testimony on General Causation Excluded in Non-Fusarium Eye-Infection Contact-Lens Case Against Bausch & Lomb

Article in AmLaw Litigation Daily -- Shook Hardy Wins Junk Science Dismissal for Bausch & Lomb, by Ben Hallman.  Here's an excerpt:

In 2006 Bausch & Lomb yanked its ReNu Moisture Lock contact lens solution from store shelves following a Centers for Disease Control study that showed an association between the product and eye infections. The problem related to a specific kind of fungus called fusarium. Left untreated, a fusarium infection causes all sorts of nasty eye problems, including cornea scarring, which requires surgery. Over the last few years, Bausch & Lomb has settled about 400 fusarium claims. The company also faced claims from contact wearers who have gotten non-fusarium infections. On Wednesday, New York state court judge Shirely Kornreich threw out the case, ruling that plaintiffs had failed to present any compelling evidence that linked eye infections of other varieties to the Bausch & Lomb product.

And here's a link to the opinion by Justice Kornreich of the New York Supreme Court, New York County.

BGS

Federal Court in NJ Dismisses Off-Label-Marketing Suit Against Schering-Plough

Article in AmLaw Litigation Daily -- Schering-Plough Wins Dismissal of 'Off-Label' Suit, by Ben Hallman.  Here's an excerpt:

A recent decision by a New Jersey federal court sets a tough standard for plaintiffs trying to piggyback on government investigations of off-label drug marketing. In dismissing a lawsuit against Schering-Plough, federal district court judge Stanley Chesler ruled that even if the company has violated off-label marketing rules--as it seems to have done for two cancer drugs--plaintiffs must prove that the drug was marketed for an ineffective use, and that the patient received no benefit from it.

And here's a link to the opinion by Judge Chesler.

BGS

The Law of the Banana, Part II

Article in the Los Angeles Times -- Pesticide cases could be upended, by Victoria Kim and Alan Zarembo.  Here's an excerpt:

The unraveling of multimillion-dollar Los Angeles cases alleging that Nicaraguan men had been sterilized by pesticide exposure is now threatening to upend hundreds of other claims in U.S. courts, as judges examine charges that plaintiffs' lawyers orchestrated an extraordinary international fraud.

At the center of the claims is the pesticide DBCP and allegations that workers in banana plantations in Central America and Africa were harmed by exposure to the chemical.

In November 2007, a Los Angeles jury awarded $5.7 million to six Nicaraguan men who sued Dole Food Co. and chemical companies, alleging they had been made sterile by DBCP on Dole's plantations. The amount was later reduced by a judge and is now on appeal. The case will probably be thrown out entirely in the wake of a judge's findings of fraud in two related cases.

Those cases against Dole, Dow Chemical Co. and AMVAC Chemical Corp. were set to go to trial this year. Then, in April, Superior Court Judge Victoria Chaney dismissed the claims, ruling that U.S. lawyers and their Nicaraguan partners had concocted the cases through an audacious fraud, recruiting plaintiffs who had never worked on banana plantations, training them to lie on the witness stand and then waging a campaign of intimidation to prevent the scheme from being uncovered.

For more, see Professor Lahav's prior blog post, The Law of the Banana.

BGS

Latest Use of Bellwether Trials

Bellwether trials are gaining popularity, particularly in Louisiana.  After Judge Fallon used the trials to help establish settlement values in the Vioxx litigation, Judge Kurt D. Engelhardt is proposing their use in the litigation over formaldehyde-laden FEMA trailers (FEMA Trailer Formaldehyde Prods. Liab. Litig, MDL No. 1873, E.D. La.).  As is typical in bellwether trials, the jury's opinion is advisory only and does not bind the parties for purposes of preclusion.  The government has strongly opposed a jury trial given that the jury pool is likely to have strong feelings about the government's handling of pre- and post-Katrina events.  Plaintiffs claim that the government-supplied trailers contained toxic materials, including formaldehyde.

