Monday, March 31, 2008

"Anticipated Life" And The Statute Of Repose

For reasons too numerous to mention, neither of us can comment on the recent decision in Montgomery v. Wyeth, No. 1:05-CV-323, slip op. (E.D. Tenn. Mar. 19, 2008) (copy here) (now published at 540 F. Supp.2d 933).

But you should know about that decision, so we're describing it (very briefly) here, stripped of any commentary.

Plaintiff Angela Montgomery pleaded that she ingested the diet drug Pondimin in 1996 and 1997 in the state of Tennessee. Allegedly as a result of ingesting Pondimin, she developed Primary Pulmonary Hypertension in 2005. Later in 2005, she filed a product liability action against Pondimin's manufacturer.

Tennessee's product liability statute includes a statute of repose that provides, among other things, that a complaint must be filed "within one (1) year after the expiration of the anticipated life of the product." Tenn. Code Ann. Sec. 29-28-103. The "anticipated life of the product" is the "expiration date placed on the product by the manufacturer when required by law but shall not commence until the date the product was first purchased for use or consumption." Id. at Sec. 29-28-102.

Defendant stopped manufacturing Pondimin in September 1997. The expiration dates on the packaging (which were required by law) were three years from the date of manufacture, or no later than September 2000. Montgomery, slip op. at 4. The statute of repose therefore expired no later than September 2001, several years before Montgomery was allegedly diagnosed with PPH.

Statutes of repose are designed to set an absolute time bar on lawsuits. The Tennessee Supreme Court has held that when an "injury occurs outside the [repose] period, no substantive action ever accrues, and a claimant's actions are . . . barred." Penley v. Honda Motor Co., 31 S.W.3d 181, 184 (Tenn. 2000). The "anticipated life" provision operated the same way: "[W]hen a plaintiff does not discover (and could not have reasonably discovered) her injury until after the statute of repose period, the cause of action never accrues." Montgomery, slip op. at 7. Montgomery's claims were therefore barred by the statute of repose.

The court considered, and rejected, three arguments proferred by Montgomery to avoid this result. First, the earlier class action settlement in the Diet Drug litigation did not include PPH claims and so could not have affected Montgomery's claims. Id. at 8-12. Second, the defendant had pleaded the statute of repose in its Answer and so preserved the defense. Moreover, a statute of repose, unlike a statute of limitations, is substantive and probably cannot be waived. Id. at 12-13. Finally, the court held that Tennessee law applied to plaintiff's claims; she could not avoid summary judgment by invoking Georgia law.

We know that we promised at the top that we'd provide no commentary on this case.

But we can't resist (you'll be startled to hear).

So far as we're aware, and as the Montgomery decision says, the "anticipated life" provision in the Tennessee statute of repose is unique. If anyone ever says that it's okay to paint with broad strokes in litigation, and that only crazy compulsives fret the details, the Montgomery decision should be "Exhibit A" in your response to that person. It's extraordinarily unlikely that anyone -- even a product liability lawyer practicing regularly in Tennessee -- would have been aware, off the top of his head, of the "anticipated life" provision. This case shows the need to pay close attention to, and do meticulous research into, local state law. Complete defenses sometimes appear in the most unlikely places.

Sunday, March 30, 2008

Welcome . . . World!

The Associated Press asked us about preemption, which resulted in our little blog being mentioned first on the AP newswire and then . . . everywhere!

We extend a warm welcome to our new visitors from the print or on-line editions of papers ranging from the Chicago Tribune, the Houston Chronicle, Newsday, and the Minneapolis Star Tribune to the Bismarck Tribune and the Herald & Review -- and scores of others too numerous to mention.

Welcome aboard!

We're glad you came to visit, and we hope we don't disappoint.

Friday, March 28, 2008

We Like Sykes Again

A year ago, on March 31, 2007, we published a post titled "We Like Sykes" about the Pennsylvania federal decision in Sykes v. Glaxo-SmithKline, et al., 484 F. Supp.2d 289 (E.D. Pa. Mar. 28, 2007). In that decision, Judge Stengel granted summary judgment in favor of the vaccine manufacturers (as preempted by the National Vaccine Injury Compensation Act) and held that the Sykes' failure-to-warn claim against Bayer was preempted by federal law. Judge Stengel transferred the remaining claims to the Eastern District of Virginia, where Lisa Sykes had received an injection of HypRho-D to protect her son (who was in utero) from developing hemolytic disease of the newborn.

Last month, the transferee court in Virginia granted in large part Bayer's motion for judgment on the pleadings. Sykes v. Bayer Pharmaceuticals Corp., No. 3:07 CV-660, slip op. (E.D. Va. Feb. 12, 2008) (here's a link) (now reported at 548 F. Supp.2d 208).

The court first dismissed the Sykes' strict liability claims, because Virginia does not generally recognize strict liability product liability claims. Id. at 4-5.

The court then addressed the Sykes' claim that Bayer negligently failed to package HypRho-D in a single-dose vial, which would have eliminated the need to use the preservative that allegedly injured the newborn. The court never used the "p-word" -- preemption -- but it held that the FDA requires all immune globulins to contain a preservative, so the Sykes' claim that Bayer could have avoided using a preservative could not survive. Id. at 5. We read that as a preemption victory (and we're putting the case in the Drug Preemption Scorecard) even though the court didn't precisely analyze the issue as conflict preemption. In the future, we won't be timid about characterizing Sykes II as the dismissal of a design defect claim on the ground of preemption.

The court next rejected the Sykes' claim of failure to test because Virginia does not recgonize failure-to-test claims. Id. at 6-7. As we've posted before, that puts Virginia squarely in the majority, as basically every case decided in the last 15 years has rejected stand-alone failure-to-test claims.

Finally, the court denied the Sykes' motion for leave to amend their complaint to plead failure to warn, failure to test, negligent misrepresentation, fraud, negligent infliction of emotional distress, gross negligence, and for punitive damages -- all because the amendment would have been futile. Id. at 8-11.

The court did allow the Sykes to amend to plead claims for negligent design and express warranty (without, of course, ruling on the merits of those claims).

Perhaps that means we'll be writing about Sykes III next March.

Heaven help us.

Thursday, March 27, 2008

Preemption Wins Again

We’re pleased to report on another preemption victory, Horne v. Novartis Pharmaceuticals, 2008 WL 1847077 (W.D. N.C. Apr. 23, 2008), this time involving the drug Lotensin, which (logically enough) is used to reduce hypertension/high blood pressure. While the opinion is only a “partial” dismissal, it’s our sense that the “partial” victory covers the really important claims.

Horne is an implied preemption prescription drug decision that squarely presents one of the categories of claims that the FDA believes is preempted – an “FDA already said no” situation. The plaintiff asserted that certain birth defects were caused by the use of Lotensin during the first trimester of pregnancy. At the relevant time (2003) the drug had a boxed warning against use during the second and third trimesters, but not the first.

Three years after the fact (2006) a new study suggested that there was also a risk of first trimester birth defects. The FDA looked at it, and told the manufacturer not to change the black box warning to add the first trimester. In a public health advisory, the FDA stated:

At this time, based on this one observational study, the FDA does not plan to change the pregnancy categories for ACE inhibitors.
Horne, slip op. at 8 (quoting FDA 6/7/06 Public Health Advisory).

That’s what gave rise to preemption. It was clear from the public health advisory that the FDA had specifically reviewed the birth defect/first trimester evidence and told the defendant not to change its label in 2006, after receipt of new information. A fortiori it would not have permitted a different warning earlier, before even that new information existed. This FDA decision brought the case within the preempted categories of the FDA’s 2006 Preemption Preamble, which the court relied upon. Slip op. at 22-24. The first trimester issue raised a direct conflict:

The text of the warning label as approved by the FDA indicates that the FDA affirmatively considered the medical and scientific proof available at the time and concluded that the risks of birth defects and fetal injury do not appear to result from the use of the drug during the first trimester. . . .

To hold the Defendant liable for failing to provide an additional warning to the effect that use of [the drug] during the first trimester poses risks of birth defect and fetal injury when the FDA has already determined that such risks do not appear to result from use of the drug in the first trimester would create a direct conflict between the requirements of federal law and the requirements of state law and would place the Defendant in an impossible situation whereby the Defendant could not comply with federal law and state law at the same time.

Slip op. at 29-30. The direct conflict thus required preemption, id. at 31 – as it must if federal authority over drug labeling is to be maintained.

The court allowed plaintiff to continue with her other, vaguer (“no specific factual allegations”), non-warning related claims past the pleadings stage. Slip op. at 32-35. Since those claims might not have been based on the allegation of failure to warn (although we think they probably were) the court allowed such claims to survive for the time being.

That kind of a split decision – even if the most important claims bit the dust – is one of the hazards of arguing preemption as a motion to dismiss. We don’t generally recommend that procedural posture (although it does make for a less expensive and time consuming defense), because even if granted, motions to dismiss make for lousy record evidence of conflict on appeal. But in Horne, the court was willing to take judicial notice of the FDA’s public health advisory. Slip op. at 14-15. The advisory certainly established the conflict starkly enough.

