WEEKLY MDL and MASS TORT UPDATE by Mass Tort Nexus (February 2, 2018)

 

Week of January 29, 2018

This Week in Mass Torts Around The Country:

By Mark A. York

 

 

Xarelto MDL 2592: Are Settlement Talks Coming to Xarelto Litigation?

> During the January 30, 2018 monthly status conference hearing in Xarelto products liability MDL No. 2592, US District Court Judge Eldon Fallon stated that this MDL is nearing its end, and “I need to devise an end game,” as he now seems to be pushing both sides toward a resolution. He also referred to selection of cases to remand where 400 cases each will be selected by plaintiff and defense counsel and 400 more by the court, for a total of 1200 cases being designated for remand back to the court of original jurisdiction for trial or settlement.

Full hearing transcript: XARELTO MDL 2592 Judge Fallon January 31, 2018 Hearing Transcript

 Related-Xarelto Docket briefcase: XARELTO MDL 2592 US District Court ED Louisiana Judge Fallon

Opioid Crisis:

See Mass Tort Nexus Briefcase Re: OPIOID CRISIS MATERIALS INCLUDING: MDL 2804 OPIATE PRESCRIPTION LITIGATION

>  Insys Therapeutics Sued by New York Attorney General for “Opioid Marketing Abuses” Even After MDL Judge Schedules Settlement Conference Inviting State AG’s

How will Opiate MDL 2805 Judge Polster view NY AG’s suit after he requested states attend his January 31, 2018 full day opioid “settlement” meeting in Cleveland? More than 200 attorneys for city and county governments as well as unions and others met all day in closed door meetings. The day included presentations by non-legal “opioid experts” including Dr. Anna Lembke from Stanford, Dr. Aaron Kesselheim from Harvard Medical School who offered views on the who, how and why the opioid drug makers were able to create the opioid crisis, including how Congress hindered attempts at controlling Big Pharma as well as Joseph Rannazzi, former DEA Head of Diversion Control who spoke to restrictions on DEA enforcement against opioid abuses by drug manufacturers and distributors.  

>New York State Attorney General Eric T. Schneiderman on Thursday became the latest attorney general to sue Insys Therapeutics Inc. for allegedly misrepresenting that a spray version of the opioid fentanyl is safe for non-cancer patients and appropriate for mild pain.
Schneiderman alleged in state court that Insys’ marketing of the drug Subsys for unapproved uses caused physicians to overprescribe the treatment, exacerbating the opioid epidemic currently affecting New York and many other states. The MDL judge has stated he wants all parties to come to the settlement table with an open mind, however behind the scenes parties are expressing different views on a quick settlement, since more and more of the suits filed against “Opioid Big Pharma” are RICO claims and some parties want to punish the drug makers for creating the opioid crisis.

 Opioid Indictments:

Pennsylvania Appeals Court Affirms Doctor Conviction For Opioid Prescriptions

 

>A Pennsylvania appeals court panel on Jan. 26 affirmed a doctor’s sentence for illegally prescribing opioid medications and submitting fraudulent bills to insurance companies after finding that the jury was properly instructed about the state’s standards for properly prescribing the drugs (Commonwealth of Pennsylvania v. Lawrence P. Wean, Nos. 1165 EDA 2016, 1167 EDA 2016, Pa. Super., 2018 Pa. Super.

Insys Therapeutics Sales Manager Wants Term “Opioid Crisis” Barred From Trial

>A former Insys Therapeutics Inc employee going to trial for paying kickbacks to doctors to prescribe fentanyl, has requested the court bar U.S. prosecutors from referring to the “opioid crisis” at his trial. Defendant, Jeffrey Pearlman, a former Insys district sales manager , filed a motion asking a Connecticut  federal judge to bar references at his trial to the crisis and evidence the dangers opioids pose. His lawyers cited the “rampant media attention” devoted to opioids, stating  “jurors would likely have strong biases against someone like Pearlman whose company sold and marketed opioids:, even though Pearlman and Insys engaged in rampant illegal sales and marketing of Subsys, the Insys Theraputics, Inc. fast acting fentanyl based opioid drug. . Pearlamn is jusyt one of more than 15 people at Insys to be indicted, including billionaire founder, John Kapoor, and the entire Board of Directors, for marketing off-label prescriptions of Subsys fentanyl spray (United States of America v. Michael L. Babich, et al., No. 16-cr-10343, D. Mass.).

Rhode Island Doctor Pleads Guilty to Taking Kickbacks from Insys Therapeutics, Inc

>A Rhode Island doctor on Oct. 25 pleaded guilty to health care fraud and taking kickbacks for prescribing the opioid Subsys to unqualified patients (United States of America v. Jerrold N. Rosenberg, No. 17-9, D. R.I.).

Related Mass Tort Nexus Opiod Articles:

>California Appeals Court Denies Insurance Coverage For Opioid Drug Makers Defense: Will other insurers say no to opioid coverage? Nov 15, 2017

>Targeting Big Pharma and Their Opiate Marketing Campaigns: Across The USA Nov 3, 2017

For more Mass Tort Nexus Opiod Crisis Information See: Mass Tort Nexus Newsletters and MDL Updates

IVC Filters:

See Bard IVC Filter MDL-2641 Briefcase

510(k) Defense Allowed In Bard IVC Bellwether Trial

>An Arizona federal judge overseeing the C.R. Bard Inc. inferior vena cava (IVC) filter multidistrict litigation on Jan. 29 denied a plaintiff motion to preclude evidence about the devices’ 510(k) clearance in an upcoming bellwether trial, but said he will put the evidence in context and will not allow it to be used as evidence that the devices are approved by the Food and Drug Administration (In Re:  Bard IVC Filters Products Liability Litigation, MDL Docket No. 2641, No. 15-2641, Sherr-Una Booker v. C.R. Bard, Inc., et al., No. 16-474, D. Ariz.)

