New York And Other State Court Opioid Litigation Moves Forward Along With Federal Opiate Rx MDL 2804

“LAWSUIT FLOOD VERSUS ENTIRE OPIOID INDUSTRY IS GETTING BIG PHARMA’S ATTENTION”

By Mark A. York (June 11, 2018)

 

 

 

 

 

 

Opioid litigation in New York and other state courts, where hundreds of counties and cities have filed lawsuits against opioid manufacturers and distributors,  are now moving forward even with the explosion in the Federal Opiate Litigation MDL 2804 OPIOID-CRISIS-BRIEFCASE -MDL-2804-OPIATE-PRESCRIPTION-LITIGATION, where more than 500 states, counties, cities as well as unions, hospitals and individuals have filed lawsuits against the opioid industry as a whole.

At one point, the opiate industry attempted to raise arguments stating that the Food and Drug Administration hasn’t yet determined whether narcotic painkillers are unnecessarily dangerous – a central question in any litigation, which was quickly denied and seems to show that Opiate Big Pharma is once again attempting to hide behind the FDA shield.

In a two-page order issued in March by Judge Jerry Garguilo of the Suffolk County Supreme Court, New York where he ruled that there is “no compelling reason to impose a stay of proceedings” until the FDA completes its own review of the benefits and risks of opioids. The lawsuits by most of the counties in New York, which have been consolidated in Garguilo’s court, are “backward-looking” toward allegedly fraudulent marketing materials and tactics the drug companies used to convince doctors and patients their products had low risk of addiction.

In another state court, the first of many opioid litigation trials to be scheduled is now set in Oklahoma, where Cleveland County District Judge Thad Balkman set May 28, 2019 for the start of the trial. ate has been set for a lawsuit by a state against pharmaceutical companies over the opioid epidemic, according to Oklahoma‘s attorney general. See Original Complaint – State of Oklahoma vs. Purdue Pharma et al, June 30, 2017 (Cleveland County, OK District Court)

Oklahoma, one of at least 20 states besides New York that have opioid lawsuit dockets against drugmakers, alleges fraudulent marketing of drugs that fueled the opioid epidemic in the lawsuit filed in June 2017, and seeks unspecified damages from Purdue Pharma, Allergan, Janssen Pharmaceuticals, Teva Pharmaceuticals and several of their subsidiaries.

The New York state court lawsuits are joined by another somewhat unique group of plaintiffs in the legal battle over the opioid-epidemic with class actions filed by consumers who claim they’re seeing skyrocketing health insurance costs as a result of the crisis.

The suits, filed in New York and four other states, were brought by individual persons against opioid manufacturers and distributors, and are among the few class actions filed against drug makers and marketers. The vast majority of cases have been separate actions brought by government entities like cities and counties.

The plaintiffs in this new wave of cases have filed across the country in federal courts in  USDC SD New York (Complaint) , a New Jersey Complaint,  a Massachusetts Complaint, an Illinois Complaint as well as a California Complaint  where they’ve filed lawsuits on behalf of those who paid increased health insurance costs–including higher premiums, deductibles and co-payments–because of effects attributable to the opioid epidemic.

The proposed classes include businesses and individuals who paid for health insurance as part of employer-sponsored plans.

“We don’t know anyone who in the litigation is addressing the private sector harms to consumers and businesses from increased premiums and other insurance costs that flow to anyone in the health insurance market as a result of the fact that insurers are paying more for addictions,” said Travis Lenkner, one of the plaintiffs attorneys filing the cases.

The opioid cases add a new type of plaintiff into the wide-reaching opioid litigation, which have also includes states, Native American tribes, pension funds and hospitals.

John Parker, senior vice president of the Healthcare Distribution Alliance, speaking on behalf of distributors AmerisourceBergen Drug Corp., Cardinal Health Inc. and McKesson Corp., all named as defendants, called the opioid epidemic a “complex public health challenge.”

“Given our role, the idea that distributors are responsible for the number of opioid prescriptions written defies common sense and lacks understanding of how the pharmaceutical supply chain actually works and is regulated,” he said in a statement. “Those bringing lawsuits would be better served addressing the root causes, rather than trying to redirect blame through litigation.”

Purdue Pharma spokesman Bob Josephson noted that his company’s products account for less than 2 percent of all opioid prescriptions. Johnson & Johnson’s Janssen Pharmaceuticals defended the labels on its prescription opioids and called the allegations “baseless and unsubstantiated.”

Representatives of the other manufacturing defendants, which include Endo Health Solutions, Teva Pharmaceutical Industries and Insys Therapeutics Inc., did not respond to requests for comment.

It is now fairly common knowledge in the legal world that there is more than enough data that links increased health insurance costs to the opioid epidemic as well as the overall catastrophic impact of the flood of opioids into the America marketplace.

The suits cite statistics. In California, for instance, health insurance premiums for family coverage increased 233.5 percent from 2002 to 2016. Monthly premiums for the plaintiff in that case, Jordan Chu, jumped from $160.52 in 2016 to $240.76 this year. New Jersey residents with private health insurance spent $5,081 in insurance premiums in 2014, up from $2,454 in 2001. And an average family plan in New York with annual costs of $9,439 in 2003 had jumped to $19,375 in 2016.

