Life Sciences Legal Update : Life Sciences Lawyers & Attorneys : Reed Smith Law Firm : Healthcare, Food and Drug Law, Biotechnology, Privacy, Product Liability

Recent events highlight the importance of having a plan for product recalls. The Food and Drug Law Institute's recent monograph entitled, "International Prescription Product Recalls: A Practical Guide, Volume 1, Number 4," provides comprehensive guidance and practical recommendations on dealing with recalls internationally as well as a checklist and valuable "dos and don'ts" for manufacturers facing product recalls. Written by Reed Smith partners James M. Wood and Areta L. Kupchyk, the publication is available for download by series and individual issue subscribers.

For more information or to order, see www.fdli.org.

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China's long-awaited Tort Liability Law, passed on December 26, 2009 by the Standing Committee of the National People’s Congress of China, will take effect on July 1, 2010. The law, which serves to provide a stronger basis for the development of tort law and practice in China, offers standard guidance on issues ranging from product liability, environmental pollution, medical malpractice to employee-related liabilities. For example, prior to the enactment of the law, defective product recall obligations were only applied to a limited number of products, including medicine, food, toys and automotive products. The new law, however, expands the recall system to cover all products manufactured or sold in China.

Reed Smith Beijing Counsel Mao Rong and Michael H. Dardzinski and Consultant Joyce Sun recently drafted a brief summary of China's new tort law provisions regarding product liability, medical-related damages and environmental pollution. Read the full summary here.

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This post was written by Steven P. Murphy.

Responding to efforts by a number of industry groups, on December 28, 2009, the U.S. Consumer Product Safety Commission ("CPSC") posted a Federal Register notice announcing its continuation of the stay of enforcement of the third-party laboratory testing and certification required under section 14 of the Consumer Product Safety Improvement Act of 2008 ("CPSIA"). The stay was continued until February 10, 2011. The continued stay involves a discrete group of products, including children's toys and child care products with banned phthalates, toys subject to ASTM's F-963 standards, baby walkers, electrically operated toys, youth all-terrain vehicles, carpets and rugs, vinyl plastic film, and children's sleepwear. Most importantly, the stay was continued for the third-party testing and certificate of the lead content limit that applies to all children's products.

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This post was written by Areta Kupchyk, Kevin Madagan, and Paul Sheives.

Following a decade-long hiatus, the Food and Drug Administration (“FDA”) appears ready to finally address industry Internet communications. FDA’s Center for Drug Evaluation and Research (“CDER”) in collaboration with other divisions within FDA, held a two-day hearing on November 12^th and 13^th to help the Agency determine how the statutory provisions, regulations, and policies governing advertising and promotional labeling should be applied to product-related information on the Internet and emerging technologies.

Much has changed since 1996, the last time FDA held a public hearing on this topic. The Internet is now widely used as a medium for companies to disseminate information about their products, and the Internet's ability to facilitate communication and collaboration has substantially evolved over the last few years primarily as a result of a second (Web 2.0) and now third (Web 3.0) generation of Internet development and website design. The inherent flexibility and intelligence of Web 2.0 and 3.0 is great for society, but also fraught with risk for an FDA-regulated industry that must carefully control its interactions with consumers and health care practitioners. Indeed, the industry has largely avoided using Web 2.0 out of fear that any social media use may result in FDA enforcement action. 

Given the above, it is not surprising that FDA’s hearing was a welcome relief to many. Even though the hearing technically was only an information gathering exercise for FDA, it was an important opportunity for industry leaders and stakeholders to contribute to FDA’s emerging Internet policy. This Client Alert provides a brief summary of the major themes and recommendations from the presenters at the hearing.

In addition, please see a related commentary on the blog Adlaw by Request (“FDA Seeks To Understand Social Media”). Adlaw by Request is a blog designed to provide regular news on advertising law developments in the United States and elsewhere, with practical commentary and analysis from Reed Smith’s Advertising, Technology and Media (ATM) practice.

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This post written by Eric Buhr.

In a precedential decision issued Thursday, In Re: Pharmacy Benefit Managers Antitrust Litigation (MDL 1782), the U.S. Court of Appeals for the Third Circuit reinstated a district court order compelling arbitration of antitrust claims, an order which another district court judge vacated after the case was transferred to a federal Multi-District Litigation (MDL)s. Based on the law of the case doctrine, the Court of Appeals held that MDL judges may not overturn an order of the transferor court absent a finding of extraordinary circumstances - a conclusion that has broad ramifications for MDL proceedings in general.

The In Re Pharmacy Benefit Managers Antitrust Litigation case began in 2003, when Bellevue Drug Co. and several other pharmacies and associations sued AdvancePCS, a pharmacy benefits manager now known as CaremarkPCS, Inc for antitrust violations. In 2004, AdvancePCS moved to compel arbitration of all of the Plaintiffs' claims based on a contractual arbitration clause, and the district judge, Judge Eduardo Robreno of the U.S. District Court for the Eastern District of Pennsylvania, granted the motion to compel arbitration and stayed the district court action. 

Two years later, though, the case was transferred to an MDL pending in the Eastern District of Pennsylvania before Judge John P. Fullam. There, Judge Fullam lifted the stay and vacated the order for arbitration. Although Judge Fullam admitted the orders compelling arbitration were "clearly appropriate under the Federal Arbitration Act," he felt that an order vacating the arbitration order would help expedite the case. In support of his ruling, he explained his belief that a transferee judge under the multidistrict litigation statute had the power to vacate or modify any order of a transferor court bearing on pretrial matters.

The Court of Appeals clearly disagreed, stating that "there is nothing in the rules adopted by the Joint Panel on Multidistrict Litigation that authorized a transferee judge to vacate or modify the order of a transferor judge."   Although Judge Fullam relied, in part, on portions of the Manual for Complex Litigation suggesting that a transferee judge may vacate or modify orders of the transferor court, the Third Circuit dismissed that argument. The Court explained that "if Judge Fullam's interpretation of the statute were accurate, litigation could begin anew with each MDL transfer…Moreover, we do not believe that Congress intended that a 'Return to Go' card would be dealt to parties involved in MDL transfers." 

Ultimately, the Third Circuit agreed that the transfer of a case to an MDL does not confer more power on a transferee court; its powers are commensurate with those the transferor court has absent the transfer. Therefore, under ordinary application of the law of the case doctrine, an MDL court may only revisit past orders upon a finding of "extraordinary circumstances". Some recognized examples justifying exceptions and revisiting old orders anew include: (1) when new evidence becomes available; (2) when a supervening new law has been announced; (3) when there is a need to clarify or correct an earlier ambiguous ruling; and (4) when the order might lead to an unjust result. Since the MDL judge had not relied on on any such exception to the law of the case doctrine, the Third Circuit reinstated the original order by the transferor court.  

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A recent study suggests that exposure to nanoparticles may have caused the death of two female workers and the illnesses of five others in China. Life science health industry companies that manufacture, integrate, sell or buy products that contain nanomaterials may want to monitor reaction to this report, which may garner attention from media outlets, scientists, regulators and the plaintiffs' bar. For a full discussion of these issues, review the full Client Alert written by Reed Smith attorneys Antony Klapper, Jesse Ash and David Wagner.

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On Tuesday, August 4, 2009, the Senate Committee on Health, Education, Labor and Pensions met for a hearing called "Protecting Patients from Defective Medical Devices" regarding Senate Bill 540, a companion bill to the House bill, H.R. 1346, the "Medical Device Safety Act of 2009." The House Subcommittee on Health, of the Committee on Energy and Commerce also met earlier this year on this issue, with some of the same speakers. 

S. 150 and H.R. 1346 seek to overturn the Supreme Court's important ruling in Riegel v. Medtronic, Inc., 128 S.Ct. 999 (2008), which held that the PMA approval process for Class III devices imposes federal requirements that preempt state tort claims which would impose additional or different "requirements" regarding the safety and efficacy of the device, pursuant to the express preemption clause found in the Medical Devices Amendment of 1976.

Speaking in support of the bill were William Maisel, Director of the Medical Device Safety Institute, Thomas McGarity, Professor at the University of Texas School of Law, and Michael Mulvihill, a patient who was formerly implanted with a medical device. The arguments they presented echoed those of preemption opponents.

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On August 4, 2009 at 2:30 p.m., it will be the Senate's HELP Committee's turn to hold a hearing entitled "Protecting Patients from Defective Medical Devices". No witness list is yet posted.

For our coverage on past hearings on this issue, click here.

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Since last year, a number of courts have interpreted and applied the express preemption holdings of Riegel v. Medtronic, Inc., 128 S.Ct. 999 (2008). Miller v. DePuy Spine, Inc., 07-cv-01639, 2009 US Dist LEXIS 49602 (D. Nev. May 1, 2009), is another example and, although it was decided on May 1, has just recently been picked up by LEXIS.

In Miller, the Nevada District Court granted summary judgment for the manufacturer of a PMA approved spinal implant disc called the Charite Artificial Disc. While many courts, including this one, correctly follow Riegel and hold that the state law claims challenging the design, manufacture and labeling claims are expressly preempted, this court also entered judgment for the defendant on warranty and misrepresentation claims that have a received a more mixed reception in some courts.

As to express warranty, Miller concluded that the plaintiff failed to establish the receipt of any express warranties, and that such warranty claims directly challenged the safety and effectiveness established through PMA approval of the device. The Court further held that even when couched as a warranty claim , claims are preempted when they would "impose liability for the defendant's use of labeling approved and required by the FDA." 

The plaintiff also claimed to assert "parallel claims" contending  that the implanted device was "out of conformity with the materials or manufacturing specifications approved by the FDA," but the court dismissed these as well because plaintiff failed to meet his burden in demonstrating that there was a genuine issue of fact. As the Court succinctly noted: "Only a departure from such FDA-approved specifications could conceivably escape preemption, and absence of any evidence of such departure justifies summary judgment." 

Plaintiff's claims that the manufacturer allegedly made misrepresentations or omissions of material information to the FDA in order to "secure or maintain the PMA" were also dismissed. Not only had the plaintiff offered only "argument about this hypothesis" rather than admissible evidence, under 21 U.S.C. Section 337(a), any attempt to enforce the FDCA and its regulations were preempted; and any contention that the manufacturer provided inaccurate or incomplete information to the FDA was impliedly preempted under Buckman v. Plaintiffs' Legal Committee, 531 U.S. 341 (2001). 

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This post was written by Adam M. Masin.