Cordis IVC Filters:

See Cordis IVC Filter Litigation Alameda County, California Superior Court

>California State Court Cordis IVC Plaintiffs Argue “No Mass Action” To US Supreme Court

WASHINGTON, D.C. — Plaintiffs in an inferior vena cava (IVC) filter case on Oct. 18 told the U.S. Supreme Court that their suggestion of individual bellwether trials does not convert their actions into a mass action under the Class Action Fairness Act (CAFA), 119 Stat. 4 (Cordis Corporation v. Jerry Dunson, et al., No. 17-257, U.S. Sup)

Pelvic Mesh:

Boston Scientific TVM Litigation MDL 2362

>Exclusion of 510(k) Defense in Boston Scientific Pelvic Mesh Case:

ATLANTA — The 11th Circuit U.S. Court of Appeals on Oct. 19 said multidistrict litigation court judge did not err in consolidating four pelvic mesh cases for a bellwether trial and in excluding the so-called 510(k) defense raised by defendant Boston Scientific Corp. (BSC) (Amal Eghnayem, et al. v. Boston Scientific Corporation, No. 16-11818, 11th Cir., 2017 U.S. App. LEXIS 20432).

PLAVIX:

See Mass Tort Nexus Briefcase Re: PLAVIX MDL 2418 USDC NEW JERSEY

>Plaintiff Loses Plavix Case on Summary Judgment Over Late “Learned Intermediary” Declaration

TRENTON, N.J. — The judge overseeing the Plavix multidistrict litigation on Oct. 26 granted summary judgment in a case after ruling that the plaintiff’s “eleventh hour” declaration by one treating physician did not overcome California’s learned intermediary defense for defendants Bristol-Myers Squibb Co. (BMS) and Sanofi-Aventis U.S. Inc. (In Re:  Plavix Products Liability Litigation, MDL Docket No. 2418, No. 13-4518, D. N.J.)

 Hip Implant Litigation

UTAH FEDERAL JUDGE ASK STATE SUPREME COURT “Does Unavoidably Unsafe Apply To Medical Devices”

A Utah federal judge on Jan. 23 asked the Utah Supreme Court whether the state recognizes the unavoidably unsafe product doctrine for medical devices, such as hip implants, as well as drugs  (Dale Burningham, et al. v. Wright Medical Group, Inc., No. 17-92, D. Utah)

Most Wright Profemur Hip Claims Dismissed in Iowa Federal Court Ruling

See: Wright-Medical-Inc-MDL-2329-Conserve-Hip-Implant-Litigation

>An Iowa federal judge on Jan. 26 dismissed most claims in a metal-on-metal hip implant lawsuit and found no personal jurisdiction of Wright Medical Group Inc. (Rebecca Dumler, et al. v. Wright Medical Technology, Inc., et al., No. 17-2033, N.D. Iowa, Eastern Div).

Related Article: Federal Judge Joins Plaintiff Cases in Wright Profemur Hip California Litigation

Diabetes Drugs

Actos Cases Dismissed in California Court: 2014 Global Settlement Applies

>A California federal judge on Jan. 25 dismissed for lack of jurisdiction an Actos class action because the four plaintiffs previously settled their individual claims against the diabetes drug maker Takeda Pharmaceuticals America Inc. (Gary Bernor, et al. v. Takeda Pharmaceuticals America Inc., et al., No. 12-04856, C.D. Calif)

Birth Control

Non-Missouri Plaintiffs Dismissed From Essure Litigation “No Personal Jurisdiction”

>A Missouri federal judge dismissed 92 plaintiffs from a multiplaintiff Essure lawsuit Jan. 24, finding that the court lacked personal jurisdiction over the non-Missouri plaintiffs see Bayer-Essure Missouri Federal Court Order Dismissing All Non- Missouri Plaintiffs Jan 24, 2018 (Nedra Dyson, et al. v. Bayer Corporation, et al., No. 17-2584, E.D. Mo., Eastern Div.)

Mirena IUD:

>2nd Circuit Appeals Court Excludes Mirena MDL Experts—Litigation Terminated

NEW YORK — The Second Circuit U.S. Court of Appeals on Oct. 24 affirmed the exclusion of general causation experts in the Mirena multidistrict litigation and a court order terminating the MDL before any trials were held (In Re:  Mirena IUD Products Liability Litigation, Mirena MDL Plaintiffs v. Bayer HealthCare Pharmaceuticals, Inc., Nos. 16-2890 and 16-3012, 2nd Cir)

Related: Federal Court Reopens Mirena IUD Product Liability MDL Nov 3, 2016

Testosterone Replacement Therapy:

See Mass Tort Nexus Briefcase Re: TESTOSTERONE MDL 2545 (AndroGel)

>Seventh Circuit Appeals Court: “Premeption Applies to Thousands of Depo-T Cases”

CHICAGO — The Seventh Circuit U.S. Court of Appeals on Jan. 19 said a regulatory quirk in how the testosterone drug Depo-T is classified means that thousands of product liability claims involving the drug are preempted (Rodney Guilbeau, et al. v. Pfizer Inc., et al., No. 17-2056, 7th Cir., 2018 U).

