Showing posts with label California. Show all posts
Showing posts with label California. Show all posts

Wednesday, May 27, 2015

Insurer Declaratory Action: To Stay or Not to Stay?

This month’s edition of For the Defense magazine focuses on insurance law.  That makes sense.  It is difficult to do much defending without bumping against insurance issues.  Our torts professor constantly emphasized the relevance, sometimes even the primacy, of insurance considerations.  But law school being law school, we learned precious little of the mechanics of insurance.  Some companies self-insure, some use captive insurers, and some have some/several/many complicated insurance policies where the scope of coverage becomes a question of theoretical majesty.  A colleague of ours, Rick Berkman, probably knows as much as about settling cases and dealing with insurers as anyone on the planet.  He once told us that insurance policies seem to contain a clause written in invisible ink:  “Void upon claim.”  There are lawyers who devote their careers to representing insurers.  There are lawyers who devote their careers to harassing insurers -- come to think of it, quite a few of these folks have offices quite close to us. And then there are lawyers (we count ourselves among them) who often do a delicate dance of collaboration and conflict with insurers.  Whether there is insurance overage, or what is the extent of such coverage, plays a huge role in case disposition.  Think of the simplest auto accident case and how the policy limits drive the settlement numbers.

We have not represented an insurer for a good long while.  As a summer associate, we had a case where the issue was whether an auto insurance policy covered the death of a man who, after experiencing car trouble, entered a phone booth (remember those?) to call for road service and was then shot by a street criminal.  We do not remember how that one turned out.  You name a bizarre fact pattern, and there is probably an insurance case that comes close to it.  Insurers naturally would rather pay less or not at all, but they are in a sticky spot, particularly when the insured seeks litigation defense.  If the insurer denies coverage, including denial of a defense, and then turns out to be wrong, that insurer is in a heap of trouble.  After all, when someone buys insurance, what they are really buying is peace of mind. Otherwise, just based on the actuarial numbers, it is a dodgy investment.  But if the insurer wrongly denies coverage, there is a betrayal of that peace of mind. It is one of the areas of the law (along with mishandling of corpses) where psychic injury damages cropped up relatively early in our jurisprudence and did not seem entirely nonsensical.  The rational thing for an insurer to do – and insurers are nothing if not rational – is to tender a defense whilst reserving rights.  In the meantime that defense can turn out to be terribly expensive.  Consequently, there is something else an insurer can do: file a declaratory judgment action seeking a ruling that the underlying case is outside coverage.  One wonders whether that fairly typical maneuver by the insurer might exhaust a penurious insured, at least giving the insurer some leverage in the coverage dispute.  But we hate to indulge our cynical side.            

An insurer filed such a declaratory judgment action in Ironshore Specialty Ins. Co. v. 23andMe, Inc., 2015 U.S. Dist. LEXIS 64145 (N.D. Cal. May 14, 2015).  The defendant in that case provided a Personal Genome Service (“PGS”) directly to consumers who want to know about their personal genetic information.  The results consisted of raw genetic data obtained by saliva testing (“DNA Data”), information regarding ancestry (“Ancestry Component”), and information regarding personal health (“Health Component”).  On November 22, 2013, the FDA issued a warning letter stating that sales of the PGS without market clearance or approval violated the Food, Drug and Cosmetic Act because the Health Component of the PGS was not so accurate.  The defendant stopped offering the Health Component to new consumers, but not quickly enough to avoid a couple of federal class actions, arbitrations, and a Civil Investigative Demand (“CID”) by the state of Washington.  The federal actions and arbitration complaints alleged that the defendant had (1) falsely represented in advertising that the PGS would give consumers knowledge about their health conditions and their status as carriers of genetic disorders when, in fact,  the results provided were inaccurate and incomplete; (2) misled consumers into believing that the PGS had received government approval; and (3) failed to disclose to consumers that their genetic information would be used to create a database that the defendant would market to physicians and pharmaceutical companies.  The claims asserted various theories, including the inevitable violations of California Business & Professions Code § 17200.

Just as inevitably, the defendant tendered the defense of the federal actions and arbitration complaints to its insurer under a “Products/Completed Operations Liability and Professional Liability Policy for Life Sciences.”  The insurer accepted the defense of the actions, and of the CID, but with the inevitable reservation of rights.  Maybe it was not quite inevitable, but it was at least unsurprising for the insurer to file an action seeking a judicial declaration that it did not have a duty to defend or indemnify the defendant in the underlying actions because the claims were outside the scope of the insurance policy.  Then, inevitably, the defendant moved to stay the declaratory relief action pending resolution of the underlying litigation.  The court’s resolution of this dispute was not exactly inevitable, but neither was it crazy.