In this instance, the split decision probably doesn’t give the plaintiff very much to work with. Dismissal of the warning claims leaves the plaintiff without the claims that are ordinarily most important in prescription drug litigation. The testing claim will eventually follow suit, since there is no such thing as a stand-alone failure to test claim. Finally, it’s rather rare to find a manufacturing or design defect claim successfully asserted against a prescription drug – at least one that has but a single active ingredient (as Lotensin seems to have).

Horne is thus the kind of split decision we don’t really mind all that much.

Adverse Event Reporting - By The Numbers

Today we’re boldly going where lawyers usually fear to tread (at least alone) – into the realm of epidemiology, albeit perhaps loosely defined. Why? Well, we do have to come up with things to write about, and there’s only so much preemption theorizing that even we can do before it sounds like we’re babbling.

Also, this particular topic, epidemiology, basically forced itself upon us. We recently received, from two entirely unrelated sources, a couple of articles that illustrate the pitfalls of using the FDA’s adverse drug experience reporting system to prove anything about causation in drug product liability litigation. We’ve already posted more than once about most (but not all) courts refusing to permit experts to rely on ADE epidemiology as proof of causation in prescription drug cases. We won’t rehash those posts, since you can read them yourselves, but in a nutshell, the biggest problems courts have had with ADE-based epidemiology are: (1) the reports are wholly anecdotal, since the government does not there to be any causation criteria; and (2) since reporting is voluntary, it’s highly influenced by outside events – chiefly adverse publicity concerning this or that drug.

That’s the legal side.

These two articles, on the other hand, are from scientific journals, and they illustrate these problems from the mathematical side. Ordinarily us talking about math without guidance from experts would be like us running with scissors. But we’re willing to leave our nannies behind for once because, first, we think we’re familiar enough with ADE-related issues to make sense of it, and, second, we have to feed the blog, and we find this stuff interesting.

We know. We’re kinda weird like that.

The most recent of the articles is in an (on-line?) journal called Pharmacoepidemiology (now that’s a mouthful). It compared ADE reporting of a particular adverse event, rhabdomyolysis (that’s another mouthful – it’s a serious muscle and kidney condition), among various statins (cholesterol lowering drugs) marketed in the United States.

At one point a few years ago one of these statins was already the target of major mass tort litigation, and plaintiffs’ lawyers were hungrily eyeing the rest, given the classwide effect.

That didn’t happen, but we do remember how plaintiffs’ lawyers liked to make the argument, based simply on adding up ADEs, that “your statin had a higher number of adverse events than the rest of them.”

The defense reply was, “Well, duh – since it was the first of them to be hit with a major contraindication, you’d expect more reports even if injuries were no more common.”

But back then, the numbers weren’t really there to provide solid support for that response.

We defense lawyers just knew in our gut that publicity bias in ADE reporting was real.

Well, the Pharmacoepidemiology article goes a long way to providing the publicity bias data that we wished we’d had back then. In particular, it provides the previously unavailable denominator (total cases) numbers without which you can’t really calculate reporting frequency. The article has all the mathematical details on how that denominator was calculated – like any study it has strengths and weaknesses (which anyone interested can read about). But that stuff’s complicated; and we’re lawyers, not statisticians, so we’ll leave it and go directly to the bottom line.

Just as we defense lawyers have long suspected, the statin data show huge reporting differences among the same serious condition and among the same class of drugs. The article concludes that there was between a 500% and 600% reporting difference between drugs of the same class – even though everybody now agrees the risk of this condition is a classwide effect of any statin drug.

Where do those dramatic numbers come from? The article calculates that, for the one statin that was ultimately recalled, 30% of its rhabdomyolysis cases were reported to the FDA. At the other end, the least-reported statin saw only 5% of identical cases reported. Another analysis, with somewhat different assumptions primarily concerning length of use, calculated the reporting difference at 20% versus 4%, respectively. The article points out that this bias might have been accentuated by promotional activity, since the drug with the fewest reports (according to the article) was “promoted. . .as safer than other statins.”

Using statins as a model of reporting differences within a class of drugs, the article calculated the extent of the publicity bias in voluntary FDA adverse event reporting. Where there’s major adverse publicity, such as a product recall or a public health alert, the publicity bias gets huge – between 500 and 600 percent.

And even that 500-600% publicity bias probably understates what happens when mass tort litigation really gets going. That’s because the article deliberately excluded the post-recall time period from the statin data. In real litigation, once the complaints generated by all that plaintiff solicitation needed to create a mass tort start being served on the defendant manufacturer, it is obligated to treat each and every one of them as an adverse event report and submit it to the FDA.

The second interesting statistical point in the Pharmacoepidemiology article is its estimation of how much does significant adverse publicity – such as the addition of a publicly announced major contraindication – bias the voluntarily reporting frequency for that same drug (as opposed to within an overall class of drugs). Examining the relevant data, the article concludes that not quite 15% (14.8%) of hospitalizations for the relevant adverse effect were reported to the FDA before the publicity. Afterwards, with the medical community more attuned to the adverse effect, fully 35% of cases were reported.

“Fully” 35%? That the reporting rate was that low, even after that kind of publicity, is disturbing in its own right for other reasons – but those reasons must await some other day, at least on this blog.

We know that we’ll be confronted with similar ADE-based allegations in the future. It’s inevitable, since plaintiffs’ experts know every bias in ADE data and how to manipulate the statistics to maximize or minimize that bias, as the opinion they wish to give requires. But now we at least have some reasonably firm scientific data from which to argue that ADE statistics in mass tort situations are so badly biased by adverse publicity (the very adverse publicity that spawned the mass tort) that they can’t validly be relied upon to prove anything. These are: (1) that for the same drug, major adverse publicity can cause an uptick in voluntary reporting of more than 100%; and (2) as between drugs in the came class, involving an identical risk, the effect of publicity bias can reach fully 500-600%.

Hence the two main takeaways from the Pharmacoepidemiology article:
  • The extent of spontaneous adverse event reporting to FDA may not be uniform for all drugs, as demonstrated by the case study of statin-associated rhabdomyolysis.
  • Factors such as publicity surrounding a drug, the extent of use in the US population, and the marketing of a drug may affect the number of cases reported to the AERS [adverse event reporting system].
Pharmacoepidemiology Article, at “Key Points.”

There’s a second article of similar interest because it also deals with ADE statistics. This article was published in the Archives of Internal Medicine in September of last year.

We’re inclined have to be a little (actually a lot) more skeptical of this one since one of the authors, Dr. Curt Furberg, is a plaintiffs’ expert. He’s appeared for plaintiffs in the Rezulin mass tort. See In re Rezulin Products Liability Litigation, 309 F. Supp.2d 531, 545-46 (S.D.N.Y. 2004) (excluding Furberg testimony as “hav[ing] no basis in any relevant body of knowledge or expertise”). He was also the lead plaintiff expert who appeared in a Paxil case (Colacicco) as amicus curiae along with eleven other plaintiff’s experts – none of whom ever disclosed their employment by the plaintiffs’ side to the Court. Looking to page 1758 of the article, it appears that Dr. Furberg again makes no financial disclosure of his plaintiff work.

To be fair, though, there are two other authors on the article besides Dr. Furberg – both of whom work for or with an organization named the Institute for Safe Medication Practices.

One thing that the Furberg article has going for it is that the statistics are a lot less sophisticated, so it’s easier to understand. All the article really does is add up the number of deaths and other serious adverse events reported to the FDA over an eight-year period (1998-2005) – it finds an overall increase in yearly reported incidents of more than 250% – and then breaks down the ADE reports by drug.

That means the Furberg article contains “top ten” list of drugs with the most “reported” deaths and serious injuries over this seven year period. That list has predictably been picked up on the Internet, where it now forms the basis for a starkly titled “10 Deadliest Drugs” webpage.

Unlike the first article we discussed in this post, Dr. Furberg’s piece doesn’t attempt any fancy estimates of how many people have actually used any of the drugs that find their way onto these lists. Thus “estrogens” (oral contraceptives and hormone replacement) and “insulin” (diabetes), which are used by many millions, top the list of drugs with the “most” serious outcomes, ahead of various other drugs (including things called DMARDs) probably used by far fewer people.

In short, there’s no “denominator” at all for these top ten lists. It’s like selecting the 10 best hitters in baseball by looking at the number of hits they got, but ignoring their batting averages - but we don't think that anyone would really believe that, for example, Juan Pierre (221 hits) was a better hitter than Barry Bonds (.362 BA) in 2004.

Nor does the Furberg article distinguish between adverse events involving drug abuse and those associated with proper therapeutic uses. Thus, in four of the six top slots on the “death” list are “opiod analgesics” – narcotics, in other words – which are frequently taken illegally to get high.

We do give the article credit for at least making an attempt to remove from consideration ADE reports that really are just computer generated complaints from mass tort actions – so it at least recognizes that problem. Thus the Furberg study excludes all ADEs filed more than two weeks after a drug was withdrawn. That’s a decent start, but there are a lot of mass torts where the product is not withdrawn. With that confounding factor, one of the article’s primary conclusions: that “The change and overall risks can be primarily attributed to a minority of important drugs” (p. 1757), could well be litigation, rather than safety, driven. If only a few of these “important” drugs are those saddled with mass tort litigation (and we recognize a number of major litigation targets on the article’s top ten lists), then litigation could well be playing a larger role in the overall results than the authors acknowledge.

