Thursday, November 20, 2014

Pennsylvania Product Liability – Azzarello Is Dead, Long Live…?

Bexis is pretty pleased this morning.  Almost eighteen years ago, to the day, he filed his first brief with the Pennsylvania Supreme Court challenging the negligence/strict liability dichotomy adopted in Azzarello v. Black Brothers Co., 391 A.2d 1020 (Pa. 1978) (in a case called Spino).  Over twelve years ago, he filed his first outright “overrule Azzarello” brief (in a case called Phillips).  Well, yesterday the Pennsylvania Supreme Court did precisely that – it overruled Azzarello – unanimously in an opinion written by Chief Justice Castille.  In the end, even the most pro-plaintiff members of the Court (those remaining, anyway) could not stomach the travesty that Azzarello had become.  End of self-congratulatory gloat.

We learned of this development late yesterday afternoon and published a very brief “breaking news” post alerting our readership.  At that point we had not yet read the Court’s entire 137-page opinion, Tincher v. Omega Flex, Inc., No. 17 MAP, slip op. (Pa. Nov. 19, 2014).  Now we have.  While it’s clear that the most obnoxious aspects of the Azzarello regime − the bizarre pre-trial procedure for determining “unreasonably dangerous” as a matter of law, the absolutist negligence/strict liability dichotomy, and the “plaintiff wins” guarantor/any element jury instruction (for those of you not familiar with Pennsylvania law, this is what jurors are instructed: “The supplier of a product is the guarantor of its safety.  The product must, therefore, be provided with every element necessary to make it safe for its intended use, and without any condition that makes it unsafe for its intended use,” Azzarello, 391 A.2d at 559 n.12) – have been disapproved, what’s taken their place is less clear.

On the theory that you can’t beat something with nothing, ever since Phillips Bexis had been advocating the Third Restatement of Torts as an alternative, even though there were significant aspects of the Third Restatement that could hardly be called defense friendly.  Yes, Azzarello was that bad.  The Court, however, did not adopt the Third Restatement in Tincher.  Instead, it has adopted a more mainstream (compared to Azzarello) approach to Restatement Second §402A, that in places is also informed by Third Restatement principles.  We’ll be discussing that in more detail.
It could have been better, at least for non-drug device defendants (see the dissenting part of the concurrance/dissent), but compared to Azzarello the result is excellent.

Tincher’s Impact on Drugs and Medical Devices

First, how does Tincher affect drugs and medical devices, the primary focus of this blog?  For prescription products, the short answer is “not much.”  One of the adverse consequences of Azzarello’s negligence/strict liability dichotomy was precedent that rejected state of the art as a “negligence principle.”  Largely as a result of concerns over liability for scientifically undiscovered risks (something the Supreme Court never really had to address), in Hahn v. Richter, 673 A.2d 888 (Pa. 1996) (another case Bexis briefed) the Court excluded prescription medical products entirely from Azzarello strict liability using Restatement §402A, comment k.  See Tincher, slip op. at 59 n.13 (describing Hahn holding as “where adequacy of warnings associated with prescription drugs is at issue, strict liability is not recognized as basis for liability”).  Thus Tincher’s reworking of strict liability doesn’t affect prescription medical products because that theory wasn’t applicable in the first place.  Indeed, one of Bexis’ worries about the Third Restatement was that eventually it might call the Hahn strict liability exemption into question.  Without the Third Restatement, that doesn’t happen.

However, Azzarello strict liability has been imposed on manufacturers of over-the-counter (“OTC”) drugs.  Dunson v. McNeil-PPC, Inc., 2009 WL 1178651, at *4-5 (Pa. Super. April 24, 2009); Wolfe v. McNeil-PPC, Inc., 773 F. Supp. 2d 561, 568 (E.D. Pa. 2011).  Thus, OTC manufacturers will be able to take advantage of the post-Azzarello landscape, even on current appeals, if they’ve properly preserved the issue.

Generic drug manufacturers, however, should note Tincher’s express rejection of absolute liability.  Slip op. at 85.  This closes one (nonexistent) loophole to preemption that the Superior Court had attempted to leave open in the Reglan Trilogy .

Tincher’s Historical Overview

So what do we have?  Fortunately, most of the first half (56 pages) of the Court’s opinion is prefatory and don’t require much discussion.  The Court engages in a long historical review of early Pennsylvania strict liability cases under §402A.  The purpose of this is to underscore how the Court in those cases made a number of overly broad and less-than-thought-out statements in the course of adopting and applying §402A.  E.g., Tincher, slip op. at 44 (Webb v. Zern “offered little explanation of its reasoning for formally adopting the Second Restatement”); 49 n.11 (other “interim” cases decided “without offering any insight into foundational matters of concern”); 50 (several decisions “lapsed, generally, into comparisons with the more familiar negligence and warranty causes of action”).  In discussing the plurality decision in Berkebile v. Brantly Helicopter Corp., 337 A.2d 893 (Pa. 1975), the Tincher court observed that the infamous “every element necessary to make it safe” language arose in a discussion of warning defects.  Slip op. at 55.  Tincher summed up the early §402A cases thusly:

[I]t is now apparent that the first decade of applying the doctrine of strict liability in Pennsylvania offered a series of missed opportunities to develop a vibrant and coherent body of common law on the issue.

Slip op. at 56.  The foundation that these cases laid for strict liability was “confus[ed] and “formulaic”:

To the extent that the Court spoke to broader considerations, several trends became evident:  . . . rhetoric emerged not only to distinguish strict liability from its negligence roots, but also to excise negligence principles and terms (such as foreseeability) from strict liability theory; the reliance upon formulaic reiteration of consumer protection-related policies, offered as a bulwark against attempts to dilute the application of strict liability theory in individual cases; and then a focus in strict liability theory that ultimately turned upon a statutory construction-type of analysis of the Second Restatement.  Experience suggests that these trends, and fits and starts, have proven antithetical to the orderly evolution of our decisional law, one that must be responsive to new problems, perspectives, and consequences.

Id. at 57 (emphasis added).  Ouch.  That’s what one calls repudiation.

Tincher discussed Azzarello.  It pointed out that the “every element” language from Berkebile “was quoted subsequently out of context by the majority in Azzarello as the standard of proof in a strict liability action.”  Slip op. at 56.  It explained the removal of “unreasonably dangerous” from jury consideration and pointed out that court’s reliance on the Cronin case from California.  Id. at 57-58.  “According to the [Azzarello] Court, in cases of an alleged defective design, the dispositive question is whether the product is safe for its intended use.”  Id. at 59.  Azzarello required that the jury be instructed that the manufacturer was a “guarantor” of safety and “should not be instructed on the “unreasonably dangerous” standard.”  Id.