Whether or not to stay an insurer’s declaratory action largely turns on whether the declaratory action poses the risk of inconsistent factual determinations that could prejudice the insured.  More concretely, the court examines whether:  (1) the insurer might “join forces with the plaintiffs in the underlying actions as a means to defeat coverage”; (2) the insured might be “compelled to fight a two-front war, doing battle with the plaintiffs in the third party litigation while at the same time devoting its money and its human resources to litigating coverage issues within its carriers”; and (3) “the insured may be collaterally estopped from re-litigating any adverse factual findings in the third party action, notwithstanding that any fact found in the insured’s favor could not be used to its advantage.”  A stay is required in the first and third type of prejudice involving factual overlap.  Otherwise, whether to grant a stay or fashion some other remedy is left to the discretion of the trial court.  In Ironshore, the court ended up staying parts of the insurer’s declaratory actions and not staying other parts, depending on which arguments for non-coverage were asserted by the insurer. 

First, the insurer argued that all of the claims in the underlying action sought either equitable relief or restitution, which are not recoverable under the terms of the policy, or disgorgement of profits, which is not insurable under California law.  But it was by no means apparent from the pleadings that the underlying plaintiffs were limiting the damages sought in the way characterized by the insurer.  The insurer tried to bolster its position by submitting the mediation statement submitted by the plaintiffs in the underlying actions.  No fair, said the court, because that statement is protected by California’s mediation privilege.  Accordingly, the insured succeeded in staying that portion of the declaratory action with respect to the insurer’s contention that the underlying actions did not seek covered or insurable damages.

Second, the insurer denied coverage on the grounds of the policy’s exclusion for any liability or obligation assumed by the insured via a contract or agreement.  The insurer argued that all of the underlying claims were barred by the exclusion because each plaintiff and class member entered into a contract with the defendant, and thus their claims sought damages arising out of the defendant’s “assumption of liability or obligations in a contract or agreement.”  The court did not indicate whether it bought the insurer’s argument (to us it seems to make coverage illusory in a situation involving the sale of anything), but it acknowledged that the parties’ dispute regarding applicability of the defense turned largely upon construction of the language used in the policy exclusion.  The lawyer for the insurer did a very smart thing at oral argument by representing that the insurer could demonstrate a complete absence of coverage under the policy exclusion in a limited early motion for summary judgment, without the necessity for discovery.  Such a potential resolution seemed easy, potentially dispositive, and, therefore, appetizing to the court, so it denied the stay request on that coverage issue.  The insurer would get its shot at getting out of the case based on the policy exclusion. 

Third, the insurer argued that the underlying claims were barred by the policy’s Off-Label Promotion exclusion, which barred coverage for damages or expenses “based upon[,] arising out of, directly or indirectly resulting from or in any way involving” the defendant’s “promotion of off-label or unapproved uses for drugs or medical devices approved by the Food and Drug Administration for other uses.”  We must admit that we did not know that such a thing as off-label exclusions even existed.  We wonder whether most plaintiff lawyers know about that.  If so, maybe they should start laying off the allegations of off-label promotion because such allegations are mostly irrelevant and might even take insurance money off the table.  The Ironshore court reasoned that the insurer’s argument would require a factual determination that the defendant had promoted “off-label or unapproved uses for drugs or medical devices” that were FDA-approved for other uses, and then would have to conclude that the underlying claims are based upon that promotion.  If the court ultimately found that there was off-label promotion, that would not only be a win for the insurer, but it would be a big, big loss for the insured, both in the insurance dispute and in the underlying actions.  It would be an incredible gift to the plaintiffs in the underlying actions.  For that very reason, the Ironshore court granted the insured’s motion to stay the declaratory judgment action as to the off-label promotion exclusion.

Fourth, the insurer sought a declaration that it need not cover intentional acts.  The policy provided coverage for “Damages that the Insured becomes legally obligated to pay because of a Claim alleging a Wrongful Act by the Insured.”  “Wrongful Act” means any actual or alleged negligent act, error or omission.  A “Wrongful Act” would not include intentional misconduct.  The insured admitted as much.  But the insured argued that no purpose would be served in the court’s fashioning a determination that the policy applied only to negligent acts, errors, and omissions, because such a determination could not possibly eliminate the insurer’s duty to defend.  It is not as if the plaintiffs in the underlying actions limited their claims to intentional acts.  Some of the claims were a bit unclear.  For example, false advertising and unfair competition might look like excluded intentional acts. But maybe not.  And there were other acts alleged that did not appear to be necessarily intentional.  Thus, even if the insurer  were successful on that defense it would still have a duty to defend in the underlying actions.  The Ironshore court concluded that the burden to the insurer in fighting a two-front war outweighed the insurer’s interest in obtaining an immediate partial coverage determination that would not eliminate its duty to defend.  That part of the declaratory action was stayed.

