Friday, February 05, 2016

Learned Intermediary: Arizona Supreme Court Restores Order in the Desert


We recently brought you the breaking news that the Arizona Supreme Court has adopted the learned intermediary doctrine in prescription drug cases.  The case is Watts v. Medicis Pharmaceutical Corp., No. cv-15-0065-PR, 2016 WL 237777 (Ariz. Jan. 21, 1016), and the Arizona Supreme Court’s unequivocal adoption of the doctrine allows us to check one more state off the list—the number stand at 37 states (plus D.C.) whose highest courts have adopted the LID.  (See our headcount here). 
Having now had the opportunity to take a deeper dive, we can say that the Watts opinion is a solid endorsement of the learned intermediary doctrine and an artful explanation of the doctrine’s underpinnings.  But before we get there, we note that Bexis filed an amicus brief in support of adopting the doctrine.  On the other side, the lead author of an amicus brief for the trial lawyers was former Arizona Supreme Court Chief Justice Stanley G. Feldman.  Bexis versus the former Chief?  We like those odds.  We actually worked in Phoenix for a year following law school and became acquainted with Chief Justice Feldman while we clerked in the chambers next door.  This was in the mid-1990s, and while he was a polarizing figure even then because of his background as a plaintiffs’ advocate, we came to know him as a brilliant and vigorous individual.  On the learned intermediary doctrine, however, we don’t mind saying that the former Chief is wrong and that his successors (and Bexis) got it right.
So what about the Arizona Supreme Court’s opinion?  In Watts, the plaintiff took prescription medicine for acne on two separate occasions, each time for 20 weeks, and she allegedly experienced drug-related lupus and hepatitis.  When she later sued the drug’s manufacturer, she alleged that the manufacturer failed adequately to warn her of the consequences of the drug’s long-term use.  Why did she claim that the manufacturer failed adequately to warn her, the patient, and not the prescribing physician?  We suspect it was because the drug’s prescribing information included both lupus and hepatitis under its warnings and precautions.  However, the discount card that the plaintiff herself received from her physician was less specific, stating that “[t]he safety of using [Solodyn] longer than 12 weeks has not been studied and is not known.”  Id. at *1.  The trial court granted the manufacturer’s motion to dismiss, presumably under an application of the learned intermediary doctrine.
The Arizona Court of Appeals vacated the judgment in an opinion that can be characterized as nothing short of bizarre and that we have covered extensively (here, here, and here).  The Court of Appeals ruled that the learned intermediary doctrine conflicted with the Uniform Contribution Among Tortfeasors Act (“UCATA”).  According to that court, the learned intermediary doctrine interferes with the application of comparative fault because it “preemptively limits a manufacturer’s duty” and thus conflicts with UCATA’s demand that “each defendant in a tort case is liable for his or her own respective share of fault.”  Id. at *6.  Of course, the Court of Appeal’s opinion completely confused duty and liability with the allocation of fault once liability is found, but we’re getting ahead of ourselves. 
The Arizona Supreme Court granted review, vacated the Court of Appeals’ opinion, and adopted the learned intermediary doctrine.  The Court was even so kind as to describe exactly what it was going to do at the very beginning of the opinion:

Under the learned intermediary doctrine (“LID”), a manufacturer satisfies its duty to warn end users by giving appropriate warnings to the specialized class of persons who may prescribe or administer the product.  We hold today that the LID generally applies to a prescription drug manufacturer.  We further conclude that the LID is not displaced by the Uniform Contribution Among Tortfeasors Act.

Id. at *1.  As the Arizona Supreme Court reasoned,

The premise for the LID is that certain types of goods (such as prescription drugs) are complex and vary in effect, depending on the end user’s unique circumstances, and therefore can be obtained only through a qualified intermediary like a prescribing physician, who can evaluate the patient’s condition and weigh the risks and benefits. 

Id. at *3.  Thus, the Court held that the learned intermediary doctrine applies generally to prescription drug manufacturers, and it did not stop there. 
First, the Arizona Supreme Court adopted the learned intermediary doctrine as set forth in the Restatement (Third) of Torts: Product Liability § 6.  We routinely see courts applying the learned intermediary doctrine, but it is less common (though not unprecedented) to see reliance on the Third Restatement.  Here, the Arizona Supreme Court embraced it:  “In our view, the Third Restatement properly states the LID, and therefore we adopt § 6(d) as our expression of it.”  2016 WL 237777, at *3.  The court even noted parenthetically that “[a]bsent Arizona law to the contrary, this court will usually apply the law of the Restatement.”  Id.
Second, the Arizona Supreme Court rejected the idea that the learned intermediary doctrine creates “blanket immunity” for pharmaceutical manufacturers, reasoning that a patient can still have a claim “if the manufacturer fails to provide adequate warnings to the learned intermediary.”  Id. at *4.  This states the obvious.  Warnings-based claims under the LID exist in most every jurisdiction and sometimes are the exclusive basis for liability in prescription drug and medical device cases. 
Third, the Court ruled that the learned intermediary doctrine was not in any way outdated.  The Court of Appeals had found that the rationale underlying the doctrine “was no longer viable,” but the Supreme Court ruled that its rationale is as vital as could be.  Quoting the Texas Supreme Court, the Arizona court stated,

Because patients can obtain prescription drugs only through their prescribing physicians . . . and because the “learned intermediary” is best suited to weigh the patient’s individual needs in conjunction with the risks and benefits of the prescription drug, we are in agreement with the overwhelming majority of other courts that have considered the learned intermediary doctrine and hold that, within the physician-patient relationship, the learned intermediary doctrine applies and generally limits the drug manufacturer’s duty to warn to the prescribing physician.

