Tuesday, August 04, 2015

DDL Summer Vacation Tripadvisor


To keep the DDL blog up and running even through the dog days of Summer, your trusted correspondents try to stagger their vacations.  Bexis recently got back from his typically Hemingway-esque adventure, and now it’s our turn.  Unlike Bexis, if we go hiking anywhere, it is more likely in pursuit of beer or chocolate, not vistas or grizzly bears.  Here are some legal clues to help you play the game of Where in the World is Stevie Mac:


-          An entity that calls itself the World Justice Project purports to rank national legal systems in terms of clarity, effectiveness, accessibility, judicial independence, absence of corruption, etc.  Their rankings place mostly Nordic countries at the top (Denmark is number 1).  Venezuela is number 102 out of 102, edging out Afghanistan for the honor of being the very worst legal system under consideration.  The United States is ranked a not-so-impressive number 19.  Folks, on our vacation, we will be walking the cobbled streets of a top 5 country.

-          Where we are headed, civil law, not case law, governs.

-          Judges are appointed civil servants with life tenure.

-          There is not much opportunity to argue forum non conveniens, but, given the other aspects of this eminently rational system, that is probably not a big deal.

-          Class actions are unheard of, though some groupings of actions are occasionally available.

-          There are no juries. 

-          Repeat:  there are no juries.

-          There are no punitive damages.

-          Repeat … well, you get it.

-          Judges, not parties, determine whether expert testimony is needed.  (Thus, the opportunities for unscrupulous experts to sell their result-driven opinions are minimized.  That is kind of surprising, considering how this country is otherwise amazingly tolerant of prostitution.)

-          This country is one of the two most liberal on the planet when it comes to allowing euthanasia.  You have probably heard how some American states, such as Oregon and Vermont, are way ahead in permitting people with terminal diseases to end their lives with dignity.  But our vacation destination occupies a whole other moral-legal universe when it comes to suicide.  It gives the okay to people who want to exit this vale of tears simply because they are really, really depressed.  If that were the rule in our home Commonwealth of Pennsylvania, the hearses would be constantly rolling during baseball season.  Plus, the ranks of defense hacks would be decimated after every latest high court babbling on product liability.


Given all those legal goodies in this happy land (yes- it is also top 10 in the world happiness ranking; the USA is number 15), it makes us feel feckless here for begging for punitive damages caps, reminding courts to apply Daubert, and pining for Lone Pine orders.  And even with those modest goals, we feel we are tilting at windmills.


Anyway, those clues should be more than enough for you.  Whether or not your Summer vacation took or takes you to a venue blessed by the World Justice Project, we trust that it was or will be splendid.     


Monday, August 03, 2015

Medical Device Decision Plays PA’s Greatest Hits

When we read the opinion in Kline v. Zimmer Holdings, 2015 WL 4077495 (W.D. Pa. July 6, 2015), it felt like driving back from the mountains (or the Jersey Shore) after a holiday weekend, listening to classic rock radio playing last half-hour or so of some “countdown” of the top 500 (1000, whatever) songs of all time.  Kline granted summary judgment to the defendant, ending a lot of bobbing and weaving by the plaintiff, who claimed injury from a hip implant that broke.  It’s a two-part opinion, with the judge adopting and supplementing an earlier magistrate’s recommendation.

The design claims were dismissed because plaintiff ultimately couldn’t coax the necessary design defect opinions out of his experts – and non-experts.  The most interesting witness was the plaintiff’s treater, who was also alleged to have “involvement with the design team of the device at issue.”  Kline, 2015 WL 4077495, at *2.  However, that “unique” status fell rather hard by the wayside because plaintiff played fast and loose with the rules, sandbagging the defendant by failing to file any expert report.  Id. at *3.  Yes, he was a treater, so that’s allowed – but only to the extent that the physician “give[s] opinion testimony based upon the physician's examination, diagnosis, and treatment of a patient.”  Id.  The opinions that the treater offered about his interactions with the defendant’s design team could not be considered:

[The witness] was not identified as an expert witness to testify about the design of the device at issue. While [he] may have been a consultant to [defendant] about the device at issue, there is no record that he is an expert in the design of or warning about the product or that his consulting services enabled him to give an opinion as a design or warnings expert. . . .  There was no identification of his qualifications to be a design or warnings expert, he was not designated as such, and he did not submit an expert report about design defects or warnings.

Id. at *3.  Oops.  That’s what happens when a plaintiff tries to be too cute.

That wasn’t the only questionable expert.  Another expert, this one designated as such, “only briefly discussed in her expert report and then retreated from at her deposition.”  Id. at *4.  Instead, when under oath, this expert stated “that this is mostly a warnings defect case” and denied having a design defect opinion.  Id.  See also Id. at *11 (magistrate’s opinion describing expert’s testimony at greater length).  Plaintiff tried to rehabilitate the expert’s design-related testimony with a post-deposition affidavit.  That failed because, in light of the sworn deposition testimony the affidavit was a “sham.”

It is appropriate to disregard [the expert’s] affidavit pursuant to the sham affidavit doctrine.  A sham affidavit is a contradictory affidavit that indicates only that the affiant cannot maintain a consistent story or is willing to offer a statement solely for the purpose of defeating summary judgment.”  If it is clear that an affidavit is offered solely for the purpose of defeating summary judgment, it is proper for the trial judge to conclude that no reasonable jury could accord that affidavit evidentiary weight and that summary judgment is appropriate.