Thus, in a number of respects, the Furberg article is an example of how not to use ADE statistics. But that’s not to say that the article doesn’t have anything interesting or useful to say – because it does.

For one thing, there are a set of fascinating multi-year graphs (p. 1757) that illustrate the dramatic effects of adverse publicity on ADE reporting.

Another point is that withdrawn drugs – those drugs that the plaintiffs’ lawyers and their political allies love most to harp about – didn’t really have that much effect on ADE reporting. “Contrary to our expectations, drugs related to safety withdrawals were a modest share of all reported events and declined in importance over time” (p. 1757). That’s a finding of significant importance, although we can’t really say it's all that surprising to us. After all, with all ADEs for any withdrawn drug deliberately excluded after fourteen days, that such ADEs would “decline. . .over time” can’t really be all that hard to believe.

The Furberg article does acknowledge the “many known limitations” of ADEs data that we’ve discussed in our prior posts: that the data are “voluntary” rather than “systematic”; that the reports “do[] not establish causality”; that reported “events” include a wide variety of disparate occurrences; and that reported events are only a “fraction” of actual events (pp.1757-58).

But from our point of view, perhaps most useful thing about the Furberg article is its rather frank acknowledgement of reporting bias related to both litigation and adverse publicity. It states:

We also explored whether the results were influenced by external factors such as. . .safety withdrawals, or legal claims. Our 8-year study period featured several such episodes. . . . [examples omitted]. It seemed possible that increased reporting could have been stimulated through media publicity and lawyers seeking injured clients through radio, television, and Internet advertising. We limited the impact of this phenomenon by excluding reports received more than 14 days after a drug was withdrawn for safety reasons. Even if all cases associated with withdrawn drugs involved legal claims, the subset data showed that such claims accounted for less than 10% of all events and declined since 1999. Nevertheless, the influence of publicity and legal claims can be seen in specific drugs. . . . [examples omitted] However, overall, the increased reporting effect from these events was partially adjusted for, was limited to relatively few drugs, and may have declined over time.
Furberg Article, at 1758 (emphasis added).

Given the nature of our practices, we tend to represent the manufacturers of those “relatively few drugs” for which ADE reporting is concededly affected by litigation and publicity. Thus we welcome ammunition, like “the influence of publicity and legal claims can be seen,” that we can use to argue that, because of such biases, ADEs cannot be used as evidence of causation. And we especially welcome ammunition tossed to us over the transom by somebody (like Dr. Furberg) who is normally associated with the other side of the “v.”

Wednesday, March 26, 2008

Alaska Zyprexa Consumer Litigation Settles

There's a settlement announcement on Eli Lilly's website. It looks like $15 million changed hands. While it's over (and litigating in Alaska this time of year is no fun), we still have considerable reservations about this type of suit, which we'll be discussing in the future. This particular suit, however, is history.

A Few Of Our Favorite Posts

We've been at this for nearly a year and a half now, to the tune of over 400 posts.

Man, are we tired.

On the other hand, we're awfully proud of . . . well, four of those 400 posts.

These are our favorites:

We really liked our Anatomy of a Mass Tort from June 2007. Without identifying either a product or a defect, we traced how a prototypical mass tort progresses. And, oddly enough, our prototype has generally matched the mass torts that have broken out since we posted nearly a year ago.

We liked The FDA's Amicus Curiae Briefs on Preemption - Redux, too. In that post, we both gathered in one place all of the relevant FDA submissions (which was worth doing) and traced how the FDA's position has evolved over time. That post is a handy research tool, if we do say so ourselves.

While we're thinking about research tools, we thought that Headcount: Who's Adopted The Learned Intermediary Rule was also worth posting. It's a 50-state survey of the learned intermediary doctrine and thus an easy first step for research.

Finally, we liked Happy Birthday To Us! because, well, we like a good party.

Four decent posts out of 400.

What's more surprising -- that we wrote four good ones, or that you folks stuck with us all this time?

But we sure do appreciate it. And, with any luck at all, we'll find four posts that we like out of the next 400 that we write, too.

Tuesday, March 25, 2008

Today's News

We don't usually operate as a news aggregation service here at the Drug and Device Law Blog, but we noticed three items today that we thought would interest many of our readers.

First, today's Wall Street Journal reports on Pfizer's unsuccessful (at least before a magistrate judge) effort to subpoena documents about Bextra and Celebrex in the possession of the Journal of the American Medical Association. (HT to FDLI's SmartBrief.)

Second, today's New York Times reports that an Alaska court is deciding whether to hold an individual in a psychiatric hospital for 30 days because, among other things, he refuses to take Zyprexa for his mental illness. Since the attorney general's case against Eli Lilly for alleged off-label promotion of Zyprexa is being tried in the same courthouse, there's a certain irony there.

Finally, the February issue of Scientific American has this article about the widespread use of antidepressants. We express no opinion about the merits of the article, but it's out there in the popular press, so many pharmaceutical defense lawyers will be interested in it.

Monday, March 24, 2008

Damned If You Do . . .

We don't usually report on labor and employment cases in this space.

Heck, we don't usually read labor and employment cases.

But the recent decision in Mylan Pharmaceuticals , Inc. v. United Steel, Paper and Forestry, Local 8-957, No. 1:07CV4, 2008 U.S. Dist. LEXIS 17988 (N.D.W. Va. Mar. 6, 2008), compels us to speak. Not because of its implications for labor law (you'll be startled to hear), but because of the intersection of this labor case and the defense of product liability litigation.

In a nutshell, Mylan manufactures generic prescription drugs. John Jones worked in Mylan's granulation department, running tests to determine the density of raw drug materials that would later be made into tablets or capsules. When the results of one of those tests didn't meet the pre-established parameters, "Jones manipulated the results and recorded false numbers on a data sheet." Id. at *2. "Jones admitted that he had altered the numbers, and further disclosed that he had manipulated data approximately 50 times in the past." Id. at *3. (Apparently, the tests do not affect the potency of the final drug product, but could affects the drug's release behavior.)

Mylan fired Jones for violating both Mylan's Code of Conduct and the federal Code of Federal Regulations.

So far, so good. That response seems entirely appropriate to us.

Naturally, that's where the train jumps the tracks.

Jones' union initiated a grievance procedure in which it argued that Mylan subjected Jones to disparate treatment by firing him for a first-time offense.

The testimony at the arbitration sounds about right to us: Federal law prohibits adulterating drugs, and fudging test results can constitute adulteration. The FDA can sanction, in a host of ways, manufacturers that adulterate drugs. At the most extreme, the FDA can seek an injunction to shut down the company.

On the other hand, apparently no other union member at Mylan had ever before been successfully discharged for a first-time violation of a rule.

The arbitrator held that "Mylan had not enforced the Code of Conduct in a reasonable and fair manner and had discharged Jones without just cause. He thus awarded Jones reinstatement
. . . . " Id. at *7.

The federal court found that the arbitrator's award did not violate a clearly defined public policy and drew its essence from the collective bargaining agreement, and so affirmed the award. Jones goes back to work. Id. at *29.

Maybe this makes sense as a matter of labor law; we don't know -- we don't play in that sandbox. But it's not very fair from the product liability, or consumer fraud, perspective.

Suppose purchasers of the adulterated Mylan drug sue Mylan for consumer fraud because Mylan sold an adulterated product. Isn't one of Mylan's best defenses (at a minimum, to a claim for punitive damages) that it promptly fired the guy who falsified the data? Won't a jury be awfully mad if Mylan chose to use gentler, progressive discipline for such a heinous offense?

Okay, you say, the defendant can explain to the jury that it tried to fire the culprit, and an arbitrator ordered him reinstated. Maybe a jury will understand.

But what about the next guy who does the same thing that Jones did? It would be silly for a company in Mylan's shoes to try to fire the next guy, because it already knows the result -- the employee will be reinstated. Maybe the company would even be sanctioned somehow -- for taking an indefensible position -- if it tried to fire the next guy situated like Jones, when the company already knew the result in Jones' case.

In that next situation, you have an employee repeatedly fabricating test results and a company deciding not to fire him. Then, as sure as we're typing here, a consumer will sue Mylan. The company will face an outraged plaintiff telling a jury in a consumer fraud or product liability case that the company should be hung high for knowingly selling adulterated products.

The explanation -- "we tried to fire the last guy who did it; an arbitrator wouldn't let us; a court upheld that award; we couldn't fire this guy" -- would be the object of scorn in plaintiff's counsel's closing argument: "A big company like this couldn't figure out a way to fire an employee who was fabricating test results? They want you to believe that? Is there anything this company won't say to take your eye off the ball?" And so on.

We know that it's asking a lot for the fabric of the law to be entirely consistent across all substantive areas. But the clash between labor and product liability law becomes just a little too stark when you read decisions like this one.

We do have two prescriptions for drug companies suffering from the Mylan malady. First, don't unionize. (Egad! We spend our lives writing pro-defense stuff in the realm of product liability, and we immediately write the typical pro-corporate position when we veer off into labor law. Maybe it's in our genes.) Without a union, there's no arbitration process to undo the firing. There's still, of course, the possibility of a lawsuit to undo the firing, but that's inevitable.