Id. at *4.  When we said at the outset that the opinion was artful, we had this quote in mind.  Maybe “artful,” is not the correct word, but we still think this quote captures the underpinnings of the doctrine very nicely in a nutshell.  Moreover, the Arizona Supreme Court expressly rejected the West Virginia Supreme Court’s opinion in State ex rel. Johnson & Johnson Corp. v. Karl and correctly characterized that opinion—which found that the learned intermediary doctrine to be outdated—as an outlier.  Id. at *5. 
Fourth, the Court rejected a “direct-to-consumer” advertising exception to the learned intermediary doctrine.  We have always scratched our heads at the “DTC” exception, which exists only in New Jersey.  Even when prescription drug manufacturers advertise to consumers, the product is still available only by prescription, i.e., only from a learned intermediary.  In rejecting a DTC exception, the Arizona Supreme Court held that the learned intermediary doctrine provided sufficient protection to patients under its own terms.  Id. 
Fifth, the Arizona Supreme Court dismantled the Court of Appeals reliance on UCATA, and it did so on the basis that we describe above.  The LID defines the scope of a manufacturer’s duty; UCATA governs the allocation of fault once liability is found.  As the Arizona Supreme Court put it,

Because the LID and UCATA address two distinct subjects, they are not mutually exclusive.  The LID identifies circumstances when a manufacturer has met its duty to warn and thus is not at fault.  UCATA does not identify the scope of duties or when parties are at fault; instead, given a determination that multiple parties are at fault, it specifies how liability is apportioned among them.

Id. at *6.  There you have it—apples and oranges. 
Sixth, and certainly not least, the Arizona Supreme Court rejected arguments based on the Arizona Constitution’s anti-abrogation clause, which provides that “[t]he right of action to recover damages for injuries shall never be abrogated, and the amount recovered shall not be subject to any statutory limitation . . . .”  Ariz. Const. art. 18, § 6.  Several other states have comparable constitutional provisions, and plaintiffs’ lawyers often roll them out in opposition to civil justice reform efforts.  The plaintiffs’ lawyers rolled it out here (we are told that Justice Feldman likes the argument).  The Court, however, rolled it right back in, locked the door, and threw away the key.  It held unanimously that the anti-abrogation provision has no effect on the evolution of common-law claims, and the learned intermediary doctrine does not abrogate anything anyway: 

Moreover, the LID does not abrogate a right to recover damages, but instead provides a means for a manufacturer to fulfill its duty to warn the end user by properly warning the learned intermediary. . . .  It does not prevent a plaintiff from asserting an action against the manufacturer in appropriate circumstances, such as when the full medical information and warnings are not given to the medical provider.

Id. at *7.  In other words, plaintiffs can assert a failure-to-warn claim, just not the one they want.  Nothing about that offends the Arizona Constitution, which is welcome commentary on anti-abrogation provisions generally. 
The opinion is terrific, but the result is not a complete win for the drug manufacturer.  The Arizona Supreme Court declined to reinstate the trial court’s order dismissing the case and remanded the matter for further proceedings consistent with its opinion.  Perhaps the trial court will dismiss the case again, or maybe the manufacturer will have to raise the adequacy of the warnings or warnings causation on a motion for summary judgment.  Either way, the manufacturer’s duty to warn will run to the prescribing physician, and not the patient directly, and that is way it ought to be. 

Thursday, February 04, 2016

Pecking A Blow For Chicken Preemption


            It may have been our limited caffeine intake to that point in the day, but, when Bexis asked us to do a post on a case about representations about chicken, our initial thought was of some of the songs sung a la chicken.  Like this and this.  When we read the decision and saw it was authored by Judge Fischer, we thought about how fishers (the weasel relatives) kill and eat chickens and other “farmed” birds.  (They also kill and eat porcupines, which takes rare talent.)  At that point, our self-diagnosed mild adult ADD satisfied, we proceeded to read the case.  As you would expect if you read the title or had analyzed the trends of when we post about food cases, Arnold v. Kroger Co., No. C-150291, 2016 Ohio App. LEXIS 176 (Ct. App. Ohio Jan. 22, 2016), is not just a case about representations about chicken, it is a case about preemption state law claims based on those representations.

            The plaintiffs in Arnold brought purported class action under a variety of Ohio common law and statutory theories based on chicken labeled as “raised in a humane environment” and “humanely raised,” which they said was misleading because the chicken was raised like other mass produced (raised?) chicken.  (The chicken was supplied by a non-party company, which used to have television ads proclaiming “it takes a tough man to make a tender chicken,” which could cut for or against the “humane environment” depending on your view.)  Title 21 of the United States Code is divided into 27 chapters addressing various things about food and drugs.  Chapter 10 is from the Poultry Products Inspection Act (“PPIA,” which you can squawk if you try) and it includes a familiar express preemption provision along with various provisions on inspection, labeling and marketing of poultry.  A provision that preempts “marketing, labeling, packaging, or ingredient requirements . . . in addition to, or different than, those [from the PPIA]” should be fairly easy to apply.  Id. at **4-5.  For private civil actions for damages, the express preemption inquiry starts with the duty that plaintiffs seek to impose under the state law.  “Thus, the question here is whether the legal duty upon which each damages action is predicated constitutes an additional or different marketing, labeling, packaging, or ingredient requirement imposed by Ohio.”  Id. at *6.