In discussing post-Azzarello cases, Tincher analyzed in detail the majority, concurring and dissenting opinions in Lewis, the holding of which was to exclude evidence of industry standards in strict liability cases as “negligence” related.  Slip op. at 60-62.  It also addressed “doctrinal separation” and the Court having been “adaman[t] that negligence concepts have no place in a strict liability action” expressed in the Kimco case refusing to allow comparative negligence in strict liability cases.  Id. at 62-63 & n.14.

Turning to more recent cases, Tincher focused primarily on their discussions of the Third Restatement of Torts – not surprising, given that this was a question that the Court expressly intended to decide in Tincher.  In Phillips, only one justice was willing to decide the case based on the Azzarello negligence/strict liability dichotomy.  That justice thought the Third Restatement question waived (which in fairness it probably was, as Bexis raised it in an amicus brief).  Tincher, slip op. at 64.  One justice in Phillips did not agree on the negligence analysis.  Three concurring justices in Phillips (including (then) Justice Castille) “advocated taking the opportunity to address foundational matters, to reassess Pennsylvania’s Second Restatement approach, and to examine the range of readily accessible, corrective measures, including adoption of the Third Restatement.”  Slip op. at 65.

In relevant part, the concurrence addressed three points: first, that strict liability doctrine is embedded with concepts central to negligence theory; second, that ambiguities and inconsistencies in prevailing strict liability jurisprudence affected the proper disposition of the appeal; and third, that the Third Restatement’s approach would provide the most viable route to clarification and remediation of strict liability jurisprudence in Pennsylvania.

Id. (describing Phillips concurrence).  Tincher goes on to describe the Phillips concurrence at length, in part because of the Tincher defendant’s advocacy of the same rationale.  Id. at 65-68.

Tincher also discussed various Third-Restatement-related statements in the decade following the 2003 Philllips opinion.  In particular this discussion included the dissent from dismissal of the Bugosh appeal as improvidently granted, also joined by Chief Justice Castille, that included the following points:  (1) the “categorical divide between strict liability and negligence principles,” is “far more problematic” in design and warning cases; (2) “the alternative of a judicially imposed mandatory insurance scheme . . . is unpalatable and incongruent with the general rejection of a pure loss-spreading tort”; (3) Azzarello “was not reasoned well in its time and has not withstood the test of time”; (4) the legislature was “best positioned” to address product liability but had failed to act; and (5) “the difficulties . . . are with Azzarello rather than the Second Restatement itself.”  Tincher, slip op. at 69-72.  See also Id. at 73-74 & n.16 (discussing Third Circuit’s Berrier prediction of adoption of Third Restatement and several “tangential” recent decisions).

Overruling Azzarello

After all that preface, Tincher overruled Azzarello.  Azzarello articulates governing legal concepts which fail to reflect the realities of strict liability practice and to serve the interests of justice.”  Slip op. at 74.  It got rid of Azzarello’s relegation of the “unreasonably dangerous” prong of §402A to a preliminary question of law to be decided courts rather than juries.  It criticized Azzarello for “approv[ing], and thereby essentially requir[ing], instructions which informed the jury that, for the purposes of a supplier’s strict liability in tort, ‘the product must, therefore, be provided with every element necessary to make it safe for its intended use’.”  Id. at 75.  “Subsequent decisional law has applied Azzarello broadly, to the point of directing that negligence concepts have no place in Pennsylvania strict liability doctrine.”  Id.  These errors, Tincher went on to explain, “led to puzzling trial directives that the bench and bar understandably have had difficulty following in practice, including in the present matter.”  Id.

Thus, Tincher disapproves of three key aspects of prior Pennsylvania strict liability law:  (1) the “each and every element”/”guarantor” jury instruction; (2) taking “unreasonably dangerous” issues away from the jury and giving them to courts; and (3) the strict separation of negligence and strict liability concepts.

These problems arose, first because Azzarello had treated §402A as if it were a statute, which was improper:

The Court [in Azzarello] parsed the language of the Second Restatement, particularly the terms “defective condition” and “unreasonably dangerous,” for a precise meaning and the reporter’s intent in the utilization of those terms.  But, Section 402A does not articulate legal “requirements” as a statute may; and, moreover, the “intent” of the reporter is, of course, not due the same weight as a pronouncement of legislative intent. . . .  Yet, the Azzarello Court seemed to engage in a statutory-type construction of Section 402A, including by proceeding to presume every part of Section 402A effective.

Tincher, slip op. at 76.  Further, the non-Rstatement precedent that Azzarello followed has not stood the test of time.  Azzarello relied upon cases from California (Cronin) and New Jersey (Glass) that have both been overruled in those states.  Tincher, slip op. at 78.  “Pennsylvania, unfortunately, did not adjust its jurisprudence in light of these developments that eroded Azzarello’s underpinnings.”  Id.

Jury Instruction:  Nor were the “generalities” in Azzarello “that negligence-related rhetoric saddles a plaintiff in a strict liability case with an additional and unwarranted burden of proof” necessary.  Id. at 76-77.

The facts of Azzarello, when viewed with the appropriate judicial modesty, did not require such a broad pronouncement. . . .  The Azzarello Court offered no explanation of either the nature of the perceived unwarranted additional burden nor how that burden altered the liability calculus

Id. at 77.

Azzarello’s imposition of a lock-step strict liability jury instruction omitting reasonableness and foreseeability was excessive and unwise:

Nor did the Azzarello Court explain the leap in logic necessary to extrapolate that every lay jury would relate reasonableness and other negligence terminology, when offered in a strict liability charge, to a “heavier,” negligence-based burden of proof.  Jury charges are generally delivered orally to ordinary citizens, and not by written transmission to be pored over by scholars or lawyers. . . .  The concern with across-the-board jury confusion, especially where counsel is there to suggest adaptation of standard charges and to hear the charge as a whole, is simply overstated.

Tincher, slip op.. at 77.  The Azzarello jury instruction “essentially perpetuated jury confusion in future strict liability cases, rather than dissipating it.  Id.  Azzarello and its progeny “compounded the problem . . . by . . . ‘approving’ jury instructions in strict liability cases generally.”  Id. at 79-80.

Predictably, the “approval” of such jury instructions operated to discourage the exercise of judicial discretion in charging the jury, including in the Tinchers’ case, and likely stunted the development of the common law in this area from proceeding in a more logical, experience-based and reason-bound fashion.

Id. at 81.  The Azzarello jury instruction was also “impractical.”  Id.  “[T]he Azzarello Court offered that a supplier is not an insurer of a product, although it is a guarantor; these [being] terms of art, with no further explanation of their practical import.”  Id.

The Tincher Court does not offer a replacement strict liability charge.  Instead it refers to “the fashioning of suggested jury charges applicable to a particular case.”  Id. at 128.