Plaintiff counsel stated that they will be filing suits in more states and fight any attempts to transfer these cases to the Northern District of Ohio, where U.S. District Judge Dan Polster is overseeing the opioid multidistrict litigation, MDL 2804, even though the cases were filed in federal courts. A damaging discovery win for the plaintiffs was the order of May 18, 2018, see DEA ARCOS Database Access Order May 8, 2018 MDL 2804, where Judge Polster ordered the DEA to turn over distribution data for all 50 states based on the revelations in a prior DEA related order where the Opioid Drug distribution data provided very solid information on all the parties involved in creating the opioid crisis over the last 15 years.

The New York court docket parallels the federal and many other opioid based complaints, filed in state courts across the country where parties have decided to pursue their claims in their state courts versus the federal docket. These filings in both state and federal courts, will only increases the pressure on manufacturers and wholesalers to either win dismissal of these cases or prepare for an accelerated trial schedule.

There are currently more than 500 of the nation’s 3,200 counties have sued and plaintiff lawyers hope to soon get that number to 1,500, which some lawyers consider critical mass for a settlement.

The defendant companies argue they can’t be held liable for selling a legal product sold only with a doctor’s prescription whose distribution was controlled and overseen, from manufacturing to retail sales, by federal and state regulators.

The plaintiffs argue manufacturers used a variety of tactics, including misleading marketing materials and highly paid physician-influencers, to convince prescribing physicians their products were safe for treating chronic pain when, in fact, they were highly addictive.

In the March order, Judge Garguilo rejected the defendants’ claim that the FDA has exclusive authority to determine whether, in effect, opioids should be sold for anything other than relieving the pain of terminal illness. Regardless of what the FDA determines, the judge said, the municipal plaintiffs have the right to seek redress for their costs associated with addiction.

“Because the focus of this lawsuit is on the state of scientific knowledge that existed when the defendants made their marketing claims, there is no risk of inconsistent rulings, and none of the current studies will have any bearing on whether the defendants’ representations were misleading when made,” the judge wrote. The court isn’t being asked to decide the risks and benefits of opioids but whether the defendants misrepresented those risks and benefits, he added.

In case the defendants didn’t grasp the judge’s ultimate goal, the judge restated his “previously expressed desire” for a “prompt resolution of this matter.” The federal judge overseeing multidistrict litigation in Ohio, Judge Dan Aaron Polster, has similarly urged defendants to engage in settlement talks, although a global resolution of the litigation could prove difficult to negotiate.

In addition to hundreds of cases consolidated in federal court, the defendants face a wave of litigation in state court, like the New York cases, as well as lawsuits and investigations by state attorneys general and the federal government. Any settlement would have to protect the defendant companies from future lawsuits over the same issue and that may be difficult to negotiate given all the concurrent litigation in different courts. The time has now arrived for Opioid Big Pharma, in all forms to face the facts that for close to 20 years they have flooded the mainstream commerce of America with massive amounts of opiates with little to no oversight, which whether caused by a catastrophic systemic failure on many levels, or simple greed, the time has now come for the opiate industry to face the music of complex litigation in state and federal court venues across the country.

For those looking to tap into the opioid litigation or learn what the current status is in both state and federal court opioid litigation, please visit www.opioidcrisissummit.com where Mass Tort Nexus is hosting national political leaders and lead opiate counsel who are active in the day to day opioid crisis and have the most up to date case information during the two day event taking place July 21-22, 2018 in Fort Lauderdale.

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First State Court Opioid Crisis Trial Set In Oklahoma With May 2019 Start Date

By Mark A. York (May 24, 2018)

 

 

 

 

 

 

 

May 28, 2019 trial date set in the first opioid litigation case to go to trial where a  state filed suit versus the opioid pharmaceutical companies

(MASS TORT NEXUS MEDIA) The first of many opioid litigation trials where states, counties and cities have filed lawsuits against the Opioid Big Pharma industry and it’s affiliates, is now set in Oklahoma where Cleveland County District Judge Thad Balkman set May 28, 2019 for the start of the trial.  The trial date date has been anticipated in the lawsuit by the State of Oklahoma against pharmaceutical companies over the opioid epidemic, according to Oklahoma‘s attorney general Mike Hunter. See Original Complaint – State of Oklahoma vs. Purdue Pharma et al, June 30, 2017 (Cleveland County, OK District Court)

To summarize the view in Oklahoma and other states who are pursuing the Opioid prescription drugmakers in courts all across the country, Oklahoma Attorney General Mike Hunter stated in his filings  “Defendants created the worst public health crisis in modern history. Families destroyed,”adding “Children killed. Babies addicted. Morgues overflowing. Prisons full.” This is a common view across the entire United States at this point.

Oklahoma, one of at least 13 states that have filed lawsuits against drugmakers, alleges fraudulent marketing of drugs that fueled the opioid epidemic in the lawsuit filed in June 2017, and seeks unspecified damages from Purdue Pharma, Allergan, Janssen Pharmaceuticals, Teva Pharmaceuticals and several of their subsidiaries.