Id. at *4 (citations and quotation marks omitted).

No other expert purported to give design-related opinions.  Thus, summary judgment was proper against the design defect claim.  Plaintiff lost one “expert” to the disclosure rules, and the second to poor deposition testimony that could not be rescued by a “sham” affidavit.  Even so, plaintiff had a third expert, but that one “was not asked to review or comment on the design of the device.”  Id. at *5.  Called strike three.  “Without the opinion of an expert, plaintiffs cannot prevail.”  Id.  Yer out!

And design defect isn’t even the most fun part.  The warning claim?  Plaintiff didn’t even bother objecting to summary judgment, so the magistrate's opinion was adopted.

The facts already discussed indicate where the warning defect claim was going.  Since, the plaintiff’s prescribing surgeon was also a consultant for the defendant regarding the device, one can expect that this particular prescriber will have even more prior knowledge of this device’s risks than the average surgeon.  Given these facts, it’s no surprise that plaintiff could not establish a warning claim under the learned intermediary rule.  Here’s where the hits keep coming.

Plaintiff’s surgeon testified that he “has never read a package insert for any device he has implanted,” and “did not see, let alone read, the package insert that accompanied [plaintiff’s] device.”  Id. at *13 (this discussion is from that part of the magistrate’s opinion adopted by the district court without objection by plaintiff).  “It is standard practice for nurses in the operating room to open device packages without surgeons ever seeing the warnings.”  Id.  That didn’t matter because this surgeon “was also independently aware of the risks of total hip arthroplasty, including that an implant can break, from his practice and reading literature.”  Id.

So what are the greatest hits?

First, plaintiff’s warning defect expert was unqualified.  “[She] is not an orthopedic surgeon” and was thus “not qualified” to opine on how a warning defect could have caused injury.  Id. at *15; accord id. at *26.  That’s a hit because inadequate warning claims require expert testimony in Pennsylvania (something discussed more thoroughly here), and warnings directed to orthopods should be judged by orthopods.  Free Bird.

Second, “plaintiffs must further establish proximate causation by showing that had defendant issue a proper warning to the learned intermediary, he would have altered his behavior and the injury would have been avoided.”  Id. at *24 (citations and quotation marks omitted).  Gimme Shelter.

Third, “[p]ursuant to the learned intermediary doctrine, a manufacturer will be held liable only when it fails to adequately warn the intended user, which in the case of prescription drugs or medical devices, is the physician and not the patient.”  Id. (citations omitted).  Consistently with Pennsylvania law, but without specifically so stating, Kline thus applies the learned intermediary rule to medical devices.  Stairway to Heaven.

Fourth, since the prescribing surgeon “testified that he did not read the package insert,” plaintiff loses.  Id. at *25.  Since it went unread, “even if the warning in this case were insufficient, it would not have made a difference.”  Id.  Baba O’Riley.

Fifth, plaintiffs can’t invent alternative channels for providing warnings – here the treater’s “work[] as a paid consultant for [defendant].”  Id.  “Plaintiffs point to no support for the contention that a defective warnings case can be based on information provided to a plaintiff's treating physician other than via the official warning on the package.”  Id.  Hey Jude.

Sixth, alleged inadequacy in discussion of patient selection criteria wasn’t a warning defect.  There’s no duty to tell physicians how to exercise their “medical judgment.”  “Pennsylvania law does not require such specificity in a warning, particularly where, as here, the question is one of patient selection for a particular medical device.”  Id. at *26.  Layla.

Seventh, plaintiffs can’t get around warning causation with a “heeding presumption.”  Pennsylvania doesn’t recognize any such thing in prescription medical product cases:

Plaintiffs appear to be relying on a “heeding presumption” argument. . . .  This argument fails, however, because the “heeding presumption” has been applied only to strict liability causes of action, which are no longer part of this case. Pennsylvania has never applied the heeding presumption to a negligence case.

Id. (citation and quotation marks omitted).  Bohemian Rapsody.

By the end of the composite opinion, it was evident that both the magistrate and the district judge were frustrated with this plaintiff’s delaying tactics and oft-rejected arguments.  Resolving that they Won’t Get Fooled Again, they entered summary judgment.

Note:  song titles are those typically appearing in the final 10-15 of greatest hits lists, without bearing any particular relation to the legal propositions.

Friday, July 31, 2015

Considering Consolidating Cases for Trial

            We have managed to pretty much avoid asbestos litigation.  Sure, we encounter decisions from asbestos cases that sometimes impact our own cases.  They even sometimes appear in our posts, but rarely as a focus.  We have been less successful in avoiding consolidation of drug and device cases for trial.  Some courts that tend to favor multi-plaintiff trials are informed by experience from asbestos litigation.  Plaintiff lawyers, informed by whatever past experience makes them think there is a route to bigger verdicts and bigger settlements, often favor consolidating cases for trial.  To us, the plaintiff preference seems driven by the prospect of a jury being more sympathetic to several plaintiff themes when there are multiple injured plaintiffs in front of them throughout trial, especially if having a sicker plaintiff in the mix will drive up damages for the rest.  Plus, notwithstanding limiting instructions, the breadth of liability evidence tends to expand with each plaintiff.  Meanwhile, courts seem to mostly consider their dockets, accepting as given that trying cases together will get the number of pending cases down faster than would trying cases individually.  We had a case sent our way on consolidation in asbestos litigation and, given a combination of a paucity of blogworthy cases, our interest in the subject, and an impending vacation, we decided to post on it.