The American Dialect Society named “truthiness” as the word of the year for 2005 and Merriam-Webster followed suit in 2006. Popularized by political satirist Stephen Colbert’s character “Stephen Colbert,” truthiness is generally defined as “knowledge” based on emotion and gut instinct rather than on information, facts, evidence, or logic. A true proponent of truthiness, for example, would “feel” the definition and would never look it up in a book. Whether on Colbert’s show, in academic and political circles, or in the pages of the New York Times, the concept of truthiness has been on a lot of important minds lately. Add the United States Supreme Court to that list. Although the Court did not explicitly invoke that word in discussing why the Complaint had to be dismissed in Iqbal v. Ashcroft, 2009 WL 1361536 (May 18, 2009), truthiness, it said in essence, is not the pleading standard under Rule 8. Welcome to the world of reality-based pleading.

Finally, our clients might add. As the Drug and Device Law Blog recently noted, defenders of the Iqbal decision have been more reticent that those horrified by it. The authors of that blog have ably raised a number of defenses for Iqbal and its older brother Twombly and took issue with plaintiffs’ claims that Iqbal and Twombly stand as obstacles to filing meritorious cases, arguing that “the hallmark of a meritorious case is that it’s factually supported from the get go.” That is undoubtedly true, and it should be added that all Iqbal and Twombly require is that plaintiffs give the trial judge some reason to belief that their case is meritorious “from the get go.”

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This post was written by Kevin G. Lohman.

On May 26, 2009, the U.S. Supreme Court denied a petition for writ of certiorari to review a decision from the Supreme Court of Tennessee that upheld an award of punitive damages for over $13 million dollars, which amounted to a 5.35-to-1 ratio of punitive damages to actual damages. See DaimlerChrysler Corp. v. Flax, NO. 08-1010, 2009 WL 357533, (2009). ProductLiability.com deserves recognition for flagging this decision. 

The case arose out of a motor vehicle accident in June 2001, which resulted in the death of an eight-month-old baby. Plaintiffs, the parents of decedent, filed suit alleging wrongful death and negligent infliction of emotional distress (NIED) against the other driver involved in the accident and against DaimlerChrysler Corp., who was the manufacture of plaintiffs’ 1998 Dodge Caravan. The jury assigned fault evenly against the defendant driver (for speeding) and DaimlerChrysler Corp. (for defective design of the car seats), and awarded plaintiffs $5 million dollars in compensatory damages for their wrongful death claim, and $2.5 million damages for their NIED claim. During the second phase of the trial, evidence was presented that DaimlerChrysler Corp. was aware of the defective design of their car seats, they failed to warn customers, they hid evidence of the of the defective design, and they continued to market the Caravan as a vehicle that put safety first. The jury awarded punitive damages against DaimlerChrysler Corp. in the amount of $65.5 million for the wrongful death claim, and $32.5 million for the NIED claim. The trial judge remitted the punitive damages down to $13,367,345.00 for the wrongful death claim and $6,632,655.00 for NIED. 

On appeal, the Tennessee Court of Appeals reversed, holding that there was insufficient evidence to award any damages pertaining to the NIED claim. Further, the court held that there was not clear and convincing evidence that DaimlerChrysler Corp. acted recklessly or intentionally in order to warrant punitive damages, and struck the entire punitive damage award.

On further appeal, the Supreme Court of Tennessee affirmed the court of appeal’s holding pertaining to the NIED. However, they reversed the portion of decision pertaining to punitive damages. Holding that there was in fact sufficient evidence to support a finding of punitive damages, the court reviewed whether the size of the punitive damages award is excessive in violation of the due process standards set out by the United States Supreme Court in BMW of North America, Inc. v. Gore, 517 U.S. 559 (1996) and State Farm Mutual Automobile Insurance Co. v. Campbell, 538 U.S. 408 (2003). Specifically, the court relied on the first two guideposts set out in Gore and Campbell (the reprehensibility of the defendant’s conduct; and the ratio between the punitive damage award and the compensatory damages). 

With regard to the first guidepost, the court noted that the evidence in this case “clearly demonstrates that [DaimlerChrysler Corp.’s] conduct was reprehensible.” As to the second guidepost, the court noted that the punitive-to-compensatory ratio was 5.35-to-1 and acknowledged the language of the Supreme Court decisions in Gore (suggesting that a ratio of greater than 4-to-1 approaches the outer limits of constitutionality) and Campbell (suggesting that a ratio of 1-to-1 may be all that is permissible in cases where compensatory damages are “substantial”). However, the court also noted that in Campbell the Supreme Court declined to adopt a fixed mathematical formula to determine the appropriateness of punitive damages and stated that “the precise award in any case, of course, must be based upon the facts and circumstances of defendant’s conduct and the harm to the plaintiff.” The Tennessee court held that “In light of the first two guideposts, we believe that a ratio of 1 to 5.35 would be warranted in this case,” noting that the evidence pertaining to the defendant’s conduct demonstrated their conduct was reprehensible and the harm to the plaintiffs in this case was tragic (the death of an eight-month-old baby). 

Interestingly, the Tennessee court chose not to acknowledge the Supreme Court’s most recent punitive damage decision from Exxon Shipping Co. v. Baker, ___ U.S. ___, ___, 128 S. Ct. 2605 (2008), which was decided one month prior and established a 1-to-1 ratio between punitive and compensatory damages under federal maritime law and contained implications for applying the 1-to-1 ratio to limit punitive damages in state court actions. (The Exxon decision is discussed in this prior post). Despite the fact that Supreme Court of Tennessee did not acknowledge Exxon, the United States Supreme Court denied DaimlerChrysler’s petition for writ of certiorari.

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The White House Press Office just released a Memorandum for the Heads of Executive Departments and Agencies re Preemption.  Regarding actions by the executive branch intended to preempt state law, it directs:

1. Heads of departments and agencies should not include in regulatory preambles statements that the department or agency intends to preempt State law through the regulation except where preemption provisions are also included in the codified regulation.

2. Heads of departments and agencies should not include preemption provisions in codified regulations except where such provisions would be justified under legal principles governing preemption, including the principles outlined in Executive Order 13132.

3. Heads of departments and agencies should review regulations issued within the past 10 years that contain statements in regulatory preambles or codified provisions intended by the department or agency to preempt State law, in order to decide whether such statements or provisions are justified under applicable legal principles governing preemption. Where the head of a department or agency determines that a regulatory statement of preemption or codified regulatory provision cannot be so justified, the head of that department or agency should initiate appropriate action, which may include amendment of the relevant regulation.

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Yesterday, May 18th, the United States Supreme Court issued Ashcroft, Former Attorney General v. Iqbal, and confirmed the pleading standards it announced in Bell Atlantic Corp. V. Twombly, 550 U. S. 544 (2007), an anti-trust case. Although Ashcroft also dealt with other significant legal issues, it is quite possible that its broadest impact will come from its pronouncements regarding pleading standards in federal court.

As Ashcroft explains:

Two working principles underlie our decision in Twombly. First, the tenet that a court must accept as true all of the allegations contained in a complaint is inapplicable to legal conclusions. Threadbare recitals of the elements of a cause of action, supported by mere conclusory statements, do not suffice. [Twombly, 550 U.S. at 555] (Although for the purposes of a motion to dismiss we must take all of the factual allegations in the complaint as true, we “are not bound to accept as true a legal conclusion couched as a factual allegation” (internal quotation marks omitted)). Rule 8 marks a notable and generous departure from the hyper-technical, code-pleading regime of a prior era, but it does not unlock the doors of discovery for a plaintiff armed with nothing more than conclusions. Second, only a complaint that states a plausible claim for relief survives a motion to dismiss. Id., at 556. Determining whether a complaint states a plausible claim for relief will, as theCourt of Appeals observed, be a context-specific task that requires the reviewing court to draw on its judicial experience and common sense. 490 F. 3d, at 157–158. But where the well-pleaded facts do not permit the court to infer more than the mere possibility of misconduct, the complaint has alleged—but it has not “show[n]”—“that the pleader is entitled to relief.” Fed. Rule Civ. Proc. 8(a)(2)."

Slip Op. at 14-15.

Formulaic recitations of the elements of a cause of action do not suffice. Slip Op. at 17. Legal conclusions in a complaint -- an allegation that an agreement was "unlawful" is one example; that a drug or device manufacturer "violated FDA regulations" would be another -- are not entitled to an assumption of truth when a defendant moves to dismiss. Slip Op. at 16. In other words, Ashcroft is a nice addition to any federal court defendant's arsenal. 

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This post was written by Keith Yandell and Lisa Baird.

This morning, May 18, 2009, the California Supreme Court issued its ruling in In re Tobacco II Cases, a case that will shape how parties litigate California Unfair Competition Law (“UCL”) claims. At issue was the viability of UCL actions that seek to certify a class despite the fact that not all putative plaintiffs suffered injury as a result of a defendant’s allegedly unfair practice. Since California’s infamous UCL (also known as Bus. & Prof. Code, § 17200 et seq.) is often used to add broad “consumer fraud” claims to product liability lawsuits against the life sciences industry (as well as many other industries), the outcome of In re Tobacco II garnered substantial attention. 

Questions Presented

(1) In order to bring a class action under the UCL, as amended by Proposition 64, must every member of a proposed class action have suffered “injury in fact,” or is it sufficient that only the class representative comply with that requirement?

(2) In a class action based on a manufacturer’s alleged misrepresentation of a product, must every member of the class have actually relied on the manufacturer’s representations?

Background of the Case

The gravemen of the plaintiffs’ Complaint was that defendant tobacco manufacturers and researchers engaged in a decades-long conspiracy to conceal the health effects and addictiveness of cigarettes and, in so doing, made numerous false and misleading statements to consumers.

The Court of Appeal unanimously affirmed the trial Court’s holding that every class member must have suffered injury in order to maintain a class action under the UCL.

The California Supreme Court Ruling

The Court answered the above questions as follows:

(1) “[S]tanding requirements are applicable only to the class representatives, and not all absent class members.” In re Tobacco II Cases, slip Op. at p. 2 (Cal. May 18, 2009).

The Court also repeated the “likely to deceive” standard, and concluded “the language of section 17203 with respect to those entitled to restitution — to restore to any person in interest any money or property, real or personal, which may have been acquired” (italics added) by means of the unfair practice — is patently less stringent than the standing requirement for the class representative — “any person who has suffered injury in fact and has lost money or property as a result of the unfair competition.” (§ 17204, italics added.) . 