Finally, the insurer asserted that the CID issued by the Washington Attorney General did not qualify as a covered “claim” under the policy.  “Claim” means a “written demand for Damages, services or other non-monetary relief.”  The CID was issued at the outset of the state’s investigation and it merely consisted of document requests and interrogatories.  There was not yet a written demand for damages, services, or other non-monetary relief.  There was no lawsuit yet.  Note those “yets.”  The insured quite sensibly argued that the Washington Attorney General might not have initiated legal proceedings against it, but it was only a matter of time.  The court disagreed.  It held that the balance of prejudice favored permitting the insurer to demonstrate the application of the defense in a limited early motion for summary judgment.    The stay motion was denied on this issue. 

Essentially, it looks as if the Ironshore court was willing to allow the insurer to make its case for noncoverage only if the issues raised were straightforward and could not wreck the insured’s position in the underlying cases.  That result seems reasonable enough.   

Monday, March 30, 2015

Limiting the Damage from One-Sided Ex Parte Interviews of Doctors

This post originates from the non-Reed Smith side of the blog, only.

We’re going to take a walk once again onto the uneven ground of ex parte interviews of treating doctors, an area in which Plaintiffs’ counsel too often seem to be handed the higher ground.  Plaintiffs’ counsel always seems to get the opportunity to conduct doctor interviews.  They then talk to the doctors about the plaintiff’s medical records, course of treatment, diagnosis and prognosis, but those are only the preliminaries.  That’s not what they’re there for.  They're lawyers.  They’re there to litigate.  They want opinions on key litigation issues like causation, warnings and marketing.  So plaintiffs’ counsel shows the doctors documents that they never saw before or ever had any reason to see and uses them to try to generate plaintiff-friendly opinions. 
Defense lawyers, on the other hand, often don’t have the same opportunity.  In New Jersey, for instance, judges rarely allow ex parte interviews by defense counsel in mass tort litigation, even though the New Jersey Supreme Court has authorized such interviews, as a general matter, in tort litigation.  On the other end of the spectrum, New York allows defense counsel to conduct ex parte interviews of treating doctors whether it be in an individual tort action or as part of a mass tort litigation—though our experience with such interviews (known as Arons interviews) is that courts sometimes place authorization and notification requirements on defense counsel that allow plaintiffs’ counsel the opportunity to speak to the doctor first and learn which documents defense counsel may show the doctor.  It’s still much better than no interview at all.  (We blogged about the varying approaches of different states here.)

That leads us to a California state court decision issued ten days ago in the Actos litigation.  See Yotam v. Takeda Pharmaceuticals North America, Inc., No. BC411687 (Cal.Sup. Ct. Mar. 20, 2015).  There, plaintiffs’ counsel had been conducting ex parte interviews with treating doctors in much the way that we have come to expect.  They were meeting with doctors alone and showing them internal company documents, no doubt those with the seemingly worst language they could find.  Then, no doubt, some doctors, armed with little to no context, foundation or understanding of how the company operates and makes decisions, express ill-conceived opinions about marketing and which snippets of internal information or isolated data should have been included in the warning.  Doctors are often also given a handful of minutes to look at pre-highlighted clinical studies and, with no time to scientifically analyze them, asked to offer opinions.  Then, a few days later, plaintiffs’ counsel elicits those newly-minted opinions at a deposition.  Blindsided, defense counsel scrambles to either illustrate the doctor’s lack of foundation for the opinions in the hope of later excluding them or, in the alternative, place the documents in context so as to undermine or reverse the doctor’s opinions.  Through this process, plaintiffs’ counsel has conjured up a stealth, undisclosed expert witness, one with the added credibility of having treated the plaintiff.  Defense counsel is left to simply watch the end product unfold in front of her at a deposition.  

This is hardly a fair-handed way to conduct discovery.  

So, the defense counsel in Yotam asked the court to stop it.  They moved the court for one of two orders: either (1) limit plaintiffs’ counsel’s ex parte interviews to a plaintiff’s treatment, diagnosis and prognosis or, instead, (2) allow defense counsel the opportunity to also interview treaters using the same type of documents that the doctors likely never saw before.  While neither of these solutions would grant the defense the same access as plaintiffs’ counsel – that is, the defense wouldn’t be allowed a straight-up interview on a plaintiff’s treatment, diagnosis and prognosis (which presumably was previously disallowed by the court) – it would make the process a bit fairer, allowing defense counsel, before the deposition, to undo or better inform certain of the doctor’s newly-minted opinions.  

The court agreed to option 1.  That’s the right decision.  As the court put it, treating doctors are “percipient” witnesses.  For those (like us) who need to look that word up, it means that they are real witnesses.  They are there to discuss what they perceived in treating the plaintiff, not opinions later concocted during litigation.  Sure, doctors are experts in their field.  But that doesn’t mean they can be willy nilly used as undisclosed experts in the litigation.  “While the treating physicians are percipient ‘experts’ (and may in fact provide fact and opinion testimony), they are not designated experts.”  Id. at 13.  They court laid out the new limitations on Plaintiffs’ counsel:
Plaintiffs' counsel may meet ex parte with treating physicians and ask them questions about the information obtained by an examination of their patients.  Plaintiffs' counsel may then use the information learned from the ex parte contacts to tailor deposition questioning.  As Defendants note, during deposition, Plaintiffs' counsel may show the treating physicians medical articles and documents [those which have been deemed confidential) and ask them whether they would have made prescribing decisions had they known certain facts at the relevant time.