            From In re: New York City Asbestos Litig., No. 190411/13, 2015 N.Y. Misc. LEXIS 2634 (N.Y. Sup. Ct., N.Y. Cty., July 24, 2015), we learned that there is a pretty developed law governing whether to consolidate asbestos cases for trial.  Without really digging in, we would say that it is more developed and detailed than the law on consolidating drug or device cases for trial and offers some principles that might work fairly well for our cases.  NYCAL­—that is what we will call it—concerned whether to put together two plaintiffs in each of two trials based on six factors identified in Malcolm v. National Gypsum Co., 995 F.2d 346, 350-53 (2d Cir. 1993).  Not all the Malcolm factors will have a direct parallel to drug or device cases, but they are a good start:  1) common or similar worksite, 2) similar occupations, 3) same exposure period, 4) same disease, 5) living or dead plaintiffs, and 6) extent of overlap between defendants.  Beyond the enumerated factors, though, the court should consider both judicial economy and the “paramount concern for a fair and impartial trial.”  2015 N.Y. Misc. LEXIS 2634, *9 (citation omitted).  In a well-expressed quote from another asbestos case, “The systemic urge to aggregate litigation must not be allowed to trump our dedication to individual justice, and we must take care that each individual plaintiff s - and defendant's - cause not be lost in the shadow of a towering mass litigation.”  Id. (citation omitted). 
            Rather than simply accepting the idea that consolidation saves judicial resources, the defendants had statistics from nineteen recent consolidated and non-consolidated asbestos trials in the same jurisdiction, which showed that consolidated trials lasted much longer.  In the drug and device context, there are rarely enough trials with the same (or similar products) to make an exact comparison, but evidence tending to show that the efficiency claimed with consolidation does not show up in actual trials would be nice to have.  (We have had somewhat similar evidence in the context of reverse bifurcated trials, another procedure adopted from asbestos cases, to show that the bifurcation the defendant preferred actually does tend to shorten trials.)  The results from those nineteen recent asbestos trials also provided some evidence that consolidation is not so fair to the defendants.  In the individual trials, the defense won two-thirds of the trials and had about $4.4 million per plaintiff verdicts in the rest.  In the consolidated trials, the defense won one-tenth of the trials and had about $9 million per plaintiff verdicts in the rest.  While a record of more defense-friendly results without consolidation is not necessarily the same as proof that consolidation does not result in a “fair and impartial trial,” having statistics like this to fend off consolidation in the drug and device context would be nice.  The court “duly considered judicial economy and efficiency,” but did not say how the statistics were weighed.

            As you would expect from the post so far, the consolidations were denied based on insufficient commonalities within each pair of proposed trial plaintiffs.  In the first pair, the claims of a living plaintiff were likely controlled by Michigan law and those of a dead plaintiff were controlled by New York law.  Both claimed the same disease, mesothelioma.  Each alleged exposure while in the Navy, but while working different jobs during different time periods.  Twenty of the twenty-four defendants do not overlap between the cases.  In the second pair, the same disease, lung cancer, was alleged by a living plaintiff and a dead plaintiff, both subject to New York law.  There was no commonality of their occupations, worksites, or exposure period, though.   What does this all mean for consolidation in drug and device cases?  On a Friday afternoon at the end of July, we are not sure.  We have certainly seen consolidation urged for larger groups of plaintiffs based on less commonality than these cases had—like all the plaintiffs from a certain state who sued at roughly the same time.  And we do know that consolidation does tend to favor plaintiffs for all the wrong reasons.  So, maybe an order denying a request to consolidate two plaintiffs per trial in the litigation that helped spawn multi-plaintiff trials will maybe help a drug or device defendant defeat consolidation in its own case.  Maybe.

Thursday, July 30, 2015

Plaintiffs Allowed To Make a Case Out of Thin Air

            This post is from the non-Reed Smith side of the blog.

            Is anyone else watching the CW’s “Penn & Teller: Fool Us”?  It is perfect summer TV – easy, funny and interesting.  Each week aspiring, talented magicians perform to try to fool Penn & Teller.  If at the end of the trick, the comedy-magic duo can’t figure out how the trick was performed, the magician gets to appear on Penn & Teller’s enormously popular Las Vegas show.  Recorded on your dvr so you can skip commercials, it’s 45 minutes of stage performances, most of which are quite good and entertaining.  And that’s where we like to see magic – on the stage.  Who isn’t intrigued when a torn up playing card turns up tucked into a magician’s wallet whole again?  Or when a dove appears where only an egg was before?  Slight of hand, hidden compartments, mirrors, trap doors – all things designed to make an audience think they are seeing something more than they really are. 