>Defense Wins 4th AndroGel MDL Bellwether Trial

An Illinois federal jury on Jan. 26 returned a defense verdict for AbbVie Inc. in the fourth AndroGel multidistrict litigation bellwether trial (Robert Nolte v. AbbVie, Inc., et al., No. 14-8135, N.D. Ill.)

Fosamax MDL 1789:

See Mass Tort Nexus Briefcase Re: MDL 1789 Fosamax Products Liability Litigation USDC New Jersey and FOSAMAX MDL 2243 (FEMUR FRACTURE CLAIMS) BRIEFCASE

>Fosamax Plaintiffs Request Supreme Court To Deny Merck Preemption Argument

Counsel for more than 500 Fosamax femur fracture plaintiffs on Oct. 25 urged the U.S. Supreme Court to deny certiorari to Merck Sharp & Dohme Corp., arguing that their claims are not preempted by “clear evidence” that the Food and Drug Administration would have rejected stronger warnings for the osteoporosis drug (Merck Sharpe & Dohme Corp. v. Doris Albrecht, et al., No. 17-290, U.S. Sup., 2017 U.S. S. Ct.)

 

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JPML Approves Opiate Prescription MDL No. 2804: “Profits Before Patients” Exposed

JPML Approves Opiate Prescription MDL No. 2804

 

 

(Mass Tort Nexus) The U.S. Judicial Panel on Multidistrict Litigation, formally approved the “NATIONAL PRESCRIPTION OPIATE LITIGATION MDL No. 2804” earlier today see, JPML Transfer Order in MDL No. 2804, December 5, 2017.  Cases filed into MDL 2804 by counties, cities and other parties are expanding quickly as plaintiffs in more than 100 lawsuits against pharmaceutical companies related to the opioid epidemic were successful, when getting the MDL assigned to Judge Daniel Polster in the US District Court, Northern District of Ohio. While the manufacturers had argued for consolidation in corporate defense friendly New York, and various distributors supported consolidation in West Virginia. The location of this MDL in Ohio, which has been one of the hardest hit states by the “opioid crisis” may have far reaching implications toward the management and ultimate resolution of the onslaught of opioid claims.

Case plaintiffs are filing new claims across the country from Montana to New Mexico and into Wisconsin, where every county in the entire state of Wisconsin has filed suit against the opioid drug makers and distributors, see Mass Tort Nexus briefcase “OPIOID CRISIS MATERIALS INCLUDING: MDL 2804 OPIATE PRESCRIPTION LITIGATION” for materials, including case dockets and information related to all areas of the opioid crisis across the country.

 Parties Vie For Strategic Positioning In Their Preferred Venues

On Sept. 25, 2017, 46 government plaintiffs filed a motion with the

panel seeking coordination or consolidation of their claims and 20

“substantially similar” lawsuits pending in 11 federal districts.

Among the common questions of fact that would justify MDL,

plaintiffs cited:

  • Whether, and to what extent, defendants promoted or allowed

the use of prescription opioids for purposes other than those

approved by the U.S. Food and Drug Administration.

  • Defendants’ knowledge of the actual or potential diversion of

prescription opioids into illicit channels.

  • The nature and adequacy of defendants’ internal controls and procedures for identifying suspicious orders for prescription opioids and reporting them to the authorities.

 Plaintiff Positions:

Pro-MDL plaintiffs had wanted to keep the docket in the hard hit Ohio or West Virginia courts, as the impact there has crossed all lines with no demographic not affected in one way or another by the opioid crisis.

Anti-MDL plaintiffs, including the city of Chicago and eight plaintiffs from West Virginia, opposed centralization, arguing their claims named

distributors or manufacturers, but not both, and the MDL would hinder their individual case interests, which was rejected by the panel, as Judge Charles Breyer of the Northern District of California noted repeatedly, the central factual issue for these claims is “what

did [the manufacturers and distributors] know and what did they do [with that knowledge]?” Plaintiff-specific questions, such as how many pills were shipped into a given community, could be answered in the context of MDL without hindering any individual plaintiff’s case.

 Drug Distributors:

The “big three” distributor defendants, McKesson Corporation, Cardinal Health Inc., and AmerisourceBergen Corporation, wanted the MDL before Judge David A. Faber in the Southern District of West Virginia, which already has a heavy MDL docket with the thousands of TVM cases, and the panel decided against another massive caseload being assigned to that venue.

Drug Manufacturers:

The manufacturers sought transfer to the federal district where they were first sued, in the Northern District of Illinois, where Judge Jorge Alonso is presiding over the lawsuit filed by the city of Chicago in June 2014.  As an alternative to the Illinois court, the manufacturers, with many being based in Connecticut, Pennsylvania, New York and New Jersey, argued for the U.S. District Court for the Southern District of New York, even though there is no opioid litigation pending against them there.

 MDL 2804 Impact on Opioid Crisis

Transferee courts often make crucial pretrial decisions regarding case management, the scope of discovery and class action certification.

The opioid claims have this far suffered from the lack of such coordination and guidance, and MDL 2804 would be making an important step in managing the ever growing case docket. Which has unique challenges including, opioid claims that are not brought by the injured individuals themselves. Instead, these claims have been filed b by government entities that allege they are out massive amounts of money and lost services after having treated or responded to the opioid epidemic for the last 15 years.