[I]t is incumbent upon the parties, through their attorneys, to aid courts in narrowing issues and formulating appropriate instructions to guide juries in their factual determinations.  It is worth reiterating that bright lines and broad rules always offer a superficially enticing option . . . judicial modesty counsels that we be content to permit the common law to develop incrementally.

Id. at 128-29 (citation and quotation marks omitted).  Thus, in this particular instance the Court did replace something with nothing.  As for jury instsructions, the Azzarello instruction is error, and it will be like the Wild West out there, at least for a while.  Instead of Azzarello, jury instructions must be tailored to the specific facts and theories in a given strict liability case:

In charging the jury, the trial court’s objective is to explain to the jury how it should approach its task and the factors it should consider in reaching its verdict.  Where evidence supports a party-requested instruction on a theory or defense, a charge on the theory or defense is warranted.  At that point, the trial court has broad discretion in phrasing its instructions, and may choose its own wording so long as the law is clearly, adequately, and accurately presented to the jury for its consideration.  It is essential for the bench and bar to recognize that the test we articulate today is not intended as a rigid formula to be offered to the jury in all situations.

Slip op. at 130-31.  “The crucial role of the trial court is to prepare a jury charge that explicates the meaning of “defective condition” within the boundaries of the law . . . and the facts that pertain.”  Id. at 132-33.  There is no single, mandatory instruction anymore.

Unreasonably Dangerous:  Taking risk-utility balancing away from the jury and giving it to “judges” because the “unreasonably dangerous” element of §402A sounded in negligence was also “problematic on its face.”  Id. at 82.  Keeping risk-utility separate from the “condition of the product” “is incompatible with basic principles of strict liability.”  Id.  It also places courts in an untenable position:

[T]rial courts simply do not necessarily have the expertise to conduct the social policy inquiry into the risks and utilities of a plethora of products and to decide, as a matter of law, whether a product is unreasonably dangerous except perhaps in the most obvious of cases.

Id. at 81-82 (using a knife being sharp as example).  This, too, is “impractical” and “would encourage trial courts to make either uninformed or unfounded decisions of social policy.”  Id.

Going forward, “severing findings relating to the risk-utility calculus from findings related to the condition of the product is impracticable and inconsistent with the theory of strict liability.”  Slip op. at 129.  Instead of a special procedure – with plaintiffs excused from ever meeting their burden of proof – the jury explicitly considers risk-utility, and “whether the party has met its burden of proof” is decided under the normal standard otherwise applicable to jury questions.  Id. at 132.

Negligence versus Strict Liability:  The notion of an absolute dichotomy between negligence and strict liability was also “confusing” and ultimately not “viable”:

Subsequent application of Azzarello elevated the notion that negligence concepts create confusion in strict liability cases to a doctrinal imperative, whose merits were not examined to determine whether such a bright-line rule was consistent with reason in light of the considerations pertaining to the case.  Beyond the merits of the narrow holdings in the several cases, the effect of the per se rule that negligence rhetoric and concepts were to be eliminated from strict liability law was to validate the suggestion that the cause of action, so shaped, was not viable, and to invite calls for reform.

Id. at 83-84 (citations omitted).

The dichotomy between strict liability and negligence often arose in evidentiary matters.  Tincher does not directly address particular evidentiary exclusions, none of which was before the Court, id. at 127, but holds generally that neither side’s interests are superior.  Thus “evidentiary considerations . . . should not be mistaken for the question of whether a substantive duty in strict liability exists or should exist, or what constitutes a breach.”  Id. at 89.  “As with any other tort relationship, the supplier and the consumer are protecting legitimate but conflicting interests.”  Id. at 91.  On the consumer’s side, are “interests in the safe continued use of a product and, relatedly, in the cost of any injury,” counterbalanced by “economic, moral, and visceral interests in the sales price of the product, the availability of new or innovative products, and in any spillover effects.”  Id.  On the supplier’s side are “generat[ing] a sustained profit” along with “maintaining a reputable name and in providing new or innovative products,” counterbalanced by “a moral interest in providing a safe product with minimal negative externalities.”  Id.  It is this “balance of interests respecting what is socially or economically desirable” that should determine what is relevant evidence.”  Id. at 92.

Lewis and its state-of-the-art progeny had precluded such “negligence evidence in all strict liability actions.  Tincher recognizes that result as excessive:

Derived from its negligence-warranty dichotomy, the strict liability cause of action theoretically permits compensation where harm results from risks that are known or foreseeable (although proof of either may be unavailable) − a circumstance similar to cases in which traditional negligence theory is implicated − and also where harm results from risks unknowable at the time of manufacture or sale − a circumstance similar to cases in which traditional implied warranty theory is implicated.  The difficulty is in cabining liability premised upon a risk unknowable at the time of manufacture/sale, which was logically unavoidable, in circumstances in which liability and attendant compensation was potentially limitless.

Slip op. at 126-27 (emphasis added).  Tincher did not involve the latter (unknowable risk) situation.  Rather, their claim “claim was essentially . . . that the risk of harm related to [the product] was both foreseeable and avoidable.”  Id. at 127.  Such “typical” allegations “bear the the indicia of negligence.”  Id.  They are situations in which the Third Restatement’s alternative design requirements make sense.  Id.  But not all cases are “typical.”  Id. at 128.  What evidence is admissible in strict liability for now will be decided on an “incremental” basis.  Id. at 129.

What Replaces Azzarello?

It appears that the Tincher court viewed Azzarello’s chief vice as lack of judicial “modesty.”  “This case speaks volumes to the necessity of reading legal rules – especially broad rules -- against their facts and the corollary that judicial pronouncements should employ due modesty.”  Id. at 79.  Trying to “extrapolate broad lessons” from Azzarello, its progeny tied the law in knots:

As courts have struggled with the application of the deceptively simple Azzarello rule that a jury must be insulated from negligence concepts and rhetoric in strict liability cases, decisional law has lapsed into an arguably unprincipled formulaic application of rhetoric, threatening to render the strict liability cause of action hopelessly unmoored in modern circumstances.

Id.  To replace Azzarello, the Court first implored the Legislature to enact “comprehensive legislative reform” that “address[ed] this arena of substantive law.”  Id. at 84.  But recognizing that legislative action “remains unlikely or uncertain,” the Court had to do something, particularly since it realized that “the underlying problem derives from our own decisional law.”  Id.  See also id. at 111 (“special tort-insulated status for certain suppliers . . . requires an assessment and balancing of policies best left to the General Assembly”) (citation and quotation marks omitted).