            When magic is at work in legal opinions, we aren’t as enthusiastic.  Especially, where the result is the conjuring of a case out of thin air.  That is precisely what happened in Fields v. Eli Lilly and Co., slip op., Case No. 2:13-CV-35-WKW (M.D. Ala. Jul. 20, 2015).  Plaintiff alleged that because she ingested Prozac in 1996 during the first 8 months of pregnancy, her son was born with a congenital heart defect.  But she has NO proof of two of the most fundamental aspects of any prescription drug case – that she ingested the drug and that an alleged inadequate warning caused the injury.  We would have thought that a complete lack of evidence on two key elements is enough for summary judgment, but plaintiffs managed to pull a rabbit out of a hat. 

            Let’s sum up all of the missing evidence.  Plaintiff has no pharmacy records showing that a Prozac prescription was ever filled.  She alleges her pharmacy no longer has those records.  She has no financial records (bank statements, receipts, credit card statements) showing a purchase of Prozac.  Id. at 9.  Presumably she also doesn’t have insurance records reflecting a Prozac prescription. She has no medical records that Prozac was ever prescribed.  Id. at 8.  There isn’t a single reference in any of her medical records that confirms that Prozac was ever prescribed to plaintiff. 

            The only mention of Prozac at all is in a note by one doctor that stated that he wanted lab work done and then he would decide whether or not to start Prozac.  That note was made for an appointment on May 23, 1996.  Just eleven days later, Plaintiff returned to her doctor to report a positive pregnancy test.  There is no mention that Prozac was discussed at that second appointment.  Nor was Prozac ever discussed with plaintiff’s treating obstetrician/gynecologist.  Id. at 5-6.  Allow me to break our blogging rule about first person for a minute.  As a woman who has been pregnant twice – I cannot conceive of an ob/gyn who upon assuming the care for a pregnant woman does not ask her, even 19 years ago, what medications she was currently taking.  The fact that no place in those records is Prozac mentioned is a huge red flag for me.

            Back to blogging.  So the only “evidence” of Prozac usage is plaintiff’s self-serving statement that at that May 23 appointment where he had not yet decided to prescribe Prozac, her doctor gave her a sample packet and a prescription with three refills.  Plaintiff claims she got the blood work done, heard nothing from the doctor’s office, assumed no news was good news and started taking Prozac.  Id.  She also stated that she stopped taking Prozac around her 8th month of pregnancy on her own decision.  Id. at 7.  Conveniently, not only did she never discuss with any doctor whether she should be taking Prozac while pregnant, neither did she discuss with any doctor the impact of stopping the drug either.  Plaintiff’s husband also alleged that he remembers seeing Prozac prescription bottles in their home.  Id. at 7.    

            At this point you may be asking yourself, why not just ask the alleged prescriber?  Because he died in 2009, four years before this lawsuit was commenced.  Id. at 10.  So, this is truly a case where absolutely the only evidence that Plaintiff took a prescription drug is her say so.  That cannot be enough.  The court looked at the question as one of credibility not admissibility. Id. at 15.  The court was also unwilling to find that plaintiff’s self-serving testimony was directly contradicted by the pharmacy and medical records such that her testimony should not be accepted for purposes of a summary judgment motion.  The court found that the “absence of physical evidence” (no pharmacy records) is not the same as “the presence of physical evidence that directly contradicts a fact.”  Id. at 16.  Finally, defendant argued that the rule regarding viewing the facts in a light most favorable to the non-moving party should be different “in pharmaceutical cases where the plaintiff cannot produce medical or prescription drug records to substantiate a self-serving affidavit or declaration that he or she actually used the drug at issue.”  Id. at 17.  The court didn’t agree, but we do. 

            Prescription drugs are heavily regulated and as such there are numerous records kept regarding how they are dispensed – doctors, pharmacies, insurers.  If a plaintiff can’t offer up even one record from one source that indicates he/she was prescribed a drug – the case should not proceed.  One of the problems in this case is the time between the alleged ingestion/injury and the filing of the suit.  We understand the long statute of limitations to protect the interests of minors who may wish to file suit after they become adults.  But we again find it slightly disingenuous that plaintiff waited 16 years to file suit and in all that time did nothing to preserve any of the evidence either she or her son would need to pursue this case.  That burden should fall to plaintiff and plaintiff should not reap a benefit when all of the supporting documents and witnesses are no longer available. 

            Finding plaintiff’s statement was enough to survive summary judgment on the issue of ingestion, the court next looked at defendant’s argument that plaintiff could not prove causation on her failure to warn claim.  Because Alabama recognizes the learned intermediary doctrine, “the success of [plaintiff’s] failure-to-warn claims is contingent upon whether she can show that an adequate warning would have altered [her doctor’s] prescribing practices.”  Id. at 21.  Defendants logically argued that therefore, the prescriber’s testimony was necessary for plaintiff to carry her burden on causation.  Again, the court disagreed, but at least acknowledged that the plaintiff’s path forward was a “rocky one.”  Id. at 24. 