            Other than some perverse desire to talk about chicken, we probably would not be discussing this case if the main analysis was all that was at issue.  The PPIA gives something called the Food Safety and Inspection Service (FSIS) authority to approve labeling for chicken and it determined the label for the chicken in this case was not false or misleading.  Therefore, by contending that specific language in the label—“raised in a humane environment” and “humanely raised”—was false and misleading, “any liability the Arnolds seek to impose based on their state-law claims would attach additional or different terms to the [chicken’s] labeling.”  Id. at **6-7.  That is pretty straightforward.

            The plaintiffs did try something creative, though.  They said the PPIA’s labeling purview does not extend to anything about the chickens while they are alive, just to the carcasses or portions of carcasses that are sold.  That did not avoid preemption for three reasons.  First, the PPIA prohibits labeling that is “false and misleading in any particular,” which logically includes representations about the prior state of the chicken.  Id. at *7.  Second, the PPIA’s requirement that chicken must be “wholesome, not adulterated, and properly marked, labeled, and packaged” to be sold is tied to a public health purpose, so the “Inspection” part of the Act is not divorced from the labeling part.  Id. at *8.  Third, FSIS published notice in the Federal Register recounting its finding that “birds that have not been treated humanely” many result in adulterated chicken that is “not acceptable for human food,” indicating humane treatment is part of the decision to approve labels.  Id.

            It seems to us that this is reminiscent of some of the attempted end runs on device preemption that we see, particularly where the theory of the plaintiff is that something about the materials that went into the finished product should have been the subject of additional warnings in the label.  Even if you start with the egg or the hen who laid it—we are not taking sides on the great debate—broad preemptive effect should follow from the requirement that a federal agency assure that labeling for the finished product, whether it be a device or a pack of drumsticks, is not “false or misleading in any particular.”  In addition, like the record that the FSIS pays attention to how the chicken lived in allowing its parts to be sold as food, there tends to be a record that FDA pays attention to materials selections and a bunch of other stuff in approving (or clearing) a device and its label.  A famous fast food commercial from the 1980s declared “parts is parts” in slighting a competitor’s chicken-based menu item.  This may not be an appetizing declaration, but the parts and materials that go into a PMA device should be part of the express preemption picture.

Wednesday, February 03, 2016

New Jersey Federal Judge Says It’s Not So Easy to Preserve Confidentiality of Discovery Documents


Fifty-seven years ago the Music Died.  On Feb 3, 1959, a small aircraft carrying rock and roll legends Buddy Holly (“Everyday,” ”It’s So Easy,” “Peggy Sue,” and a whole lot of other, crucial early rock and roll tunes), Ritchie Valens (“La Bamba,” “Come On, Let’s Go”), and J.P. Richardson, aka the Big Bopper (“Chantilly Lace”) crashed in Clear Lake, Iowa.  It is the precipitating event in Don McLean's eight and a half minute 1971 pop hit “American Pie.”  (Hence, “But February made me shiver/with every paper I’d deliver/bad news on the doorstep/I couldn’t take one more step.”) The plane was a four-seater, so only three passengers could join the pilot for the short flight to the next stop, which was  Moorhead, Minnesota – through a blizzard.  One of Holly’s backing musicians, Waylon Jennings, was also supposed to be on the plane, but he gave up his seat to the Big Bopper, who was suffering from the flu.  In some versions of the story, Jennings lost a coin toss.  But that is not the story on the official Waylon Jennings website.  In any event, Jennings rode the bus.  As a result, he lived another 43 years.  Fate gave Jennings a second chance.  He didn't waste it.  Jennings had a fine career as an outlaw C&W star. His catalogue is impressive:  “Luckenbach, Texas,” “Are You Sure Hank Done it this Way, “ “Mamas, Don’t Let Your Babies Grow Up to be Cowboys,” and many more.  Jennings was also the balladeer/narrator on the Dukes of Hazzard tv show. 

Jennings was also for a while part of a supergroup called The Highwaymen, which included a few other fellas you might have heard of:  Johnny Cash, Willie Nelson, and Kris Kristofferson.  And now our little account must take a legal detour.  There was an earlier musical group called The Highwaymen.  Some Wesleyan students got together to perform folk music.  Turns out they were pretty good.  They had a hit record in 1961 with their version of "Michael, Row the Boat Ashore."  Those original Highwaymen were an impressive lot.  Several went on to graduate school.  Stephen Trott was one of the Highwaymen.  He attended Harvard Law School, became a prosecutor, and later became a Ninth Circuit Judge.  So maybe it's not much of a surprise that these original, collegiate Highwaymen filed a lawsuit against Waylon, Willie, et al. for appropriating their group's name.  Like most cases, it settled.  Unlike most cases, the settlement included a provision permitting the original Highwaymen to share the stage with the more famous folks during a 1990 concert in Hollywood.    

Back to the main branch of our story.  Maybe Jennings never quite entered the pantheon alongside Holly.  Or maybe he did.  Either way, he did okay.  He used his second chance well.   