Second, and less dramatically, a company could negotiate with its union to eliminate violations of FDA regulations from grievance procedures covered by the collective bargaining agreement. If firing an employee for violating federal law were exempt from the grievance process, then the Mylan situation could not arise. We don't know if a union would agree to that, but it's a theoretical possibility.

Ultimately, both of those remedies are pretty strong medicine for an ill that simply shouldn't exist at all.

Most companies would generally like to do the right thing and not be held liable for doing so. The law should leave enough breathing room to make that possible.

Friday, March 21, 2008

North To The Future?

Without the question mark, that's Alaska's state motto.

With the question mark, it's our title for a post analyzing the on-going trial in State of Alaska v. Eli Lilly and Company.

The State of Alaska is seeking civil penalties from Lilly under the Unfair Trade Practice Consumer Protection Act of at least $1000 for every time a physician in Alaska prescribed Zyprexa.

You read that correctly: The remedy is seemingly unrelated to why the physician prescribed the drug and whether or not the patient's condition improved. No causation; no injury; no nothing. It's at least a thousand bucks (and perhaps as much as $25,000) per script times hundreds of thousands of alleged violations.

You don't have to sit on our side of the "v" to think that's a little heavy-handed.

But wait! It gets worse.

Alaska's unfair trade practices act, like similar acts in many other states, exempts from its coverage transactions regulated under laws administered by an "officer acting under statutory authority of the state or of the United States." AS 45.50.481(1). If, say, the federal FDA regulates the labeling on Zyprexa, then sales of Zyprexa are exempt from regulation under the state trade practices law.

Call us silly (as many of you have), but we were under the distinct impression that the FDA does regulate the labeling on prescription drugs, such as Zyprexa.

Among many other things, the labeling on a prescription drug must be "informative and accurate and neither promotional in tone nor false or misleading in any particular." 21 C.F.R. Sec. 201.56(a)(2). Surely that regulation means that the FDA -- not the state trade practices act -- is meant to regulate the veracity of claims made on the label of a prescription drug.

This just leaves us scratching our heads.

Surely Lilly did nothing wrong if a physician, independently aware of the risks of Zyprexa, chose to prescribe the drug for a patient, and the patient got better. It's hard to see any injury there, or any reason why a state attorney general should seek recovery from the drug's manufacturer.

And surely the FDA prohibits false statements on the package insert of a prescription drug. The State thus appears to be using state law to punish something that's already regulated under federal law and therefore exempt from regulation under the trade practices act. Either that, or the State of Alaska is trying to punish Lilly for making truthful statements on its package insert, which seems even worse.

If we've got the facts and law right (and we believe that we do), then Seward's Folly was not the only one involving our forty-ninth state.

Thursday, March 20, 2008

Preemption In Philadelphia

As regular watchers of our Drug Preemption Scorecard know, the good guys had been on a bit of a roll with preemption in prescription drug cases in 2008. We’d gone 5 for five, with courts in Dobbs v. Wyeth Pharmaceuticals, 530 F. Supp.2d 1275 (W.D. Okla. 2008); O’Neal v. SmithKline Beecham Corp., 551 F. Supp.2d 993, 2008 WL 275782 (E.D. Cal. Jan. 30, 2008); Miller v. SmithKline Beecham Corp., 2008 WL 510449 (N.D. Okla. Feb. 15, 2008); Longs v. Wyeth, 536 F. Supp.2d 843, 2008 WL 542387 (N.D. Ohio Feb. 28, 2008); and White v. SmithKline Beecham Corp., 538 F. Supp.2d 1023, 2008 WL 612354 (W.D. Mich. March 6, 2008), all ruling in favor of implied preemption in prescription drug product liability litigation. Before that the rulings had been split more or less even-Steven.

To some extent this little run was the product of defendants doing a better job of picking their spots: Three of the five cases were suicide cases involving SSRI (that’s “selective serotonin reuptake inhibitor,” if you really want to know) anti-depressants, which is probably the industry’s strongest fact pattern for arguing preemption, another was a fraud on the FDA claim in a precedent-bound court (Michigan’s in the Sixth Circuit), and the fourth involved an unusual claim that, despite the FDA’s approval of the drug, there was no possible warning that could have made the drug “safe” under the purported common-law standard. All these were excellent preemption fodder.

Also these five opinions were all in federal court. Preemption – being the displacement of state by federal law – has naturally always been a tougher sell in state as opposed to federal courts. We’re not just talking about preemption in drug and medical device cases, but in all types of cases. The same decisional pattern exists in other types of preemption that we’ve worked on, airbags, tobacco, etc.

Well, to the point of that post, our little win streak just got snapped. The Honorable Allan L Tereshko of the Philadelphia Court of Common Pleas issued a ruling a little over a week ago finding no preemption in another suicidality case. For those of you with access to online libraries, the decision is also at Collins v. Smithkline Beecham Corp., 2008 Phila. Com. Pl. Lexis 57 (Pa. C.P. March 11, 2008) (as of yesterday Westlaw didn’t have it).

Yeah, we know that ten days is like an eternity in the blogosphere. Ten days ago, very few people had heard of the Reverend Wright’s stuff, for example. But we once again wish to remind our readers – we do not claim to be operating an unbiased reporting service. We’re defense lawyers, and in every legally-related thing we do, including this blog, we hold the interests of our clients paramount. That’s our ethical responsibility. You’ll just have to live with that.

Anyway, we knew about Collins the day after it was handed down. We (belatedly) thank Jeff Andrus at HarrisMartin Publishing for being the first of several readers to pass the Collins decision along to us. With respect to trial court decisions that are adverse to our clients, however, our policy is not to identify them until after they have been added to one or the other of the major online legal libraries (Lexis and Westlaw). We know good and well (thanks to Google Analytics) that people working at both of these services regularly read this blog, and frankly we’re not in business to make adverse decisions more widely known and available.

Sometimes it works out, sometimes it doesn’t.

With Collins it didn’t, and now that the decision’s on Lexis anyway, we can blog about it.

First things first. Generally we like Judge Tereshko (or at least that’s the word from Bexis, who practices in Philadelphia). He’s been head of the Complex Litigation center in the Philadelphia Common Pleas Court for more than a year, now, and not only is he fair to both sides, but he’s also a hard worker. In other words, he decides cases and writes opinions. Judges like Judge Tereshko are why the Philadelphia court is no longer counted as one of ATRA’s “judicial hellholes,” after making regular appearances on that list for quite a few years.

But just because we like Judge Tereshko doesn’t mean we agree with everything he decides. Not surprisingly we have our differences with the reasoning in Collins. What did you expect? We’re defense lawyers.

So now we’re tell you why.

We think that the court got off on the wrong foot when it refused to consider the FDA’s amicus briefs filed in other cases. As best we can tell, that happened because of a Pennsylvania principle that only “admissible evidence” can be used in summary judgment motions. Collins found the FDA’s briefs to be inadmissible hearsay. Slip op. at 5. We think the court misunderstood the purpose of the briefs. I don’t think anybody thinks agency (or anybody else’s) briefs should be evidence to be heard by the jury. We sure don’t. As we recently discussed in another context, the judge and only the judge instructs the jury on the law.

But that wasn’t the point of the FDA briefs in the preemption motion for summary judgment. Their purpose was purely legal – to provide the judge with information on the position of the relevant administrative agency about a matter that affected the application and construction of the Agency’s regulations. The “admissible evidence” rule doesn’t – or shouldn’t – apply to matters relevant only to questions of law, and not to issues of fact. Moreover, FDA amicus briefs count as “advisory opinions” of the Agency under 21 C.F.R. §10.85. See McNellis v. Pfizer, Inc., 2006 WL 2819046, at *3 (D.N.J. Sept. 29, 2006). Under §10.85(j), FDA advisory opinions “may be used in administrative or court proceedings” although they cannot be urged as “legal requirement[s].”

So we think, as an initial matter of procedure, that the court in Collins was incorrect when it refused to consider the FDA’s views as stated in its amicus briefs.

As is the case with just about any decision rejecting preemption in the prescription drug area, the court turns almost immediately to the “presumption against preemption.” Slip op. at 6. We’ve already discussed at length why we think that, in preemption cases arising by direct operation of the Supremacy Clause – those involving actual conflict – as opposed to preemption by statutory construction (express preemption) or preemption by implication (field preemption), there shouldn’t be any presumption one way or the other, and the scope of preemption should simply be decided by the scope of the conflict. Our earlier post demonstrated that the Supreme Court (as opposed to lots of lower courts) has not applied any such presumption in its conflict preemption cases. We hope this is an issue that the Supreme Court will resolve in the pending Levine matter. We know one of the amici briefed this issue in Kent, and we hope that happens again when the briefs are filed in Levine.

So as expected, Collins’ “bedrock principle,” slip op. at 7, is a “presumption” of dubious applicability – and indeed both of the two presumption cases that the court cited, Schemerhorn and Metropolitan Life, involved express, not implied, preemption. “Gravel” – or even “shifting sands” – would be a better description of the status of a presumption against preemption in implied conflict preemption cases.