ECB

Certification Denied in St. Jude Heart Implant MDL

 The U.S. District Court for the District of Minnesota recently issued a ruling denying a third attempt at class certification in a consumer fraud MDL alleging material omissions by a manufacturer of a heart valve whose product was found to cause leaking in some clinical trials and was subsequently recalled from the market.  District Court Judge John R. Tunheim (pictured) had previously approved class certification twice and on both occasions the Eighth Circuit reversed.  Not surprisingly, then, Judge Tunheim ruled on this third occasion that the latest decision from the Eighth Circuit required him to deny certification. 

WBR

Robert Rabin on Conflicting Conceptions of Tort Preemption

Professor Robert Rabin (Stanford) has posted on SSRN his article, Territorial Claims in the Domain of Accident Law: Conflicting Conceptions of Tort Preemption, Brook. L. Rev. (forthcoming 2009).  Here's the abstract:

Beginning in 1992, with the landmark decision in Cipollone v. Liggett Group, Inc., the U.S. Supreme Court has decided a burgeoning number of preemption cases, squarely challenging the continuing vitality of tort in many domains of accident law. Cipollone addressed the preemption question in an atypical context. The case did not involve competing claims to territorial authority between a regulatory regime and state tort law. Rather, Cipollone involved a challenge to the continuing viability of tort in the face of statutory directives mandating explicit industry conduct; more specifically, the explicit warnings required in the 1969 version of the cigarette labeling act.

In this article, I begin by revisiting Cipollone to reassess what it has to offer as a foundation for setting the boundaries of regulatory containment of the tort system. Next, I discuss three leading cases from the series of efforts by the Supreme Court to grapple with express preemption clauses in a variety of regulatory schemes. Against this backdrop, I then explore the circumstances under which it might be justified to imply preemption despite the absence of an express provision, with particular reference to the recent Supreme Court decision in Wyeth v. Levine, addressing preemption in the context of FDA regulation of prescription drugs. A concluding note ties the strands together.

BGS

Douglas Smith on Preemption After Wyeth v. Levine

Douglas Smith (Kirkland & Ellis) has posted on SSRN his article, Preemption After Wyeth v. Levine, Ohio St. L.J. (forthcoming 2009).  Here's the abstract:

This Article addresses the Supreme Court’s recent preemption decision in Wyeth v. Levine. In Wyeth, the Court held that the Food and Drug Act did not preempt a state law tort suit alleging that the labeling for an anti-nausea medication, Phenergan, failed to adequately warn about the risks associated with IV-push administration of the drug. Already, Wyeth has been interpreted by some as sounding the death knell for the preemption doctrine in the context of pharmaceutical products. However, a careful analysis of the Court’s decision indicates that this is far from the case. The majority underscored that its decision was a 'narrow' one based largely on the facts and circumstances before it. In particular, the Court made a point of noting that the record was devoid of evidence that the particular risks at issue had actually been considered by the FDA and that the defendant had thus failed to show that there was an actual conflict between FDA regulation and the state law tort suit. The majority’s analysis therefore suggests that state law tort suits based on an alleged failure to warn are preempted in cases in which the FDA has specifically considered the particular risks at issue and has determined that the pharmaceutical product’s labeling adequately warns of those risks. I argue that the ruling thus construed has significant benefits. As the Court has repeatedly recognized, there is an inherent tension between the congressional establishment of a federal regulatory regime for the labeling of pharmaceuticals and medical devices by experts at the FDA and allowing a jury of ordinary citizens with no specialized expertise to render their own judgment regarding, and in effect overrule, such expert determinations. As several members of the Court have noted, there is a potential danger in allowing these expert decisions to be undermined by state court juries. Moreover, such an outcome may have undesirable indirect effects, such as raising the prices of pharmaceutical products to satisfy state court judgments that are not warranted based on the best available scientific evidence and the potential confusion and inconsistency that may result with juries in fifty-two separate jurisdictions imposing different standards concerning what constitutes appropriate labeling. The Court’s decision properly balances these competing considerations.

BGS