Id.  That’s right.  These solo interviews, which defense counsel does not get to conduct, should not be used as a breeding ground for undisclosed, litigation-created opinions.  

Now, this is a good result, but only from the position from which the defense was forced to operate—having no ex parte access to doctors at all.  To be completely fair, the defense should have the same access to doctors that the plaintiffs’ counsel has.  The defense should be allowed to meet with the treaters and discuss plaintiff’s treatment, diagnosis and prognosis.  Doctor-patient confidentiality has been waived.  Plaintiffs put their treatment at issue the moment that they filed suit, leaving no meaningful basis to limit doctor interviews to only plaintiff’s counsel.  That said, this was an impressive victory in which defense counsel limited the damage from an already uneven playing field. 

Wednesday, March 18, 2015

An Exemplary "Learned Intermediary" Win for Lilly and Byetta

A tip of the hat to our friend and former colleague Ken Zucker from Pepper Hamilton, who achieved this victory and sent us the decision.  In the consolidated California Byetta litigation, 2015 WL 663211 (Cal. Super. Feb. 26, 2015), defendant Eli Lilly & Co. moved for summary judgment in a Byetta pancreatitis case, arguing that, under the “learned intermediary” doctrine, it was entitled to summary judgment on plaintiff’s claims that Byetta’s pancreatitis warnings were inadequate.

Plaintiff cross-moved for summary adjudication, arguing that manufacturer’s duty to warn ran to the plaintiff because, pursuant to 21 C.F.R. §208, a required Medication Guide was provided to the patient when the drug was dispensed.    Id. at *1.  The plaintiff claimed that “the [Medication Guide] given directly to a patient changes or eliminates the traditional ‘learned intermediary’ defense [sic] for prescription medicines where the entire focus is on the adequacy of the warnings given to the  prescribing doctor, not the quality or accuracy of communications that may have come to the patient user’s attention.”  Id.

This was an attempt to revive a moribund would-be "exception" to the doctrine - involving then-novel FDA-mandated direct-to-patient oral contraceptive warnings - that gained a couple of adherents in the early to mid 1980s (Massachusetts and Oklahoma), and then promptly died out as its contradictions became increasingly overwhelming.  See In re Norplant Contraceptive Products Litigation, 165 F.3d 374, 379 (5th Cir. 1999) (applying Texas law), which debunks this purported "exception" at some length.  Not a single jurisdiction had signed on with this exception in the last thirty or so years, and California in particular has never given it the time of day.

In the meantime, the FDA replaced its ad hoc oral contraceptive decision with a general medication guide requirement, such guides became routine, and adherence to the learned intermediary doctrine grew simultaneously with the ubiquity of medication guides.

The Byetta Court recognized this as it disagreed with the plaintiffs disco-era theory, holding, “[T]he Court is not persuaded in the absence of even one citable decision on point from any American jurisdiction that the now somewhat common FDA practice of requiring a Medication Guide for more than a trivial subset of all approved prescription drugs changes the entire existing common law.”  Id.
Having confirmed that the “learned intermediary” doctrine was applicable to the case, the Court turned to testing the evidence of record on warnings.  The Court held, “After a careful review of the testimony of [the prescribing doctor] and the other relevant evidence, the Court concludes that defendants . . . have met their burden  to establish  . . . that [the doctor] would still have prescribed Byetta to the patient even if the label had been more direct or unequivocal in stating that Byetta “causes” pancreatitis for certain patients.”  Id.  Key to the Court’s holding was evidence demonstrating that:
  • Warnings given to the doctor and also to the patient alerted both to the association between Byetta and pancreatitis;
  • The doctor and the patient discussed the risk of pancreatitis before Byetta was described;
  • The doctor examined the plaintiff’s medical history to determine whether she was at a higher risk for pancreatitis but ultimately decided to prescribe Byetta instead of other diabetes drugs. 

Id.   As such, “Plaintiff’s efforts to reconstruct in the context of this litigation what ‘might have happened’ if a stronger warning was used by defendants is based on conjecture rather than admissible or persuasive evidence.”  Id.  Check and mate – summary judgment for Lilly.  This simple analysis -- doctor was aware of warning – doctor considered warning in light of patient’s circumstances – doctor prescribed drug anyway – is the essence of the learned intermediary doctrine and is so often obfuscated by courts superimposing “maybes” on the clear facts of a case.   Add to this the Court’s refusal to allow the presence of the Medication Guide to alter its analysis, and score a double victory for law and logic.   