Holly, of course, was a genuine musical genius and had attained stardom by 1959.  Jennings back then was a sometime dj and sometime musician who had been given a big break when Holly invited him along on the Winter Dance Party tour.  As the musicians gathered outside that little plane on that cold, blustery Iowa night, Holly jokingly told Jennings he hoped the bus would break down and that Jennings would freeze.  Just as jokingly, Jennings said, “I hope your ol’ plane crashes.”  Understandably, Waylon was always haunted by that near miss back in 1959.  You can see a video of Jennings telling the story here


                ****************************************


Today’s case is about a second chance.

 

We are talking about the dismal topic of document confidentiality.  Many -- definitely too many -- documents are produced in mass tort litigations.  Almost all those documents are produced by the corporate defendants.  Most end up having nothing to do with the case.  If two million documents are produced in an MDL, fewer than 200 are likely ever to be marked as exhibits at trial.  But producing all those documents is wickedly expensive for the company, a lot say things that no company would want to become public, so what the hey, why shouldn’t the plaintiff lawyers have a little fun?  A lot of those documents involve proprietary information about marketing, pricing, new avenues of scientific research, etc. – all things that a competitor would enjoy reading.  (We remember a professor in law school suggesting that companies wishing to engage in joint-pricing arrangements would be smart to file bogus law suits against each other occasionally and then use document discovery as a way of learning, and then coordinating, pricing strategies.  Yes, our law school had as many cynics as scholars.) 


Any right-thinking, diligent company will mark some discovery documents as confidential so as to limit dissemination.  Parties, their lawyers, and experts might be entitled to see the documents, but discovery documents need not be fair game for other assorted nosy Nellies.   Why did we call this topic “dismal”?  Because Judges are often hostile to the notion of document confidentiality.  Maybe they truly think that any case before them is necessarily a matter of public interest.  Or maybe they simply hate the administrative difficulties of sealing documents.  This much is clear: plaintiff lawyers revel in the opportunity to hand discovery documents over to press toadies who can help poison jury pools.  We know plaintiff lawyers who spend more time holding press conferences than cuddling up with the Rules of Civil Procedure or Evidence.  Sometimes a bloviating lawyer representing the press will intervene to get access to confidential discovery documents.  The plaintiff lawyer will pretend to honor the confidentiality order that he or she signed off on, but will also do a bad job of disguising the glee at the fact that the intervenor will do its best to undo the protections bargained for in the confidentiality order.  Here’s the point: maintaining confidentiality of litigation documents is an uphill battle. 


That uphill battle was on display in In Re:  Benicar (Olmesarten) Products Liability Litigation, 2016 U.S. Dist. LEXIS 7977 (D. N.J. January 21, 2016).  The defendants sought to seal some exhibits attached to the plaintiffs’ motion to compel discovery.   As is fairly typical in mass tort litigation, the parties had agreed to a confidentiality order that permitted a party producing proprietary, trade secret and/or highly sensitive commercial information to designate the material as “protected” if disclosure of the materials being produced could cause competitive harm to the producing party.  The documents at issue here included MedWatch forms, internal emails, study summaries, presentations on foreign regulatory requirements, correspondence with licensing partners, and various other materials.  The plaintiff opposed the sealing of those documents, arguing that the documents contain no personal patient information, trade secrets, proprietary information or sensitive commercial information.  The plaintiffs also argued that the defendants had not established that there is “legitimate private or public interest which would warrant sealing” and that the plaintiffs would suffer “a clearly defined and serious injury if their requested relief is not granted.”  The defendants argued that disclosure of the materials would reveal sensitive personal information of patients and the defendants’ business practices to competitors, as well as cause harm to the defendants’ reputation in the market-place.  The defendants also argued that disclosure of at least some of the documents was barred by federal regulations.


After applying a dreaded balancing test (public’s right to know vs. company’s interests in confidentiality), the court denied the defendants’ motion.  (Local Civ. Rule 5(c)(2) lists four factors, but take our word, it adds up to a balancing test.)  We say “dreaded” balancing test because, as Justice Black said long ago, application of a balancing test is often just a fig leaf covering a court’s  determination to do what it simply wants to do.  That’s inevitable and that’s okay – just realize that most courts will end up wanting not to keep litigation documents sealed.  In Benicar, the court based its denial of the motion to seal on its conclusion that the defendants did not include a competent affidavit or certification to support the elements of confidentiality.  There was a supporting affidavit, but the court held it to be insufficient because it was too generalized.  The affidavit, which was not drafted for the purposes of this motion but rather in support of a proposed discovery confidentiality order, established that the market for hypertension drugs is competitive, that defendants would be harmed by disclosure of some information sought by the plaintiffs, and that the defendants went to great lengths to maintain security.  Nevertheless, the court found that the affidavit failed to demonstrate the affiant’s personal knowledge as to how disclosure of the exhibits in question would create a “clearly defined serious injury.”  What more was needed? One example supplied by the court was that the affidavit needed to “address how a competitor viewing defendants’ internal analysis of foreign regulatory compliance would harm defendants.”  Even aside from the lack of specific, concrete evidence of competitive harm, the court questioned whether such competitive harm could overcome the public’s “paramount interest” in learning about side effects or “the operation of public agencies.” 

We do not agree with the court's reasoning, not even a little.  For example, the FDA has taken the position that MedWatch forms should be confidential.  But the court's undervaluing of confidentiality concerns hardly arrives as a bolt from the blue. 