Third Restatement Relevant but Not Adopted:  This “modesty” and distaste for what transpired in the wake of Azzarello more than anything explains the Tincher court’s reluctance to exchange their demonstrably failed body of broad product liability principles for another body of broad product liability principles represented by the Third Restatement.  As for former, “what drives the [ALI] and treatise writers does not make comparative modesty, nuance, and reticence in the judiciary mistaken (much less make indecisive) in a jurisdiction, like Pennsylvania, where the area, to date, has been the exclusive province of the common law.”  Tincher, slip op. at 111-12.  As for the latter:

[O]ur reticence respecting broad approval of the Third Restatement is separately explainable by looking no further than to the aftermath of Azzarello, whose negligence rhetoric-related doctrinal proscription arising from a peculiar set of circumstances had long-term deleterious effects on the development of strict liability law in Pennsylvania.

Id. at 116.  This is rather ironic, since the Second Restatement, which Tincher kept, was adopted in a far more precipitous manner (which the Court admitted) than the consideration given to the Third Restatement.

The Court seemed comfortable with many of the principles in the Third Restatement – save its universal alternative design requirement, which it viewed as “problematic” because it “articulat[ed] the burden of proof in terms of evidence (alternative design).”  Slip op. at 108-09.  The court was not impressed with using evidence in that fashion.  Nor did the Court wish to create “a priori categorical exemptions for some products.”  Id. at 109.  It counted itself among those that “cannot foresee all the myriad products and circumstances that may arise.”  Id. at 110.  The majority (because at this point the concurrence becomes a dissent) views “public policy” as being “that compensation is available for an injury caused by any type of defective product”) (emphasis original).  Instead it “settle[d] for the incremental approach.”  Id. at 116.

Otherwise the majority – as well as the dissent – was receptive to the Third Restatement’s view of alternative design as “highly probative” of the existence of defect in the “typical” design defect case:

That evidence of the existence and specifications of an alternative design is relevant and even highly probative to prove disputed issues in a products liability case, such as technological feasibility, cost, etc., is certainly true.  That the more typical case implicates the type of products and circumstances in which evidence of an alternative product design is the most persuasive and efficient means of convincing the trier of fact may also be true.

Tincher, slip op. at 113.  The Court simply was not willing to risk “wooden application of
abstract principles to circumstances in which different considerations may pertain.”  Id. at 114 (citation and quotation marks omitted).  The Court recognized that in a “typical” case – involving “foreseeable” and “avoidable” risks – many of the Third Restatement’s “insights” about alternative designs would be pertinent:

[I]n some respects this is the “typical” case, which explains both the insight that in design cases, the character of the product and the conduct of the manufacturer are largely inseparable, and the Third Restatement’s approach of requiring an alternative design as part of the standard of proof.

Id. at 127.  The problem with wholesale adoption of the Third Restatement “is that courts do not try the ‘typical’ products case exclusively and a principle of the common law must permit just application to myriad factual circumstances.”  Id. at 128.

Renovating §402A:  In deciding with what to replace Azzarello, if not the Third Restatement, Tincher quickly rejected “absolute” liability.  Slip op. at 85 (“experience has taught otherwise and, in modern application, strict liability doctrine is a substantially narrower theory”).  It decided to stick with a “properly calibrated” version of Restatement Second §402A.  The Court sought guidance from classic negligence concepts – duty and breach.  “The duty in strict liability pertains to the duty of a manufacturer and of suppliers in the chain of distribution to the ultimate consumer.”  Id. at 87-88 (referencing Restatement §402A, comment c).  Strict liability exists so that:

a person or entity engaged in the business of selling a product has a duty to make and/or market the product -- which “is expected to and does reach the user or consumer without substantial change in the condition in which it is sold” − free from “a defective condition unreasonably dangerous to the consumer or [the consumer’s] property.”

Id. at 88 (quoting Restatement §402A(1)).  Breach of the duty requires proof of a “defective condition,” which is a “legal term of art” suggesting “neither its colloquial import nor a scientifically immutable fact.”  Id. at 89.

Composite Standard:  After thoroughly discussing each alternative, Tincher adopted a “composite” standard including both “consumer expectation” and “risk utility” definitions of defect, recognizing drawbacks to each.

[I]n Pennsylvania, the cause of action in strict products liability requires proof, in the alternative, either of the ordinary consumer’s expectations or of the risk-utility of a product To maintain the integrity and fairness of the strict products liability cause of action, each part of this standard of proof remains subject to its theoretical limitations.

Slip op. at 119.  This test allows the plaintiff, initially to choose the theory as “master” of his/her claim.  Id. at 130.  The defendant can always challenge the plaintiff’s choice of theories, based on the drawbacks (see below) of that theory:

A defendant may also seek to have dismissed any overreaching by the plaintiff via appropriate motion and objection.  The trial court is to act in its ordinary gate-keeper role . . . adjudicating . . . pending objections and motions, including those seeking to narrow, or expand, the theories of litigation to be pursued at trial.

Id. (citing Soule, a California case holding reliance on consumer expectations to be improper).

The Tincher court understood that a composite test invites a distinction between simple and complex products that could potentially cause the same problems as Azzarello if factual distinctions are “mistaken for establishment of a distinct burden of proof, and treated as doctrine.”  Slip op. at 103-05 (discussing Barker and Soule cases from California).  The Tincher court viewed the Third Restatement as another variant of the “combined” approach, folding consumer expectation principles into an overall risk/utility approach.  Id. at 104 (“a variation upon those tests primarily based upon a risk-utility determination by requiring proof of a reasonable alternative design”).

Consumer expectation:  The consumer expectation standard is that “the product is in a defective condition if the danger is unknowable and unacceptable to the average or ordinary consumer.”  Slip op. at 95.  “The nature of the product, the identity of the user, the product’s intended use and intended user, and any express or implied representations by a manufacturer or other seller are among considerations.”  Id. (citing, among other things, Restatement §402A, comment i).  Limitations of the consumer expectation test are:  (1) “obvious dangers” exempt products from liability; and (2) the test becomes “arbitrary” if applied to “complex” products “whose danger is vague or outside the ordinary consumer’s contemplation.”  Id. at 97-98.

Risk/Utility:  The “risk/utility” standard is” a test balancing risks and utilities or, stated in economic terms, a cost-benefit analysis.”  Tincher, slip op. at 98.  “The risk-utility test offers courts an opportunity to analyze post hoc whether a manufacturer’s conduct in manufacturing or designing a product was reasonable, which obviously reflects the negligence roots of strict liability.”  Id. at 99.  Limitations of the risk/utility test are:  (1) “not be[ing] immediately responsive in the (typical) case implicating allegations relating to a particular design feature”; and (2) “in some respects, it conflicts with bedrock moral intuitions regarding justice in determining proper compensation.”  Id. at 99-100.