Friday, March 13, 2015

Medical Monitoring For Soft Drink Purchasers: Not The Choice For This Generation

            Those of us who have been paying at least marginal attention to developments in popular culture and product liability law—not necessarily the fanatical level of attention to these subjects paid by certain of our co-contributors—will recall that the “Cola Wars” and medical monitoring (for otherwise uninjured plaintiffs) were a big deal back in the 1980s and 1990s.  For the former, people used to pay attention to new slogans, new formulations, celebrity endorsements, and ad campaigns.  Whether one self-identified as a “Coke” or “Pepsi” person somehow mattered.  (Maybe people still do care about these things, but they do not seem to have the place in our national consciousness that they once did.)  Similarly—OK, not similarly at all, but we get latitude in an introduction like with leading questions to an expert about her qualifications at the start of direct examination—medical monitoring used to be a big deal and it was unclear where the weight of authority would eventually come down on whether manufacturers or other tort defendants might be regularly saddled with the cost of paying to monitor for diseases that had not been (and might never be) diagnosed.  In 1984—a few months after Michael Jackson’s hair caught on fire filming a Pepsi ad—Judge Starr, with Judge Bork concurring, wrote the landmark decision in Friends for All Children, Inc. v. Lockheed Aircraft Corp., 746 F.2d 816 (D.C. Circ. 1984), which is often credited with creating medical monitoring as a cause of action or type of relief, although the term “monitor[ing]” is not to be found in it.  For years after Friends, there seemed to be trend toward acceptance of medical monitoring around the country for classes of plaintiffs who would not have been able to recover damages under traditional tort principles because they did not have compensable, present injuries.  Somewhere in the early 2000s, the tide clearly shifted—for selfish reasons, we point to Wood v. Wyeth-Ayerst Labs., 82 S.W.3d 849 (Ky. 2002), as the arguable tipping point—and the recognition of medical monitoring for uninjured people became a clear minority position.

            Yet, even well into the second decade of this millennium, we still have fights over colas and medical monitoring.  Today’s case is about both.  Riva v. Pepsico, Inc., No. C-14-2020 EMC, 2015 U.S. Dist. LEXIS 26494 (N.D. Cal. Mar. 4, 2015), also weaves in some of our favorites subjects, like the toxicological concept of dose, an aggressive look at pleadings, and rejecting serial amendments.  The case stems from California’s notorious Proposition 65, which has spawned litigation over the years, but requires disclosure of purported carcinogens in consumer products rather than anything approaching medical monitoring for those who consume those products.  Apparently, levels of a chemical called 4-methylimidazole (“4-Mel” in the opinion) in Diet Pepsi and Pepsi One sold in California passed the Prop 65 thresholds for disclosure in 2013.  Id. at *5.  In 2014, nine separate putative class actions were brought and, after some procedural wranglings, the court allowed an amended complaint to be filed by some plaintiffs to try to state a claim for medical monitoring on behalf of all California purchasers (not consumers) of these products over the course of about four years.  Id. at **1-2 & 6.  The defendant challenged the amended complaint on the grounds that it did not properly plead standing, the elements of medical monitoring in California, or the requirements for class certification.
            The reason that the court had to do a thorough analysis of the first two issues—which made the third issue moot—was that California is one of the jurisdictions that rode the wave after Friends and adopted a claim for medical monitoring in Potter v. Firestone Tire & Rubber Co., 863 P.2d 795 (Cal. 1993).  The requirements set out in Potter are similar to those from some of the other cases endorsing medical monitoring:

(1) the significance and extent of the plaintiff's exposure to chemicals;

(2) the toxicity of the chemicals;

(3) the relative increase in the chance of onset of disease in the exposed plaintiff as a result of the exposure, when compared to

(a) the plaintiff’s chances of developing the disease had he or she not been exposed, and

(b) the chances of the members of the public at large of developing the disease;

(4) the seriousness of the disease for which the plaintiff is at risk; and

(5) the clinical value of early detection and diagnosis.

2015 U.S. Dist. LEXIS 26494 at **18-19.  The major problem with these requirements is part of why most courts have now rejected medical monitoring—a plaintiff could meet them and still not have an “injury” in the sense recognized in tort law developed over many decades.  In Riva, the court recognized that it is difficult to meet the constitutional standing requirement of pleading an “injury in fact” that is “not conjectural or hypothetical” when the only “injury” is the alleged need for monitoring for a future disease.  While the decision here looked to the specifics of the plaintiffs’ pleading—and, through the wise use of judicial notice, some of the documents referenced therein—it seems to us to be one step away from the conclusion that a medical monitoring claim by presently uninjured persons, in the traditional tort sense, cannot satisfy the federal constitutional requirements of standing, which also define an “injury in fact” as “actual and imminent” and “concrete and particularized.”