Anyway, that’s the bad news.  The good news is that the court denied the defendants’ motion without prejudice regarding all of the exhibits save one.  The court made it clear that this dispensation of mercy was not “prompted by meritorious arguments, but rather the Court’s abundance of caution in the face of insufficient information.”  It will be an uphill battle for the defendants.  It always is.  We’re not sure we’ll ever encounter a judge who is truly open-minded on the issue of document confidentiality.  As Buddy Holly sang, “That’ll be the day.”    

Tuesday, February 02, 2016

First Complete PMA Preemption Win of 2016


            This post is from the non-Reed Smith side of the blog.

             Today’s mainstream media may be all about another “first” that happened yesterday, but our attention is drawn to a state to the south and west of all that hoopla, Oklahoma.  Oklahoma doesn’t wade into the presidential political process until Super Tuesday, but in the drug and device world, Oklahoma gets center stage for getting PMA preemption just right.

             The case is Nevolas v. Boston Scientific Corporation, 2016 U.S. Dist. LEXIS 9893 (W.D. Okla. Jan. 28, 2016) and it involved a spinal cord stimulator which is a Class III, pre-market approved medical device.  That means the product is subject to the express preemption provision of the Medical Device Amendments of 1976 (“MDA”).  As a reminder that provision provides that:

[N]o State . . . may establish or continue in effect with respect to a device intended for human use any requirement --  (1) which is different from, or in addition to, any requirement applicable under this chapter to the device, and (2) which relates to the safety or effectiveness of the device or to any other matter included in a requirement applicable to the device under this chapter.
21 U.S.C. § 360k(a).  With that, few if any products claims survive preemption.  See Nevolas at *5.  To do so, the claim must be a parallel violation claim.  A parallel claim is a state law claim in which damages are sought for conduct that violates a specific federal regulation – thus state and federal law are equivalent and express preemption doesn’t apply.  But the claim itself must be a recognized state law claim.  Plaintiffs cannot sue solely because defendant’s conduct violated federal regulations – that would be an impermissible attempt to privately enforce the FDCA. 

Much of the PMA preemption case law in recent years has been focused on defining parallel violation claims and much of it has developed in the context of motions to dismiss.  Therefore, plaintiffs are faced with a double specificity hurdle.  Parallel violation claims must be based on specific requirements applicable to the device at issue and the complaint must contain specific factual allegations to satisfy TwIqbal.   This means the courts are determining whether the complaint sets forth “facts pointing to specific PMA requirements that have been violated.”  Id. at *6.  The Nevolas complaint fell far short.  The allegations were “devoid of any factual support” for the contention that defendant “violated in unspecified ways” various federal requirements.  Id. at *7.  There was simply nothing specific in any of plaintiff’s allegations.  Plaintiff cited to no specific facts.  Plaintiff cited to no specific device-related requirements.  At best plaintiff used conclusory language and referenced only general manufacturing regulations – not the type that support a parallel claim.  Id. at *7-8. 

At this point plaintiff argued that she could not have pleaded “more” because information on PMA devices is kept confidential and not available to plaintiff absent formal discovery.  Id. at *9.  While the court was sympathetic, it didn’t find plaintiff’s argument persuasive because plaintiff didn’t even attempt to allege a violation of a regulation that would support a parallel claim down the road:
The Court finds plaintiff's allegations that defendant was required to follow nonspecific federal regulations and current good manufacturing practice requirements, which are applicable to all manufacturers of all medical devices, are insufficient to state a plausible parallel claim upon which relief can be granted. Allowing a plaintiff to plead non-specific regulations as a basis for a parallel claim is inconsistent with the Supreme Court's reasoning in Riegel, as well as the pleading requirements articulated in Twombly [and] Iqbal.
It’s not a ground-breaking decision and plaintiff is being given a chance to amend.  But, it does toss the entire complaint on preemption and it’s the first to do so this year.  No deadlock here.  A decisive defensive win in Oklahoma.

Monday, February 01, 2016

Disproportionate Discovery, Even in an MDL


Here’s a significant post-rules-amendments discovery decision out of the Xarelto MDL.  In In re Xarelto (Rivaroxaban) Products Liability Litigation, 2016 WL 311762 (E.D. La. Jan. 26, 2016), the court (Fallon, J.) cited both new Rule 26’s heightened proportionality emphasis, as well as privacy issues, in rejecting the plaintiffs’ discovery demand for the personnel files of a large number of the defendant’s employees.  This was not a demand for custodial files, call notes or anything peculiarly relevant to the litigation – but for personnel files.

No way, José.  Not after December 1, 2015.

A personnel file, unlike a work-related custodial file, is not the kind of thing that any company wants its litigation opponents rummaging through:

[T]he personnel file is not maintained by the employee.  The personnel file is maintained by the Human Resources department of an employer, and is likely to contain confidential employer evaluations which the employee may have never seen.  The personnel file also may include other sensitive information, such as salary, information concerning physical or mental health issues, alimony and child support garnishment, tax records, and drug test results.

Xarelto, 2016 WL 311762, at *1 (citations and quotation marks omitted).