“We appreciate the urgency Judge (Thad) Balkman saw in getting the case to trial,” Attorney General Mike Hunter said. “Oklahomans who have suffered immeasurably from the years of fraudulent marketing campaigns will see this case resolved sooner rather than later.” Hunter said Balkman scheduled the trial to begin May 28, 2019.

For up to date information on the Opioid Litigation across the country see, OPIOID-CRISIS-BRIEFCASE-INCLUDING-MDL-2804-OPIATE-PRESCRIPTION-LITIGATION (https://www.masstortnexus.com/Briefcases/Drugs/254/)

Within the last 2 weeks, state attorneys general of Nevada, Texas, Florida, North Carolina, North Dakota and Tennessee lawsuits have now joined many other states who have filed lawsuits asserting that Purdue Pharma violated state consumer protection laws by falsely denying or downplaying the addiction risk while overstating the benefits of opioids. The lawsuits also names pharmaceutical manufacturers Endo Pharmaceuticals, Allergan, Teva Pharmaceutical Industries and Mallinckrodt, as well as drug distributors AmerisourceBergen, Cardinal Health and McKesson Corporation.

“It’s time the defendants pay for the pain and the destruction they’ve caused,” Florida State Attorney General Pam Bondi told a press conference.

Joining, Oklahoma are states who’ve previously filed claims against opiate drugmakers are Ohio, AlaskaKentuckyLouisianaMississippiMissouriMontanaNew HampshireNew JerseyNew MexicoSouth Carolina and Washington state. West Virginia has been catastrophically affected by the opioid crisis and has previously attempted to stop Opioid Big Pharma from pushing opiates into their communities, without much success.  See How drug companies submerged West Virginia in opioids for years: “A small West Virginia town of 3,000 people got 21 million pills”

Medical professionals say a shift in the 1990s to “institutionalize” pain management opened the doors for pharmaceutical companies to encourage doctors to massively increase painkiller prescriptions, and Purdue Pharma led that effort. Which is now directly linked to the massive increase in drug overdoses, now see as the leading cause of accidental death for Americans under age 50, killing more than 64,000 people in 2016, according to the Centers for Disease Control and Prevention.

OxyContin was launched in the mid-90s by Purdue Pharma and aggressively marketed as a safe way to treat chronic pain. But it created dependency in many even as prescribed, and the pills were easy to abuse. Mass overprescribing has led to an addiction and overdose catastrophe across the US, more recently rippling out into rising heroin and fentanyl deaths.

Opioid overdoses made up a staggering 66 percent of all drug overdose deaths in 2016, surpassing the annual number of lives lost to breast cancer.

Florida and the other states also, named drug makers Endo Pharmaceuticals Inc., Allergan, units of Johnson & Johnson and Teva Pharmaceutical Industries, and Mallinckrodt, as well as drug distributors AmerisourceBergen Corp., Cardinal Health Inc. and McKesson Corp. The distributors played a part in opioid abuse through oversupply, including failing to identify suspicious orders and report them to authorities, including the DEA and other oversight agencies, contributing to an illegal secondary market in prescription opioids, such as Purdue’s OxyContin, Endo’s Percocet and Insys Therapeutics fentanyl drug Subsys, a fast acting and extremely addictive drug.

The companies deny wrongdoing and say they complied with Federal Drug Administration requirements that include warning labels showing potential risks that come with using their drugs. “We are deeply troubled by the prescription and illicit opioid abuse crisis, and are dedicated to being part of the solution,” Purdue Pharma said in a statement Friday. “We vigorously deny these allegations and look forward to the opportunity to present our defense.”

Ohio Filed First

In announcing his office’s lawsuit in May 2017, Ohio Attorney General DeWine said the drug companies helped unleash the crisis by spending millions of dollars marketing and promoting such drugs as Purdue’s OxyContin, without consideration of the long term effects of the related addiction, which Purdue was absolutely aware of throughout the years of profits that now total billions of dollars.

The lawsuit said the drug companies disseminated misleading statements about the risks and benefits of opioids as part of a marketing scheme aimed at persuading doctors and patients that drugs should be used for chronic rather than short-term pain.  Pain centers and medical practices across the country started writing an ever increasing number of high dose opioid prescriptions for what would be considered low to mid-level pain treatment.

Similar lawsuits have been filed by local governments, including those in several California counties, as well as the cities of Chicago, Illinois and Dayton, Ohio, three Tennessee district attorneys, and nine New York counties have also filed individual suits.

It is unknown at this time, if all of the legal actions filed by governmental entities across the country will be consolidated into MDL 2804, which may be the most effective way to manage the soon to be massive number of legal claims against Big Pharma and their long term opiate profit centers. Municipalities across the country seeking to recoup the enormous financial losses brought on by the opioid crisis.

The state lawsuits are separate from pending lawsuits in Ohio by dozens of local governments, and lawsuits by Native American tribes in the Dakotas and Oklahoma.