As Judge Vance noted throughout the hearing, “there are serious threshold issues” with the government entities’ standing to bring claims that do not apply to other plaintiff categories, such as individuals claiming wrongful death, which could lead to an inefficient MDL for non-government plaintiffs.

JPML Judge Refers to Future Individual Claims

Judge Vance stated, “Therefor the manner in which government entities can prove their damages will be a challenging topic for any MDL court, as will the consideration of how a settlement may be structured such that it does not impinge on the rights of recovery for the actual individuals who may later claim personal harm from opioids.” Which may be taking place sooner as opposed to later, as individual claims are being filed in a few courts across the country already.

 Settlement Ability Of Big Pharma

An additional consideration of the court is the pharmaceutical manufacturers being the primary target of opioid litigation, as the drug makers are alleged to have been involved in stoking the fires of the epidemic from the earliest days. Many of these companies have very large set aside cash reserves for just this type of legal development, which could give them increased leverage and ability to craft settlements in the MDL.  While distributor defendants, will face very different exposures, with resolution that may involve insurance interests, and some insurers have decided to decline coverage and spinning off a whole sub-set of insurance coverage lawsuits.

Healthcare Service Providers and Pharmacies Are Also Targets

Additional defendants in these claims now include pharmacies like CVS, Walgreens, etc, doctors and pain management clinics, all of which have settlement interests and exposures that differ from the others.  As opioid claims mount, reports have surfaced indicating that Purdue Pharma and other pharmaceutical defendants are eyeing settlement, at least at the state level.

RICO Claims Are In The Mix

Several entities have filed RICO claims against the drug makers and distributors alleging that the opioid crisis was developed and directed by boardroom decisions of some of the largest companies in the United States. How this affects the MDL direction will be worth watching.

The opioid plaintiff pool across the country now includes state and local governments, hospitals, labor unions and an ever growing number of individual plaintiffs as well, how Judge Polster decides to manage this extremely complex docket will be watched closely.

 Spin Off MDL’s As Needed

Judge Breyer offered one potential solution to multiple plaintiffs and defendants with divergent interests, which is allow the transferee court to create different “tracks” based on plaintiff category, spin off new MDLs as appropriate, or remand cases that have ceased to benefit from MDL 2804.

 A Conclusion Or A Reckoning

Now that MDL 2804 has been established, the pace of opioid litigation will quickly accelerate, with many new claims being filed daily as they have over the last 10 weeks, since the initial Motion to Consolidate was filed. With an MDL now looming over the entire pharmaceutical industry, the prescription opioid market will never be the same, as evidenced by criminal indictments of drug company executives and ongoing investigations that are taking place in many states. Perhaps now there will be an adjustment of the “profits before patients” policies that have been adopted by Big Pharma in this country, and drug makers will be forced to come to terms with the catastrophic damage they’ve caused by their flood of opioid drugs released across America over the last 15 years.

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First on the House Agenda: HR 985 Raises the Bar Class on Actions

The House of Representatives moves quickly to curtail victims’ rights.

By Jesse Jensen, Esq. Reprinted with permission.

As recognized by the Supreme Court, class action lawsuits play an invaluable role in protecting investors, consumers, and employees by “overcom[ing] the problem that small recoveries do not provide the incentive for any individual to bring a solo action prosecuting his or her rights.” Amgen Inc. v.
Conn. Ret. Plans & Tr. Funds, 133 S. Ct. 1184, 1202 (2013).

Yet even after the wave of populist outcry that dominated the
2016 election, the newly-elected majority in the US House of Representatives passed as one of its first acts this year a bill striking at the heart of people’s rights to class action litigation.

The bill — the so-called “Fairness in Class Action Litigation Act of 2017” (H.R. 985) — seeks to frustrate class actions brought by consumers, employees, and investors while tipping the scales in favor of corporate defendants.

A remarkable coalition of consumer rights groups, civil rights advocates, and members of the legal community have united in opposition to H.R. 985. Nonetheless, the House majority passed H.R. 985 without permitting even a single hearing on its merits, and this dangerous and much-criticized legislation now resides with the Senate.

H.R. 985’s radical effects

Author Jesse Jensen is an attorney in the New York office of Bernstein Litowitz Berger & Grossman LLP
Author Jesse Jensen is an attorney in the New York office of Bernstein Litowitz Berger & Grossman LLP

Close examination of H.R. 985 reveals that, far from promoting “fairness,” the bill relies on creative methods to delay, and ultimately dismantle, class action lawsuits.

For example, courts currently permit lawsuits to proceed as class actions only if (among other requirements) the proposed class representative shows that its claims, including its injury, are “typical” of the class’s claims. H.R. 985, however, would prohibit class actions unless the plaintiff demonstrates that each proposed class member suffered “the same type and scope of injury.”

In many types of class actions, this provision could radically pare down what a “class” could be, because the same wrongdoing may injure large groups of consumers or workers to different degrees. For instance, the same dangerous prescription medication may manifest side effects that differ in scope.

While one patient may suffer a lethal heart attack, another may suffer a debilitating stroke. This provision of H.R. 985, however, could be interpreted to rob from the victims of that defect their ability to band together against the pharmaceutical company, even though all suffered from the same faulty medication.

Moreover, H.R. 985 does not explain how precisely a class representative could demonstrate that all of the class members suffered “the same type and scope of injury.” Ultimately, courts could spend years of litigation attempting to settle on an accepted meaning of this restrictive requirement — preventing adjudication of the merits, and any relief to pending classes, in the meantime.