Plaintiffs claimed that personnel files were relevant to “rush to market” and “employee” bias.  Id.  Defendant argued that these files were “not relevant to the claims or defenses in this case” – the post-December 1, 2015, discovery standard – and also that “privacy” outweighed the plaintiffs’ “broad non-particularized requests.”  Id.  Plaintiffs demanded “performance reviews, self-reviews, annual compensation information, incentive information, bonus information, post-employment information, the reason for the employee's termination (if applicable), and the existence (or lack thereof) of a non-disparagement clause.”  Id. at *5 n.4.  They wanted these documents for all employees being deposed, including sales representatives.  Id. at *2.  Plaintiffs claimed they had received similar information in three prior MDLs.  Id.

Not this time.

The court held:

[A] plaintiff in a products liability MDL cannot discover a non-party employee’s personnel file without an individualized showing of relevancy, proportionality, and particularity.  Plaintiffs have failed to make this showing in both their memorandum and proposed pretrial order. Rule 26(b) commands that all discovery be both relevant and proportional.

Xarelto, 2016 WL 311762, at *4.  Under Rule 26(b) the “specific discovery test” for personnel files, must be conducted “on a witness-by-witness basis.”  Id.  The plaintiffs’ broad request for all witnesses’ personnel files “fails to demonstrate sufficient relevancy and particularity.”  Id.

Both privacy and “thorny issues of corporate policy” weighed against generalized discovery into personnel files.  “The privacy concerns implicated by a personnel file are distinct from those presented by a custodial file, because they are far more likely to contain personal, embarrassing material.”  Id.  As a matter of corporate employment policy:

[M]any files in a personnel file are not intended to be shared with an employee or disclosed outside of the company.  A deponent-employee may be embarrassed or upset by the production of a critical performance evaluation or self-evaluation, and allowing personnel records to be per se discoverable following a generalized showing of “rush to the market” conditions or a need for evidence of bias would eviscerate any semblance of protection.

Id.  So plaintiffs are not able to ambush opposing employees at their depositions with adverse information calculated to make the deponents turn on their employers.

The “importance of the information sought to the plaintiff’s case” was not strong enough to warrant discovery.  Id.  “[I]t is not clear that this information is sufficiently relevant and particularized to a ‘rush to the market’ theory of liability or employee bias.  The Court has been given no information about the targets of the [plaintiffs’] discovery request for personnel files, except that [plaintiffs] intend[] to depose them and that they are currently or were at one time employees of Defendants.”  Id.  After a discussion of relevant case law (all of it outside the realm of product liability), the court concluded:

With respect to the personnel records, a one-size-fits-all discovery request for eight separate categories of documents for all deposed witnesses in this matter is insufficient. . . .  Plaintiffs must show relevancy and particularity on a witness-by-witness basis.

Xarelto, 2016 WL 311762, at *5.

While it is unclear in Xarelto exactly how much the discovery rules amendments, as opposed to peculiarities of Fifth Circuit precedent, influenced Judge Fallon not to follow the three other MDLs on discovery of personnel files, the new language clearly played some role, since both proportionality and the new, less expansive scope of discovery were quoted in Xarelto.  Let that be a lesson to everyone on our side that, just because outrageous discovery was previously allowed, that alone is no reason for allowing the outrage to persist under the new discovery rules.

Friday, January 29, 2016

Sales Reps Denied Summary Judgment in Artificial Hip Case Despite Absence of Legal Duty to the Plaintiff


Once upon a time there was a federal judge . . . . When we were little, we liked it when our mom spun free-form fairy tales for us.  We would contribute the object of the “was” (“Once upon a time there was a . . . bullfrog”), and she would make up the rest as she went along.  Which is fine for mommies, but less so for federal judges, as today’s (very short) case illustrates.

In Fay v. Depuy Orthopedics, Inc., et al, 2015 U.S. Dist. LEXIS 175344 (D.N.D. June 11, 2015), plaintiff’s hip was replaced with a metal-on-metal hip system.  The system consisted of various components, two of which were at issue:  the femoral head and the acetabular cup.  Both components come in various sizes, but, for the system to work correctly, matched sizes of the two components must be implanted in the patient.

In Fay, it was undisputed that Plaintiff received mismatched components and had to undergo revision surgery.  One of the defendants was a distributor that marketed and sold the system. Plaintiff’s surgeon testified that two specific sales reps employed by the distributor were always in the operating room when he implanted that particular hip system.  According to the surgeon (who was not sued), the reps were responsible, based on a process called “templating” of the patient’s x-rays, for placing an appropriate range of sizes of the two components on a table in the operating room before the surgeon arrived.  From the prepared template, the surgeon would determine what size acetabular cup would be implanted, and would ask for that size cup and the correspondingly-sized femoral head.   The sales reps were allegedly responsible for selecting the components from the implant table, verifying for both that they had pulled the size the surgeon requested, and handing the packaged components to the circulating nurse, who unpacked them and placed them in the sterile field.  In the absence of sales reps, the circulating nurse would be responsible for selecting the correct sizes of components.

The distributor moved for summary judgment, arguing that there was no evidence that its sales reps were ever actually in the operating room on the day of the plaintiff’s surgery, as the intraoperative report, in which the circulating nurse was responsible for recording the names of everyone in the operating room, omitted any mention of sales rep participation.  Plaintiff argued that the nurse had simply forgotten to include the names of the sales reps, and the surgeon took an affidavit swearing that he never implanted this system without the assistance of his chosen reps. 