In South Dakota, the Rosebud Sioux Tribe, Flandreau Santee Sioux Tribe and the Sisseton Wahpeton Oyate filed a federal lawsuit in January against 24 opioid industry groups. See https://www.indianz.com/News/2018/04/11/navajonationopioid.pdf.  n Oklahoma, a federal judge has ruled that another similar lawsuit by the Cherokee Nation cannot be tried in tribal court, and Cherokee Nation Attorney General Todd Hembree told the Tulsa World that the tribe will re-file the lawsuit in state court.

Lawsuits have already been filed by 16 other U.S. states and Puerto Rico against Purdue and the related opioid drug companies and distributors. Purdue, which is a privately held company, owned by the Sackler brothers and family, in February said it stopped promoting opioids to physicians after widespread criticism of the ways drugmakers market highly addictive painkillers.

Purdue Pharma is owned by the Sackler family, listed at 19th on the annual Forbes list of wealthiest families in the country at a worth of $13 billion. The family’s fortune largely comes from OxyContin sales, which its company branded and introduced as an extended release painkiller in 1995.

Two branches of the Sackler family control Purdue, which developed and continues to make OxyContin, the narcotic prescription painkiller regarded as the “ground zero” of America’s opioids crisis.

Bondi said state attorneys general from New York, California and Massachusetts were preparing similar lawsuits, with Massachusetts last week sending a letter to Purdue notifying the company of its intention to sue. The California and New York attorney general offices did not immediately respond to a request for comment.

Stamford, Connecticut-based Purdue, in a statement, denied the accusations, saying its drugs were approved by the U.S. Food and Drug Administration and accounted for only 2 percent of all opioid prescriptions, seemingly ignoring the 600 lawsuits filed against them in the last year, as well as the minimum of 15 federal and state criminal investigations that are underway across the country.  At the forefront of the criminal investigations is the U.S. Attorney, John H. Durham, District of Connecticut, U.S. Department of Justice, Criminal Division, based in New Haven, CT the state which is also where Purdue Pharma is headquartered, who is leading a multi-group task force looking into the potential criminal conduct of not only Purdue, but the entire Opiate Big Pharma industry as a whole.

“We are disappointed that after months of good faith negotiations working toward a meaningful resolution to help these states address the opioid crisis, this group of attorneys general have unilaterally decided to pursue a costly and protracted litigation process,” Purdue said.

Opioids were involved in more than 42,000 overdose deaths in 2016, the last year for which data was available, according to the U.S. Centers for Disease Control and Prevention. Kentucky, one of the nation’s hardest-hit states, lost more than 1,400 people to drug overdoses that year.

Separate litigation involving at least 433 lawsuits by U.S. cities and counties were consolidated in a federal court in Cleveland, Ohio. The defendants include Purdue, J&J, Teva, Endo, AmerisourceBergen, Cardinal Health and McKesson. The federal litigation is growing daily see, Opiate Prescription MDL 2804, US District Court of Ohio link.

The federal lawsuits which accuse drugmakers and the opioid industry as a whole, of deceptively marketing opioids and the distributors of ignoring indications that the painkillers were being diverted for improper uses.

U.S. District Judge Dan Polster, who is overseeing the consolidated litigation, has been pushing for a global settlement. He had previously invited state attorneys general with cases not before him to participate in those talks, from the start of the MDL 2804 litigation being assigned to his courtroom.

Despite filing separate lawsuits, the six attorneys general on Tuesday said they would continue to engage in settlement discussions with Purdue and other companies. “You always want to settle and prevent a prolonged litigation,” said Florida’s Bondi. “But we’re sending a message that we’re fully prepared to go to war.”

Will litigation in most every state in the union paired with the National Opiate Prescription MDL 2804 reign in the Opioid industry that’s earned billions and billions of dollars over the last 20 years, all at the expense of the people of the United States and their families?  If history is a gauge of how things will end up, chances are a big “NO” as money and greed at the corporate levels have traditionally overruled anything affiliated with long term public health concerns in our for-profit healthcare system currently entrenched in the United States.

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While Big Pharma “Off-Label” Drug Marketing Continues – FDA Does Nothing

By Mark A. York (April 24, 2018)

“BY REMOVING FDA OVERSIGHT BIG PHARMA RUNS AMOK”

 

 

 

 

 

 

 

(MASS TORT NEXUS MEDIA) In 2017 and continuing into 2018, Big Pharma has been fighting major legal battles related to off-label marketing of drugs for unintended uses. They also engaged in a parallel strategy, where they were influencing the FDA and other policy making agencies behind the scenes in Washington DC. Big Pharma was paying millions to lobbyists, making campaign donations and generally buying influence as they always have. It was a foregone conclusion that with the Trump administration view of , “no regulatory oversight required” that there would be some loosening of the FDA regulatory shackles.