Then the court goes off on an unusual tangent. It seems to hold that, because Congress did not include a private right of action under the FDCA, it’s “intent” must have been to preserve any and all tort claims against regulated manufacturers – even those that directly conflict with FDA decisions about what’s supposed to be in the labeling. Slip op. at 7. The support for that somewhat breathtaking proposition? A characterization of a prior Congress’ deletion of a private right of action provision by a law review article:

The draft version of the Act included a provision for creating a Federal cause of action. This provision was rejected because, “a common law right of action exists.” See Adler v. [sic] Mann, Preemption and Medical Devices: The Courts Run Amok, 59 Mo. L. Rev. 985, 924 and supporting cite at N. 130.
Slip op. at 7.

The problem is (as the title of the article shows) Adler and Mann weren’t exactly neutral observers. The actual history of the FDCA doesn’t in fact say what their article said it did. Another problem is that the source material is so obscure that nobody ever checks it out. Well we have. Defendants should never sit by silently when Adler and Mann are cited for what turns out to be a very questionable proposition.

The actual legislative history of the FDCA establishes that the initial 1933 draft legislation – proposed five years before the FDCA became law – contained a specific provision allowing a private action “for injury or death proximately caused by a violation of this Act.” See S. 1944 §24, 73rd Cong., 1st Sess. (1933) (reprinted in C. Dunn, Federal Food, Drug, and Cosmetic Act, A Statement of Its Legislative Record, at 49 (G.E. Steichert & Co. 1938). The 1934 substitute version of the bill deleted this provision, see generally, S. 2000, 73rd Cong., 2d Sess. (1934) (reprinted in Dunn, FDCA Legislative Record, at 52-87). There’s almost no mention of this deletion, but a 1933 exchange between the bill’s sponsor, Sen. Royal S. Copeland (D-NY), and a witness reveals that Sen. Copeland felt private actions were “gratuitous” under existing law.

Senator COPELAND. Let me ask you about section 24, on page 31. Is that a little gratuitous?

Mr. CAMPBELL. That is a statement of legal rights.

Senator COPELAND. They have that power now, if they will ever get it?

Mr. CAMPBELL. Right.
Hearing Before a Subcommittee of the Senate Committee on Congress, Statement of Walter G. Campbell, Chief, Food & Drug Administration, Department of Agriculture (Dec. 7, 1933) (reprinted in Dunn, FDCA Legislative Record, at 1106). That’s it. That’s the sum total of all the “legislative history” there is on this point. Adler and Mann’s characterization of it is, at best, misleadingly overreaching.

“Gratuitous” does not necessarily mean “duplicative” – and certainly not Adler and Mann’s claim that, “a common law right of action exists.” In fact, there was no precedent (we’ve looked), as of 1933, holding that common-law litigants could already assert violations of federal food and drug law. Moreover, a single senator’s passing comment in a hearing years before the legislation finally became law – that could be interpreted any number of ways – is hardly a valid use of legislative history. Indeed, it illustrates the proposition that the statements of individual legislators are not properly considered “legislative history” at all.

So that’s a rather long-winded discussion of the second issue we have with Collins. If the lack of a private right of action is somehow evidence that (along with the questionable presumption against preemption) is enough to establish that no conflict preemption exists, then there’s no preemption in any case, anywhere – because there’s no private right of action under the FDCA, in any case, anywhere.

The next point the court states is “critical to our analysis” in Collins is the FDA’s “changes being effected” (or “CBE”) regulation, 21 C.F.R. §314.70. See Slip op. at 8. Buying a frequently made, but quite erroneous, view of the FDA's regulations (while refusing to acknowledge the Agency's contrary view) the court interprets the CBE regulation for drugs as meaning that “a possessor of an existing NDA shall supplement the label on its product when it has reasonable evidence of a hazard, a causal relationship need not be proved.” Slip op. at 9 (quoting regulation) (emphasis original).

Nope. Sorry.

This statement is erroneous for several reasons. First of all, it ignores entirely that the FDA has to approve, albeit after the fact, all CBE requests – and in SSRI suicide cases the FDA specifically considered and specifically rejected the exact warning that the plaintiffs sought at least six times.

Second, it ignores the administrative history of §314.70, which – far more persuasively than the snippet the court borrowed from Adler and Mann – demonstrates that CBE supplements are intended only to be used for “new” information – an emergency situation – and not for something like the purported suicide risk, which the FDA had already evaluated several times. We demonstrated this administrative history here, and, lo and behold, the FDA itself later agreed with us, and has proposed a change to these regulations precisely to make clearer that they are intended to provide a limited, emergency exception to the general rule of Agency preapproval. That change should be effective, we hope, in the next six months or so, and at least one bogus argument will go bye-bye.

So there are lots of reasons why it’s not a good idea for a court to ignore what the FDA (or any agency) has to say about its own regulations.

Third, the minimal standard “a causal relationship need not be proved” is also a misconstruction of the FDA’s regulations. The standard that the FDA says should apply is the “substantial evidence” standard of 21 C.F.R. §201.57(c). 73 Fed. Reg. 2848, 2850 (FDA Jan. 16, 2008). The court cites 21 C.F.R. §201.80(e), but that has to do with putting a warning on the label with prior FDA approval. That’s an entirely different situation from a label change made without so much as a “by your leave.” If somebody’s going to take the extraordinary step of acting without prior FDA approval, there ought to be a really good reason for doing so. Thus the FDA states (and we agree) that “substantial evidence” must be required. If there’s no proven causal relationship, then the label change isn’t urgent enough to bypass normal FDA channels.

By refusing to consider the FDA’s positions, it may be that the court in Collins has created a bigger conflict with federal law than existed previously.

At the end, the Collins opinion circles back to the issue of no private FDCA right of action. Slip op. at 12-13. The court basically holds that, if the feds aren’t going to provide a federal claim, then preemption can’t preclude the states from providing a remedy. Id. The court offers a really long block quote from an older Supreme Court opinion called Silkwood for this proposition. Id. at 13.

The Supreme Court in Riegel, however, disposed of the Silkwood argument:

The dissent would narrow the pre-emptive scope of the term “requirement” on the grounds that it is “difficult to believe that Congress would, without comment, remove all means of judicial recourse” for consumers injured by FDA-approved devices. [citation to minority quotation from Silkwood omitted] But, as we have explained, this is exactly what a pre-emption clause for medical devices does by its terms. The operation of a law enacted by Congress need not be seconded by a committee report on pain of judicial nullification. It is not our job to speculate upon congressional motives.

Riegel v. Medtronic, Inc., 128 S. Ct. 999, 1008-09 (U.S. 2008) (emphasis added). The Supreme Court’s observation in Riegel is even more apt in a conflict preemption situation, where the conflict, rather than congressional intent, is the main issue. The reason that preemption exists is precisely to preclude states from creating common-law remedies that are contrary to federal law. The existence of a federal cause of action is, at bottom, a red herring – irrelevant to conflict preemption analysis.

There are two lessons that jump out at us from the Collins decision. The first is that it’s not a very good idea for the courts to ignore the FDA. The regulatory scheme is quite complicated, and courts acting on their own – guided only by advocates for one position or another – are likely to come to erroneous conclusions.

The second lesson is that the old Silkwood analysis never made any sense, and it’s a good thing that the Supreme Court majority in Riegel jettisoned it. The proposition that Congress wouldn’t preempt state law without making some sort of federal arrangement for would-be state law claimants is simply an excuse to eliminate implied preemption altogether – because Congress rarely creates remedies for state tort plaintiffs and when it does it specifies the preemptive scope, as with the Vaccine Act.

Elimination of conflict preemption obviously isn’t federal law, and as demonstrated by the Pennsylvania Supreme Court’s decision in Cellucci v. General Motors Corp., 706 A.2d 806, 811-12 (Pa. 1998), holding “no airbag” claims impliedly preempted due to their conflict with federal agency action even though there was no federal remedy, it isn’t Pennsylvania state law either.

So we’ll be looking for an appeal at some point. But we realize we might not get it. That’s because, Collins or no Collins, Judge Tereshko is still a good judge in our books. He’ll probably throw the case out on some other grounds (there are lots of state-law reasons why suicide cases have poor prospects) – or the defendants will win it at trial, which they’ve tended to do lately when one of these cases escapes preemption.

Wednesday, March 19, 2008

Taxation By Litigation - A Dubious Proposal To Expand False Claims Act Liability

Neither of us, personally, knows a whole lot about the False Claims Act, but we know a stealth tax increase when we see one. There’s a bill floating around Washington, with the innocuous sounding name of “The False Claims Act Correction Act Of 2008” that isn’t really about “false” claims or “correction.”

Rather, it’s about amending the statute to call “false claims” things that aren’t really false at all. It’s also a revenue-raising scheme for the government, and in our day-to-day vocabulary, that’s called a “tax.”

What’s more, it’s a peculiarly inefficient means of raising revenue, since instead of having anybody fill out a tax form, the tax would be collected by private litigants authorized to sue a broad range of defendants unfortunate enough to fall within these amendments’ extraordinarily expansive definitions. If the amendments pass – not only will whatever the government’s increased collection of dollars be passed along to customers in the form of higher prices (as with any tax), but so will all of the litigation expenses incurred by both sides.