            The court appears to agree with defendant that plaintiff could not satisfy her burden with objective evidence of how a reasonable physician would have acted upon receiving a different warning.  Id. at 23-24.  But then goes on to find that plaintiff, absent the prescriber’s testimony, could still meet her burden.  First the court examined the parties’ competing views of what needs to be proven under the learned intermediary doctrine.  Both sides agreed that the issue is the impact of the warning on the prescriber, not the plaintiff.  But they differed on what that really means.  Defendant argued that plaintiff had to demonstrate that if the prescriber had received a different warning he would not have prescribed the medication – a fact to which only the prescriber could testify.  Id. at 28.  Plaintiff, on the other hand, took a broader view and argued that the question is whether the doctor would have behaved differently if he had received a different warning.  Id. at 26.  And “behaved differently” is not limited to not prescribing – it included whether the doctor would have warned the plaintiff differently. 

[Plaintiff] can demonstrate factual causation by proving that had [defendant] given [the prescriber] a strong warning about the association between the ingestion of Prozac during pregnancy and an increased risk of birth defects, [the prescriber] would have informed [plaintiff] of the risk and his warning would have resulted in a different outcome for [plaintiff] in that she would not have taken Prozac.  This theory is not predicated upon the effect an adequate warning would have had on [plaintiff] but rather upon the effect an adequate warning would have had on [the prescriber]’s prescribing practices.

Id. at 29. 

            This still leaves open the question of how plaintiff demonstrates, without the prescriber’s testimony, whether her prescriber would have changed his risk discussion with plaintiff.  According to plaintiff and the court – through his long time nurse.  The nurse testified that it was the doctor’s “standard practice to discuss with all of his patients the risk and benefits disclosed on a drug’s package insert.”  Id. at 31.  The court found that a reasonable inference could be drawn from that testimony that if the Prozac label disclosed the increased risks of birth defects, the doctor would have discussed it with plaintiff.  Id.  This seems like a stretch in a more typical case – testimony that the doctor was diligent in discussing risks means he would have discussed a particular risk with a particular patient.  Feels more like that objective reasonableness standard that the court was disinclined to allow.  But now put it in the context of this case.  Based on the doctor’s standard practice, we are supposed to infer that he would have discussed a risk of use during pregnancy with a woman who was not pregnant at the time and for whom he was only considering starting the medication?  You can’t look at each piece of the case in a vacuum.  You have to look at the whole.  And here the whole adds up to a whole lot less than the sum of its parts.  Inference, upon inference, upon speculation, upon self-serving testimony should not get a case to the jury.

            Plaintiff here really pulled off a quite a magic trick.  She had nothing up her sleeves; nothing in her pockets; nothing tucked in her socks.  And poof, she made a case appear.  If this was “DDL Blog:  Fool Us” – the answer is, she didn’t.            

Wednesday, July 29, 2015

Guest Post - Just the Fax, Ma’am

While Bexis is on vacation, here is a guest post to take up some of the slack.  Our guest blogger today is Henry Pietrkowski, a partner in Reed Smith's Chicago office.  This one's a little different.  It's about the impace of a 1991 federal statute prohibiting unrequested faxes, and how it could impact on pharmaceutical promotional activities that send faxed information to healthcare providers.  As always, our guest bloggers deserve all the credit, as well as any blame, for their posts.  Here goes.


Scottish inventor Alexander Bain is credited with inventing the first fax machine in 1843 – an “Electric Printing Telegraph.”  By 1846, Bain was able to reproduce graphic signs in laboratory experiments by synchronizing the movement of two pendulums to transmit a message across a wire.  But it was not until over a century later, in 1964, that the Xerox Corporation introduced the first commercialized version of the modern fax machine. From there, faxes became ubiquitous.  They provided a standardized method of communication used worldwide, and their validity as a method of transmission was adopted by the business world.  By the 1980s, faxes had become widely used as a form of marketing.  Why pay the cost of postage to send an advertisement when the advertiser could use the recipient’s own paper and toner to print it?

It was at this point that Congress stepped in by passing the Telephone Consumer Protection Act of 1991 (the “TCPA”).  Among other alleged telemarketing abuses, the TCPA specifically prohibits the use of a “telephone facsimile machine, computer, or other device to send, to a telephone facsimile machine, an unsolicited advertisement.”  47 U.S.C. § 227(b)(1)(C).  To ensure that businesses took the Act seriously, Congress imposed a minimum statutory damage award of $500 per fax regardless of the sender’s intent, and up to $1,500 for a knowing or willful violation of the statute.  Id. at § 227(b)(3).  Senator Ernest Hollings, who sponsored the bill, expressed his hope that violations of this law could be enforced by aggrieved individuals in small claims court where counsel would not be needed. 

As it turns out, however, it was the clients who would not be needed.  Instead, plaintiffs’ class action attorneys have filed hundreds of class action lawsuits alleging violations of the TCPA’s fax provisions, calling them “junk fax” or “blast fax” cases.  These lawsuits have resulted in hundreds of millions of dollars being paid to the plaintiffs’ class action bar, with actual fax recipients receiving relatively little compensation.  One the primary targets in recent years has been pharmaceutical and medical device companies.

But wait a minute (you say), no one uses faxes anymore.  We have email and websites and a million other ways of using computerized technology to engage in marketing communications.  Not true – at least not in the pharmaceutical/medical device industry.  The reason is simple:  doctors love faxes, and pharmacies love them too.  Yes, for some strange reason, doctors and pharmacies still prefer this antiquated communication method from the Industrial Revolution over email, web portals and computers.  Some surmise that doctors believe fax transmissions are more secure and ensure greater privacy for patients.  Maybe they just like the palpable feel of paper crackling in their hands.  Regardless of the reason, however, the fax is alive and well among doctors and pharmacies.  And as a result, pharmaceutical and medical device companies are still using faxes to communicate with them.