Other provisions of the bill also transparently seek to manufacture delay. For instance, while appellate courts currently have discretion as to when they will hear appeals of class certification decisions, H.R. 985 would require appellate courts to hear all appeals of class certification decisions, no matter how frivolous.

This element of H.R. 985 caught experienced legal scholars and practitioners by surprise, as little-to-no commentary had suggested that appellate courts have failed to oversee appropriately district court rulings on class certification. By unnecessarily burdening appellate courts, this provision of H.R. 985 would add further time and expense to the class certification process.

Near-universal criticism

Other than the US Chamber of  Commerce — the highest-spending lobbying group in the United States — H.R. 985 has received no notable endorsement. Instead, the bill has faced widespread denunciation, including by dozens of consumer, labor, environmental, disability, investor and civil rights advocacy groups, all of whom expressed concern with how the bill would stymie the enforcement of individual legal rights. This disparate alliance includes such prominent organizations as:

  • The AFL-CIO
  • National Disability Rights Network
  • Southern Poverty Law Center

Even beyond this pervasive concern over the bill’s impact, several legal commentators have criticized the bill for fundamentally disregarding Congress’s own acknowledgment that federal courts themselves are best positioned to make rules governing their procedures.

For example, on March 8, 2017, the American Bar Association — a prominent nonpartisan professional association of legal professionals — noted in a public letter to members of the House that H.R. 985 would interfere with the efforts to improve class action procedures already in progress by the policy-making body for the federal courts, the Judicial Conference of the United States, all while wasting judicial resources and unnecessarily delaying and denying claims.

Public outcry

Fortunately, public outcry forced the elimination of one of the bill’s most onerous (and arguably unconstitutional) provisions. The bill’s sponsor, House Judiciary Committee Chairman Bob Goodlatte (R-VA), voluntarily removed from the legislation a provision that would have forbidden any class representative from being represented by any counsel who had previously served as counsel for the class representative in a different class action.

Nonetheless, even this pared-back version of the bill could not garner a single Democratic vote in the House, and even failed to capture over a dozen Republican votes. Ultimately, however, the substantial GOP House majority advanced the bill to the Senate in March 2017, where it has since been referred to the Senate Committee on the Judiciary.

Since that time, the Senate has apparently shown no urgency with respect to the legislation, leaving unclear H.R. 985’s fate. Last year, the Senate Judiciary Committee refrained from acting on similar anti-class action legislation, also introduced by Rep. Goodlatte. Many commentators believe that, even if H.R. 985 moves forward to the Senate floor, it will face greater scrutiny — and likely revision — than it did in the House.

Ultimately, perhaps the biggest wildcard facing H.R. 985 is whether the new President will attempt to play any role in its future, and what that role would be.

H.R. 985 threatens to erect unnecessary,  costly, and time-consuming barriers to class actions nationwide, and the House of Representatives disappointed the country in making its passage one of its first priorities this year. With the bill now in the Senate’s control, legal experts, advocacy groups, institutional investors, and others should remain vigilant regarding this anti-consumer legislation.


Jesse Jensen is an Attorney in the New York office of Bernstein Litowitz Berger & Grossmann LLP (www.blbglaw.com). He can be reached at jesse.jensen@blbglaw.com and 212.554.1584.

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The Senate Should Reject the ‘‘Fairness’’ in Class Action Litigation Act of 2017

Myriam Gilles Vice Dean, Paul R. Verkuil Chair in Public Law
Myriam Gilles
Vice Dean, Paul R. Verkuil Chair in Public Law at the Benjamin N. Cardozo School of Law

By Elizabeth Chamblee Burch And Myriam Gilles

This article is reprinted from the Bloomberg Law Product Safety & Liability Reporter.

Some may argue that House Bill 985, the ‘‘Fairness’’ in Class Action Litigation Act of 2017, will weed out frivolous lawsuits and help make America great again.

Don’t be fooled. We know that class litigation isn’t perfect—after all, our academic work focuses on chronicling abuses within class action litigation and outing the cozy relationships that have evolved between plaintiff and defense lawyers. But this bill doesn’t fix what’s ailing the system. Instead, it seeks to eliminate group litigation altogether.

If it becomes law, the bill could prevent consumers from litigating together the next time a company like Volkswagen masks its emissions and thwart General Motors’ victims from joining forces to recover if their car ignition turns off while they’re driving. It would deprive consumers of the right to sue when businesses rip them off little by little, and derail litigation by small businesses hurt by anticompetitive practices.

Elizabeth Chamblee Burch is the Charles H. Kirbo Chair of Law at the University of Georgia School of Law.
Elizabeth Chamblee Burch is the Charles H.
Kirbo Chair of Law at the University of Georgia
School of Law.

This certainly isn’t the first time a Republican-led House has pursued legislation to ‘‘reform’’ complex litigation. But it is the first time that this pernicious, heavy-handed legislation has had a chance of enactment. While the bill’s prospects are aided by Republican control of both Houses of Congress and the presidency, the real momentum behind HR 985 (which is being fasttracked—in and out of committee in less than a week—by Rep. Bob Goodlatte (R-VA)) is congressional distrust of courts. And this distrust has a new-found respectability; it can now be openly aired because the President himself has repeatedly disparaged the legitimacy and authority of judges who have the temerity to rule against him.

HR 985 would stifle judges’ discretion and override appellate court consensus. For instance, courts have long struggled with cases where there is no good way to determine money damages on a class-wide basis. But over the past 20 years, the federal courts have come to a hard-won consensus that permits ‘‘issue classes’’— where a defendant’s liability gets tried on a class basis, followed by individual damages proceedings. This bill would trash that bipartisan consensus. In fact, one could argue the only class actions it would permit are those where every class member suffered the exact same damages.