Big Pharma was getting ready for freedom to sell, sell, sell their drugs in any way they could, including off-label marketing of the drugs for unintended use purposes. A corporate policy, that’s technically illegal, yet results in billions of dollars in profits every years for Big Pharma. Then the FDA rolled out an unexpected new proposed rule, in March 2017 cracking down on “off-label’ marketing of drugs. This new rule change wasn’t in Big Pharma’s bests interests, sending the drug industry into a furious lobbying scramble. Bring in the Trump camp and on January 12, 2018 Big Pharma and the army of lobbyists and elected officials that were recruited, seem to have succeeded in stopping the FDA rules change that would have tightened up “off label” marketing of drugs.

Trump stops FDA enforcement rule change: January 12, 2018 Food and Drug Administration Press Release: FDA Delays Change to “Off-Label” Drug Use Enforcement Rules

This seems to be further evidence of the Trump administration permitting private corporations to control what goes on behind the scenes in federal regulatory agencies these days. The same loosening of enforcement rules has been seen in the EPA as well as in Dept. of Energy oversight enforcement authority. Whatever else you might think about the ramped up Trump vs. Obama administration mindset, this rule delay is an example of the new FDA leadership doing what is in the best interests of those they are supposed to be regulating, the drug makers, and not in the interests of the US consumers.

To put this into perspective, consider the current “Opioid Crisis” gripping the entire country, where “off-label” marketing of opiates for the last 20 years by drug makers, has resulted in thousands of deaths each year, unknown financial losses and the related social impact felt in every state across the country. Another result is the Opiate Prescription Litigation MDL 2804, (see OPIOID CRISIS BRIEFCASE: MDL 2804 OPIATE PRESCRIPTION LITIGATION) where litigation started when hundreds of counties, states and cities and other entities impacted by the catastrophic expense related to combatting the opiate healthcare crisis fought back. The various parties have filed lawsuits against opioid drug makers and distributors, demanding repayment of the billions of dollars spent on addressing the massive costs related to opioid abuse, primarily due to opioid based prescription drugs flooding the country.

When the Obama administration ended on January 9, 2017, the FDA issued a Final Rule on “Clarification of When Products Made or Derived from Tobacco are Regulated as Drugs, Devices, or Combination Products; Amendments to Regulations Regarding ‘Intended Uses.’” That “clarification” was meant to enable additional enforcement and control over drug makers rampant “off -label” marketing of drugs for purposes that were never FDA approved. This was an attempt by the FDA to have the ability to punish off-label promotions, where previously the process was a two-step regulatory review, whereby off-label promotions are said to prove an indicated use not included in the label and, thus, not accompanied by adequate directions for use – making the product misbranded. These regulations have been around since the 1950s, but a recent series of court decisions invoking the First Amendment called into question the FDA’s interpretation of “intended use” and its efforts to shut down truthful medical-science communications about potential benefits from off-label use.

In a 2015 proposed rule, the FDA referred to striking the language from regulations permitting the FDA to consider a manufacturer’s mere knowledge of actual use as evidence of intended use, which would have further enabled Big Pharma drug marketing abuses to go unchecked. But then, the FDA’s January 9, 2017 proposal reversed course, stating that retained knowledge of off-label use as evidence of intended use, clarified that any relevant source of evidence, whether circumstantial or direct could demonstrate intended use, and ultimately invoked the dreaded “totality of the evidence” standard. This would have enable the FDA to begin oversight and enforcement of practices such as the blatant and wide open “off-label” marketing of opioid prescription drugs that started in the mid-1990’s and never stopped.

Instead of putting a check on Big Pharma abuses, we have the Trump administration placing a hold on new regulations, and delaying the “intended use” regulation change to March 19, 2018, so that comments could be received and considered, and thereby enabling the Big Pharma “lobby machine” to become fully engaged across all DC circles, ensuring that the FDA changes are effectively put to rest.

The bottom line is that the FDA is now proposing to “delay until further notice” the portions of the final rule amending the FDA’s existing regulations on “off-label” drug use, when describing the types of evidence that may be considered in determining a medical product’s intended uses.  The FDA will receive comments on this proposal through February 5, 2018.

Here is the official FDA publication of January 16, 2018:

The Federal Register:  https://www.federalregister.gov/documents/2018/01/16/2018-00555/clarification-of-when-products-made-or-derived-from-tobacco-are-regulated-as-drugs-devices-or

WHAT IS “OFF-LABEL” MARKETING?

Global health care giant Johnson & Johnson (J&J) and its subsidiaries will pay more than $2.2 billion to resolve criminal and civil liability arising from allegations relating to the prescription drugs Risperdal, Invega and Natrecor, including promotion for uses not approved as safe and effective by the Food and Drug Administration (FDA) and payment of kickbacks to physicians and to the nation’s largest long-term care pharmacy provider.  The global resolution is one of the largest health care fraud settlements in U.S. history, including criminal fines and forfeiture totaling $485 million and civil settlements with the federal government and states totaling $1.72 billion.

“The conduct at issue in this case jeopardized the health and safety of patients and damaged the public trust,” stated Eric Holder, then US Attorney General, “This multibillion-dollar resolution demonstrates the Justice Department’s firm commitment to preventing and combating all forms of health care fraud.  And it proves our determination to hold accountable any corporation that breaks the law and enriches its bottom line at the expense of the American people” he added.