And if you’re wondering whether your company uses faxes, here’s some food for thought.  As a TCPA class action defense lawyer, many of the cases I’ve encountered arise from a variant of the following scenario:  Pharma/medical device company has a new drug or device that it wants to bring to market.  An individual (or team) in the marketing department is assigned to this task.  He or she retains an outside marketing consultant to find out the “best practices” for marketing that product to doctors or pharmacies in particular geographic areas or specialties.  The marketing company proposes a variety of marketing methods, one of which is faxes.  The vendor promises to obtain a list of physicians and take care of all the details.  Usually, there is no discussion about compliance with the TCPA; when there is, the vendor gives it short shrift, saying that it has sent faxes many times in the past and never encountered a problem.  A few months (or up to four years)  later, the company is hit with a TCPA class action lawsuit. 

Perhaps you are one of the lucky few companies with a centralized marketing team who runs every detail of every promotion by the legal team for a full TCPA compliance review.  Most companies don’t fall into this category, however.  They conduct compliance reviews, but those reviews are aimed at FDA regulations.  They leave it to the marketing companies and vendors to deal with TCPA compliance.  That could be a big mistake.

Despite being a strict liability statute, however, there are a number of defenses that pharma/medical device companies can raise to a TCPA fax claim.  I will briefly discuss three of them here:  (1) the faxes are not “advertisements”; (2) the faxes are not “unsolicited”; and (3) the company is not vicariously liable for the vendors’ actions.

Is the fax an “advertisement?”

The TCPA prohibition on faxes applies only to “unsolicited advertisements,” which the TCPA defines in relevant part as “any material advertising the commercial availability or quality of any property, goods, or services . . . .”  47 U.S.C. § 227(a)(5).  A spate of litigation has ensued over the scope of this definition as well as what evidence can be considered in deciding whether a fax contains an “advertisement” under the TCPA. 

The Sixth Circuit recently weighed in on this issue, holding that a pharmacy benefit manager’s faxes encouraging providers to “consider prescribing plan-preferred drugs” on its formulary was not an “advertisement” under the TCPA.  Sandusky Wellness Ctr., LLC v. Medco Health Solutions, Inc., ___ F.3d ___, 2015 WL 3485900, at *1-2, 4-5 (6th Cir. June 3, 2015).  The Sixth Circuit found it essential to the term “advertisement” that the faxes involve buying or selling property, goods or services for a profit.  Id. at *3, 5.  Because the pharmacy benefit manager was not out to make a profit, but merely to inform the provider what drugs its clients might prefer in order to save them money, the faxes were not “advertisements.” Id. at 4-5.  The Sixth Circuit further held that its analysis was limited to the face of the fax itself rather than extrinsic evidence that the sender of the faxes might gain some “hypothetical benefit later on.”  Id. at 6.

In another recent case, a federal district court dismissed the plaintiff’s TCPA claim where it found that faxes about reclassifying a drug for insurance purposes were informational with only “an incidental amount of commercial material.”  Physicians Healthsource, Inc. v. Jannsen Pharma., Inc., No. 12-2132 (FLW), 2013 WL 486207, at *1 (D.N.J. Feb. 6, 2013).  The court found that the “potential to gain some benefit from sending information, without the presence of additional commercial statement in the message, is insufficient to transform an informational message to an advertisement.”  Id. at *4.  However, after granting the plaintiff leave to amend its complaint to state additional facts regarding the timing and nature of the faxes at issue, the court subsequently denied the defendant’s summary judgment motion on the “advertisement” issue, leaving it for the trier of fact to decide.  Physicians Healthsource, Inc. v. Jannsen Pharma., Inc., No. 12-2132 (FLW-TJB), 2015 BL 196108 (D.N.J. June 19, 2015).

Other recent federal court decisions involve faxes inviting physicians to “free” seminars regarding a new drug or medical device.  Courts have studied these faxes on a case-by-case basis to determine whether or not they are “advertisements” under the TPCA.  See, e.g., Physicians Healthsource, Inc. v. Stryker Sales Corp., ___ F. Supp. 3d ___, 2014 WL 7109630, at *5-10 (W.D. Mich. Dec. 12, 2014, as amended Jan. 12, 2015) (finding issues of material fact precluding summary judgment as to whether a fax that featured a picture of an implantable device and offered a free steak dinner to attendees was an “advertisement” under the TCPA).

Is the fax “unsolicited?”

The TCPA prohibition on faxes applies only to “unsolicited advertisements,” which means that it must be “transmitted to any person without that person’s prior express invitation or permission, in writing or otherwise.”  47 U.S.C. § 227(a)(5).  Determining whether the named plaintiff consented to the fax at issue is often the first order of business for a class action defendant.  But even if the named plaintiff did not consent, individual issues of consent among the putative class members can be a potent defense to a class certification motion.  See, e.g., Gene & Gene LLC v. Biopay LLC, 541 F.3d 318, 326-29 (5th Cir. 2008) (reversing district court’s class certification order where “evidence show[ed] that some of the fax advertisements it sent were solicited by the recipients, but which ones can only be decided on a case-by-case basis”).