But wait – under what legal doctrine could the plaintiff maintain a claim against a distributor based on conduct by its representatives?  Plaintiff argued that it was the reps’ “duty and responsibility to make sure proper implants [were] available for the case and that the proper implants [were] in fact what [were] opened and used at the time of surgery.”  Fay, 2015 U.S. Dist. LEXIS 175344 at *8 (internal punctuation and citation omitted).  The distributor countered that it owed no such duty to the plaintiff.  The court noted that the parties had “not directed the Court to any legal authority outlining the duty of an orthopedic sales representative in a case of this nature.”  Id. at *7-8.  End of decision, right?  If plaintiff could not cite authority for imposing a duty on the sales reps, then it didn’t matter whether the reps were in the operating room or not, right?  (Erie principle #1 – if there is no currently existing state-law duty, a federal court exercising diversity jurisdiction is not supposed to create one.  We have law from every circuit (including the Eighth) for that proposition, here and here.)  

Wrong.  Glossing over the legal vacuum to (silently) superimpose an imaginary duty, the judge held that there was a genuine issue of material fact as to whether the reps were present for the surgery, and denied summary judgment.  We shake our figurative head on several levels.  First, call us old-fashioned, but we’re pretty sure a plaintiff shouldn’t be able to maintain a lawsuit when she has no legal claim, and that it wasn’t the defense’s burden to find precedent affirmatively rejecting nonexistent duties.  Second, on a more personal level (we represent device manufacturers), we are horrified at the notion that a judge can “create” a duty that could subject sales representatives to liability for a surgeon’s conduct in an operating room.  In any event, we can only hope that one federal judge in the District of North Dakota will come to his senses as the case progresses.  And that all will live happily ever after. 

Breaking News – Learned Intermediary Mandates Dismissal of 31 of 32 New Jersey Accutane Plaintiffs


The demise of the New Jersey Accutane litigation under the new mass tort judge continues apace.  Today 31 more Accutane cases were dismissed for failure to establish warning causation under the learned intermediary rule.  The order is here, but the actual opinion is about halfway through the PDF, so keep looking, you’ll find it.

It’s worth looking for, too. 

This round of dismissals is all about the learned intermediary rule.  The court recites six bases for the rule:  (1) prescription drugs have risks that require a prescription in the first place; (2) prescription drugs are complex, requiring a doctor to make patient-specific assessments; (3) direct warnings to patients are impracticable’ (4) medical ethics require the physician to act as intermediary; (5) patients can’t be expected to evaluate technical information; and (6) not to put too fine a point on it – plaintiffs tend to lie once they get into litigation (“human nature is what it is”).  In re Accutane Litigation, No. 271, slip op. at 7 (N.J. Super. Law Div. Jan. 29, 2016).  In these 32 cases:

In each claim, there was a “willing patient” who only thought differently upon acquiring new information via the litigation process.  Because the doctors, in each and every instance, testified that even with a different warning they still would have prescribed the medicine, the manufacturer’s duty is fulfilled.  Because the warning is directed to the prescribing physician, she/he is afforded the opportunity to engage in “hindsight” and opine on what they would have done had they known then what they knew at the time of their deposition, Plaintiffs are not afforded an opportunity at “hindsight.”

Slip op. at 9.  In only one case was summary judgment denied, without prejudice, because a deposition hadn’t been completed.  Id. at 11-12.

Choice of law was no obstacle.  These plaintiffs all chose to come to New Jersey and asked for New Jersey law, so they got what they asked for.  Id. at 9-10.  Ask for a New Jersey mass tort, and you get New Jersey law.  Next time, plaintiffs, be more careful what you ask for.  But since the learned intermediary rule is virtually universal, even under other states’ law (Kansas, Louisiana, California, Texas) the result is the same.  Page after page of the slip opinion (pp. 11-36) consist of minor variants on the theme of no change in prescribing behavior equals no causation.

Thursday, January 28, 2016

The Shape of (Discovery) Things To Come?

We assume that all of our readers by now know that significant changes to the federal discovery rules went into effect on December 1, 2015.  We’ve posted about them frequently.  We’re not going to bore you by describing the changes for the umpteenth time.  There are a couple of new developments, though, that are worth noting.  First, on December 31, 2015, the Supreme Court, per Chief Justice Roberts, issued its “2015 Year-End Report on the Federal Judiciary,” available here.  Coming hard on the heels of the rules changes going into effect, the 2015 Report is the best indicator of how the Court contemporaneously intended these rules changes to be applied.  To the extent that the other side is trying to pooh-pooh these changes as not changing much of anything, the 2015 Report suggests that they are quite wrong:

  • “Many rules amendments are modest and technical, even persnickety, but the 2015 amendments to the Federal Rules of Civil Procedure are different.  Those amendments . . . address the most serious impediments to just, speedy, and efficient resolution of civil disputes.”  2015 Report at 4.
  • The amendments “focus discovery − the process of obtaining information within the control of the opposing party − on what is truly necessary to resolve the case” and “address serious new problems associated with vast amounts of electronically stored information.”  Id. at 5.
  • “The amended rules . . . mark significant change, for both lawyers and judges, in the future conduct of civil trials.  Id.
  • “The amendments may not look like a big deal at first glance, but they are. That is one reason I have chosen to highlight them in this report.”  Id.
  • “Rule 26(b)(1) crystalizes the concept of reasonable limits on discovery through increased reliance on the common-sense concept of proportionality. . . .  The amended rule states, as a fundamental principle, that lawyers must size and shape their discovery requests to the requisites of a case. Specifically, the pretrial process must provide parties with efficient access to what is needed to prove a claim or defense, but eliminate unnecessary or wasteful discovery.”  Id. at 6-7 (block quote from Rule 26(b)(1) omitted).
  • “The 2015 civil rules amendments are a major stride toward a better federal court system. But they will achieve the goal of Rule 1 . . . only if the entire legal community, including the bench, bar, and legal academy, step up to the challenge of making real change.”  Id. at 9.
  • “[T]he 2015 civil rules amendments provide a concrete opportunity for actually getting something done.”  Id. at 11.