(2) “[A] class representative proceeding on a claim of misrepresentation as the basis of his or her UCL action must demonstrate actual reliance on the allegedly deceptive or misleading statements, in accordance with well-settled principles regarding the element of reliance in ordinary fraud actions.” A class representative, however, need not plead or prove that they actually relied on a particular advertisement or statement when the unfair practice is a fraudulent advertising campaign. Id.

As to whether class representatives actually have standing, the court did conclude that Prop. 64 “imposes an actual reliance requirement on plaintiffs prosecuting a private enforcement action under the UCL’s fraud prong. This conclusion, however, is the beginning, not the end, of the analysis of what a plaintiff must plead and prove under the fraud prong of the UCL. . . .While a plaintiff must show that the misrepresentation was an immediate cause of the injury-producing conduct, the plaintiff need not demonstrate it was the only cause. ‘It is not . . . necessary that [the plaintiff’s] reliance upon the truth of the fraudulent misrepresentation be the sole or even the predominant or decisive factor influencing his conduct. . . . It is enough that the representation has played a substantial part, and so had been a substantial factor, in influencing his decision.’ [Citation.] [¶] Moreover, a presumption, or at least an inference, of reliance arises wherever there is a showing that a misrepresentation was material. . . .Nor does a plaintiff need to demonstrate individualized reliance on specific misrepresentations to satisfy the reliance requirement.” Id. at p. 31.  

Additional Materials

The opinion is available at the judicial branch website and copies are available at the Supreme Court Clerk’s Office.

For a summary of the oral argument in this matter, please see "California Supreme Court Hears Landmark Consumer Fraud Case".

The lower Court’s ruling is available here.

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Washington Legal Foundation's latest Legal Backgrounder, the "Logic of Michigan's 'FDA Defense' Survives Recent Supreme Court Ruling", authored by Thomas J. Foley, explains why the Wyeth v. Levine, 129 S.Ct. 1187 (2009) ruling does not support a rationale to overturn Michigan law that provides a defense against drug product liability suits where the manufacturer obtained FDA approval.

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On May 12, 2009 the Subcommittee on Health, of the Committee on Energy and Commerce, House of Representatives, held a hearing on H.R. 1346, the "Medical Device Safety Act of 2009".  If passed, it would overturn the Supreme Court decision, Riegel v. Medtronic, Inc., 128 S.Ct. 999 (2008), which held that under the express preemption clause of the Medical Devices Amendment of 1976 (MDA), the federal requirements created by the premarket approval process for Class III devices preempted state law tort claims that added or differed from the federal requirements.  This hearing comes at the heels of public and media scrutiny of this decision, including last year's House Committee on Oversight and Government Reform preemption hearing held May 14, 2008 and the Senate Judiciary Committee's preemption hearing held June 11, 2008.

Before the invited panel of witnesses spoke, numerous members of the subcommittee provided opening remarks, which reflected the division among those who argued that the Supreme Court's analysis in Riegel departed from the legislative intent of the MDA, and those who agreed that the pending legislation would prevent innovation and access to medical devices that are life-saving. Arguments against the bill also noted that moving against preemption would otherwise place safety concerns in the hands of juries across the country, instead of on the FDA's safety and efficacy evaluations. Some focus was also placed on the FDA's effectiveness in policing the manufacturers, with several congress members such as Representative John Dingell, MI and Henry Waxman, CA arguing that the FDA has not been able to identify and take action on defective products, therefore calling into question their effectiveness in ensuring safety, while other congress members such as Representatives Steve Buyer, IN and Michael Burgess, TX argued that if the FDA is underfunded and without resources, the Committee should focus on the FDA, not on tort reform.

Most of the invited witnesses were repeat appearances from last year's hearing. David Vladeck, J.D., Professor of Law, Georgetown University Law Center presented his case in support of the bill, and repeated his concerns about the Riegel court's alleged deviation from congressional intent as reflected in legislative history. He also argued that manufacturers brought the express preemption defense to fore and that it was a more recent phenomena since the mid 1990s, after the Cipollone v. Liggett Group, Inc., 505 U.S. 504, 517, 112 S.Ct. 2608, 2618 (1992) decision.

William H. Maisel, M.D., M.P.H., Director, Medical Device Safety Institute, Department of Medicine, Beth Israel Deaconess Medical Center, Boston also testified, as both a practicing cardiologist and as a consultant and advisory committee member for the FDA. He provided anecdotal background with what he represented as an example of a man who was implanted with a St. Jude pacemaker that allegedly was subjected to a recall and resulted in additional surgical procedures.  In making this example, Dr. Maisel argued that the self-interest of companies are at odds with the congressional goal of ensuring public safety. Gregory Curfman, M.D., Executive Editor, New England Journal of Medicine also echoed similar sentiments, and discounted the arguments made about innovation and safety for consumers being mutually exclusive.

Richard Cooper of the law firm Williams & Connolly LLP provided a big-picture review of what it would mean to have 50 state juries take the place of the FDA and seasoned clinicians when determining what constitutes a "defect" meriting liability. Mr. Cooper also emphasized that innovation would be hampered should preemption be denied to medical device companies, noting how many smaller companies that are focused on under-served areas of practice would be litigated out of their market share.

Bridget Robb of Pennsylvania and Michael Kinsley of Washington both presented anecdotal history with medical devices. Ms. Robb testified about her experience with a cardiac lead that she claimed unnecessarily shocked her and caused grievous subsequent emotional and physical injury, while Mr. Kinsley presented his story of how deep brain stimulation and other implanted medical devices has allowed him to lead a productive life despite a Parkinson's Disease diagnosis. Both presented different takes on the limits of how much risk a patient should face when balanced with the potential benefits offered by their medical devices.

Prior to the hearing, the Energy & Commerce Committee also published a letter asking the FDA to reexamine its decision to approve a medical device called the "collagen scaffold" that is used to reinforce and repair the meniscus, which is a natural cushion in the knee. This letter, as addressed to the FDA Principal Deputy Commissioner, seeks reexamination of the approval decision that the authors argue was made over the objection of FDA scientists.

For more information, please see the previous post "Will The May 12 Hearing On The "Medical Device Safety Act of 2009" Recognize The Costs Of Eliminating Preemption?"

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The House Committee on Energy and Commerce's Subcommittee on Health will hold a hearing on Tuesday, May 12, 2009, at 2:00 p.m. regarding a bill to overturn medical device preemption (H.R. 1346 /S. 540), called the "The Medical Device Safety Act of 2009.” Although the hearing is not yet listed on the Subcomittee's website, hearing materials should become available here. (If you are interested, video and transcripts also are available from last year's lopsided House Committee on Oversight and Government Reform preemption hearing held May 14, 2008 and the Senate Judiciary Committee's preemption hearing held June 11, 2008.)

Those in the industry will find H.R.1346/ S. 540 ironically named, as patient access to critical new devices and public health would suffer if this bill passes. These ill effects are detailed in a new economics study, “The Economic Impact of Eliminating Federal Preemption for Medical Devices on Patients, Innovation and Jobs” by Ernst Berndt, PhD, and Mark Trusheim of the Massachusetts Institute of Technology’s Sloan School of Management. As the authors state in the executive summary to their article,

"Eliminating preemption protection for medical devices—as some currently advocate—will impact:

1. Patient access and public health
2. Medical technology innovation rates
3. Industry employment
4. Government expenses as a healthcare payer, regulator and judicial funder

The results from eliminating preemption are likely broad and generally negative across this host of categories."

The article is thoughtful and well worth reading.

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Over the centuries, many have sought better opportunities in the United States. For the last few years, tort plaintiffs have been among them. Companies in many industries have been the target of lawsuits filed by plaintiffs who live outside the United States, over injuries that also allegedly occurred elsewhere, whether because of perceived advantages in substantive law within the United States, or access to procedural devices in U.S. courts that are not widely available in the rest of the world (such as the class action device).

In a May 1 opinion by Judge Posner filed in two consolidated appeals, Abad v. Bayer Corp. and Pastor v. Bridgestone/Firestone North American Tire, LLC, the Seventh Circuit affirmed dismissal of two cases on grounds of forum non conveniens. In both cases, the plaintiffs are Argentine citizens who live in Argentina and allegedly were injured there, but filed product liability lawsuits against American manufacturers in U.S. district courts. Under the familiar forum non conveniens doctrine, the district courts had weighed various factors and concluded in both cases that Argentina was better-suited to decide plaintiffs' lawsuits -- Abad being a 600-plaintiff class action in which hemophiliacs contended they contracted the AIDS virus from the defendant's clotting factor, and Pastor an auto accident rollover case involving allegedly defective tires.

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The European Court of Justice ("ECJ") recently had the opportunity to opine on limits on the scope of advertising for medical products in the European Union, when a journalist who had reprinted factual information about a pain medication sold in Norway but prohibited in Denmark, was made an example under Danish legal provisions prohibiting advertising for medicinal products that are not lawfully marketed in Denmark. As exmplained by Paule Drouault-Gardrat, Julie Gottenberg and Juliette Peterka in "Advertising of medicinal products versus freedom of expression of a journalist - European Court of Justice Decision dated 2 April 2009 (C-421/07) 'Frede Damgaard' " (available also in French), the ECJ concluded the issue was a matter for the national court in the first instance, relying in part on a line of French cases holding that any publication praising the merits of a medicinal product must be considered as advertising whomever its author, regardless of whether the manufacturer sought or paid for publication.

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In a recent law journal article authored about FDA approved labels and off-label uses, authors Mark Herrmann (of the http://druganddevicelaw.blogspot.com) and Pearson Bownas demonstrate the folly of letting the standard of care in medical malpractice cases be defined by whether the doctor used a prescription product "on label" or "off label." The article succinctly explains how off-label use is a prevalent and necessary part of the practice of medicine, and that off label use is not and cannot be legally regulated by the FDA. Off label treatments are undeniably common, whether because manufacturers face prohibitive costs to obtain approval for certain uses when those uses are already accepted in the medical community, or because doctors are ethically obliged to provide the best treatment possible for their patients regardless of the indications for use approved by the FDA . Further, the authors point out that in many instances off-label use may be the standard of care for providing the "safest, most effective, state-of-the-art treatment." Thus, in light of the accepted and prevalent practice of off-label use, the authors point out that allowing FDA approved drug and device labels as "some evidence" of the standard of medical care should be outweighed by the significant risk of prejudice, confusion and time wasting that admission of evidence about the label indications for use would cause. Of relevance to the Life Sciences and Health Industry, the article provides a good overview of the reasons and authorities existing to mitigate the force of a product's label in failure-to-warn off-label use cases.