Choice of Theories:  In choosing between the two in any given case, the Court recognized that “the theory of strict liability as it evolved overlaps in effect with the theories of negligence and breach of warranty.”  Slip op. at 121.  It “combin[es] the balancing of interests inherent in those two causes of action.”  Id.  Reflecting this “duality of purpose,” a composite formulation of strict liability “articulate[s] a standard of proof which stated the consumer expectations test and the risk-utility test in the alternative.”  Id. at 122.  The Court further viewed this duality as springing from the abolition of privity – while the manufacturer “engages in a risk-utility calculus,” intermediate sellers “implicitly represent[]” the non-defectiveness of the product as in a warranty claim.  Id. at 123.

Miscellaneous Stuff

The Court speculates that it’s possible there could be situations that would justify reversing the burden of proof.  Tincher, slip op. at 133-35.  This is primarily another bad idea out of California.  The Court ultimately didn’t decide anything, or change the usual civil burden of proof, but it’s something else that’s now out there.  Bexis’ work is never done.

The court mentioned that the law could change about other things – “foundational issues regarding manufacturing or warning claims” and “subsidiary” issues “such as the availability of negligence-derived defenses, bystander compensation, or the proper application of the intended use doctrine.”  Id. at 135.  Again, issue-spotting; nothing more.

Having not adopted the Third Restatement, the Court declined to make any special holding about the retroactivity of its decision.  Id. at 136.  Having “preserved the issue and presented its claim that Azzarello should be overruled” the defendant “is entitled to the benefit of [the] decision.”  Id.  Thus, there’s nothing in Tincher to prevent the usual retroactive application of an appellate decision.

“[T]he general rule is that all decisions are to be applied retroactively.”  Commonwealth v. Gray, 503 A.2d 921, 926 (Pa. 1985).

[T]he general law of our Commonwealth continues to be, as it was at common law, that our decisions announcing changes in the law are applied retroactively, until and unless a court decides to limit the effect of the change, and that litigants have a right to rely on the change, especially if they have a suit pending in our courts at the time the change is announced.

McHugh v. Litvin, Blumberg, Matusow & Young, 574 A.2d 1040, 1044 (Pa. 1990).

Bottom line?  Azzarello was so bad for defendants that practically anything is an improvement.  Tincher gets rid or three really pro-plaintiff things:  the “plaintiff wins” Azzarello jury instruction, the negligence/strict liability dichotomy which is the basis for several awful evidentiary exclusions, and the jury not being to decide risk utility with the plaintiff bearing the  burden of proof.  We don’t particularly like the consumer expectations test, as it has been prone to abuses in other jurisdictions, however, Tincher explicitly recognizes that theory’s problems and authorizes defendants to challenge its use in inappropriate cases.  Nothing in Tincher undermines the application of Restatement §402A, comment k in Hahn.  All in all, defendants are significantly better off today than they were yesterday.

Wednesday, November 19, 2014

Breaking News II - Tincher Decided in Pennsylvania - Azzarello Overruled

This is as short as the Tincher majority opinion (137 pp.) is long.  Azzarello is overruled.  The preliminary judicial evaluation of "unreasonable danger" is abolished.  The jury considers it under a dual standard.  The negligence/strict liability dichotomy originating in Azzarello is gone.  The Third Restatement is not adopted.  Haven't finished reading.  There will be more tomorrow about this.

Breaking Bauman News from California

This is short – but very sweet.  Regular readers will recall the California appellate decision that we criticized in our “Hotel California” post back in August.  In that case, the court avoided the restrictions that Daimler AG v. Bauman, 134 S. Ct. 746 (2014), had imposed on “general” personal jurisdiction by transferring wholesale the prior “continuous and substantial” rationale to “specific” personal jurisdiction.  See Bristol-Myers Squibb Co. v. Superior Court, 175 Cal.Rptr.3d 412 (Cal. App. 2014).
Well, today the California Supreme Court granted review in the case.  Here’s a link to the docket entry reflecting the grant.  Because the grant of review automatically depublishes the Court of Appeal’s opinion under California procedure, the Court of Appeal’s overreaching opinion is no longer—which is a welcome development, albeit not entirely surprising. 
You see, this case was Bauman to a T – the claims were brought against non-resident defendants by non-resident plaintiffs alleging injuries that occurred outside California and involving products designed, manufactured, and sold outside California.  In other words, neither the parties nor the particular products consumed by these plaintiffs ever reached California, yet the Court of Appeal held the manufacturer defendants to answer.  We viewed it as an end run on Bauman, with the Court of Appeal finding “specific jurisdiction” based on “substantial, continuous economic activity” that sounded an awful lot like the “systematic and continuous” forum contacts that characterized general jurisdiction before Bauman recalibrated the scales. 
We have only skimmed the defendant’s petition for review, but they have compelling arguments, including that general and specific jurisdiction are distinct concepts that should be kept within their respective spheres.  We agree, and let’s hope the California Supreme Court agrees, too.  We like the defendant’s chances.  The case made its way to the Court of Appeal in the first place on an order from the Supreme Court to consider and apply Bauman, which the Court of Appeal purported to do, but incorrectly and to the wrong result.  This is the second time then that the California Supreme Court has voted to take up the case.  Will the Supreme Court reel in the Court of Appeal’s expansion of specific jurisdiction and toe the Bauman line?  Again, we hope so, but either way, we can foresee a petition for certiorari to the U.S. Supreme Court coming down the road. 

Far from Dumbo: M.D. Fla. Gets "Parallel Claim" Case Right

This is the time of year when our thoughts start migrating southward.  We can see all those birds’ nests in our suddenly denuded poplar trees.  The driveway is a skating rink of damp leaves.  The baseboards in our home now gurgle from the operation of an ancient oil heating system. 
Over the last two weeks our posts leaned against a pair of intemperate blasts from a Vermont federal court.  The results were dreary and/or indecipherable.  Thus, it is with some relief that we bask in the warm glow of a nice, straightforward decision from the happiest place on Earth, the federal court in Orlando.  In Stanifer v. Corin USA Ltd, Inc., 2014 U.S. Dist. LEXIS 158587 (M.D. Fla. Nov. 10, 2014), a hip resurfacing system was implanted into the body of the plaintiff during a right hip arthroplasty procedure.  Subsequent failure of the system allegedly caused the plaintiff to suffer a revision left total hip arthroplasty and surgical removal of the system.  The plaintiff filed a lawsuit in state court seeking to recover “damages and losses” from the defendants based on state law strict liability claims for breach of warranty, manufacturing defect,  and design defect.  After removal of the action to federal court, the defendants moved to dismiss the claims based on federal preemption. 

The hip system was a class III device, and therefore subject to the PMA process and the attendant federal preemption.  After the Supreme Court’s decision in Reigel, a plaintiff injured due to use of a Class III PMA device can escape preemption only by asserting a “parallel” state law claim.   As readers of this blog likely know, we think of the parallel claim exception as something crazy and made-up, like a fairy tale or a Johnny Depp movie.  Luckily, the Stanifer case is governed by the law of the Eleventh Circuit, a place that knows how to deal with such things.  The Stanifer court embraced Eleventh Circuit precedent to the effect that plaintiffs cannot effectively state a “parallel claim” absent allegations that the defendant violated a “particular federal specification.”  Ah – we are far from the windy incoherence of Vermont (or Chicago – the Bausch case still stands as the babbling zenith of parallel claim doofus-prudence).