The Chief Justice’s 2015 Report was among the authorities cited in Kissing Camels Surgery Center, LLC v. Centura Health Corp., 2016 WL 277721 (Mag. D. Colo. Jan. 22, 2016), medically-related (but not drug/device) litigation involving claims – and counterclaims – between four surgical centers and some of the largest health insurers in Colorado.  The lead plaintiff, Kissing Camels, is located in Colorado Springs, which accounts for the unusual name (a rock formation).  Very briefly, the subject matter of the lawsuit involves health insurance reimbursements, which vary depending on whether the health care provider is in the insurer’s network.

But we don’t care about that today.  We’re interested in the court’s take on post-new rules discovery disputes in this long-running litigation.  Basically, the court decided that both sides need to shape up.  “[T]he new amendments to the Federal Rules of Civil Procedure, effective December 1, 2015, refocus the court and the Parties on their respective obligations in discovery.”  2016 WL 277721, at *1

The first issue was proportionality. The new rules, having emphasized this issue, “require this court to address issues of proportionality of discovery.”  Id. at *2.  Litigation “mired in continuous disputes over the appropriateness of discovery served and the adequacy of responses” for some “six months . . . is not what the Federal Rules intended.”  Id.  Proportionality did not permit the defendants’ “omnibus requests,” which were “improper on their face.”  Id.  The court gave an example:
All documents relating to any meeting, discussion, or conversation (whether in person, by telephone, or via e-mail) between you and [a third-party defendant] in which a payor, including [defendants], is directly or indirectly mentioned or referenced.
Id.  The “definitions” accompanying this request only made things worse – “including, without limitation, any [long list], or any other person(s) acting or purporting to act with or on behalf of the foregoing.”  This kind of scattershot approach doesn’t cut it any longer.  “[T]here appears to be no attempt by Defendants to tailor the discovery request to issues arising from this case.”  Id.

On the other hand, the plaintiffs’ objections to this discovery were “no better.”
Boilerplate objections are improper.  The responding party has the obligation to explain and support its objections.  As far as this court can tell, Plaintiffs fail to provide any specificity to their objections, including their objection that they have already produced responsive documents.  Rather, it appears that Plaintiffs’ response simply points generally to the production of 1 terabyte of information − conservatively, millions of pages − without providing any type of guidance to Defendants as to where in the production such responsive documents are to be found.
Id. (footnote omitted).  The court held that, with respect to ESI (electronically stored information – if you haven’t yet learned this acronym, learn it now), a party cannot rest on Fed. R. Civ. P. 34(b)(2)(E)(i), validating production of hard copies as “kept in the usual course of business.”  Rather:
This distinction between a party’s obligations with respect to ESI and traditional, hard copy documents permeates the Rules. . . .  ESI, and therefore, its treatment, is distinct from hard copy documents.  The newly amended Rule 37(e) also distinguishes ESI from other discoverable information.
2016 WL 277721, at *3 (citations omitted).  “[P]arties, by mutually agreeing to transmit discovery in ESI format, had chosen to have Rule 34(b)(2)(E)(ii) govern the production.”  Id.  “[P]arties requesting ESI [are] able to organize it themselves − in their own way, to their own satisfactory level of thoroughness, and at their own expense.  Id. at *4 (citation and quotation marks omitted).

Here, however, the plaintiffs’ vague “already produced” objections  were not sufficient.  The court ordered them to “provide additional information about where in the production Defendants may find certain information.”  Id.  In so holding, the court took into account case-specific circumstances, here:
the volume of the document production to date, the asymmetry of information regarding the production between Plaintiffs . . ., the duration of time during which this case has been pending, and the fact that the Parties suggest that additional discovery must be conducted as to [new] claims.
Id.  The court would not require page-specific designations “for every Request for Production” because of the gross overbreadth of those requests.  Instead, proportionality required prioritization.  Defendants could “identify ten limited categories of documents” that had been subject to the boilerplate “already produced” objections.  Id.  For those ten categories only, “Plaintiffs must identify bates ranges of responsive documents.”  Id.
This will ensure that Defendants prioritize their requests regarding location of responsive documents within the 1 terabyte of data, and will limit Plaintiffs’ obligation to sort through the production on Defendants’ behalf and correlate every Request for Production to specific bates ranges.
Id.

Moral of story:  The new rules require courts to confine discovery “within a proper scope,” but producing parties must likewise facilitate that process with “objections [that] are appropriate” and not boilerplate.  Id.

Kissing Camels is thus the second case we’re aware of that, since the amended rules became effective, has actually restricted discovery due to proportionality concerns.  See also State Farm Fire & Casualty Co. v. Gates, Shields & Ferguson, P.A., 2015 WL 8492030, at *4-5, 7 (Mag. D. Kans. Dec. 10, 2015) (contract action between insurer and law firm).