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This post was written by Antony B. Klapper and Jesse J. Ash.

On April, 8, 2009, the National Institute for Occupational Safety and Health ("NIOSH") and the Centers for Disease Control and Prevention ("CDC") submitted a notice for public comment in the Federal Register, requesting information to evaluate potential health risks associated with the use of carbon nanotubes ("CNTs"). 74 Fed. Reg. 15985-15986 (Apr. 8, 2009). NIOSH and CDC request by May 15, 2009, all information related to studies, workplace exposure data and information on control measures where companies manufacture CNTs in products. The agencies plan to use this information to formalize recommendations for the safe handling of products that contain CNTs.

Recent scientific reports have drawn parallels between CNTs and asbestos. CNTs are long, thin particles similar to the needle-like shape of some asbestos fibers. In fact, these reports suggest that CNTs can cause adverse effects on the lung function of mice. These reports, in part, likely form the rationale for NIOSH's and CDC's focus on CNTs. Suggesting a connection between CNTs and the human health questions associated with asbestos is a sure way to gain the public's and the government's attention, even though the reports do not answer the critical question of whether CNT exposure can cause adverse consequences in humans, and are limited in a variety of ways. Regardless, this Notice from NIOSH and CDC demonstrates that the government is now highly concerned about the effects of CNTs on human health, and that it is focused on the future regulation of its use.

Companies that manufacture, integrate or sell nanomaterials, including, in particular, CNTs, need to be mindful of the actions taken as a result of this Notice. Companies should evaluate whether to communicate their views and/or findings to NIOSH and CDC by May 9, either through associations or directly. Whatever information NIOSH collects, and any guidance it may promulgate, could become the floor that companies may need to adhere to or risk future liability.

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The Supreme Court had held action on a petition in Colacicco v. Apotex, Inc., No. 08-437, an implied preemption decision out of the Third Circuit involving an anti-depressant, pending the outcome of Wyeth. The docket now reflects that the case has been distributed for the Court's March 6, 2009 conference. The most likely outcome is that the Court will issue an order remanding the case to the Third Circuit for reconsideration in light of Wyeth.

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Today the Supreme Court affirmed Wyeth v. Levine, as reported by Drug and Device Law.

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This post was written by Keith Yandell.

This morning, March 3, 2009, the California Supreme Court heard argument in In re Tobacco II Cases, a case that will shape how parties litigate California Unfair Competition Law (“UCL”) claims. At issue is the viability of UCL actions that seek to certify a class despite the fact that not all putative plaintiffs suffered injury as a result of a defendant’s allegedly unfair practice. Since California’s infamous UCL (also known as Bus. & Prof. Code, § 17200 et seq.) is often used to add broad “consumer fraud” claims to product liability lawsuits against the life sciences industry (as well as many other industries), the outcome of In re Tobacco II is garnering considerable attention.

Question Presented

(1) In order to bring a class action under the UCL, as amended by Proposition 64, must every member of a proposed class action have suffered “injury in fact,” or is it sufficient that only the class representative comply with that requirement?

(2) In a class action based on a manufacturer’s alleged misrepresentation of a product, must every member of the class have actually relied on the manufacturer’s representations?

Background of the Case

The gravemen of the plaintiffs’ Complaint is that defendant tobacco manufacturers and researchers engaged in a decades-long conspiracy to conceal the health effects and addictiveness of cigarettes and, in so doing, made numerous false and misleading statements to consumers.

The Court of Appeal unanimously affirmed the trial Court’s holding that every class member must have suffered injury in order to maintain a class action under the UCL.

Report From This Morning’s Argument

At the argument, Daniel Collins represented Phillip Morris, and Mark Robinson represented the plaintiffs. Justice Moore, of the 4th Appellate District, replaced Justice George who recused himself. Justice Kennard presided as Chief Justice.

Mr. Robinson focused his argument on the Mervyn’s decision¹, where the Court held that Proposition 64 did not change the substantive requirements of a UCL cause of action. According to Mr. Robinson, if the tobacco companies’ theory were correct, the UCL would be reduced to “nothing more than a fraud cause of action that does not allow damages.” Justices Baxter and Chin responded with a series of questions focusing the lack of symmetry that would result if absent class members could use the UCL to bring claim they would not have had standing to maintain individually. Mr. Robinson countered that the UCL “has always been broad” and has never included a reliance requirement. Justice Werdegar offered the insightful query, “As a practical matter, what did Proposition 64 change?” Plaintiff’s counsel responded that it changed standing requirements. When pressed, however, he had no answer for how the statute’s new reference to California Code of Civil Procedure Section 382’s class action requirements changed the UCL. 

Mr. Collins ably fielded a number of questions including: from where in the statute he derives his conclusion that all class members must show injury in fact (Justice Kennard); whether a request for injunctive relief as opposed to restitution affected standing (Justice Moore), and whether the term “claimant” refers only to a representative class member (Justice Chin). The theme of Mr. Collins’ responses was that a class member cannot use the class action mechanism to recover under a claim that he or she could not have brought individually. Therefore, Section 17204’s new language mandating compliance with C.C.P. § 382 could only be read to require that all class members must have suffered injury in fact as a result of the allegedly deceptive conduct. This message appeared to resonate with Justice Baxter, who aptly summarized Mr. Collins’ position.

In the end, the Court will balance Mr. Robinson’s argument that Proposition 64 did not change the substance of the UCL against the truism that allowing absent class members to recover for claims they could not have maintained individually would render the UCL’s new reference to C.C.P. 382 a nullity. Regardless of the outcome, as both parties acknowledged, this decision will have a dramatic impact on California class action litigation.

The California Channel, a public affairs cable network, broadcast live coverage of oral argument on many cable stations. It also carried a live streaming Webcast at www.calchannel.com.

We will post the decision as soon as it is released, which should be within the next 90 days.

Additional Materials

The Supreme Court’s website allows users to obtain additional information and sign-up for e-mail notices about this case. 

The lower Court’s ruling is available at courtinfo.ca.gov.

---

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As Point of Law pointed out on February 3, a move is afoot to "Revers[e] Preemption, One Bill At A Time," starting with industries regulated by the FDA.

Section 2 of the FDA Globalization Act OF 2009, H.R. 759, merits the attention of the life sciences industry. It provides:

This Act and the amendments made by this Act may not be construed as modifying or otherwise affecting any action or the liability of any person (as defined in section 201 of the Federal Food, Drug, and Cosmetic Act) under the law of any State.
 

 

UPDATE:  Drug and Device Law has posted Bert Rein On The Politics Of Preemption on this issue, and it is definitely worth a read.

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Although the life sciences industry continues to await the Supreme Court's decision in the Wyeth v. Levine preemption case, the court already is half-way through this term.

The Washington Legal Foundation (WLF) will be holding its annual Midterm Supreme Court Media Briefing event on Wednesday, February 11 at 9:00 a.m. EST:

The program will be moderated by WLF’s Legal Policy Advisory Board Chairman, The Honorable Dick Thornburgh, and feature Akin Gump partner and SCOTUSblog creator and editor Thomas Goldstein, Gibson, Dunn & Crutcher partner and former Deputy Solicitor General Thomas Hungar, and WLF Chief Counsel Richard Samp. In addition to reviewing key Court rulings, previewing upcoming oral arguments, and assessing pending cert petitions, our speakers will discuss the impact a new Solicitor General will have on current cases and petitions, as well as positions taken by the Federal Government in future cases.

Those in D.C. can attend in person at 2009 Massachusetts Avenue, NW, and everyone else can watch the webcast online at www.wlf.org. WLF requests that RSVPs be sent to glammi@wlf.org.

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UPDATE: After more than two years, on February 3, 2009, the California Supreme Court finally set argument in an important UCL case, In re Tobacco II for Tuesday, March 3, 2009, at 9:00 a.m., in San Francisco. With the Court's 90-day rule, a decision can be expected by June 1, 2009 in the ordinary course.

California product liability lawsuits against life sciences defendants often include claims under California's Unfair Competition Law (or 'UCL"), Cal. Bus. & Prof. Code § 17200 et seq. Sometimes UCL claims are the main theory of liability against life sciences clients, particularly when the plaintiff, or plaintiff class, has not suffered personal injuries from a medical device or drug they have used.

The UCL is controversial. For many years, critics complained that allowed individuals or groups to sue businesses on behalf of the "general public" over allegedly "unfair", fraudulent, or illegal practices, even if they never suffered any type of loss or harm, personal injury or otherwise. The voters passed Proposition 64 in November 2004, however, and imposed limitations to stem what were fairly viewed as abuses of this law. UCL plaintiffs now must show that they suffered an actual injury and lost money or property as a result of the defendant's alleged practice, and lawsuits brought on behalf of the general public now also must meet must traditional class action requirements. 

In response to Proposition 64, some entreprenurial plaintiffs' lawyers turned from the UCL to another statute, California's Consumer Legal Remedies Act ("CLRA"), Cal. Civ. Code §1750 et. seq., seeking another broad and malleable cause of action. (For more background about the UCL and CLRA, see this page or the always informative UCL Practitioner.

But the CLRA remains more limited than the pre-Proposition 64 version of the UCL. Last week, the California Supreme Court issued an important new CLRA decision, Meyer v. Sprint Spectrum L.P., unanimously affirming judgment for Sprint and concluding that a CLRA plaintiff lacks standing "without some allegation that he or she has been damaged by an alleged unlawful practice." Sprint was represented in the California Supreme Court by Reed Smith's own Ray Cardozo and Dennis Maio.

Meyer began in early 2004 with allegations, on behalf of the general public, that Sprint violated the UCL by including mandatory binding arbitration and other provisions in its customer service agreements. After Proposition 64, the original plaintiff (who was not a Sprint customer) was replaced by new named plaintiffs, and CLRA and declaratory relief causes of action were added. Sprint challenged the amended complaint because even the new plaintiffs had not alleged that the contract provisions had been enforced against them, and they also did not allege that they were personally damaged by the provisions. Although plaintiffs argued that the CLRA imposed no damage requirement whatsoever, the court concluded that California's Legislature had "set a low but nonetheless palpabale threshold of damage." It also noted that with statutes like the UCL and CLRA, "any rule that would expand the ability of individuals to bring lawsuits has costs as well as benefits." There is little to say other than that Meyer is a sound and well-reasoned decision that provides important and clear guidance for future CLRA claims.