Where the evidence demonstrates, however, that the faxes at issue were sent en masse without any attempt to obtain prior express consent from any fax recipients, courts generally have certified such classes.  See, e.g., Chapman v. Wagener Equities, Inc., No. 09 C 07299, 2014 WL 540250, at *15 (N.D. Ill. Feb. 11, 2014) (“defendants have identified no basis to believe that this case will be different than the ‘normal’ § 227 class action in which the common issues arising from the near-simultaneous transmission, by the same defendant, of the same unsolicited fax predominate”). 

A statutory exception does exist for faxes sent to those with whom the defendant has an “established business relationship.”  47 U.S.C. § 227(b)(1)(C).  However, that exception is much more limited than companies often believe.  It is not enough to simply have an “established business relationship” with the recipient.  The fax number must also have been received in a particular way and, more importantly, the fax must contain specific opt-out language required by the statute and its regulations.  Courts have held that the failure to include this opt-out language is itself a violation of the TCPA that creates a common issue for class certification.  See, e.g., A Aventura Chiropractic Ctr., Inc. v. Med Waste Mgmt. LLC, No. 12-21695, 2013 WL 3463489, at *4 (S.D. Fla. July 3, 2013).  In the pharma/medical device context, issues arise regarding whether doctors have consented to receive faxes, or created established business relationships, by agreeing to be part of certain professional associations, such as the AMA.  See, e.g., Stryker Sales, 2014 WL 7109630, at *11-13 (refusing to find that plaintiff’s participation in AMA’s physician database was sufficient to establish consent to receive advertising faxes from third parties).  Again, this is an evolving area of the law that suggests that caution be used in determining whether consent has been obtained before any faxes are sent.

 Is the company liable for the acts of its vendors?

Another litigation battleground in blast fax class action lawsuits involves the extent to which companies may be liable for the acts of third-party vendors who sent the faxes at issue.  While the FCC has opined that the telemarketing portions of the TCPA are subject to the federal common law of agency, the FCC has refused to apply the same standard to faxes.  See Bridgeview Health Care Center v. Clark, No. 09 C 5601, 2015 WL 1598115, at *4-5 (N.D. Ill. Apr. 8, 2015), appeal filed 7th Cir. Apr. 13, 2015.  In a letter to the Eleventh Circuit, the FCC stated that the relevant standard for faxes is embodied in the FCC’s definition of the term “sender”: “the entity or entities on whose behalf facsimiles are transmitted are ultimately liable for compliance with the rule banning unsolicited facsimile advertisements.”  Id. at *5.

Courts have struggled with how to apply this definition.  Does it literally mean that a company whose products are advertised by fax is strictly liable for those faxes even if the company did not know they were being sent?  At least one federal district court found this interpretation to be “absurd,” reasoning: “[t]o conclude that a defendant is always liable for faxes advertising her goods or services would allow an overzealous third party to expose a defendant to substantial liability without notice or without receiving any direction to do so.  This sort of universal liability does not appear to have been contemplated by Congress.”  Id. at *7.

We hope this helps you to spot potential problems that can arise from sending faxes to physicians, pharmacies or other health professionals without obtaining prior consent or ensuring that the technical requirements of the “established business relationship” exception have been met.  A thorough compliance review is highly recommended.  And if you have been sued, please contact an attorney who is experienced with the ever-changing legal landscape of the TCPA.

Tuesday, July 28, 2015

Almost, but Not Quite: No Summary Judgement for Mentor on Two of Plaintiff’s ObTape Claims

We flew to Pittsburgh this week for depositions.   From Philadelphia, it takes only about 40 minutes in the air to get to Pittsburgh.  But there are only a few nonstops each day.  With no other options, we booked a nonstop flight scheduled for a 7:55 a.m. departure, coordinated plans with colleagues, clients and witnesses, and went to sleep with our overnight bag packed and waiting at the door.  All in order, right?  Until our phone rang at 3:30 a.m. bearing the robotic message, “Your flight has been canceled.”  No explanation.  We called back to find that we had been “protected” – re-booked – on the next available flight, a couple of hours later.  So far, so good.   (Well, not really, but as good as it gets at that point.)  But then we discovered that our colleague, scheduled to fly with us, was not “protected” on our flight, but had been bumped to a much later flight so he could continue to take advantage of the first class upgrade he had not requested in the first place.  Good times. The next day, our flight for home departed right on schedule.  We landed in Philadelphia, taxied to the gate, stood up, and remained standing in the aisle for the next 30 minutes, informed that the jetway would not move to the door of the plane and “a mechanic has been called.”  Twice in one trip, the airline stopped just short of getting it right. 