But for a moment the plaintiff in Stanifer tried to take the court through the looking glass, ludicrously arguing that the fact that the hip system went through the PMA process could not be applied during the motion to dismiss stage, since that was beyond the pleadings.  The court held fast to reality, invoking Fed. R. Evid. 201, which provides that a court may take judicial notice of an adjudicative fact “at any stage of the proceeding” if it “can be accurately and readily determined from sources whose accuracy cannot reasonably be questioned.”  The public records of the FDA, including the FDA website, enjoy such accuracy, so the plaintiff was stuck.  There was simply no question that all of the plaintiff’s claims would impose requirements that differ from the FDA PMA, and that preemption therefore applied. 

At that point, perhaps momentarily seized by an attack of conscience, candor, or common-sense, the plaintiff had to admit that it had not alleged a “parallel” defect, so it was reduced to requesting leave to amend the complaint and also to obtain discovery to determine “the circumstances surrounding the exact nature of the manufacturing defect,” “the facts presented by” the defendants, and whether the defendants complied with PMA requirements.  Such discovery, of course, offers all the horrors of the Haunted Mansion at Disney World.  Or maybe even the Aerosmith Rock and Roller Coaster.  Or the Twilight Zone Tower of Terror ride where you drop several stories in two sphincter-clenching seconds.  Or, most scary of all, that torture cruise called It’s a Small World.

The court did the right thing by dismissing the complaint.  It also did the predictable, annoying, soft-headed, inevitable thing by, in an “abundance of caution,” permitting the plaintiffs “one opportunity” to amend the complaint, if it could be done in accordance with the obligations under Rule 11 without discovery to determine “the circumstances surrounding the exact nature of the manufacturing defect.”  The court also noted that the plaintiff had not managed to cite any Florida private cause of action for enforcing the FDCA, so there is more than one reason to believe that the Stanifer case is history.  Unlike with Pirates of the Caribbean, we foresee no sequels.    

Tuesday, November 18, 2014

Short Subjects

Today’s post is really three different posts on three unrelated subjects.  None of them very long (at least by DDLaw Blog standards), but we think that each will be of interest to at least some our readers.

On Generic Plaintiffs’ Preemption “Win” in New Jersey

This piece is from the non-Dechert side of the blog.

Plaintiffs alleging failure to warn of the risks of a generic drug scored a “win” of sorts in In re Reglan Litigation, 2014 WL 5840281 (N.J. Super. App. Div. Nov. 12, 2014).  The court held, in an unpublished decision, that “failure-to-update” claims survived the otherwise comprehensive impossibility preemption that applies to generic drugs:

[T]he trial court correctly determined that plaintiffs’ claims based on the Generic Defendants' failure to update their warnings to conform to changes made to the brand-name warnings are not preempted by federal law.  The court correctly found that allowing plaintiffs to assert these claims would not frustrate any of the purposes or objectives that Congress sought to achieve . . . .  Moreover, plaintiffs are not pursuing state-law claims based on an alleged violation of federal law.

Id. at *4.  As the Appellate Division points out, non-preemption of “duty to update” is the majority view.

We may not like it, but we’re not losing much sleep about it.


We have never seen a plaintiff, permitted to allege anything else, voluntarily bring a claim against a prescription medical product manufacturer for failure to update a label to conform to FDA-mandated changes.  We doubt we ever will.

That’s why we put “win” in parentheses.  Compared to the usual product liability theories, “failure to update” is a really lousy cause of action.  Let us count some of the ways:

  • Failure to update is very manufacturer specific, an especially serious problem in generic drug cases where a plaintiff might have taken bioequivalent products made by more than one manufacturer.  Sorting out the causative effects of chemically identical products differing only in when their labels are updated will not be easy for plaintiffs.

  • The “defect” is defined solely by the period of time that the product was not updated, which will not have anything to do with the dosage or exposures necessary to prove medical causation.  Focusing solely on a few months of un-updated warnings will be scientifically dubious and probably not very appealing to a jury.

  • Plaintiffs normally like warning claims to be “moving targets” so they are hard to pin down.  Failure to update claims are the antithesis of a moving target, since every jot and tittle of the necessary warning change is known in advance.  Plaintiffs are deprived of many of their “what if” games, both in discovery (prescriber depositions) and at trial.

  • By definition, a failure to update claim involves a product risk sufficiently well established that it has been evaluated by the FDA and a new warning promulgated.  Regulatory action necessarily lags the underlying science, so the likelihood is high that a plaintiff’s prescriber will have already learned of the risk through other sources, thereby greatly increasing the likelihood of a successful warning causation defense under the learned intermediary rule.

  • Plaintiffs love to call every warning up to and through the end of their exposure “defective.”  The non-updated period may well not have extended that far, putting plaintiffs in the awkward position of having contended that the FDA’s updated warning is still “defective.”  We know of no state, outside of the failure-to-update context, recognizing a warning theory predicated on an alternative warning that, while “better,” is nonetheless still “defective.”  The theory makes no logical sense and has little jury appeal.  In metoclopramide cases, we’ve seen it rejected as a matter of law on several occasions.

  • We presume that the FDA has some kind of guidelines for how long of an update lag is “reasonable.”  Plaintiffs will have to abide by that FDA judgment to avoid preemption.

So while Reglan and other similar cases count as “wins” for the other side of the “v.,” in that complete dismissal was avoided, such victories are likely to be of the Pyrrhic variety in most cases.  That may set generate some nuisance settlements, but in the long run we think that most of our adversaries will not be chomping at the bit to take failure-to-update cases, even if there were an actual delay in updating the label.  They have more remunerative ways to spend their time.

An Alternative Demise Scenario for the FDA’s Ban on Truthful Off-Label Promotion?

We find the FDA LawBlog, run by our friends at Hyman Phelps particularly informative.  Those readers interested in off-label promotion issues would be well-advised to read their recent post, “How Far Does FDA’s Say-So Travel?”  When we read it, we immediately thought about not only the government’s criminal prosecutions for alleged illegal promotion, but also the plague of tag-along False Claims Act (“FCA”) cases screeching “me too.”

We recently did a post about a Supreme Court certiorari denial statement involving a cy pres case.  Similarly, the FDA Law Blog’s post highlights a statement in last week’s United States Supreme Court denial of certiorari in Whitman v. United States, 135 S. Ct. 352 (2014).  Two justices (Scalia and Thomas) questioned the amount of deference properly afforded administrative interpretations in situations “that contemplate[] both criminal and administrative enforcement.”  Id.