That some members of Congress are willing to tolerate these inefficiencies to get more money is a testament to how far they are willing to go, in the current climate, to avoid calling a “tax” by its proper name. H.R. Gross will surely be spinning in his Iowa grave if this latest Lawyer’s Full Employment Act becomes law.

What is the False Claims Act anyway?

Well, there are whole books (and legal practices – not either of ours) devoted to that subject, but essentially it started out as a statute allowing the government to prosecute contractors who defrauded it by selling, for example, rotten food to the army. So it’s a quasi-penal statute authorizing the recovery of treble damages. That’s OK with us as long as it’s being used to prosecute something that’s really fraudulent. The problem with these amendments is that anything resembling wrongdoing would be defined out of existence.

Historically, the False Claims Act has also authorized private suits on the government’s behalf – which in ubiquitous lawyer-speak are called “qui tam” actions. Don’t ask us what it stands for because we don’t know and we’d have to look it up. In this way, the False Claims Act is sort of like a throw back to the old days at sea when governments, unwilling to pay for their own navies, would let loose privateers to prey on an enemy’s nation’s shipping.

One man’s privateer was, of course, another man’s pirate.

Anyway, under the False Claims Act, privateering plaintiffs don’t have to be injured in any way by the conduct they’re suing over. All they have to do is claim that the government somehow lost money. The privateering qui tam plaintiffs get to keep for themselves as much as 30% of the loot. Once one of these private False Claim actions is filed, the government has the right to take a look and, if it thinks there’s merit to it, the government can take it over. The Feds do that only in a distinct minority of cases – unabashed cherry-picking – and they’re doing the right thing. That minority of government-adopted cases accounts for almost all the money the Feds makes through privateering under the False Claims Act.

So far, so good. But these amendments go way overboard. The privateers would become full-blown pirates.

Throughout the history of the False Claims Act, the privateers have had to be people in the private sector, quite frequently people working at the companies that become targets of suits. One purpose of the Act is to prevent fraud by enlisting would-be violators’ own personnel to inform on them (even though the pending amendments weaken those incentives somewhat, see §4(c)(3)(A)). We have no conceptual problem with that either. We recognize the value of deterrence.

But these amendments would allow most government employees, excepting only those whose job specifically is to investigate possible violations, to file suit for their own private benefit over things that they learn about on the job. §3(6)(a).

We don’t like that.

First, that creates blatant conflicts of interest – given how much money can be at stake, it’s an open invitation for government employees to manipulate their own files to create false impressions of criminality by the persons they regulate, and then to seek to profit from it.

Second, it undermines the government’s own chain of command. Rather than having complaints go through proper channels, government workers can bypass and ignore the decisions of their own agency’s internal controls system, and instead file a private suit for their own gain. §3(6)(A)(iv).

Third, it opens up a new ground for guerilla warfare inside the government, as government employees could use False Claims actions as a vehicle to oppose the policies of their own agency by suing those whom the agency engages to carry out that policy.

These amendments also do away with the requirement that the government actually suffer a loss. §2(a)(1) (way at the bottom of this section). More than anything else, that’s why this amounts to nothing more than a disguised tax increase; only collected by private litigants. The amendments consign actual loss to the dustbin of history. Rather, “damages” now include “the amount of money or property paid or approved because of the act of” the defendant – even if whatever it was that the government the government bought (or paid for) worked perfectly. Id.

That’s a pure windfall in our book – not only for the government, but even more for the privateering litigants and their lawyers. If the government got precisely what it paid for, then there’s no basis to send out the treble damage privateers. If, for example, the government paid for prescriptions that came about because of truthful off-label promotion, and the prescriptions provided the people who used them with precisely the beneficial health effects that were promised, there’s nothing that warrants a False Claims suit, even though off-label promotion is illegal (and, we’ve said, First Amendment protected). There’s no loss to anybody, so any attempt to recoup funds that paid for efficacious drugs is nothing more than a weirdly assessed tax.

Such a broad definition of “claim” also creates political thickets. Say you’re opposed to the government inoculating troops against anthrax. See, e.g., Doe v. Rumsfeld, 172 Fed. Appx. 327 (D.C. Cir. 2006). These amendments to the False Claims Act look broad enough that a politically motivated qui tam plaintiff could sue the contractor administering the shots (or selling the vaccine, or whatever) for treble damages because of the implied “false” claim that the vaccine is safe and effective. Just what we need, another avenue for politically motivated litigation.

Another thing about False Claims actions is that they’re supposed to be based upon real insider tips – not information that’s already publicly known. The one False Claims case Bexis ever was involved in, United States ex rel. Gilligan v. Medtronic, Inc., 403 F.3d 386 (6th Cir. 2005), was decided on that ground (although Bexis tried to argue something more exotic – that the particular claim should be dismissed as an attempt at private enforcement of the FDCA under 21 U.S.C. §337(a)). This bill would gut that restriction (only the government itself, and no longer defendants, could raise it), see §4(b), and let people bring suit over allegations that were already publicly known – and that the government presumably took a look at and decided wasn’t worth it’s time.

That’s simply a license to have litigation for litigation’s sake.

Another piece of potential mischief that these amendments would create is to open up as targets of litigation anybody who got money from somebody else (except individual government employees and some people who receive government benefits), when that somebody happened to use government funds of any sort that s/he received, in order to pay that money to the defendant. See §2(a)(1)(D-E); 2(b)(2)(A).

Think about that. These amendments propose liability for anything bought by a third party where the third party happened to use government funds to pay for it. Hordes of new defendants – none of which ever had direct dealings with the government – would become liable for treble damages for some sort of indirect false claim. Not only that, because they don’t do business with the government, these potential targets don’t even know there’s legislation out there that could affect them. Congress might slip this little nugget through with many of the affected parties never the wiser. Under this bizarre extension of False Claims Act liability to transactions not involving the government, we can see false claim suits by and against colleges and universities (indeed, anybody who gets grants) – against people who don’t pay back their student loans – all kinds of things ... and with treble damages and cost recoupment. There’s likely to be a lot of defendants out there who will never know what hit them.

And with treble damages, the incentive to bring such suits could be pretty high.

Aggravating everything else – this newly expanded liability would be retroactive (one could say ex post facto) to the enactment of the original False Claims Act (§9) (a long time ago, whenever that was). That would be sure to make people liable for actions they couldn’t have known were forbidden at the time, especially since the bill also allows liability without any intent to defraud. See §2(b)(1). And the statute of limitations would be extended to ten years – which is close to forever in litigation terms. §6(b).

Anyway, this proposed expansion of the False Claims Act seems to us like to be spherically bad policy (bad policy any way you look at it). If Congress thinks that it needs to raise taxes, we’d hope they’d just go about it directly. Don’t make us lawyers the government’s tax collectors – or worse, its privateers. Because of the inherent nature of adversary litigation, too much of the money will end up sticking to the fingers of the attorneys for both sides.

Unequal Minds Think Alike (Sharkey's Model to Understand Preemption Jurisprudence)

Professor Catherine Sharkey (now at NYU Law School), who's written more about preemption than most of us have read, saw this morning's post about how the Supreme Court often adopts the position on preemption urged by an agency in an amicus brief. She alerted us that she has an article that will appear in the April issue of the George Washington University Law Review that does not simply note this apparent coincidence (as we did), but rather proposes a new model that relies on that "coincidence" to explain and justify the Supreme Court's preemption jurisprudence.
Here are the money sentences from the abstract of Professor Sharkey's forthcoming article:

"Under this model, courts should look to agencies to supply the data and analysis necessary to determine if preemption is appropriate; i.e., to determine when a uniform, national regulatory policy with respect to a certain product makes the most sense or, instead, whether such regulation is better left to the states, in which case a plaintiff's common law claim should be permitted to proceed. This model simply acknowledges and exploits the fact that agencies are best equipped to provide the information central to this determination (a fact that the Court apparently already recognizes). "

The complete article can be downloaded at:

The two of us typically don't like to be known by the company we keep (particularly since we keep the company of each other).

But, in Professor Sharkey's case, we'll make an exception.

A Tea Leaf For Levine

Isn't it funny? The blogosphere has already beaten Riegel v. Medtronic to a pulp (we joined in the fun here, here, and here) and is moving on to other subjects, and the first law review article analyzing the case may not appear for months.

What does that say about the future of law reviews? (Then again, maybe the academics will distinguish themselves from us by saying something worthwhile.)

Anyway, we're moving on from Riegel, at least for today, and looking ahead to the blockbuster pharmaceutical preemption case that the Supreme Court will decide next Term, Wyeth v. Levine.

Many folks have been reading the tea leaves to try to decide what the decisions in Riegel and Warner-Lambert v. Kent mean for industry in Levine. As we've proved before, predicting the result of Supreme Court cases is notoriously tough -- especially before they've even been briefed.

But here's one thing to consider when you gaze into your crystal ball and speak the words Wyeth v. Levine. (The two of us were doing that just last night. Herrmann brought the crystal ball; Bexis brought the beer and chips.) (We told you we were fun guys.)

Anyway, here's the solitary tea leaf that we read. (Egad. Is this post a mishmash of mixed metaphors, or what?)

Since its decision in Cipollone v. Liggett Group, Inc., 505 U.S. 504 (1992), the Supreme Court has decided seven preemption cases in which it received amici curiae briefs giving the relevant federal agency's position on preemption.