The resolution includes criminal fines and forfeiture for violations of the law and civil settlements based on the False Claims Act arising out of multiple investigations of the company and its subsidiaries.

“When companies put profit over patients’ health and misuse taxpayer dollars, we demand accountability,” said Associate Attorney General Tony West.  “In addition to significant monetary sanctions, we will ensure that non-monetary measures are in place to facilitate change in corporate behavior and help ensure the playing field is level for all market participants.”

The Federal Food, Drug, and Cosmetic Act (FDCA) protects the health and safety of the public by ensuring, among other things, that drugs intended for use in humans are safe and effective for their intended uses and that the labeling of such drugs bear true, complete and accurate information.  Under the FDCA, a pharmaceutical company must specify the intended uses of a drug in its new drug application to the FDA.  Before approval, the FDA must determine that the drug is safe and effective for those specified uses.  Once the drug is approved, if the company intends a different use and then introduces the drug into interstate commerce for that new, unapproved use, the drug becomes misbranded.  The unapproved use is also known as an “off-label” use because it is not included in the drug’s FDA-approved labeling.

“When pharmaceutical companies interfere with the FDA’s mission of ensuring that drugs are safe and effective for the American public, they undermine the doctor-patient relationship and put the health and safety of patients at risk,” said Director of the FDA’s Office of Criminal Investigations John Roth.  “Today’s settlement demonstrates the government’s continued focus on pharmaceutical companies that put profits ahead of the public’s health.  The FDA will continue to devote resources to criminal investigations targeting pharmaceutical companies that disregard the drug approval process and recklessly promote drugs for uses that have not been proven to be safe and effective.”

 J&J RISPERDAL MARKETING ABUSE

In a related civil complaint filed today in the Eastern District of Pennsylvania, the United States alleges that Janssen marketed Risperdal to control the behaviors and conduct of the nation’s most vulnerable patients: elderly nursing home residents, children and individuals with mental disabilities.  The government alleges that J&J and Janssen caused false claims to be submitted to federal health care programs by promoting Risperdal for off-label uses that federal health care programs did not cover, making false and misleading statements about the safety and efficacy of Risperdal and paying kickbacks to physicians to prescribe Risperdal.

“J&J’s promotion of Risperdal for unapproved uses threatened the most vulnerable populations of our society – children, the elderly and those with developmental disabilities,” said U.S. Attorney for the Eastern District of Pennsylvania Zane Memeger.  “This historic settlement sends the message that drug manufacturers who place profits over patient care will face severe criminal and civil penalties.”

In its complaint, the government alleges that the FDA repeatedly advised Janssen that marketing Risperdal as safe and effective for the elderly would be “misleading.”  The FDA cautioned Janssen that behavioral disturbances in elderly dementia patients were not necessarily manifestations of psychotic disorders and might even be “appropriate responses to the deplorable conditions under which some demented patients are housed, thus raising an ethical question regarding the use of an antipsychotic medication for inappropriate behavioral control.”

The complaint further alleges that J&J and Janssen were aware that Risperdal posed serious health risks for the elderly, including an increased risk of strokes, but that the companies downplayed these risks.  For example, when a J&J study of Risperdal showed a significant risk of strokes and other adverse events in elderly dementia patients, the complaint alleges that Janssen combined the study data with other studies to make it appear that there was a lower overall risk of adverse events.  A year after J&J had received the results of a second study confirming the increased safety risk for elderly patients taking Risperdal, but had not published the data, one physician who worked on the study cautioned Janssen that “[a]t this point, so long after [the study] has been completed … we must be concerned that this gives the strong appearance that Janssen is purposely withholding the findings.”

The complaint also alleges that Janssen knew that patients taking Risperdal had an increased risk of developing diabetes, but nonetheless promoted Risperdal as “uncompromised by safety concerns (does not cause diabetes).”  When Janssen received the initial results of studies indicating that Risperdal posed the same diabetes risk as other antipsychotics, the complaint alleges that the company retained outside consultants to re-analyze the study results and ultimately published articles stating that Risperdal was actually associated with a lower risk of developing diabetes.

The complaint alleges that, despite the FDA warnings and increased health risks, from 1999 through 2005, Janssen aggressively marketed Risperdal to control behavioral disturbances in dementia patients through an “ElderCare sales force” designed to target nursing homes and doctors who treated the elderly.  In business plans, Janssen’s goal was to “[m]aximize and grow RISPERDAL’s market leadership in geriatrics and long term care.”  The company touted Risperdal as having “proven efficacy” and “an excellent safety and tolerability profile” in geriatric patients.

In addition to promoting Risperdal for elderly dementia patients, from 1999 through 2005, Janssen allegedly promoted the antipsychotic drug for use in children and individuals with mental disabilities.  The complaint alleges that J&J and Janssen knew that Risperdal posed certain health risks to children, including the risk of elevated levels of prolactin, a hormone that can stimulate breast development and milk production.  Nonetheless, one of Janssen’s Key Base Business Goals was to grow and protect the drug’s market share with child/adolescent patients.  Janssen instructed its sales representatives to call on child psychiatrists, as well as mental health facilities that primarily treated children, and to market Risperdal as safe and effective for symptoms of various childhood disorders, such as attention deficit hyperactivity disorder, oppositional defiant disorder, obsessive-compulsive disorder and autism.  Until late 2006, Risperdal was not approved for use in children for any purpose, and the FDA repeatedly warned the company against promoting it for use in children.