As discussed in more detail in the FDA Law Blog post, Whitman was not an FDCA case at all but rather a Rule 10-b-5 criminal prosecution by the Securities & Exchange Commission.  Citing to the “rule of lenity,” the Justices’ statement posits that administrative interpretations of ambiguous statutes are not entitled to deference in criminal prosecutions:

I doubt the Government’s pretensions to deference.  They collide with the norm that legislatures, not executive officers, define crimes. . . .  With deference to agency interpretations of statutory provisions to which criminal prohibitions are attached, federal administrators can in effect create (and uncreate) new crimes at will, so long as they do not roam beyond ambiguities that the laws contain.  Undoubtedly Congress may make it a crime to violate a regulation, but it is quite a different matter for Congress to give agencies − let alone for us to presume that Congress gave agencies − power to resolve ambiguities in criminal legislation..

The Government’s theory that was accepted here would, in addition, upend ordinary principles of interpretation.  The rule of lenity requires interpreters to resolve ambiguity in criminal laws in favor of defendants.  Deferring to the prosecuting branch’s expansive views . . . would . . . replac[e] the doctrine of lenity with a doctrine of severity.

Id. at 353 (citations omitted).  These justices agreed that Whitman was not the proper vehicle (for procedural reasons) to review this question, but, as the FDA Law Blog recognizes, they are “explicitly sending a signal that [they] want[] the Supreme Court to address th[is] issue.”

The FDA Law Blog does not speculate on what type of “enforcement action[s] taken on the basis of an ambiguous provision of the FDCA” might constitute a proper vehicle to explore the deference issue spotlighted by the statement in Whitman, but we have to think that off-label promotion would be high on that list (almost any enforcement action involving social media would be another – the FDA is so far behind the curve here that it risks becoming irrelevant).

First, as we’ve pointed out several times, such as here, the FDA’s off-label promotion ban is not explicit anywhere in either the FDCA or the regulations.  Rather the FDA had to cobble together several separate sections (including a definition of “intended use” that hasn’t been updated in 70 years) in order to create a rationale for an outright ban.  Heck, neither the statute nor any FDA regulation even defines “promotion.”

Second, as any reader of this blog is well aware by now, the FDA’s flat ban on truthful speech “promoting” off-label use has profound free speech implications.  The Supreme Court has dealt with that issue twice (Western States Medical and Sorrell), as have the courts of appeals (Caronia, Caputo, Pearson).  Courts often are reluctant to reach constitutional issues if they can find an alternative non-constitutional ground.   The “rule of lenity” could be that alternative to get rid of the FDA’s ban.

Third, the government has ruthlessly monetized its questionable ban on truthful off-label promotion for quite a few years now.  Indeed, the government has used this ban as the basis for a creeping administrative takeover of pharmaceutical and medical device public relations practices.  Don’t believe us?  Just take a look at the Office of Inspector General’s list of “corporate integrity agreements.”  Increasingly, relators in FCA are following suit.

Thus, the FDA’s off-label promotion ban is:  (1) precisely the sort of “ambiguous” criminal/administrative enforcement situation described in Whitman; (2) an alternative basis to avoid having to decide serious constitutional implications that have interested (and divided) the Court in the past; and (3) the subject of frequent, high-stakes governmental and “private attorney general” enforcement activity.

Gentlemen, start your engines.

Not Even Conte Goes That Far

This last one comes courtesy of Harley Ratliff of Shook Hardy.  It’s a trial court decision from San Diego Superior Court in California.  See Hamiltion [sic] v. AstraZeneca, 2014 WL 5817660 (Cal. Super. Sept. 22, 2014) (we handled getting it on Westlaw).

In Hamiltion the plaintiff attempted to convert Conte v. Wyeth, Inc., 85 Cal. Rptr.3d 299 (Cal. App. 2008) − bad enough as it is − into a sort of super-market-share-liability theory.  The drug in question, terbutaline sulfate, has two very different indications – bronchodilation (anti-asthma) and neonatal.  These different uses involve different products.  Plaintiff claimed injury from the neonatal use.  Not satisfied with suing the maker of that product (probably because it was a generic drug protected by generic preemption), the plaintiff simply sued everybody he thought ever made the stuff.  Among those named as defendants was Sanofi, which had made the type of terbutaline sulfate product used to treat asthma, but had stopped years before plaintiff was born.

Plaintiff claimed that, under Conte, it was “foreseeable” that any label about any type of this drug (asthmatic or neonatal) could “be relied upon by doctors” prescribing the neonatal version.  This claim was even worse than Conte, which is at least limited to bioequivalent products.  Heck, it was worse than Sindell market share, which at least requires the defendant’s product to have been on the market at the time the plaintiff allegedly used it.

Fortunately the San Diego court was having none of it.  The court held that plaintiff’s compound-liability theory was way beyond even what Conte contemplated, and in so doing limited Conte to its (bad enough) facts:

This Court does not read Conte as broadly as Plaintiffs.  Rather, the Court finds Conte to be limited to holding that the duty owed by a name-brand prescription drug manufacturer providing product warnings extends to not only warnings concerning its own product but also to those whose doctors foreseeably rely on the name-brand manufacturer’s information when prescribing a generic medication.  The court there explained its reasoning to include in part, that pharmacists are permitted to substitute a name-brand prescription drug with a generic drug.  This case does not concern the ingestion of a Sanofi drug or a generic for Sanofi and the Court, therefore, finds Conte distinguishable.

Hamiltion, 2014 WL 5817660, at *1.

We want Conte reversed altogether because its foreseeability-is-enough rationale misstates California law.  See O’Neil v. Crane Co., 266 P.3d 987 (Cal. 2012).  But it will take an appellate court to do that.  Until then, keeping Conte from expanding liability further is something to be welcomed.

Monday, November 17, 2014

Guest Post - When It Comes To Fraudulent Joinder In Texas, Let’s Hail The Glory Daze And Just Keep Winning

Here's another guest post by Reed Smith's own Kevin Hara, this time about a recent Texas case holding that health care providers involved in clinical trials are still protected by a state medical malpractice statute, and thus were fraudulently joined.  While we are of two minds about such statutes (making it harder to sue HCPs increases litigation against our clients), since HCPs are our clients' clients, and thus the heart of their businesses - and we're defense lawyers by temperment - in the end we come out in favor of less liability generally.  This is an interesting use of fraudulent joinder that could well apply to the definition of "health care provider" under similar statutes in other states.

As always, our guest posters deserve all the credit and any blame for the contents of their posts.