On a different subject, more traditional personal injury class actions, the Drug and Device Law Blog has a good post regarding a Washington Legal Foundation paper by John Beisner and Jessica Miller, "Litigate the Torts, Not the Mass: A Modest Proposal for Reforming How Mass Torts are Adjudicated," proposing some long-overdue revisions to American Pipe tolling.

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This post was written by Areta L. Kupchyk, James M. Wood and Kevin M. Madagan.

FDA's Good Reprint Practice (GRP) Guidance went into effect in January 2009. The GRP Guidance establishes criteria that FDA will now use to determine whether the distribution of medical or scientific reprints and reference texts about off-label uses of a drug or device would constitute impermissible promotional activity under the Food, Drug and Cosmetic Act.

Read Reed Smith’s full commentary analyzing the GRP Guidance, which includes a Good Reprint Practice Checklist.

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Hat tip to the TortsProf Blog for posting yesterday on a new article by Frank Vandall, Catholic University Law Review, Vol. 57, No. 1 (2008)

As the article abstract explains, the 2006 proposal by Senator Arlen Specter (R.-PA) to criminalize aspects of product liability law is a bad idea:

Senator Arlen Specter called a hearing in March 2006, on a proposal that urges the criminalization of products liability for the manufacture of intentionally lethal goods. The hearing before the Senate Judiciary Committee provided an opportunity to comment on the numerous issues raised in the far-reaching proposal. Responding to these issues requires revisiting the foundational question of whether the manufacture and sale of a defective product should be addressed by civil litigation or criminal prosecution. Understanding the issues will assist state legislatures and federal agencies in considering such a proposal. To plumb the issues raised by Senator Specter history, economics, and the system of product design and manufacture must be examined. Because Senator Specter argues for a federal act and federal enforcement, his proposal demands consideration of the concepts of preemption, political abuse, and nonenforcement. Fundamental concepts of cause-in-fact and proximate cause must also be considered. After examining these concepts, it should be clear that the criminalization of products liability is neither necessary, nor desirable.

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This post was written by Elizabeth Carder-Thompson and Andrew L. Hurst.

A dizzying array of civil and criminal provisions address false or fraudulent representations made to, and false claims filed with, Medicare, Medicaid, and state and federal health care programs. This attached article, first published by the American Health Lawyers Association, briefly identifies relevant criminal and civil provisions relating to these issues, and then focuses more closely on recent uses of the civil False Claims Act (“FCA”) in government investigations of health care providers, suppliers, and manufacturers, including a section on state false claims legislation. Finally, it discusses the issue of distinguishing overpayments from false claims and provide information on the voluntary disclosure program of the Office of the Inspector General (“OIG”) of the Department of Health and Human Services (HHS).

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This post was written by Areta L. Kupchyk, James M. Wood and Kevin Madagan.

On January 13, 2009, eleven months after the Food and Drug Administration (FDA) issued a draft guidance document, and 2 1/2 years after the sunset of the statute intended to permit the dissemination of medical literature about unapproved uses of drugs and medical devices, the FDA issued a final guideline for such dissemination. Often referred to as “the distribution of off-label use journal articles,” FDA’s final guidance is aptly named “Guidance For Industry: Good Reprint Practices for the Distribution of Medical Journal Articles and Medical Scientific Reference Publications on Unapproved New Uses of Approved Drugs and Approved or Cleared Medical Devices.”

As with the 2008 draft guidance, the final version begins by succinctly discussing the historical attempts to regulate the distribution of literature about unapproved uses, including noting the need to balance the law’s prohibition on distributing or promoting “unapproved uses of approved drugs and approved or cleared medical devices” with the “important public policy” of providing information that “may even constitute a medically recognized standard of care.” FDA concludes that the touchstone for lawful dissemination of literature about unapproved uses is that the publications “are truthful and non-misleading.”

To meet this standard, the FDA final guidance lists “principles of Good Reprint Practices” that include criteria for determining the type of publication, and the manner in which the publication can be distributed. Although the final guidance closely tracks the draft guidance, it has some important clarifications.

Click here to read the full alert, which highlights these clarifications and provides an overview of the final guidance.

UPDATE: Much obliged to Drug and Device Law for the link and thoughtful discussion, and more also is at the FDA Law Blog.

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The Third Circuit delivered a Christmas present Dec. 24, issuing an opinion - albeit "not precedential" - that reduced a 3.13:1 ratio for punitive damages down to a 1:1 ratio. Hat tip to law.com for catching the decision.

Jurinko v. Medical Protective Co. involved a bad faith insurance lawsuit arising out of a medical malpractice policy. The physician plaintiff was awarded more than $1.6 million in compensatory damages against his insurer, as well as $6.25 million in punitive damages, for the insurer's "bad faith failure to settle" for the policy limits before trial.

Although the Third Circuit found sufficient evidence to support the punitive judgment, its analysis of the constitutional limits on the amount of the punitive-damage award led it to reduce the judgment. The court employed a 1:1 ratio as its starting "guidepost," and analyzed the punitive-damage award using the factors from State Farm Mut. Auto. Ins. Co. v. Campbell, 538 U.S. 408, 416 (2003).

With regard to the reprehensibility of the insurance company's conduct, the court noted that there was no evidence of physical harm to the insured, no evidence of recidivism, nor any reckless disregard of health or safety. In addition, "the compensatory damages [were] substantial, [the insured] suffered only economic harm, and the harm was easily measured" because it was the amount of the judgment that exceeded the policy limits. The amount of punitive damages also far exceeded the civil penalties and sanctions possible for the insurer's conduct. On the other hand, the Third Circuit recognized that the insurer's conduct was intentional, and the insured was financially vulnerable. 

In finding a 3:13:1 ratio of punitive damages to compensatory to be excessive, the Third Circuit noted that many courts start with a 1:1 guidepost (although the Ninth Circuit is not necessarily one of them). In addition, while the Supreme Court has declined to explicitly set a 1:1 ratio as a constitutional limit, it has employed that ratio in Exxon Shipping Co. v. Baker, ___ U.S. ___, ___, 128 S. Ct. 2605, 2633 (2008), this year's maritime decision (discussed in this prior post). The court concluded that "[i]n light of the substantial compensatory award and the harm being exclusively economic, this guidepost advises a reduced award."

While it is not entirely clear why the decision is marked "not precedential," footnote 1 may suggest an answer. It states: "The Honorable Maryanne Trump Barry participated in the oral argument but discovered facts causing her to recuse from this matter prior to filing of the Opinion. The remaining judges are unanimous in this decision, and this Opinion and Judgment are therefore being filed by a quorum of the panel."

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The FDA last Monday issued a proposed rule to classify "tissue expanders" as Class II (special controls) medical devices. These devices are "intended for temporary (less than 6 months) subdermal implantation to stretch the skin for surgical applications."

What makes this notice interesting is preemption. In Riegel v. Medtronic, 128 S.Ct. 999 (2008), the Supreme Court upheld preemption in part because it concluded that the premarket approval (or PMA) process for Class III medical devices results in "federal requirements" specific to the approved device. In the tissue expander proposed rule, the FDA explains its view that these special controls also amount to federal requirements that should result in preemption. It states:

"In this proposed rulemaking, FDA has tentatively determined that general controls by themselves are insufficient to provide reasonable assurance of the safety and effectiveness of the device, and that there is sufficient information to establish special controls to provide such assurance. FDA therefore proposes to establish special controls to address the issues of safety or effectiveness identified in the special controls draft guidance document. If this proposed rule is made final, these special controls would create 'requirements' for specific medical devices under 21 U.S.C. 360k, even though product sponsors would have some flexibility in how they meet those requirements (Papike v. Tambrands, Inc., 107 F.3d 737, 740-42 (9th Cir. 1997)). In addition, if this rule becomes final, as with any Federal requirement, if a State law requirement makes compliance with both Federal law and State law impossible, or would frustrate Federal objectives, the State requirement would be preempted. (See Geier v. American Honda Co., 529 U.S. 861 (2000); English v. General Electric Co., 496 U.S. 72, 79 (1990); Florida Lime & Avocado Growers, Inc., 373 U.S. 132, 142-43 (1963); Hines v. Davidowitz, 312 U.S. 52, 67 (1941).)"

Although this is the first reference we have seen to Riegel in a proposed rule to establish Class II special rules, the FDA is actually not breaking new ground. In 1997, the Papike upheld preemption in a case involving tampons (a Class II device) and an alleged failure to adequately warn of toxic shock syndrome since the FDA had issued regulations specifying the toxic shock syndrome required for tampon packaging. Other tampon cases have followed Papike, and there have been a few latex glove cases, too. See, e.g., Whitson v. Safeskin Corp., 313 F.Supp.2d 473, 479 (M.D. Pa. 2004); Busch v. Ansell Perry, Inc., 2005 WL 877805 (W.D. Ky. Mar. 8, 2005).

UPDATE: Mark Hermann and Jim Beck at druganddevicelaw.blogspot.com have posted some interesting commentary on this proposed rule, noting - among other things - that even without reference to preemption, "both a 1998 regulation applicable to latex gloves, and a 1997 regulation applicable to contact lens care products, have likewise been accorded preemptive effect due to their specificity. See Morgan v. Abco Dealers, Inc., 2007 WL 4358392 (S.D.N.Y. Dec. 11, 2007) (latex gloves); Tuttle v. Ciba Vision Corp., 2007 WL 677134 (D. Utah Mar. 1, 2007) (contact lens care products)."

Their Top 10 lists of the good and bad drug and device cases from 2008 also are not to be missed.

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Below are some notes regarding the presentation by the FDA's Gerald Masoudi today at the ACI Drug and Device Conference. Every effort was made to capture his comments accurately, but please excuse any errors created by capturing these comments on a BlackBerry:

PREEMPTION

FDCA gives FDA role of determining safety and efficacy and warnings, considering factors including patient profile and public health considerations.

Labeling is key method by which FDA communicates risks and benefits. FDA decides for populations, not individuals, and requiring safety and efficacy for every individual would lead to the absence of treatments.

Even with proper risk benefit judgment and prescribing, injuries can occur.

Products should neither under- nor over-warn.

State tort lawsuits decrease patient access, limit treatment options and interfere with the agency's judgments.

Preemption does not reach manufacturers' failure to comply with federal requirements (such as contamination with toxic substance) since there would be no interference with the FDA's judgment.

