With both sides lobbing us cases (yes the PR warover Aredia/Zometa has heated up to the point that even plaintiffs send usstuff) in the ongoing Aredia/Zometa (hereafter "A/Z" - for obvious reasons) product liability struggle, we know of fournew decisions. Here’s what’s happening(in chronological order).
On February 8, the Fourth Circuit, in a(thankfully) unpublished and thus non-precedential opinion, affirmed theplaintiff’s verdict in Fussmann. SeeFussman v. Novartis Pharmaceuticals Corp., ___ Fed. Appx. ___, 2013 WL474330 (4th Cir. Feb. 8, 2013). This isthe case where an obviously runaway jury awarded over $12 million in punitivedamages. Well, after that punitivedamages award was reduced by over 93% (to $861,000), the Fourth Circuit affirmedit, stating that there was “sufficient foundation” to find “willful”conduct. Id. at *8. It’s hard to comment, because the opiniondoesn’t state what this conduct evidence was, but any time a punitive award isaffirmed (a fortunately rare occurrence), we’re not happy.
What struck us about this aspect of Fussmanis the lack of any discussion about the magnitude of the alleged increased riskposed by A/Z. Our biggest problem withpunitive damages in prescription medical product cases is that the absolute risks of harm aregenerally small – on the order of 1% or less (often much less). In such cases, even if the product doubled ortrebled a pre-existing risk, we’re still talking about a small percentagelikelihood that any particular person gets hurt. The Restatement, on the other hand, uses a“substantial certainty” of harm standard for an inference of intent in thepunitive damages context. SeeRestatement (Second) of Torts §§8A, 500 (1965). Lots of cases address this point – here’s a representative example:
This approach is consistent with the view expressed byAmerican Law Institute in distinguishing recklessness − where a defendant knowsthere is a high risk of physical harm to another, but “deliberately proceeds toact, or fails to act, in conscious disregard of ... that risk” − from simplenegligence, characterized as “mere inadvertence, incompetence, unskillfulness,or a failure to take precautions.” Restatement (Second) of Torts § 500 cmts. a & g (1965). The latter, lacking malice, cannot supportpunitive damages, while the conscious disregard of a known and sufficientlyserious risk of harm is the equal of malice. [Courts] regularly emphasize[e] the awareness of risk necessary tojustify an award of punitive damages: only in those instances where an “actorhas intentionally done an act of an unreasonable character in disregard of aknown or obvious risk that was so great as to make it highly probable that harmwould follow, and which thus is usually accompanied by a conscious indifferenceto the consequences”. . . . Accordingly, we hold that the culpability necessary foran award of punitive damages based on reckless or wanton misconduct requiresevidence that the defendant acted, or failed to act, in conscious anddeliberate disregard of a known, substantial and intolerable risk of harm tothe plaintiff, with the knowledge that the acts or omissions were substantially certain to resultin the threatened harm.
Fly Fish Vermont, Inc. v. Chapin Hill Estates, Inc.,996 A.2d 1167, 1176 (Vt. 2010) (numerous citations omitted) (emphasisadded). Accord, e.g., Strenkev. Hogner, 694 N.W.2d 296, 304-05 (Wis. 2005). There are lots more examples - perhaps enough for a separate post.
So what happened in Fussman? Blame the North Carolina legislature. They passed a punitive damages statute that,in this respect, made things worse. Thestatute specifies “willful or wanton conduct” as an “aggravating factor” thatpermits punitive damages. N.C. Gen.Stat. §1D-15(a). But then, instead ofrequiring a high degree of risk, the statute demoted this common-lawrequirement to merely one of a bunch of factors that a jury may consider. See N.C. Gen. Stat. §1D-35(2) (listing“[t]he likelihood, at the relevant time, of serious harm” as one of ninefactors that “the trier of fact . . . may consider”). So in North Carolina, it appears a plaintiffcan recover punitive damages for conduct that, even if “willful and wanton,”posed only a minuscule actual increased risk of serious harm.
The rest of Fussman consisted chiefly ofabuse of discretion-standard review of evidentiary decisions that are specificto the A/Z litigation. The only one ofthese with much broader implications concerns the trial court’s introduction of apost-injury label change. 2013 WL 474330,at *5. That we don’t like, becausesubsequent label changes are subsequent remedial measures. It turns out, though, that the FourthCircuit doesn’t disagree – it just found any error to be harmless. Id. (“To the extent that the districtcourt erred in admitting evidence of the 2007 label revision, such error didnot prejudice [defendant]”). In ourexperience, letting a jury see that the label changed in some relevant wayafter the plaintiff used the drug is not so harmless, especially in a case withpunitive damages on the line. That’swhy, ever since the Federal Rules of Evidence were adopted in back in 1975,there’s been a specific rule (Rule 407) explicitly barring this type ofevidence – a prohibition that’s only been made stronger over time.
Things did get better in A/Z land, however.