            The core allegation of the amended complaint was that studies showed an increased risk of bronchioloalveolar cancer in mice exposed to daily doses of 4-Mel of more than 4,000 micrograms per kilogram of body weight, whereas each can of Diet Pepsi or Pepsi One might expose a human to about 1/1000 of that dose.  Id. at **24-25.  While this might have been enough for a warning under Prop 65, it was not enough for standing or the first three of the Potter criteria.  The standing analysis was more direct:  “Plaintiffs have alleged that mice experience increased risk of harm of a specific form of lung cancer at very high exposures to 4-Mel; but they have not alleged facts to show that humans experience the same increased risk, particularly at the exposures alleged.”  Id. at *13 (emphasis in original).
            To satisfy the first Potter criterion, plaintiffs “must demonstrate sufficient severity of exposure (its significance and extent) and that ‘the need for future monitoring is a reasonable certain consequence of [the] toxic exposure.’”  Id. at *25 (internal citation omitted).  Given how the doses given to mice in the studies compared to the amounts in a can of soda, one study relied on in the amended complaint concluded that “the amounts ingested from these beverages may not be significant.”  Id. at **24-25.  On top of this, the amended complaint alleged that the proposed class reps drank as much as four cans of the particular soda brands per day, but never alleged how many cans would cross the line to an increased risk of cancer.  Thus, plaintiffs “failed to demonstrate a credible risk of bronchioloalveolar cancer resulting from the human consumption of cola products at the levels alleged by the named plaintiffs” and had not properly alleged significant exposure.  Id. at *26.

            Similarly, for the second Potter criterion, the plaintiffs failed to allege that 4-Mel was toxic—at the level of consumption alleged.  Recognizing that the degree of toxicity cannot be separated from the level of exposure—like the old saw “the dose makes the poison”—was the key to this analysis and (jumping ahead) helps cut down on lengthy and costly proceedings to get to this inevitable stumbling block.  In addition, the court rejected the idea that being identified as a carcinogen by Prop 65 did not end the toxicity inquiry for purposes of medical monitoring:
Because the burden on a defendant to fund medical screening for thousands, potentially millions, of people is so substantial, the Potter factors serve a critical gatekeeping function, regulating a potential flood of costly litigation; Potter requires a higher level of proof of health risk than that required for inclusion of a substance on a Proposition 65 list.
Id. at **36-37.  Well said.  Inclusion on a Prop 65 list should not be enough to get past any substantive legal requirement, let alone the other big gatekeeper looming in a case like this—Daubert.

            The analysis of the third Potter criterion probably could have stopped with the lack of evidence about any increased risk with the level of 4-Mel in each can of soda, but it went deeper into the articles cited in the amended complaint—again, using judicial notice to look at the rest of what plaintiffs’ relied on without converting the Rule 12 motion into a Rule 56 motion—to see that low levels of 4-Mel are in lots of things a Californian might consume.  Among them were baked goods, candies, “extruded” cereal, beer, soy sauce, and coffee.  “The many sources of 4-Mel prevent the Riva Plaintiffs from satisfying the third Potter factor” because there could be no way to say that any increased risk of bronchioloalveolar cancer was from the little bit of 4-Mel in these brands of soda as opposed to the little bit of 4-Mel in lots of other stuff the putative class members might eat or drink.  Id. at **38-41.
            The last chance for plaintiffs was to ask for another shot at pleading standing and the Potter requirements.  While we all know that amendments are to be granted “freely . . . when justice so requires,” they should not be granted where amendment will be futile.  Here, the proof of futility came from plaintiffs’ concession at a hearing—honesty not found in pleadings or briefs sometimes leaks out when the judge asks questions directly—that they had no studies showing a risk to humans at the relevant exposure levels.  So, that is it for the medical monitoring class.  Time to have a Coke and a smile.  Or obey your thirst.  Or be a Pepper too.  Or maybe just have a nice glass of cold water, which may not have any Prop 65 carcinogens in it, unless you poured it from a bottle or added an ice cube formed in a plastic tray.

Tuesday, March 10, 2015

Specific Causation + General Verdict = Pain Pump Defense Win


Today’s newsflash:  winning is good.  Winning is better than losing.  Winning at trial is especially good.  Winning at trial enhances the chance of winning on appeal.  But are there ways to win at trial that improve the odds of winning on appeal?  Funny you should ask.   A recent unpublished California appellate opinion, In Re Infusion Pump Cases, Super. Ct. No. JCCP 4615 (Cal. 4th App. Dist. March 2, 2015), offers an interesting object lesson.  The plaintiff claimed a chondrolysis shoulder injury from the pain pump.  We’ve heard that before.  There were causes of action for, inter alia, strict liability and negligence.  We’ve heard that before.  The jury returned a verdict for the defendant.  We’ve heard that before.  The plaintiff appealed and argued that the court had wrongly excluded certain evidence.  We’ve heard that before.  But the appellate court’s reasoning in affirming the defense verdict causes us to think more about how to try cases, causes us to think more about how to frame verdict forms , and causes us to think more about causation.