FDA will make mistakes, but allowing juries to make failure-to-warn determinations would not be superior to the current system and the current role of FDA.

In Wyeth v. Levine, the court may issue a narrow decision--we all will have to wait to see. But it is not new for FDA to support preemption. It has been the agency position in litigation, testimony, and preambles to rules. FDA reiterated its support recently in a pregnancy labeling proposed rule and CBE rule from earlier this year. This readoption should answer any question that the agency's Final Rule on drug labeling, which also had preemption in a preamble, was improperly promulgated.

Continue Reading...

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Markets outside the United States are increasingly important for life sciences companies, and this post includes articles by Reed Smith lawyers regarding two developments in Europe. 

The first is by Edward Miller, entitled "Sidestepping the Issue", republished with permission from the International Clinical Trials e-book (registration required).  This article discusses a ruling by the European Court of Justice, holding that pharmaceutical companies can refuse to fill "unusual" orders from distributors who seek to profit by buying drugs for countries with low reimbursement prices, and shipping them for sale in countries with high prices - but falling short of the standard advocated by the pharmaceutical company defendant in that case. 

The second article is by Paule Drouault-Gardrat and Julie Gottenberg regarding French Supreme Court rulings earlier this year on causation in product liability cases.  First published in the August edition of Insights, the conference bleue newsletter, the article is reprinted with permission here:

Continue Reading...

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The gap that the Supreme Court's non-precedential decision, Warner-Lambert Co., LLC v. Kent, 128 S.Ct. 1168 (2008), left open earlier this year continues to force the lower courts to take sides, as was done in the latest case - Grange v. Mylan Labs., Inc., Case No. 1:07-CV-107 (N.D. Utah Oct. 31, 2008). Specifically, the controversy remains on whether fraud-on-the-FDA claims ruled preempted by the Supreme Court in Buckman Co. v. Plaintiffs' Steering Committee, 531 U.S. 341 (2000) will preempt exceptions that are put forth to overcome a statutory presumption that would otherwise bar recovery. So far, the Sixth Circuit in Garcia v. Wyeth-Ayerst Labs., 385 F.3d 961 (6th Cir. 2004) has held that such claims are preempted; the Second Circuit in Desiano v. Warner-Lambert & Co., 467 F.3d 85, 97 (2d Cir. 2006) has held that they are not. 

In this latest case, the District Court of Utah found the Sixth Circuit's reasoning more persuasive in deeming the exception to a statutory presumption for punitive damages preempted, because the exception was triggered where there was evidence that the manufacturer of a manufacturer's knowing withholding or misrepresentation of information required to submit to the FDA. The court in Grange stated:

"That said, the Sixth Circuit's decision in Garcia is more persuasive here. The chief problems that Buckman sought to counteract are present whenever a plaintiff, as a prerequisite to collecting damages, is required to put on evidence that there was what amounts to fraud on the FDA. When such evidence is considered, state courts are essentially second-guessing the FDA and drug companies, nervous about state litigation, will have an incentive to flood the FDA with information. The court accordingly agrees with Garcia, and holds that Utah Code Ann. § 78B-8-203(2) is, in part, preempted. Specifically, to the extent that Utah Code Ann. § 78B-8-203(2) allows for an exception in cases where a plaintiff puts on his or her own independent evidence of information being withheld from the FDA, this statute is preempted. There is no preemption, however, in a situation where a plaintiff invokes Utah Code Ann. § 78B-8-203(2) to seek punitive damages in cases where the FDA itself has found that there was fraud in the application process."

For more, see Drug and Device Law's post about this case from earlier this morning.

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In its November 2008 issue, the Harvard Law Review will publish "Preemption of State Common Law Claims," 122 Harv. L. Rev. 405, an article that discusses Riegel v. Medtronic, Inc., 128 S.Ct 999 (2008) and its impact on state law claims. 

Of note, the authors state: "Despite criticisms that it leaves tort victims uncompensated, preemption is necessary to ensure that federal regulatory agencies, like the Food and Drug Administration (FDA), are the only governmental actors able to impose requirements on manufacturers – thereby ensuring a nationally standardized system of safety regulations without myriad local variations."

The authors also tackle an issue Riegel left open: "How to treat preemptive force of FDA regulation if agency approval is obtained by fraud." The authors acknowledge Buckman Co. v. Plaintiffs' Steering Committee, 531 U.S. 341 (2001), noting that if a state fraud claim "interferes with FDA regulatory decisions, preemption is likely to be (correctly) found." The authors opine that such actions should go forward only in situations "that would not impede the FDA's ability to choose its own enforcement strategy." Id. 

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In "Ex Parte Talks Allowed Under Georgia Law For Counsel, Doctors Preempted by HIPAA" (password required), the United States Law Week discusses in detail Moreland v. Austin, Georgia Sup. Ct. No. S08G0498, a November 3, 2008 decision holding that defense attorneys who wish to engage in ex parte communications with plaintiffs' treating physicians must comply with HIPAA privacy rules. Since HIPAA affords more patient privacy than a Georgia law that permitted ex parte contact once a plaintiff put his or her medical condition at issue, the Georgia law was preempted.

Preemption giveth, and preemption taketh away.

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On Friday, the Ninth Circuit took another run at determining due process limits on punitive damages in Southern Union v. Irvin. The court previously vacated a punitive award in excess of 153 times compensatory damages [see S. Union Co. v. Sw. Gas Corp., 415 F.3d 1001, 1009 (9th Cir. 2005)], but defendant appealed again after Southern Union accepted the trial court's remittitur to $4 million in punitive (just over ten times compensatory damages).

As Judge Noonan described the jury's findings in his dissent, "Irvin, the chairman of the Arizona Corporation Commission, worked determinedly for a period of four months to promote the merger of an Arizona utility company with another utility and to defeat a merger proposed by Southern Union over $100 million more beneficial to the Arizona company" in exchange for a "bribe" that was never paid, because Southern Union filed suit.

Using the Supreme Court's three touchstones from State Farm Mut. Auto. Ins. Co. v. Campbell, 538 U.S. 408, 416 (2003) - “(1) the degree of reprehensibility of the defendant’s misconduct; (2) the disparity between the actual or potential harm suffered by the plaintiff and the punitive damages award; and (3) the difference between the punitive damages awarded by the jury and the civil penalties authorized or imposed in comparable cases” - the Ninth Circuit concluded that a three-to-one ratio was the constitutional maximum in the case before it.

Continue Reading...

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In Carter v. Novartis Consumer Health, Inc., --- F. Supp. 2d --- , No. EDCV08-0334 MRP (JCRx) (C.D. Cal. Aug. 5, 2008) and its companion cases, the Central District of California addressed the express preemption clause of Section 379r of the Food, Drug and Cosmetic Act governing OTC drugs. Here, the parents of children younger than age 6 filed a complaint against manufacturers alleging that the OTC cough and cold medicines "d[id] not work" and were dangerous to their children. There were no requests for damages based on injuries, but rather for the economic harm of purchasing these products. Plaintiffs also sought injunctive relief, pursuant to various state consumer fraud statutes, and each case sought to certify a class on behalf of all others similarly situated.

The court granted the defendants' motion to dismiss based on federal preemption for all of the claims (unjust enrichment, false and misleading advertising, fraudulent concealment, unfair and deceptive business practices, and breach of express and implied warranties), noting that OTC cough and cold medicines are regulated by the FDA pursuant to the OTC monograph, generally described within 21 CFR part 341. Such OTC monographs set forth approved indications for use and age-dependent dosage instructions that must comply with all FDA regulations, and are therefore generally recognized as safe and effective. Claims attacking these federal "requirements" therefore preempted the state "requirements" established by the state law claims. Of particular note was the court's understanding that the state requirements were not defined by its label, but "its ultimate outcome: would a finding of liability impose requirements that are different from or in addition to FDA requirements?" p. 13. Because the claims were premised on attacks based upon FDA-approved statements in product labeling and advertising, such claims were preempted.

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On Monday, the District Court of Massachusetts issued a notable attorney's fee award decision in a class action arising from a data privacy breach, In re TJX Companies Retail Securities Litig. Along with a class settlement, class counsel urged the court to approve a $6.5 million attorney's-fees award, arguing that hundreds of millions of dollars in potential value had been created for the class. However, the payout depended entirely on class members making claims, and only a small fraction of the supposed potential - $6 million - were made. The court quite reasonably rejected class counsel's suggestion that the potential (but unrealized) claims supported the requested fees. That said, the court still approved the fee request pursuant to the lodestar method ($3.3m in lodestar * 1.97 multiplier = $6.5m).

The court finished with a cautionary note, which is where the baby step comes in: "In the future . . . Plaintiff's counsel can expect that this court, when confronted with reversionary common fund or claims-made settlements, will award attorney's fees by reference to the value of benefits actually put in the hands of class members." (emphasis in original). In reality, however, it would have been entirely reasonable for the court to use this standard for attorney's fees now, without waiting for the next time.

UPDATE: Drug and Device Law also has a November 11, 2008 post about this TJX case.

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Tomorrow's JAMA contains an editorial entitled, "Prescription Drugs, Products Liability, and Preemption of Tort Litigation" (subscription) by Catherine D. DeAngelis; Phil B. Fontanarosa (JAMA. 2008;300(16):1939-1941 (doi:10.1001/jama.2008.513)).

Suffice it to say, the premise that tort litigation safeguards patient health is faulty. Ensuring patient access to innovative and needed medical options is essential. See Riegel v. Medtronic, Inc., 128 S. Ct. 999, 1009 (2009) (discussing the express preemption statute for medical devices and stating, "the text of the statute - suggests that the solicitude for those injured by FDA-approved devices, which the dissent finds controlling, was overcome in Congress's estimation by solicitude for those who would suffer without new medical devices if juries were allowed to apply the tort law of 50 States to all innovations.").

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Over at Drug and Device Law Beck and Herrmann muse on the possible impact of a win by Sen. Obama on drug and device law. This blog takes no sides on the election - and this may mean nothing for the future development of the law - but it is interesting to note that in the past, Sen. McCain has supported the criminalization of product liability in certain circumstances, as Victor Schwartz explains in this March 2006 testimony before the Senate Judiciary Committee.
 

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Reed Smith LLP, in conjunction with ChemRisk and the Center for Business Intelligence, is presenting a complimentary webinar, "Nanotechnology - What the Life Sciences Industry Needs to Know about Managing its Risks", October 22 at noon eastern.