In six of those seven cases, the Supreme Court has decided the preemption question in accord with the agency's view.

The outlier is Bates v. Dow Agrosciences, LLC, 544 U.S. 431 (2005), where the EPA favored preemption, and the Supreme Court recognized that some claims might be preempted, but held the particular claim before it was not.

Other than that, however, the Supreme Court has always ruled in favor of the position advocated by the agency.

Thus, in Geier v. American Honda Motor Co., 529 U.S. 861 (2000), the Department of Transportation thought that "no-airbag" claims should be preempted; the Supreme Court held that they were.

In Sprietsma v. Mercury Marine, 537 U.S. 51 (2002), the Coast Guard did not believe that claims relating to a propellor guard should be preempted; the Supreme Court held that they were not.

In Freightliner Corp. v. Myrick, 514 U.S. 280 (1995), the Department of Transportation opposed finding claims relating to anti-lock brakes on tractor-trailors to be preempted; the Supreme Court ruled consistently with the agency's position and found no preemption.

So, too, in the three drug or device cases the Court has heard.

In Medtronic v. Lohr, 518 U.S. 470 (1996), the FDA opposed preemption, and the Court found no preemption.

And in both Buckman v. Plaintiffs' Legal Committee, 531 U.S. 341 (2001), and Riegel v. Medtronic, __ U.S. __ (2008), the FDA favored preemption, and the Court found preemption.

This is not a very sophisticated analysis.

(Aw, c'mon. Given the source, what did you expect?)

No one has said that the relevant agency's views on preemption are always dispositive, and the Supreme Court has wrestled with the degree of deference owed to agencies' briefs and other statements. Moreover, arguments for or against preemption can be nuanced. The list that we compiled above may be giving more weight than is due to random chance -- the agency took one position out of two, and the Court took one out of two; sometimes, the positions line up.

On the other hand, the government did argue in favor of preemption in its briefing at the certiorari stage of Wyeth v. Levine, and that may well be a good sign for the pharmaceutical industry when the time comes to decide the merits.

If not, we're giving up on crystal balls.

Yo, Bexis: Do you own a Ouija Board?

Tuesday, March 18, 2008

Off-Label Promotion - An Indictment

As regular readers of this blog know, we’re interested in off-label promotion issues, and we unapologetically take the position that, as long as the information involved is truthful, the right of a company to tell the public about all medical conditions, on and off label, that its product helps prevent or treat is protected by the First Amendment.

The First Amendment issue, of course, remains unresolved. In Caputo one of us intervened against the government as amicus to make sure that that issue was not resolved badly due to bad facts

Well, we’re wondering whether there may be another possible show-down coming from the left coast. We’ve just received word that the CEO, not just the operational people, of InterMune, a company that made an interferon-related drug, has been indicted for off-label promotion. The government’s press release says that the defendant lied about the results of a study, and other things. That may well be true; we don't know – but that’s what we'd expect any good prosecutor to say at this stage of the game.

Who knows what the evidence will actually show.

Our advice? As long as the prosecutors stick to statements that are demonstrably and provably false, the First Amendment isn’t going to be implicated. But Caputo should be a lesson to everyone. Don’t throw in the kitchen sink, as it gives the defendants weighty constitutional arguments that prosecutors would do well to avoid. Even on pretty bad facts, the First Amendment issues surrounding off-label promotion gave the Seventh Circuit a lot of pause in Caputo.

We'll be watching to see if it happens again.

Monday, March 17, 2008

Dukakis and Riegel

Sometimes, two contrasting images make for a good title.

We figured we'd use two completely unrelated images: Dukakis and Riegel.

First, Dukakis:

Governor Michael Dukakis opposed the death penalty. In the 1988 Presidential debates, a reporter asked Dukakis whether he'd still oppose the death penalty if someone raped and murdered his wife. Dukakis thought for a while and then answered in a monotone.

Wrong answer!

The right answer is:

"Of course I'd oppose the death penalty in that situation! I'd personally pull the switch to fry that guy! In fact, forget electrocution -- I'd personally tear him limb from limb!

"That's exactly why we don't make public policy in America when we're outraged. We make policy by carefully considering the pros and cons of laws when we're not emotionally involved in the events. I'm a husband, and of course I'd want to strangle the guy who killed my wife. But, in the calm light of day, I know that the right policy for America is to forbid the government from killing its own citizens. That's why I oppose the death penalty."

Or something like that.

What does that have to do with Riegel?

Nothing; we just wanted to remind you about the 1988 Presidential debates.

Nah, we're kidding.

To our eye, having juries evaluate the safety and efficacy of a drug or medical device when they're sitting in the presence of an injured plaintiff is the same as asking Dukakis how he'd feel if someone hurt a loved one: Of course you want to punish the drug company that did this to that poor plaintiff -- the same way you'd want to retaliate against someone who hurt a family member.

But that's no way to make public policy.

We should make public policy calmly and rationally, at a time when we're not emotionally involved in the events.

That's exactly why the neutral experts at the FDA -- not juries sitting in the presence of an injured plaintiff -- should evaluate the safety of drugs and devices.

Friday, March 14, 2008

Scruggs Pleads Guilty

Here's a link.

What a week. First Spitzer, and now Scruggs.

What goes around, comes around.

More On Legal Questions And FDA Experts

Sometimes it’s funny how an issue that we all know is out there sits for a long time and then, all of a sudden, it comes back at us from several different directions at once. The recent flurry of interest in the question of whether “FDA experts” – usually former FDA employees – can offer expert opinions on the meaning of the FDA statute (“FDCA”) and FDA regulations is like that. First, the judge supervising the Baycol multidistrict litigation pitches this kind of testimony from a would-be FDA expert. Next, the FDA files a brief arguing that expert testimony about the meaning of its regulations should be inadmissible. Finally, the Seventh Circuit in Caputo blows such opinions out of the water (coincidentally, in a case Bexis briefed on other issues).

All this in the last several months – after the issue had been sort of bubbling along under the radar for years.

Limits on FDA expert testimony is a question we’ve certainly grappled with for a long time. As long as we’ve been practicing in this field, plaintiffs have wanted to troop out somebody who once worked for the FDA in some (almost any) capacity and put him/her on the stand to call our client criminals and claim that we somehow played fast and loose with this or that FDA regulation. More than 20 years ago that happened in a Coumadin case and one of us – OK, Bexis was the culprit – decided to fight it. The result:

As an expert, [plaintiff’s witness] may not testify about what statutes or regulations are or are not applicable to the case at hand. It is the court’s province to determine what law is applicable and to so instruct the jury. Thus, [plaintiff’s witness’] testimony and report are subject to my previous discussion of 21 C.F.R. §§314.8, 201.59, 201.100(c)(2), 201.56, and 201.57. Before plaintiffs introduce [expert] report into evidence, counsel shall insure that it complies with this opinion.
Purnell v. United States, 1987 WL 13790, at *3 (E.D. Pa. July 8, 1987). That, we believe, was the first legal opinion to exclude the testimony of a purported FDA expert on the basis that it was an impermissible opinion on an issue of law.

So what?

Well, something we posted recently on the Caputo case – that it was the “the first federal appellate ruling” (emphasis ours) to throw out an FDA expert for offering testimony on legal issues – got mistranslated in the press (in the March 7 FDA Week, which isn’t online at least for free, but the article, entitled “Federal Court Backs FDA On Testimony Of Former Officials” can be purchased here). It came out the other end as if we had said, “this appears to be the first time a federal court has weighed in on the question of allowing former employees to offer regulatory interpretations” (again, emphasis ours).

Don’t make us look dumb, guys (we’re perfectly capable of doing that ourselves).

As lawyers, unlike reporters, we’re supposed to know the difference between appellate cases and any old cases. We’re not blogging to make fools of ourselves any more than necessary. Thus, we feel obligated to make clear to all that we’re not ignorant of the rest of the pre-Caputo law on precluding testimony by FDA experts about what the law is.

So here goes.

The next case after Purnell to throw out an expert who wanted to testify about how to interpret FDA regulations was Moses v. Danek Medical, Inc., 1998 WL 34024164 (D. Nev. Nov. 30, 1998). It was (surprise!) a Bone Screw case. The plaintiff in Moses put together affidavits for two “experts” of proposed testimony that read suspiciously like prior briefs. We filed a motion to preclude this testimony – and attached redlined copies of the briefs as exhibits showing how the plaintiff had cut and pasted the supposed expert “opinions” right out of them. Perhaps not surprisingly, the court threw the lot of it out:

D. Expert Testimony on Issues of Law

Based on Plaintiff's representation. . . the testimony of [two experts] is offered to support the argument that Plaintiff's injury is the result of illegal promotion of the. . .spinal fixation device. To support this claim, these witnesses are prepared to instruct the jury as to whether or not Defendants acted “illegally;” what is “promotion” under the FDCA; and the interpretation of statutes and regulations.

Expert testimony is not proper for issues of law. Experts interpret and analyze factual evidence. They do not testify about the law.