The plaintiff underwent shoulder surgery in 2002.  The doctor used the defendant’s pain pump to control plaintiff’s post-operative pain.  The pain pump was connected by a catheter to the plaintiff’s shoulder for about two days after the surgery. Between 2002 and 2008, the plaintiff rode dirt bikes and all-terrain-vehicles, played golf, and went snowboarding and skiing.  In 2008, after he could not finish painting a room in his house due to shoulder pain, the plaintiff visited several physicians.  One orthopedist diagnosed him with arthritis. Another, who later became the plaintiff’s expert witness, concluded that the pain pump had caused chondrolysis.


One of the plaintiff’s claims at trial was that the defendant had not warned about the unreasonable risks of using a pain pump in the shoulder joint.  The plaintiff contended that the defendant should have warned physicians that its pain pump had not been cleared for intra-articular or orthopedic uses.  The plaintiff alleged that the defendant unsuccessfully tried to secure the FDA’s clearance to include orthopedic use in the pain pump’s indication for use statement.  According to the plaintiff,  the FDA refused such clearance due to safety concerns. Nevertheless, the court excluded evidence concerning the defendant’s submission to, and contact with, the FDA for clearance to market defendant’s pain pump.  Meanwhile, the parties’ expert orthopedic surgeons disagreed on the cause of the plaintiff’s problems.  As referenced above, the plaintiff’s expert opined that the plaintiff had chondrolysis.  By contrast, the defendant’s expert opined that the plaintiff had needed a shoulder replacement due to arthritis. 


The jury returned a general verdict in defendant’s favor on all of plaintiffs’ claims.   The plaintiff’s argument on appeal was that the court had abused its discretion by excluding evidence of the defendant’s communications with the FDA, “communications that should have put [defendant] on notice of potential safety risks associated with the use of its pumps in orthopedic surgeries, and particularly of use inside the shoulder joint.”  The plaintiffs asserted that the improperly excluded evidence included (1) documents exchanged between defendant and the FDA during the regulatory clearance process, and (2) the deposition testimony of an FDA staff person who reviewed the defendant’s regulatory submissions.  That strikes us as proper, given how the plaintiff sought to use that evidence.   We’ve blogged several times (here, for example) about FDA regulatory status and informed consent, and the rule is that FDA regulatory status is not something that a doctor is obligated to discuss with a patient.  Rather, informed consent covers only medical risks and benefits of proposed treatment.  But the appellate court did not need to reach the evidentiary question.  It found a much easier way to affirm. 


The excluded evidence  would have been relevant only to the defendant’s failure to warn claim.  But such evidence would have in no way dislodged or erased the substantial evidence adduced at trial supporting a finding that the defendant’s pain pump did not cause any injury whatsoever.  Thus, if the jury based its verdict on a lack of causation, the failure to warn goes nowhere.  Because the jury returned a general verdict that simply found for the defendant on the two claims of (1) “Negligence – Manufacturer or Supplier – Duty to warn”  and (2) “Strict Liability – Failure to Warn,” the appellate court was required to infer that the jury by its general verdict found for the defendant on every issue submitted.  One of the issues submitted by the defendant at trial was lack of specific medical causation – that its pain pump did not cause any harm to the plaintiff.  The defendant presented substantial evidence at trial supporting a finding that the plaintiff did not suffer from chondrolysis, and thus the failure to warn of the risk of chondrolysis was not a substantial factor in causing the plaintiff’s harm.  This evidence included the defense expert’s opinion that the plaintiff never had chondrolysis and that the plaintiff’s eventual total shoulder replacement was made necessary because he developed secondary arthritis.  Remember how, between 2002, when the plaintiff underwent the surgery in which the pain pump was used, and 2008, when he sought medical help after being unable to finish painting a room, the plaintiff had engaged in enough sporting activities to fill a Cabela’s catalogue? 


In closing argument to the jury, defense counsel stated: “[T]his may be obvious, but I’m going to say it anyway.  If the plaintiffs haven’t proven that Scott McKenna had chondrolysis, then they haven’t proven that anything Breg did at all was related to any harm of Scott McKenna.”  Just so.  That very well might have been the winning argument.  Given the general verdict form, the appellate court had to assume that the defense medical causation argument had won the jury over.  The record showed that lack of causation was a primary defense theory at trial.  It does not matter that there was also substantial contrary evidence.  We are not applying the summary judgment standard at this point.  Once the court necessarily presumes that the jury found that the pain pump had not caused the plaintiff’s injury, the failure to warn claim goes by the boards, and whether or not certain evidence might have suggested warning adequacy is a big who-cares.   