The moderator for this event will be Reed Smith partner Antony B. Klapper. Speakers include:

• Barr Weiner, Associate Director for Policy in the Food and Drug Administration's Office of Combination Products and the OCP representative on the FDA's agency-wide Nanotechnology Task Force
• Leonard I. Sweet, Senior Health Scientist, ChemRisk, Inc.
• Amy K. Madl, Senior Managing Health Scientist, ChemRisk, Inc.

The program will last one hour and will provide an overview of nanotechnology and its uses in the life sciences industry; actual and theoretical risks posed to humans by the use of engineered nanomaterials; the ways that life sciences companies can evaluate those potential risks and mitigate them through risk management practices and good product stewardship; and legal risks associated with engineered nanomaterials, and exploring next steps at the FDA and other regulatory bodies.

A link to register for this free program can be found at cbinet.com.

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The Washington Legal Foundation has published "Causation in Court: Working Principles for Toxic Tort Cases" by Reed Smith partner Antony Klapper. This interesting paper describes six working
principles that get at aspects of causation that sometimes confuse judges and juries when litigation involves allegations that a substance is toxic and has caused disease.

The principles the article explains in more depth are:

1. Causation in science is not synonymous with causation in law, but the gap has closed.
2. Proof of general causation requires, at a minimum, reliable epidemiology and a statistically significant estimated relative risk of more than 2.0.
3. Proving causation does not end with the general causation inquiry. Proof of specific causation is absolutely essential before any causal conclusions can be drawn.
4. Risk assessment is the best tool available to answer questions of causation.
5. Although risk assessment is the best tool available, regulatory rules for implementing risk assessments should not be used, and too often are abused.
6. Where there are multiple exposure sources for the same toxin, a more principled, objectively reliable methodology should be used to answer questions of causation. Concepts such as “substantial contributing” cause should be jettisoned.

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The Recorder (via Law.Com) has an article today discussing the Fifth Circuit's en banc decision In re Volkswagen of America Inc. and its ramifications for patent litigation.

The case involves the often-discussed (some would say notorious) Eastern District of Texas. The Rio Grande Valley and Gulf Coast of Texas are repeat offenders on the American Tort Reform Association's "Judicial Hellholes" list. Both patent and product liability cases historically have made their way because of the plaintiff-friendly nature of this jurisdiction, and judges in the Eastern District often rejected venue challenges under the reasoning that if a product was available in the jurisdiction, that was enough for venue—even if no other connection linked the case to the Eastern District of Texas.

In Volkswagen, however, an en banc panel of the Fifth Circuit issued a writ of mandamus ordering a product liability matter transferred from the Marshall Division of the Eastern District of Texas to the Dallas Division of the Northern District of Texas, where the underlying accident took place.

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In Parker v. Stryker Corp., 2008 WL 4457864 (D. Colo. Oct. 1, 2008), the District of Colorado addressed Riegel v. Medtronic, Inc., 128 S. Ct. 999 (2008), and the applicability of the express preemption clause of the Medical Device Amendments in a case where the manufacturer sought a discovery stay pending resolution of its motion to dismiss product liability claims regarding its PMA device, a hip implant. Although the motion to dismiss has not yet been resolved, the court exercised its discretion to decline the stay to allow discovery into plaintiffs' claims which supposedly parallel federal requirements. The case is not reported, and its lack of detail means it has limited value (if any) to future courts. So does Parker's failure to address authorities that shape and define what this so-called "parallel requirements" exception really takes. Medtronic, Inc. v. Lohr, 518 U.S. 470, 495 (1996) (state duty must be "identical" to the corresponding existing federal requirements for a plaintiff to survive preemption); see also McMullen v. Medtronic, Inc., 421 F.3d 482, 489 (7th Cir. 2005) (even a permitted act that is turned into a state requirement will not constitute a "parallel" requirement).

Preemption issues reach many products in the life sciences industry, and for preemption geeks, one category of over-the-counter (OTC) drugs is frequently featured in preemption jurisprudence: head lice treatments. Mills v. Warner-Lambert Co., --- F.Supp.2d ----, 2008 WL 4488308 (E.D.Tex. Sept. 30, 2008) is the latest. In Mills, the Eastern District of Texas interpreted and applied the express preemption provision for nonprescription drugs, Section 379r of the Federal Food, Drug and Cosmetic Act. Plaintiffs asserted that the lice treatment medications manufactured and sold by the defendants were ineffective, and asserted claims of breach of implied warranty of merchantability and violation of the Texas Deceptive Trade Practices Act. Defendants argued that Section 379r preempted these claims because they constituted a requirement on the marketing and sale of the products that differed from that provided under the FDCA. The district court agreed, holding that (1) while the medication was not approved through the NDA process but through the "monograph system for over-the-counter drugs," the FDA's oversight and review over the medication constituted a federal requirement within the meaning of Section 379r; (2) the plaintiffs' lawsuit would create a state requirement related to the medications, which followed that same holding in Riegel; (3) this state requirement would be different from, and in addition to, the federal requirement that allowed these manufacturers to sell the lice medication labeled as they were; and (4) the savings clause of Section 379r(e), which saved product liability claims from preemption, would not operate the same as for claims that were based on a contractual ground.

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This post was written by Matthew R. Sheldon and Alexander "Sandy" Y. Thomas.

On September 19, 2008, President Bush signed into law the long-awaited Federal Rule of Evidence Rule 502; “Attorney-Client Privilege and Work Product; Limitations on Waiver” (“Rule 502”). Rule 502 addresses waiver of the attorney-client privilege and work product doctrine in the context of disclosures to a federal agency or during a federal proceeding.

Among other benefits, Rule 502 adds some needed clarity to the question of what constitutes a waiver if privileged or work product material is inadvertently disclosed to an opponent in litigation. It also addresses the scope of a waiver and the impact such a waiver may have in other federal and state court proceedings.

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This article discusses the U.S. Supreme Court’s decision in Exxon Shipping Co. v. Baker, 128 S. Ct. 2605 (2008). In Exxon, the Supreme Court established a 1:1 ratio between punitive and compensatory damages under federal maritime law, and implications for applying the 1:1 ratio to limit punitive damages in state court actions. Originally published in the International Association of Defense Counsel's Drug, Device and Biotech Committee Newsletter for September 2008. Reprinted with permission of IADC.

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SCOTOSblog has its usual comprehensive coverage of the first Supreme Court case of this term, Altria Group v. Good, which involves questions of express and implied preemption in the context of tobacco.

As Lyle Denniston explains, "More than four decades ago, the Federal Trade Commission – the federal government’s main regulator of business conduct – told the major companies making and selling cigarettes that it would not challenge factual statements they made about the tar and nicotine content of cigarettes, if the claims were based on tests done using what is called the “Cambridge Filter Method.”

* * *

Three individuals who live in Maine – Stephanie Good, Lori A. Spellman and Allain L. Thibodeau – filed a class-action lawsuit, based on state law . . . . The low yields of the test method, according to the lawsuit, were offset by the actual smoking habits of users: they “compensated” by taking deeper puffs, holding the smoke in their lungs longer, or smoking more cigarettes. The lawsuit did not seek compensatory damages, but rather a return of the money smokers had paid for “light” cigarettes, along with a claim for punitive damages and recovery of their attorneys’ fees.
Philip Morris sought dismissal of the case, contending that state law claims had been displaced by the federal cigarette labeling and advertising law or FTC actions. The company made two claims of “preemption” of such state law claims: it said they were expressly pushed aside by the federal law controlling cigarette marketing, and were impliedly preempted by the FTC’s four-decades-long effort to implement a uniform policy on disclosing the health risks of smoking. A U.S. District Court dismissed the lawsuit on preemption grounds, but the First U.S. Circuit Court of Appeals in Boston reinstated it."

Links to the full analysis and briefs are on the case's SCOTUSwiki page, and links to the argument should be up very soon.

UPDATE: The transcript is now available.

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The California Court of Appeal reversed a lower court's holding for a generic pharmaceutical manufacturer and distributor, and held that implied preemption principles did not preempt the state law claims challenging the labeling for a generic drug. In McKenney v. Purepac Pharms. Co., --- Cal. Rptr. --- , 2008 WL 4355425 (Cal. App. Sept. 25, 2008), the lower court granted the manufacturer's demurrer without leave to amend, holding that because the defendant was a manufacturer of the generic drug, metroclopramide, it could not deviate from the original FDA approved warnings for the product. The reviewing court rejected this specific holding by stating that the FDA allows generic manufacturers to change its labeling with new safety information given the existence of supporting evidence. (57 Fed. Reg. 17950, 17961). The court also examined the Carlin v. Superior Court, 13 Cal. 4th 1104 (1996) decision that imposed liability for labels that failed to warn of risk that were known or reasonably known by the manufacturer. The court in Carlin noted the company's argument that the FDA evinced no intent to impliedly preempt state law claims, and nothing indicated that this intent had changed now. While the manufacturer showed more recent changes indicative of the FDA's intent, the court stated that this was particular case did not demonstrate the type of conflict preemption upheld in other cases, such as instances where the FDA precluded the manufacturer from including certain warnings for the drugs.

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We previously wrote about how the Department of Justice (DOJ) revised its Principles of Federal Prosecution of Business Organizations, which govern how federal prosecutors investigate, charge, and prosecute corporate crimes, including health care fraud. Reed Smith's Matthew R. Sheldon, Alexander “Sandy” Y. Thomas, and Richard D. Kelley have written more on the subject.

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The Institute for the Advancement of the American Legal System (“IAALS”) and the American College of Trial Lawyers Task Force on Discovery conclude in their Interim Report (“Report”) that the civil justice system, while not broken, is in serious need of repair. Significantly, however, they do conclude that the discovery system is, indeed, broken because it costs far too much and has become an end in itself.

The Report is based upon responses from 1,494 Fellows of the American College of Trial Lawyers to a survey developed by the College’s Task Force on Discovery and the IAALS. Of the 3,812 Fellows surveyed, 42 percent responded, a response rate the Report characterizes as “unusually large.” On average, survey respondents have been practicing law for 38 years, with 31 percent representing defendants exclusively, 24 percent representing plaintiffs exclusively, and 44 percent representing both, but primarily defendants.