In general terms, [Expert 1’s] declaration addresses the fraud and conspiracy claims. [He] declares that Defendants “engaged in an elaborate marketing campaign to create a market for and promote the sale and distribution of pedicle screw fixation devices outside of any FDA-approved clinical trial and in the absence of FDA approval of clearance of these devices.” [He] then declares that “in the clear prohibition by the FDA and federal law, [Defendants] established a sophisticated network of sales agents and distributors.”

* * *

Defendants argue that not only is [Expert 2’s] opinion based on Plaintiff's pleadings, but that his opinion has actually been cut and pasted from a pleading filed in the Third Circuit Court of Appeals. Both of these documents have been provided as exhibits, and have been reviewed by the Court.

The Court finds Defendants’ contention to be true. [Expert 2’s] affidavit is a reconstruction of a pleading filed in the Third Circuit, complete with legal citations. Plaintiff has merely obtained an expert to bless and restate her legal argument. Plaintiff attempts to produce an expert that restates her arguments. This is an improper use of expert testimony.

Thus, the testimony of [Experts 1 and 2] should be excluded.

Id. at *3-4 (all kinds of citations footnotes and other stuff omitted).

Moses didn’t lead us to the promised land very quickly – but there wasn’t any 40-year wait either. Five years was more like it. There was a (relatively speaking) rash of decisions on FDA experts in 2003. In Smith v. Wyeth-Ayerst Laboratories Co., the court encountered the redoubtable (we would say, very doubtable) Dr. Lemuel Moyé, this time offering his opinions about the defendant’s compliance with FDA reporting requirements. The court said “no.” “Defendant asserts that Dr. Moyé should not be allowed to provide opinion testimony about [the defendant’s] compliance, or alleged lack thereof. The Court agrees since to allow such testimony would infringe upon the jury's role in determining an ultimate issue in the case.” 278 F. Supp.2d 684, 702 (W.D.N.C. 2003) (footnote omitted).

2003 also saw the first state court ruling (at least that we know of) barring expert testimony in a prescription drug product liability action as conclusions of law. The proffered opinion this time was not about FDA regulations, but about whether a drug was “unavoidably unsafe” within the meaning of an Ohio statute (O.R.S. §2307.767). Testimony about meeting state statutory standards, as well, “state[d] a legal conclusion, and not an expert pharmacological conclusion.” Kennedy v. Merck & Co., 2003 WL 21658613, at *6 (Ohio App. July 3, 2003).

Finally, there was Steele v. Depuy Orthopaedics, Inc., 295 F. Supp.2d 439 (D.N.J. 2003), in which the court held:

[W]hether the FDA’s approval of a PMA supplement imposes requirements on a particular device is a question of law to be determined by the Court, not a question of fact for the jury. Consequently, [an FDA expert’s] opinion regarding the nature and scope of the FDA’s. . .review of the [device] would neither assist the trier of fact to understand evidence, nor help the jury to determine a fact in issue.

Id. at 446.

Things perked along at the rate of about a decision or two a year after that.

2004 – In In re Rezulin Products Liability Litigation, 309 F. Supp.2d 531, 548-50 (S.D.N.Y. 2004), more FDA expert testimony was excluded – “the proposed testimony about FDA procedures and regulations and disclosure of facts by [defendant] to the FDA is inadmissible.” The reasoning, however, was somewhat muddled by the proposed experts being incompetent as well as offering improper legal opinions. While we put the Rezulin decision in the same line of authority, it lacks a clear holding that expert testimony about the meaning or violation of FDA regulations is inadmissible as a legal conclusion.

An aside: Rezulin and some of the other cases also dealt with (and correctly excluded) supposed expert testimony about corporate intent. But we think that’s a different issue and we’re not discussing that in this post.

2005 – This was when the district court in the Caputo case pitched the testimony of an FDA expert:

Defendants correctly assert that an expert must not improperly tell the jury why a party’s conduct was illegal. While an expert may testify regarding industry standards and practices, he may not offer opinions that amount to legal conclusions. As a result, [the expert] may not testify about whether Defendants met their obligations under the Safe Medical Devices Act of 1990, because such testimony would constitute an impermissible legal conclusion. For the same reason, [the expert] may not summarily testify that [a document] was “materially misleading” within the meaning of any statute or regulation.

United States v. Caputo, 374 F. Supp.2d 632, 646 (N.D. Ill. 2005). See Troxclair v. Aventis Pasteur, Inc., 864 A.2d 1147, 1153-54 (N.J. Super. A.D. 2005) (expert testimony on whether vaccine conponent was an “adulterant” within meaning of Vaccine Act did not create issue of fact because we “need not accept a plaintiff's experts’ opinions when they bear upon construction of a statute or a matter of law”).

2006 – In Livingston v. Wyeth, Inc., 2006 WL 2129794 (M.D.N.C. July 28, 2006), the court struck testimony offered by an FDA expert. “[W]hile the summaries of FDA regulatory practices offered by [the expert]. . .may be helpful, the[] application of law to the facts of this case on an ultimate legal question is not.” Id. at *6. See Apotex Corp. v. Merck & Co., 2006 WL 1155954, at *8 (N.D. Ill. April 25, 2006) (“expert testimony – which reads more like a legal brief than an expert report – consists of plainly inadmissible legal conclusions concerning [the defendant’s] fraudulent alleged fraud and would be completely unhelpful to the fact finder”).

After that, we’re finally getting to the stuff we’ve discussed already. That was the year of the Strong case, which led to the FDA’s brief decrying FDA expert testimony on issues of law.

So, while the Seventh Circuit’s recent affirmance in Caputo was the first federal appellate decision to address the exclusion of expert testimony about what FDA regulations mean and whether they were violated as inadmissible legal conclusions – it was hardly the first case of its kind at any level, or even the first appellate decision.

And we knew that – FDA Week notwithstanding – because we’ve had to deal with that kind of thing for twenty years now.

That Didn't Take Long

Just after Riegel was decided, we mentioned that there would undoubtedly be attempts made in Congress to strangle the new legal regime that the Court wrought in its cradle. It didn’t take long, either. A couple of days ago, we saw a bill introduced in Congress that would eliminate express preemption under the Medical Device Amendments (“MDA”) altogether.

It’s very simple. The plaintiffs’ lawyers’ bill proposes to amend the MDA’s preemption provision, 21 U.S.C. §360k, to add a new, third, subsection:


Nothing in this section shall be construed to modify or otherwise affect any action for damages or the liability of any person under the law of any State.

That’s all. The legislation has no purpose except to reverse the express preemption decision in Riegel. Not only that, check out the “effective date” language. The plaintiffs’ bill is intended to be retroactive to 1976 when the MDA was enacted.

Never let it be said that the plaintiffs’ lawyers’ lobby in Washington doesn’t know how to write legislation.

With this bill, it can also said that the myth of “big bad Pharma” (including medical devices) should definitively be put to rest forever. Whatever lobbying power “Pharma” might supposedly have, that power pales in comparison to the plaintiffs’ lawyers’ lobby. This bill proves it.

Yeah, we know, the “big bad Pharma” myth dies hard (since the other side does so much to perpetuate it), so we’re going to have to give you better reasons than that.

We will.

Remember Medtronic, Inc. v. Lohr, 518 U.S. 470 (1996)? We sure do. We Bone Screwers had just gotten a preemption ruling only a couple of months before that would have shut down about 85% of that mass tort. In re Orthopedic Bone Screw Products Liability Litigation, 1996 WL 221784 (E.D. Pa. April 8, 1996).

Same old, same old…. Yup, we’ve been fighting these preemption battles for that long. You see, we’ve always tried to find ways to win mass torts, not just position them for settlement.

Well, Lohr comes down and, as everybody who reads this blog knows, the industry – big bad Pharma – got its head handed to it. Lohr was such a disaster that it’s one of those events that we still remember exactly where we were when we first heard about it.

Lohr involved medical devices cleared for marketing as “substantially equivalent” to some device that existed before the MDA was passed. How big was that? That type of marketing clearance is how well over 90% (we’ve seen stats indicating more like 99%) of all medical devices make it to market. Lohr meant, and means, essentially that 90-99% of all medical devices have no preemption protection at all.

That’s a lot of devices and a lot of device manufacturers.

So what did “big bad Pharma” do after Lohr?

Not much. The preemption landscape for the vast majority of medical devices has pretty much stayed the same ever since – for more than a decade now.

Unlike the plaintiffs’ lawyers’ lobby now, our side never tried to ram a bill through Congress (then controlled by Republicans, remember) that would have overturned Lohr and expanded preemption to the 90%+ of devices that had just had preemption ripped away from them.

Too hard, was the word. The votes just weren’t there.

Supposedly big bad pharma didn’t have the political muscle even to think about protecting 90%+ of all medical devices with a pro-preemption amendment.

But let the other side lose the preemption war with respect to even 1% of all medical devices?

Boom! The ink’s hardly dry on Riegel and here they come with legislation designed to make sure there’s no preemption anywhere, ever again - express preemption, anyway. They can’t take implied preemption away unless they repeal the FDCA and abolish the FDA

The plaintiffs’ lawyers’ side sure is convinced that they can put the political arm on Congress in ways that big bad Pharma would never even dream of. Even though they like to vilify our clients for purported political influence, they know the truth as well as we do. Our side wouldn’t even attempt such a thing.

That’s a good definition of chutzpah.