Recently, defendant Mentor Corp, moving for partial summary judgment in the Mentor ObTape Transobturator Sling Products MDL, similarly found itself at the mercy of a Court that laid the groundwork for a correct decision then stopped just short of getting it right.  Twice.
Plaintiff had been implanted with an ObTape transobturator sling in 2004 to address her stress urinary incontinence.  It was apparently undisputed that plaintiff “did not speak with anyone from Mentor or see any brochures, videos, product inserts, or other materials from Mentor before the procedure.”  In re Mentor Corp. Obtape Transobturator Sling Prods. Liab. Litig., 2015 U.S. Dist. LEXIS 93001 at *5 (M.D. Ga. July 17, 2015).  Plaintiff was happy with her implant until 2010, when she “began experiencing pain in her thighs.”  Id.  Initially, plaintiff was diagnosed with a groin strain; however, after several months of worsening symptoms, she was diagnosed with an abscess caused by erosion of the ObTape. She underwent excision surgery during which as much of the ObTape as possible was removed.  Id. at *6-7.
Plaintiff filed suit against Mentor asserting the usual litany of claims: negligence, design defect, manufacturing defect, failure to warn, breach of warranty, negligent and fraudulent misrepresentation, and fraudulent concealment.  Mentor filed for partial summary judgment on plaintiff’s manufacturing defect, express and implied warranty,  negligent and fraudulent misrepresentation, and fraudulent concealment claims.  It also sought “summary judgment as to [plaintiff’s] negligence claim to the extent it alleges a duty to recall and as to [her] failure-to-warn claim to the extent she alleges that Mentor breached a continuing duty to warn” after the ObTape device was implanted in the plaintiff.  Id. at *4.  [Apparently, Mentor did not move for summary judgment on plaintiff’s warnings claims to the extent that the claims related to any time period before plaintiff’s ObTape device was implanted.]  Plaintiff’s warranty and “failure to recall” claims were dismissed by agreement, leaving her “continuing duty to warn,” concealment/misrepresentation, and manufacturing defect claims to be resolved by the court.
Continuing Duty to Warn
Plaintiff alleged that Mentor breached a “continuing duty to warn [plaintiff’s] physicians of problems with ObTape” after plaintiff’s implant surgery.  Mentor argued that plaintiff “did not point to sufficient evidence of causation on her continuing duty to warn claim because she did not point to evidence that either of her implanting physicians would have done anything differently had Mentor provided them with additional warnings regarding ObTape.”  Id. at *13.   The court agreed, noting the record “establish[ed] that [plaintiff’s surgeon] did not contact any of his patients after their implant surgeries even though he learned of increased risks of ObTape.  And if [plaintiff] presented to [her surgeon] today with the complications she had in 2011, [he] would treat her exactly the same as he did then.”  Id.   Summary judgment for Mentor on “continuing duty to warn” claim.  But then came the turbulence.
Misrepresentation and Concealment Claims
Plaintiff alleged that her surgeon “received certain materials from Mentor that led him to recommend ObTape for [her], and that those materials contained material misrepresentations and concealed material facts about ObTape,” including facts about the frequency and severity of ObTape complications.”  Id. at *10.  Mentor argued that plaintiff could not prove the required reliance element of her misrepresentation and concealment claims, as it was “undisputed that Mentor did not make any representations directly to [plaintiff].” Id.  at *11.  The court conceded that, ‘[i]n general, a fraudulent or negligent misrepresentation claim must be based upon a misrepresentation made to the defrauded party, and relied upon by the defrauded party.” Id. at *11-12 (internal punctuation and citations omitted).  However, it held that “"the requirement of reliance is satisfied where . . . A, having as his objective to defraud C, and knowing that C will rely upon B, fraudulently induces B to act in some manner on which C relies, and whereby A's purpose of defrauding C is accomplished."  Id. at *12 (internal punctuation and citation omitted).  Thus, plaintiff created a material issue of fact by alleging that Mentor made misrepresentations to her surgeon, on whom she relied, intending to induce her to undergo the ObTape procedure.   Id.  Hmmmm.  There were:  A) no statements to the plaintiff, and B) no reliance by the plaintiff, so how do we get to C) no summary judgment?  We think that twisting the learned intermediary doctrine this way turns the entire concept of reliance on its head, allowing plaintiffs who were never defrauded to prevail on fraud claims.  It is a little bit like permitting a claim for a manufacturing defect where there is no evidence that the product in question was defectively manufactured.  Which is just what the court did.
Manufacturing Defect
Plaintiff’s manufacturing defect claim was based on evidence presented by plaintiffs in an earlier phase of the ObTape MDL, that the pore size of those plaintiffs' ObTape samples varied from Mentor’s specifications.  Id. at *9.  Mentor pointed out that plaintiff “did not point to any evidence that any expert examined the specific ObTape that was explanted from [plaintiff’s] body and opined that a manufacturing defect existed.”  Id.   No matter, the court held.  Because other plaintiffs’ experts had tested “a number of [other plaintiffs’] ObTape samples” and had found deviations in a “substantial portion” of them, plaintiff, relying on that evidence, created a genuine issue of fact.  Id.   Seriously?  Need we even comment on the absurdity of permitting a plaintiff to use other plaintiffs’ evidence to prove that her device – never examined – was defectively manufactured?   Is this some sort of non-mutual collateral estoppel jiggery-pokery? We shudder at the slippery slope this approach could create.

And so, despite a promising holding on plaintiff’s “continuing duty to warn” claim, the court twice stopped short of getting it right.  Like our travel adventures.  Next time, we’re taking the train.