The bill rejects not only the wisdom of the courts but also that of the bipartisan federal rules committee. After working to revise the class action rule for several years (and holding countless town hall meetings so that all affected stakeholders could get in their two cents), the committee announced last summer that it was best to leave issue class actions alone—to watch how the doctrine evolves in courts confronted with real cases involving real people.

Other parts of the bill try (ineptly) to simply tell judges how and when to do their jobs. For instance, the bill requires plaintiffs to submit proof like medical records shortly after they sue, and judges must decide whether that proof is sufficient within 30 days of receiving it. This would require the impossible.

For example, over 40,000 plaintiffs sued Merck before it withdrew its painkiller, Vioxx, from the market. No judge in the country has enough clerks (or clones) to fulfill the bill’s mandate under circumstances like that. It is also simply unnecessary: the Federal Rules of Civil Procedure already provide a tried-and-true path for handling just this sort of procedural and administrative tangle.

Interbranch distrust is hardwired into our constitutional structure; as James Madison famously put it, ‘‘ambition must be made to counteract ambition.’’ And it generally serves a positive function, stimulating each of the three branches to check the authoritarian, anti-majoritarian, and expansive impulses of the others.

But in this new era when distrust leads to disrespect—when ‘‘so-called judges’’ are threatened and bullied, called out and castigated—HR 985 serves as alarming example of upended norms and constitutional dysfunction. Given this new reality, now, perhaps more than ever before in our history, we need the federal courts to remain independent sources of authority.

Editor’s Note: The authors have submitted detailed comments on the bill to the U.S. House of Representatives Subcommittee on the Constitution and Civil Justice.


Elizabeth Chamblee Burch is the Charles H. Kirbo Chair of Law at the University of Georgia
School of Law.

Myriam Gilles is a Vice Dean and Paul R. Verkuil Research Professor of Law at Benjamin
N. Cardozo School of Law.

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Class Action Certified in Syngenta Corn Market Crash Litigation

Syngenta-Viptera-Corn-Damage-Lawsuit-300x200US District Judge John W. Lungstrum in Kansas certified nine class actions brought by virtually every corn producer in America who suffered a dramatic loss in the value of their crops in 2013 when Syngenta AG shipped genetically-modified corn to China, which responded by banning all US corn.

The National Grain & Feed Association pegged the market-wide losses at $6.3 billion through August 2015 when China turned away at least 1.45 million metric tons of corn starting in November 2013. It contained genetic trait MIR 162 developed by Syngenta, of Basel, Switzerland, and that variety wasn’t approved by China.

The class actions — which are part of sprawling litigation against the company — are denominated In Re: Syngenta Ag Mir 162 Corn Litigation, Case No. 14-md-2591-jwl in MDL No. 2591.

The judge appointed class counsel to be attorneys Don M. Downing of Gray Ritter & Graham, PC in St. Louis, Patrick J. Stueve of Stueve Siegel Hanson LLP in Kansas City, Scott Powell of Hare Wynn Newell & Newton in Birmingham, AL, and William Chaney of Gray Reed & McGraw in Dallas. They are also lead counsel in the federal MDL litigation.

Judge Lungstrum certified a nationwide class to pursue the Lanham Act (false advertising) claims and certification of eight statewide classes (consisting of producers in Arkansas, Illinois, Iowa, Kansas, Missouri, Nebraska, Ohio, and South Dakota) to pursue negligence claims, as well as tortious interference claims in the Arkansas and Missouri classes, and statutory consumer protection claims in the Illinois and Nebraska classes.

Tens of thousands of plaintiffs

Some 800 federal cases are pending in the multidistrict litigation docket, MDL 2591, before Judge Lungstrum. On top of that:

  • Three more federal actions, involving more than 2,800 plaintiffs, are pending in the United States District Court for the Southern District of Illinois before U.S. District Judge David R. Herndon.
  • Approximately 2,375 cases, involving over 20,000 plaintiffs, are pending in the Fourth Judicial District of Hennepin County, Minnesota, and consolidated before Judge Thomas M. Sipkins in a case captioned In re Syngenta Litigation, No. 27-cv-15- 3785.
  • In addition, about 200 cases are pending in the Illinois First Judicial Circuit Court before Judge Brad K. Bleyer.

China imports 4 million metric tons of corn per year, and corn is the largest crop export from of the US. Knowing that the clock was ticking on the expiration of its Agrisure Viptera GMO corn patent, Syngenta aggressively commercialized the crop from 2011 to 2014. Despite warnings from industry participants that China had not approved the GMO corn, U.S. exports to China were found to be contaminated with MIR162. China then began rejecting shipments of corn from the U.S.

“These events show corporate greed at its worst. But there is more. To attempt to minimize the perceived impact of its conduct, Syngenta actively misled farmers, industry participants and others about the importance of the Chinese market, the timing and substance of its application for approval in China, the timing of when China was likely to approve MIR162, its ability to “channel” Viptera® to non-Chinese markets and otherwise contain the infiltration of Viptera® into the U.S. corn supply,” the class action complaint states.

Judge Lungstrum rejected all of Syngenta’s arguments against class certification. The company argued unsuccessfully that the terms “corn priced after November 18, 2013” and the term “producer” were vague. The judge said “priced” simply means the date when the price for particular corn is agreed upon by parties for sale, and that producer was defined by the USDA’s Farm Service Agency. The judge also rejected Syngenta’s argument that the proposed classes were overbroad.