On February 7 two orders were entered in an A/Zcase called Chiles. In Chiles v.Novartis Pharmaceuticals Corp., ___ F. Supp.2d ___, 2013 WL 539891 (M.D.Fla. Feb. 7, 2013), plaintiffs and the defendant had another knock-down,drag-out battle over choice of law on punitive damages. The plaintiff, a Florida resident, sought toapply Florida law, while the defendant, a New Jersey corporation, urged NewJersey law. That’s because New Jerseylaw does not allow punitive damages where a drug complies with FDA labelingrequirements (and the statute’s fraud on the FDA exception is preempted). The defense won:
Defendant contends that the fact that the injuryoccurred in Florida is unimportant because Plaintiffs presence in the state wasfortuitous; it marketed [the drug] nationwide. . . . Plaintiffs have failed to rebut Defendant’sargument that the decisions at issue that potentially give rise to punitivedamages were made from Defendant's New Jersey headquarters.Defendant is correct that New Jersey has a moresignificant relationship to the issue of punitive damages than Plaintiff's homestate in light of [defendant’s] contacts with New Jersey and the Restatement’s§6 principles. Because the relevantconduct at issue took place primarily in New Jersey, that state’s law onpunitive damages is applicable under the Florida choice of law analysis. Thus, Defendant’s motion to apply New Jerseylaw to the issue of punitive damages is granted.
Chiles, 2013 WL 539891, at *2-3 (citationsomitted). While we view this choice oflaw issue from a “where you stand depends on where you sit” perspective –sometimes one side of this argument helps any given client; sometimes the other– it’s certainly an important issue in A/Z (just compare New Jersey to NorthCarolina, for example), and the good guys prevailed in Chiles.
Chiles also involved the admissibility ofthe ubiquitous Dr. Suzanne Parisian. Thecourt let her in, id. at 3 (which we don’t like), but not before herwings were significantly clipped by the excision of many of the mostobjectionable aspects of her testimony, those being: “medical causation, corporate state of mind,industry standards, monitoring of the clinical trials and ‘ghostwriting’.” Id. Heck, that’s most of her shtick.
The win-some/lose-some nature of Chilescontinues in the second order, which concerns Daubert motions not involving Dr. Parisianand summary judgment. Most of theopinion is a repeat (at least the court thinks so) of motions already decidedin the A/Z multi-district litigation context, which the court declined torevisit. Slip op. at 5-8. As for new motions, one treating doctor wasfound incompetent to testify to medical causation, another was allowed, and thethird was reserved until trial. Id.at 12-13. As for summary judgment, oncethe experts were admitted, denial of most of it was foreordained. On the remainder, the plaintiff just squeakedby on warning causation, as one of his three treaters (but not the others) offeredtestimony that the court found sufficient to conclude that a different warningwould make a difference (in light of the plaintiff’s inevitable, self-servingtestimony that he would not have taken the drug − prescribed to fight cancer,for crying out loud − had he only been told about its risks). Id. at 19. The other part of the summary judgment motionwas granted. In Florida, impliedwarranty requires privity. Id. at20.
Finally, on February 4, in McGuinnes v. NovartisPharmaceuticals Corp., ___ F. Supp.2d ___, 2013 WL 425331 (M.D. Fla. Feb.4, 2013), the court blew out another A-Z case, this time because the plaintiffdied − not uncommon, given that A-Z is used in the treatment of metastaticcancer − and the plaintiff’s counsel failed to make a proper substitution. (For you non-lawyers, dead people cannot sue,only executors of their estates can).
In McGuinnes the defendant did what it wassupposed to when it found out that the plaintiff died, that being filing andserving a paper called a “suggestion of death.” Id. at *1. The rulesprovide 90 days after that for the substitution of a proper representative tocontinue the litigation, but nothing happened. This inaction impeded the defendant’s ability to conduct basic discovery– getting medical records – because there was nobody to sign the necessaryconsents to release of this information. Id.
Frustrated, after the 90 days elapsed, thedefendant moved to dismiss. That finallyproduced a response, but the response was not only procedurally improper butfailed to include letters of administration to establish that the right personwas being substituted. Id. Finding nothing that would constitute“excusable neglect,” the court dismissed the following excuses:
- Ignorance − Counsel “is well aware of Rule 25 and its implications” because he “previously missed the same Rule 25(a) deadline last fall in a similar case.” McGuinnes, 2013 WL 425331, at *3.
- Too much work – “the ability of Plaintiff's counsel to manage his caseload is not a sufficient reason to disregard the Federal Rules of Civil Procedure.” Id.
- Lack of communication with plaintiff – Plaintiff had given a “durable power of attorney” to the person to be substituted. Id.
- Lack of communication with the person to be substituted – Prior filings were “internally inconsistent,” having “argue[d] that [this person] has been involved actively in this litigation,” Id.
- Lack of prejudice – belied by “delays in discovery, including an impediment to obtaining medical records.” Id.
Anyway, that’s what we know has happened in A/Zlitigation, at least during the first part of February 2013. Obviously, it’s enough to keep a lot oflawyers busy.
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