            When it comes to Texas, one might never know based on its jurisprudence that the state motto, and indeed the state’s moniker, is derived from “Tejas,” a Native American term for Friendship.  At least from a defense perspective, the Lone Star State at times seemed mighty inhospitable; after all, Texas invented that awful “heeding presumption” back in 1972, touching off a Reign of Fire, as states followed suit, adopting a variety of feeding presumptions.  It also allowed personal injury recovery under its consumer protection statute, made a big deal of Restatement Second §402B, and was the last of the large states to adopt the learned intermediary rule.  While we’re at it, let’s not forget the decision that would never die, the Murthy case, making the worst decisions list in consecutive years in 2011 and 2012, giving us not just one opinion to lament, but Two for the Money.

But we’re forgiving, and won’t “mess with Texas” too much.  Although it took until 2012, with some help from Bexis, for the Texas Supreme Court to finally adopt the learned intermediary doctrine, deciding that it was A Time to Kill an awful decision from 2010 whose name should have been Mud.  Texas adopted the Third Restatement, which should kill the heeding presumption, and even if it doesn’t, that presumption now excludes prescription drugs and medical devices, at least forcing it into Submission.  The Legislature amended the DTPA to eliminate personal injury damages, and we haven’t heard a peep from §402B in a while, and this section’s Failure To Launch into widespread acceptance is a good thing.  Texas Daubert decisions have been outstanding.  Not only that, a lot of excellent Reed Smith practitioners are based in our Houston office.

Texas has other positive attributes as well, including being the birthplace and home of Matthew McConaughey, and of baseball standout Nolan Ryan, who we believe, despite numerous accolades, remains underrated because of his somewhat pedestrian won loss record (which for pitchers reveals more about the team and much less about the individual).  Seriously, seven no-hitters?  Ryan pitched in an era where starters routinely went the distance, and they were their own closers; we urge you to check out his career innings pitched, hits allowed, complete games, and well, the strikeouts speak for themselves.  No disrespect to Madison Bumgarner, who was otherworldly in the 2014 World Series, but who has 6 complete games in his career.  Ryan had an incredible 222, including several years where he had more than 20.  We realize that people smarter and more knowledgeable than we are will correctly we might add, mention that Ryan also walked many hitters and never won the Cy Young.  That’s the beauty of sports.

            And then there’s ZZ Top and Janis Joplin and Beyonce.

            But we digress.  Back to the legal issues.  It would be remiss not to note that Texas also has some very favorable statutes, including Civil Practice and Remedies Code 82.007, which provides a rebuttable presumption of nonliability for manufacturers and prescribers in pharmaceutical product liability actions involving failure to warn for FDA approved warnings, and 82.008, which provides a presumption of nonliability for compliance with government standards.  See Tex. Civ. Prac. & Rem. Code §§ 82.007(a)(1) and 82.008.  We were concerned that a recent Southern District of Texas decision would a la Murthy, run roughshod over state law like the TCU Horned Frogs in an 82-27 rout of Texas Tech this year or UCLA in a 66-3 drubbing of Texas in 1997 (the Longhorns’ worst loss ever).  Fortunately, we were pleasantly surprised. 

            We would like to trumpet the court’s recent decision in Rodriguez v. Gilead Sciences, Inc., which is a big reason we cited the horrendous Murthy opinion from a couple years ago, in a case involving clinical trials that left us Dazed and Confused.  In Rodriguez, Plaintiff brought an action for permanent heart damage he allegedly suffered as a participant in a clinical trial for treating hepatitis C with a drug called Sofosbuvir/Ledipasvir (“S/L”).  2014 WL 5782437 at *1 (S.D. Tex. November 6, 2014).  Id. at *1.  Plaintiff, a Texas resident, sued the manufacturer Gilead, his Texas physician, and the Texas Liver Institute (“TLI”), the study center.   Id.  Gilead, a California citizen (our beloved home, but a state routinely listed as a “judicial hellhole”), removed the case to federal court, asserting that the local physicians and medical facility were fraudulently joined because healthcare liability, which plaintiff purported to disclaim in his complaint, was only basis for liability against the non-diverse defendants.  Id.  Plaintiff moved to remand, arguing that fraudulent joinder did not apply, and the court noted that a party is fraudulently joined if there is “(1) actual fraud in the pleading of jurisdictional facts; or (2) the inability of the plaintiff to establish a cause of action against the non-diverse defendant in state court.”  Id..  Put another way, fraudulent joinder exists when “there is absolutely no possibility that the plaintiff will be able to establish a cause of action against the non-diverse defendant in state court.”  Id.

            In Texas, claims against medical and healthcare providers are expressly governed by the Texas Medical Liability Act (“TMLA”), which provides that healthcare claims include any:

cause of action against a health care provider or physician for treatment, lack of treatment, or other claimed departure from accepted standards of medical care, or health care, or safety or professional or administrative services directly related to health care, which proximately results in injury to or death of a claimant, whether the claimant's claim or cause of action sounds in tort or contract.

Id. at *2; See Tex. Civ. Prac. & Rem. Code § 74.001(a)(13).  Attempting an end run around the TMLA, Plaintiff argued that when his physician recruited him for the clinical trial, “he did so only in his capacity as a businessman and agent of Gilead and not as [plaintiff’s] physician, thus triggering negligence and product liability claims.”  Id.  The plaintiff maintained that the claims were not subject to the TMLA because the clinical study was “not a process for determining the health risks and benefits of S/L but, instead, was a formality . . . to obtain FDA approval for a product.”  Id.  Ignoring the fact that his physician – clearly making a healthcare decision – attempted to treat him with the S/L, Plaintiff tried to two step around the TMLA by alleging “he [was] not relying on any doctor-patient relationship or the exercise of any medical standard of care.”  Id.

            Hold on to your cowboy boots.  The court wisely declined the invitation to dance, and ruled that the plaintiff's claims were controlled by the TMLA, as determined from “the facts at issue, not the theory pled.”  Id.  The court found that “[plaintiff] suffered from a medical illness, HCV, and sought treatment from . . . a physician, and TLI, a health care institution” which “constitute[d] ‘health care provider[s] under the TMLA.”  Id. at *3.  The physician and clinical study were “responsible for administering that treatment and monitoring [plaintiff’s] medical condition,” which related to healthcare, as defined by the TMLA.  Id.  Thankfully, recognizing the Frailty of plaintiff’s argument, the court held that the “TMLA govern[ed] all of [plaintiff's] claims, regardless of the legal theory he [sought] to impose on them.”   Id.  Therefore, the court found that the non-diverse defendants were fraudulently joined and denied remand because plaintiff disclaimed the TMLA, the only basis for liability under state law.  Id.  That sounds like a swing and a miss, no Contact, strike three, and it was game over for plaintiff’s claims.  As any life sciences defense attorney knows, establishing fraudulent joinder is no easy task, and that makes this decision tastier than Texas barbecue, to which we say, “Alright, Alright, Alright!”  From Deep in the Heart of Texas, one does not have to be a True Detective to find that this decision is truly InterStellar.