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The Department of Justice (DOJ) has revised its Principles of Federal Prosecution of Business Organizations, which govern how federal prosecutors investigate, charge, and prosecute corporate crimes, including health care fraud. A number of the revisions address the area of cooperation credit, including providing that credit for cooperation will not depend on a corporation’s waiver of attorney-client privilege or work product protection, but rather on the disclosure of relevant facts. The guidelines also instruct prosecutors not to consider a corporation’s advancement of attorneys’ fees to employees when evaluating cooperativeness, and specify that the mere participation in a joint defense agreement will not render a corporation ineligible for cooperation credit. Moreover, prosecutors may not consider whether a corporation has sanctioned or retained culpable employees in evaluating whether to assign cooperation credit to the corporation.

Reed Smith's Health Industry Washington Watch blog has new posts about these guidelines as well as new FDA initiatives; Medicare DMEPOS accreditation requirements; the Medicare Part B drug CAP program; Congressional hearings and markups; OIG and GAO reports; upcoming health care industry events; and other policy developments.

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In-house lawyers in many industries--including life sciences and health care--repeatedly confront hard questions about the attorney-client privilege. As Reed Smith lawyers Matthew Sheldon and Sandy Thomas explain in the PrivilEdge Newsletter, a number of recent developments warrant attention. These include "The Attorney-Client Privilege Protection Act of 2007"--pending legislation that would curb demands for waiver of the privilege during corporate investigations and a recent case addressing attorney-client privilege issues such as the "joint client" exception, protection for tax advice and internal audits, and corporate ratification of a lower-level employee's disclosure of privileged information. Their article also discusses proposed Rule of Evidence 502 (S. 2450) regarding inadvertent disclosure of privileged information. As of Monday, that bill is awaiting the President's signature.

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This post was written by Michelle Lyu.

The plaintiff in Hearn v. Advanced Bionics Corporation, No. 06cv114-KS-MTP, 2008 WL 3896431 (S.D. Miss. Aug. 19, 2008) attempted to win a do-over of a straightforward defense preemption win.  

The district court had granted in part and denied in part the defendant's motion for summary judgment based on preemption as a result of the Class III PMA approval of the medical device in question, a cochlear implant that malfunctioned and was replaced with surgery. After the court's ruling, the parties settled and the court entered judgment of dismissal. Id. at p. 2. 

Approximately five months later, plaintiff moved for a relief from judgment, arguing that after the settlement, she discovered that the manufacturer had "knowingly misrepresented the true facts of the status of the FDA approval" to induce a settlement. Id. Having relied on such representations and "discovery fraud," plaintiff did not seek a rescindment of the settlement agreement (in fact, she kept the settlement proceeds!), but sought sanctions and damages under various claims for relief. Id. Essentially, the plaintiff argued that the defendant "knowingly misrepresented" that an FDA investigation was commenced post-approval, "at the conclusion of which the FDA would challenge Advanced Bionics' compliance with the pre-market approval process." Id. at p. 5. 

Based on these allegations, the plaintiff unsuccessfully sought to have the judgment vacated using Rule 11, Rule 60 and the court's inherent powers. On denying these requests, the court made clear that even if the plaintiff were to succeed in establishing misconduct, the court's ruling on the motion for summary would be unchanged. That is, even if the plaintiff's claims were accurate, "the Defendant would still be protected by the preemption defense for items that received and complied with pre-market approval from the FDA." Id. at p. 6. Further, the court's order granting the summary judgment did not detail which state law claims were preempted, but only stated a point of law; thus, had the case continued and the evidence demonstrated either non-compliance with the federal requirements or the manufacturer failed to properly obtain the premarket approval for the device, the preemption argument might have "presumably fail[ed]." Id. at p. 8. However, given the procedural status of the case, the court denied the plaintiff's motion and advised that her recourse--if any--was to file a new action against the manufacturer for fraudulent misrepresentation or to seek other similar relief.

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This post was written by Michelle Lyu.

Earlier this week, in Uhm v. Humana, Inc., --- F.3d --- , 2008 WL 3891592, No. 06-35672 (9th Cir. Aug. 25, 2008), the Ninth Circuit upheld a lower court ruling that the express preemption provision of the Medicare Prescription Drug Improvement and Modernization Act preempted state law claims arising from the plaintiffs' prescription drug benefits provided by a Medicare supplement insurer. 

On behalf of a putative class, plaintiffs asserted claims for breach of contract, violation of state consumer protection statutes, unjust enrichment, and fraud arising from allegations that the class enrolled in a plan for prescription drug coverage but the insurer failed to cover their prescription medication purchases as promised. But the Act specifies that for Medicare prescription drug plans and sponsors, "[t]he standards established under this part shall supercede any State law or regulation (other than State licensing laws or State laws relating to plan solvency) with respect to MA ["Medicare Advantage"] plans which are offered by MA organizations under this part." 42 U.S.C. § 1395w-26(b)(3). 

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This post was written by Michelle Lyu.

This case provides an interesting glimpse of what could happen if the plaintiffs are successful in persuading Congress to change the import of Riegel v. Medtronic, Inc.'s, (552 U.S. ___, 128 S.Ct. 999, (Feb. 20, 2008)) holding through legislation. 

In Lundeen v. Canadian Pacific Railway Company, 532 F.3d 682 (8th Cir. July 2, 2008), the Eighth Circuit addresses the retroactive effect of an amendment to the Federal Railroad Safety Act, which removed the Act's preemptive effect over state law claims.  When plaintiffs first brought this case for personal injuries and property damage from a freight train derailment in state court against railroads, the case was first removed and then later dismissed on the basis of preemption under the Federal Railroad Safety Act.  While the cases were pending on appeal, Congress amended FRSA, "clarifying" that the state law causes of action seeking damages for personal injury, death, or property cases were not preempted.  Congress made the amendment retroactive to the day of the derailment at issue, and effectively removed the basis of the court's former holding on preemption.  The Eighth Circuit majority panel held that the amendment was constitutional despite arguments re separation of powers doctrine, due process, equal protection, and the Ex Post Facto Clause, and remanded the case. 

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A recent Virginia federal court decision demonstrates the powerful effect of the Riegel v. Medtronic precedent in product liability cases where PMA-devices are subject to claims-sounding in negligence or breach of duty related to the design, manufacturing, and labeling of the device. According to this court, however, the preemption defense of Riegel reaches only those allegations based on the safety and efficacy of the device itself, not on the alleged conduct of a company representative in the operating room during use of the device.

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Reed Smith partners James W. Wood and James C. Martin recently wrote an article regarding pharmaceutical and medical device preemption for the Washington Legal Foundation, discussing such cases as the Third Circuit's Colacicco v. Apotex, Inc. case, as well as activity in the U.S. Supreme Court.

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Lawyers representing clients as plaintiffs in litigation often overlook the fact that a cross-complaint or counterclaim may give rise to an obligation by the client’s liability insurer to provide a defense. A recent decision in favor of Hewlett-Packard, awarding it $51 million, serves as a reminder that insurance coverage must be examined when a cross-complaint or counterclaim is filed.

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This post was written by Catherine A. Durkin and Areta L. Kupchyk.

On May 22, 2008, the Food and Drug Administration (“FDA”) announced plans for what it is calling the “Sentinel System”—a new, national electronic health information surveillance system to track the performance and safety of medical products once they are on the market. See FDA, “The Sentinel Initiative: National Strategy for Monitoring Medical Product Safety” (May 2008). In addition to a whitepaper on the Sentinel Initiative, FDA has published a “Questions and Answers” document, a fact sheet, and information for the consumer that are all available at fda.gov. 

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This post was written by Peggy Sanner.

On May 1, 2008, in Lowe v. Philip Morris USA Inc., et al.¹, the Oregon Supreme Court rejected a smoker’s bid to mount a medical monitoring class action against five cigarette manufacturers. The court concluded that the plaintiff’s admitted lack of any present physical injury doomed her negligence case.

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This post was written by Marilyn A. Moberg and James M. Neudecker.

In April 2008, in Johnson v. American Standard, Inc., 2008 WL 878933 (Cal. Apr. 3, 2008), the California Supreme Court unanimously held that a manufacturer is not liable to a sophisticated user of its product for failing to warn of dangers about which the sophisticated user knew or should have known. In recognizing the so-called “sophisticated user doctrine,” California applied sound and reasoned principles that limit manufacturers’ liability for failure to warn.

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This post was written by Darren Smith, Julia Dodds, and Claire Hamm.

The UK has an estimated 3,000 deaths per year from mesothelioma, the lung cancer caused by inhalation of asbestos fibres. This rate of incidence shows no signs of slackening, a result of the historic exposure of the UK workforce to asbestos, and is not expected to peak until 2018. With the average award of damages for mesothelioma currently around £150,000 ($300,000), defendants and their insurers are already paying out close to $1 billion a year to settle mesothelioma claims alone; and to this must be added the cost of claims for non-fatal asbestos-related diseases.

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This post was written by Michael K. Brown, Lisa Baird, and Michelle Lyu.

In This Issue…

• U.S. Supreme Court Activity in Medical Device and Drug Preemption Cases
• Express Preemption in the Lower Courts
• Preemption and Buckman
• Implied Preemption in the Lower Courts
• Recent Legislation
• Miscellaneous Cases

Click here to read more.

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It seems like a rare day when there is not a notice of a foreign-made defective product being recalled in the United States. In recent months, there have been more than 500 recalls of a variety of products including millions of toys coated with lead paint, thousands of illegal fireworks, contaminated meats, and tainted medicines.

The issue has become so enormous that the U.S. Government has created a website—www.recalls.gov—that provides information about recalls coordinated by a variety of agencies including the Consumer Product Safety Commission, the Food and Drug Administration, U.S. Department of Agriculture, the Environmental Protection Agency, and others.

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This post was written by Areta L. Kupchyk, James M. Wood, Joseph W. Metro, and Kevin M. Madagan.

On February 15, 2008, a year-and-a-half after the sunset of the statute (Section 401 of the Food and Drug Administration Modernization Act) intended to permit the dissemination of medical literature about unapproved uses of drugs and medical devices, the Food and Drug Administration (“FDA”) proposed a draft guideline for such dissemination. Often referred to as “the distribution of off-label use journal articles,” FDA has saddled the proposed guidelines with a much heftier title: “Guidance For Industry: Good Reprint Practices for the Distribution of Medical Journal Articles and Medical Scientific Reference Publications on Unapproved New Uses of Approved Drugs and Approved or Cleared Medical Devices.”

The FDA has invited comments—which must be submitted no later than April 14, 2008—on the draft guidance. Only after consideration of any comments will FDA move to finalize the draft guidance.

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