The court added that the plaintiffs do have a class-wide method to show damages and have experts who have created models to determine the per-unit effect on class members’ sales of corn.

“The Court does not foresee any particular difficulties in the management of class actions, and … ascertaining the class members in this case does not require difficult individualized inquiries,” the judge wrote.

 

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Charging that Vitamin E is Bad for Your Heart, Class Action is Revived Against CVS

vitaminThe First US Circuit Court of Appeals ruled that a class action lawsuit against CVS Caremark pharmacies may proceed in light of misleading labels for Vitamin E it sold that say it promotes “heart health” — when studies show the opposite is true.

Plaintiff Ronda Kaufman alleges that one study reflects “that those taking vitamin E had higher rates of heart failure and were more likely to be hospitalized for heart failure,” while another study found “an increase in mortality that progressively increased as daily dosage exceeds 150 IU.” The complaint further states that “[a]ll variations of [CVS’s] pill type vitamin E products exceed the 150 IU level shown to increase mortality in this study.”

No Preemption

The court ruled that the Federal Food Drug and Cosmetic Act (FDCA), 21 U.S.C. § 343-1(a)(5), does not preempt the lawsuit, brought under New York’s consumer protection law. The case is Kaufman v CVS Caremark Corp. (PDF), 1st U.S. Circuit Court of Appeals, No. 16-1199 (Sept. 6, 2016).

Kaufman purchased CVS-brand Vitamin E 400 International Unites (iu) with a label making four statements that are subject to the requirements of FDCA section 343(r)(6): that Vitamin E “supports antioxidant health”; that Vitamin E helps “maintain healthy blood vessels”; that Vitamin E “supports heart health”; and that Vitamin E “supports the immune system.”

Kaufman claims that there exist no scientifically valid studies establishing that CVS’s heart health statements are truthful and not misleading. Most studies about Vitamin E simply presume that it promotes heart health.

In fact, Kaufman cited 7 studies indicating that Vitamin E can even damage the heart. One study found that increasing Vitamin E intake may increase the risk for heart failure. Another found that “high-dosage” Vitamin E supplements of 400 IU or more–the very dosage that Kaufman purchased–may increase all-cause mortality. “This indication, which the studies at least render plausible, would seem to mean that Vitamin E can play a role in harming heart health,” the court says.

Accordingly, the label can plausibly be viewed as misleading within the meaning of the FDCA. “Federal law does not, therefore, preempt application of New York state law for the purpose of holding CVS accountable for misleading consumers by failing to satisfy those requirements,” the court ruled.

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6 Mass Tort and Class Action Cases to Watch

Credit: ADR Toolbox
Credit: ADR Toolbox

By John H. Beisner, Jessica D. Miller and Jordan M. Schwartz of Skadden Arps

In 2016, the U.S. Supreme Court is expected to hand down several decisions addressing overbroad or “no-injury” class actions, and a number of important issues are percolating in the lower courts as well. Below are some issues that are likely to be at the forefront of class action practice in the coming year.

1. The Future of Overbroad Class Actions. The future of overbroad or no-injury class actions could turn on the resolution of two cases before the Supreme Court. The first is Spokeo Inc. v. Robins, a case involving Article III standing under the Fair Credit Reporting Act. The specific question at issue in Spokeo is whether Congress can confer Article III standing on a plaintiff who has not suffered any concrete harm apart from alleging a bare violation of a federal statute. The second case is Tyson Foods, Inc. v. Bouaphakeo, a wage-and-hour class action that, according to the petition for certiorari, involves the question “whether a class action may be certified … when the class contains hundreds of members who were not injured and have no legal right to any damages.” Although there are other issues at play in this closely watched case — and several justices suggested at oral argument that the Court might not address the overly broad certification issue — the Court’s ultimate decision still could have significant implications for no-injury class actions. (See “2015-16 Supreme Court Update.”)

2. Ascertainability Law Remains in Flux. Defendants in 2015 were dealt a setback in their bid to strengthen the law governing ascertainability in consumer class actions outside the U.S. Court of Appeals for the Third Circuit. Most recently, in Mullins v. Direct Digital, LLC, the U.S. Court of Appeals for the Seventh Circuit expressly parted ways with the Third Circuit’s landmark 2013 decision inCarrera v. Bayer Corp., which had recognized a defendant’s due process right to challenge class membership at the class certification stage. The Seventh Circuit disagreed with what it described as a “heightened” ascertainability requirement that would serve as a death knell for consumer fraud class actions involving products of so little cost that no consumer would bother to keep a receipt. The Mullins decision highlights a deep circuit split on the parameters of the implied requirement of ascertainability, offering the Supreme Court a prime opportunity to weigh in on this important issue. While it remains to be seen whether the Supreme Court will take up theMullins case and resolve the divide, ascertainability will continue to make its way through the federal appellate courts. Notably, the U.S. Court of Appeals for the Ninth Circuit, which has previously strived to avoid the question, likely will be the next circuit court to offer its views on ascertainability in Jones v. ConAgra Foods Inc. A decision is expected in early 2016.