The government’s complaint also contains allegations that Janssen paid speaker fees to doctors to influence them to write prescriptions for Risperdal.  Sales representatives allegedly told these doctors that if they wanted to receive payments for speaking, they needed to increase their Risperdal prescriptions.

In addition to allegations relating to Risperdal, today’s settlement also resolves allegations relating to Invega, a newer antipsychotic drug also sold by Janssen.  Although Invega was approved only for the treatment of schizophrenia and schizoaffective disorder, the government alleges that, from 2006 through 2009, J&J and Janssen marketed the drug for off-label indications and made false and misleading statements about its safety and efficacy.

As part of the global resolution, J&J and Janssen have agreed to pay a total of $1.391 billion to resolve the false claims allegedly resulting from their off-label marketing and kickbacks for Risperdal and Invega.  This total includes $1.273 billion to be paid as part of the resolution announced today, as well as $118 million that J&J and Janssen paid to the state of Texas in March 2012 to resolve similar allegations relating to Risperdal.  Because Medicaid is a joint federal-state program, J&J’s conduct caused losses to both the federal and state governments.  The additional payment made by J&J as part of today’s settlement will be shared between the federal and state governments, with the federal government recovering $749 million, and the states recovering $524 million.  The federal government and Texas each received $59 million from the Texas settlement.

NURSING HOME PATIENT ABUSES BY J&J

The civil settlement also resolves allegations that, in furtherance of their efforts to target elderly dementia patients in nursing homes, J&J and Janssen paid kickbacks to Omnicare Inc., the nation’s largest pharmacy specializing in dispensing drugs to nursing home patients.  In a complaint filed in the District of Massachusetts in January 2010, the United States alleged that J&J paid millions of dollars in kickbacks to Omnicare under the guise of market share rebate payments, data-purchase agreements, “grants” and “educational funding.”  These kickbacks were intended to induce Omnicare and its hundreds of consultant pharmacists to engage in “active intervention programs” to promote the use of Risperdal and other J&J drugs in nursing homes.  Omnicare’s consultant pharmacists regularly reviewed nursing home patients’ medical charts and made recommendations to physicians on what drugs should be prescribed for those patients.  Although consultant pharmacists purported to provide “independent” recommendations based on their clinical judgment, J&J viewed the pharmacists as an “extension of [J&J’s] sales force.”

J&J and Janssen have agreed to pay $149 million to resolve the government’s contention that these kickbacks caused Omnicare to submit false claims to federal health care programs.  The federal share of this settlement is $132 million, and the five participating states’ total share is $17 million.  In 2009, Omnicare paid $98 million to resolve its civil liability for claims that it accepted kickbacks from J&J and Janssen, along with certain other conduct.

“Consultant pharmacists can play an important role in protecting nursing home residents from the use of antipsychotic drugs as chemical restraints,” said U.S. Attorney for the District of Massachusetts Carmen Ortiz.  “This settlement is a reminder that the recommendations of consultant pharmacists should be based on their independent clinical judgment and should not be the product of money paid by drug companies.”

OFF-LABEL USE OF HEART DRUG NATRECOR

The civil settlement announced today also resolves allegations that J&J and another of its subsidiaries, Scios Inc., caused false and fraudulent claims to be submitted to federal health care programs for the heart failure drug Natrecor.  In August 2001, the FDA approved Natrecor to treat patients with acutely decompensated congestive heart failure who have shortness of breath at rest or with minimal activity.  This approval was based on a study involving hospitalized patients experiencing severe heart failure who received infusions of Natrecor over an average 36-hour period.

In a civil complaint filed in 2009 in the Northern District of California, the government alleged that, shortly after Natrecor was approved, Scios launched an aggressive campaign to market the drug for scheduled, serial outpatient infusions for patients with less severe heart failure – a use not included in the FDA-approved label and not covered by federal health care programs.  These infusions generally involved visits to an outpatient clinic or doctor’s office for four- to six-hour infusions one or two times per week for several weeks or months.

The government’s complaint alleged that Scios had no sound scientific evidence supporting the medical necessity of these outpatient infusions and misleadingly used a small pilot study to encourage the serial outpatient use of the drug.  Among other things, Scios sponsored an extensive speaker program through which doctors were paid to tout the purported benefits of serial outpatient use of Natrecor.  Scios also urged doctors and hospitals to set up outpatient clinics specifically to administer the serial outpatient infusions, in some cases providing funds to defray the costs of setting up the clinics, and supplied providers with extensive resources and support for billing Medicare for the outpatient infusions.

As part of today’s resolution, J&J and Scios have agreed to pay the federal government $184 million to resolve their civil liability for the alleged false claims to federal health care programs resulting from their off-label marketing of Natrecor.  In October 2011, Scios pleaded guilty to a misdemeanor FDCA violation and paid a criminal fine of $85 million for introducing Natrecor into interstate commerce for an off-label use.