As we said above, winning is good.  Winning with a general verdict is even better.  That is a point that gives us pause, because so often we defense lawyers fight hard for special interrogatories, thinking they will either steer the jury in our direction or will enhance the chance of attacking a bad verdict.  But it turns out that a general verdict is the best way to uphold a good verdict.  Another lesson in this pain pump case is that one should not give up on medical causation without a very good reason.  As the defense lawyer told the jury in closing, medical causation can be the be-all end-all.  


We offer a tip of the cyber-cap to the folks at Bowman & Brooke, who must be very pleased with the outcome they achieved in this case on behalf of the defendant. 



Thursday, January 22, 2015

Homeopathic Drugs – Eh, We Don’t Know

It’s difficult to draw concrete conclusions in the world of homeopathic drugs.  It seems that we don’t know exactly what they are, why they work or whether they even do work.  We’re not exactly sure why we take them, but our friend at the yoga studio said they worked and so did Dr. Oz.  So we take them, hoping that they’re more fix than fairy dust.

In the preemption and FDA world, it’s even more difficult to draw concrete conclusions when homeopathic drugs are involved.  The FDA recognizes these drugs and has in fact devoted a section of its Compliance Policy Guide (“CPG”) to them.  CPG § 400.400, “Conditions Under WhichHomeopathic Drugs May be Marketed."  But after reading it, it’s not entirely clear how much the FDA is regulating these drugs.  For OTC homeopathic drugs, it’s even less clear.  For the most part, these drugs must comply with labeling requirements, meaning that their labels must include directions for use, ingredients, the dilution and the indication.  Id.; see also 21 C.F.R. §§ 201.5, 201.10, 201.61, 201.62.  Depending on certain particulars, homeopathic drugs must also be recognized by and comply with requirements of the Homeopathic Pharmacopeia of the United States, the United States Pharmacopeia, or the National Formulary.  But none of that means that the drugs will perform as indicated or are not misbranded.  CPG § 400.400.

Given this almost half-hearted regulation, it’s not all that surprising that certain courts see a way around preemption when it comes to state-law claims against homeopathic drugs.  In Forcellati v. Hyland’s, Inc., 2015 U.S. Dist. LEXIS 3867 (C.D. Cal Jan. 12, 2015), a putative class sued the manufacturer of homeopathic cold medicines, seeking financial damages under the usual trio of claims based on the California Legal Remedies Act, False Advertising Law and Unfair Competition Law, as well as warranty claims and a claim for violation of the Magnusson-Moss Act.  The FDCA has an express preemption clause for OTC homeopathic drugs that applies if the claims touch upon the same subject matter as FDA regulations and seek to impose a requirement that is “different from or in addition to, or that is otherwise not identical with” FDA regulations.  21 U.SC. §379r(d)(1).  It’s similar to the FDCA preemption clause that applies to medical devices.  While there is an exception to preemption for product liability claims, that preemption exception doesn’t apply to claims like these seeking only financial damages.

So in Forcellati, the plaintiffs’ claim was that the homeopathic drugs didn’t work and that plaintiffs could prove it through clinical trial results and other evidence.  Forcellati, 2015 U.S. Dist. LEXIS 3867 at *13-18.  Defendants argued that such a claim is expressly preempted because the FDA doesn’t require clinical trials for OTC homeopathic drugs.  And so, the defendants argued, plaintiffs’ claims would improperly impose a requirement different from and in addition to those imposed by the FDA.  Id. at *8.  At first blush, that certainly seems right.  The FDA doesn’t require clinical trials, yet plaintiffs are seeking financial damages for the failure of the drugs to successfully complete a clinical trial.  

But the court saw a way around that, explaining that the plaintiffs were not arguing that the manufacturer should have conducted a clinical trial and that its failure to do so constitutes the basis for their claim.  Rather, they were claiming that the manufacturer’s claim that the drugs were effective is disproved by clinical trial results: 

Defendants’ argument fails from the outset because Plaintiffs are not making a substantiation claim.  Plaintiffs are not arguing that Defendant’s use of the word “effective” is false or misleading because Defendants did not conduct tests to substantiate their claim before marketing their product.  Rather, Plaintiffs claim that using the word “effective” is false because Defendants’ products are not effective, period. 


Okay.  The more we think about it, the more we get it.  The state law claim isn’t imposing a requirement that manufacturers of homeopathic drugs conduct clinical trials.  It simply asserts that, if the manufacturer make a claim that the drugs are effective, plaintiffs may try to prove that they aren’t effective (through clinical trials and other evidence) and collect financial damages if they do.  

Further supporting this notion is the FDA’s statement in its Compliance Policy Guide that, even if a homeopathic drug’s label satisfies labeling requirements, it can still be misbranded.  And so, we guess, these state law claims are more akin to parallel claims than preempted claims.  

Maybe.  We can't help but think, though, that this decision was somewhat influenced by the product involved and came with a bit of fairy dust sprinkled on top.  Okay.  We get it.