3. No Changes to Issues Certification Provision. After studying issues classes in 2015, the Rule 23 Subcommittee of the federal Judicial Conference Advisory Committee on Civil Rules recently decided against pursuing changes to the provision governing issues classes (Rule 23(c)(4)) that many believed would encourage more frequent use of that device. This is a positive development for defendants given that the subcommittee had considered a proposal under which class treatment of certain issues would have been permitted whenever there are any common questions capable of resolution on a classwide basis — even if the predominance requirement of Rule 23(b)(3) was not met as to other issues. Such a proposal would have effectively codified the trend by the Sixth and Seventh circuits of employing Rule 23(c)(4) as a means to facilitate class certification in cases where individualized issues would otherwise predominate. The subcommittee decision all but guarantees that issues classes will remain a hotly debated issue in 2016.

4. Multidistrict Litigation Abuses. Congress enacted the multidistrict litigation (MDL) statute years ago so that overlapping cases could be centralized before a single judge for coordinated pretrial proceedings, generating much-needed efficiencies for parties and courts. However, rather than use this mechanism to efficiently resolve cases and conserve resources, plaintiffs’ attorneys increasingly are using MDLs to warehouse meritless claims in the hope that the sheer number of cases will pressure defendants into settlements. One way to weed out baseless claims is by expanding the use of plaintiff fact sheets and Lone Pine orders that would require plaintiffs to satisfy a minimum evidentiary threshold at the outset of litigation, before the parties proceed to expensive and burdensome discovery. While fact sheets and Lone Pine orders have become increasingly popular in MDL proceedings, they often are imposed as requirements late in the litigation. With growing awareness that MDL proceedings are becoming magnets for meritless suits, in 2016, MDL courts may start using these tools earlier in litigation to maximize their value and impose serious sanctions for failure to comply with them, including the dismissal of cases.

5. Cy Pres. In 2015, plaintiffs continued to test the limits of cy pres, the practice of distributing class funds to third-party charities instead of the allegedly aggrieved class members. Federal appellate courts have continued to be somewhat skeptical of cy pres, including the Eighth Circuit, which recently vacated a district court’s order distributing residual funds to a third-party legal services organization after two rounds of direct distribution to class members. The Court of Appeals recognized that cy pres distributions “have been controversial in the courts of appeals,” but stated that district courts are “ignoring and resisting circuit cy pres concerns and rulings in class action cases.” Indeed, the practice is on the rise, as demonstrated by a comparison of the number of reported decisions approving/denying class settlements with cy pres components in 2009 and 2014. Thus, it is not surprising that the Rule 23 Subcommittee decided to look into the issue. However, after studying it throughout 2015, the subcommittee recently decided not to add a Rule 23 provision governing cy pres. As a result, the battle over cy pres — and whether it effectuates the interests of absent class members — will continue to play out in federal courts.

6. Third-Party Litigation Funding. Several noteworthy developments in the third-party litigation funding (TPLF) arena took place in 2015, including the announcement by Senate Judiciary Committee Chairman Chuck Grassley, R-Iowa, and Sen. John Cornyn, R-Texas, chairman of the Judiciary Committee’s Subcommittee on the Constitution, of an investigation into TPLF usage and practices. According to a press release Sen. Grassley issued on August 27, 2015, the two senators are “examining the impact third party litigation financing is having on civil litigation in the United States.” To that end, the senators sent letters to Burford Capital, Bentham IMF and Juridica Investments Ltd., three of the largest TPLF funders, requesting information regarding their TPLF activities in the United States. Another development over the past year has been TPLF’s expansion into the mass tort arena, as illustrated in a breach-of-contract complaint recently filed in Texas state court against the plaintiffs’ law firm AkinMears. The suit was brought by a former employee of the law firm, who was hired to secure third-party litigation funding for television ads and the direct purchase of transvaginal-mesh mass tort lawsuits from other plaintiffs’ lawyers. This lawsuit is worthy of close attention because it may provide new information about the ways in which TPLF is being used to fund and expand mass tort litigation.

Republished from JD Supra.

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Class Action Filed against Floor & Décor over Formaldehyde in Chinese Flooring

formaldehydeResidents of California, Nevada, Tennessee, Texas and Georgia filed a class action lawsuit against Floor & Décor Outlets of America, Inc., for allegedly selling Chinese-made laminate flooring which contained excessive levels of formaldehyde, a known carcinogen.

The lawsuit was filed by Robertson & Associates in federal district court in Atlanta, Georgia on behalf of similarly situated residents who purchased the flooring over the last four years.

Testing performed by certified and independent laboratories on laminate flooring purchased by Plaintiffs revealed formaldehyde gas emissions more than triple the legal limit established by California Air Resources Board’s (“CARB”) regulations. The lawsuit alleges that Floor & Décor falsely advertised that its Chinese-made laminate flooring sold across the country complied with the CARB formaldehyde emission standards, when it did not. The Plaintiffs also allege that Floor & Décor fraudulently concealed these material facts from consumers who purchased Chinese-made laminate flooring from the Defendant.

Causes cancer

Formaldehyde gas is known to cause cancer and can also cause chronic respiratory irritation, burning eyes, nose and throat irritation, coughing, headaches, dizziness, and nausea. Formaldehyde has also been linked to the exacerbation of asthma in sensitive individuals. People may be exposed to formaldehyde gas without knowing they are being exposed or that they are at risk. The health risks are significantly greater for susceptible persons such as children, the elderly or those with asthma.

Floor & Decor presently has 58 retail stores in 17 states, including Arkansas, California, Colorado, Florida, Georgia, Illinois, Louisiana, Maryland, North Carolina, New Jersey, Nevada, Ohio, Pennsylvania, Tennessee, Texas, Utah and Virginia.

 

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