“This case is an example of a drug company encouraging doctors to use a drug in a way that was unsupported by valid scientific evidence,” said First Assistant U.S. Attorney for the Northern District of California Brian Stretch.  “We are committed to ensuring that federal health care programs do not pay for such inappropriate uses, and that pharmaceutical companies market their drugs only for uses that have been proven safe and effective.”

Non-Monetary Provisions of the Global Resolution and Corporate Integrity Agreement

In addition to the criminal and civil resolutions, J&J executed a five-year Corporate Integrity Agreement (CIA) with the Department of Health and Human Services Office of Inspector General (HHS-OIG).  The CIA includes provisions requiring J&J to implement major changes to the way its pharmaceutical affiliates do business.  Among other things, the CIA requires J&J to change its executive compensation program to permit the company to recoup annual bonuses and other long-term incentives from covered executives if they, or their subordinates, engage in significant misconduct.  J&J may recoup monies from executives who are current employees and from those who have left the company.  The CIA also requires J&J’s pharmaceutical businesses to implement and maintain transparency regarding their research practices, publication policies and payments to physicians.  On an annual basis, management employees, including senior executives and certain members of J&J’s independent board of directors, must certify compliance with provisions of the CIA.  J&J must submit detailed annual reports to HHS-OIG about its compliance program and its business operations.

“OIG will work aggressively with our law enforcement partners to hold companies accountable for marketing and promotion that violate laws intended to protect the public,” said Inspector General of the U.S. Department of Health and Human Services Daniel R. Levinson.  “Our compliance agreement with Johnson & Johnson increases individual accountability for board members, sales representatives, company executives and management.  The agreement also contains strong monitoring and reporting provisions to help ensure that the public is protected from future unlawful and potentially harmful off-label marketing.”

FEDERAL AND STATE JOINT CRIMINAL INVESTIGATIONS

This resolution marks the culmination of an extensive, coordinated investigation by federal and state law enforcement partners that is the hallmark of the Health Care Fraud Prevention and Enforcement Action Team (HEAT) initiative, which fosters government collaborations to fight fraud.  Announced in May 2009 by Attorney General Eric Holder and Health and Human Services Secretary Kathleen Sebelius, the HEAT initiative has focused efforts to reduce and prevent Medicare and Medicaid financial fraud through enhanced cooperation.

The criminal cases against Janssen and Scios were handled by the U.S. Attorney’s Offices for the Eastern District of Pennsylvania and the Northern District of California and the Civil Division’s Consumer Protection Branch.  The civil settlements were handled by the U.S. Attorney’s Offices for the Eastern District of Pennsylvania, the Northern District of California and the District of Massachusetts and the Civil Division’s Commercial Litigation Branch.  Assistance was provided by the HHS Office of Counsel to the Inspector General, Office of the General Counsel-CMS Division, the FDA’s Office of Chief Counsel and the National Association of Medicaid Fraud Control Units.

This matter was investigated by HHS-OIG, the Department of Defense’s Defense Criminal Investigative Service, the FDA’s Office of Criminal Investigations, the Office of Personnel Management’s Office of Inspector General, the Department of Veterans Affairs, the Department of Labor, TRICARE Program Integrity, the U.S. Postal Inspection Service’s Office of the Inspector General and the FBI.

One of the most powerful tools in the fight against Medicare and Medicaid financial fraud is the False Claims Act.  Since January 2009, the Justice Department has recovered a total of more than $16.7 billion through False Claims Act cases, with more than $11.9 billion of that amount recovered in cases involving fraud against federal health care programs.

The department enforces the FDCA by prosecuting those who illegally distribute unapproved, misbranded and adulterated drugs and medical devices in violation of the Act.  Since 2009, fines, penalties and forfeitures that have been imposed in connection with such FDCA violations have totaled more than $6 billion.

The civil settlements described above resolve multiple lawsuits filed under the qui tam, or whistleblower, provisions of the False Claims Act, which allow private citizens to bring civil actions on behalf of the government and to share in any recovery.  From the federal government’s share of the civil settlements announced today, the whistleblowers in the Eastern District of Pennsylvania will receive $112 million, the whistleblowers in the District of Massachusetts will receive $27.7 million and the whistleblower in the Northern District of California will receive $28 million.  Except to the extent that J&J subsidiaries have pleaded guilty or agreed to plead guilty to the criminal charges discussed above, the claims settled by the civil settlements are allegations only, and there has been no determination of liability

With the Trump Administration still claiming that no regulatory oversight is needed to monitor the US drug industry, that they can self-regulate, it appears that there will be no letup in the rampant “off-label: and unintended use marketing of pharmaceutical drugs in the United States.  The one way that Big Pharma is held accountable is in the courtroom, although financial damages and penalties against the drug companies amounting to billions of dollars each year being awarded by juries, wont change FDA policy, it does provide a small amount of official recognition that there are ongoing abuses by the pharmaceutical industry in the USA.

 

 

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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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