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PRODUCTS LIABILITY UPDATE: Medical Monitoring for Long Term Smokers Denied

Jeremy Taylor, Senior Attorney, National Legal Research Group

     The New York Court of Appeals recently held that New York law does not recognize an independent, equitable cause of action for medical monitoring for smoking-related diseases, such as lung cancer, brought by current or former smokers who have not been diagnosed with such a disease, and who are not being investigated by a physician for such a suspected disease. Caronia v. Philip Morris, USA, Inc., 998 N.E.2d 1065 (N.Y. 2013). The plaintiffs were all over the age of fifty and had been "pack a day" smokers for at least 20 years.

     The court based its holding on the principle that a threat of future harm is not sufficient to impose liability in a tort context, noting that New York law requires physical harm as a prerequisite to tort recovery. According to the court, the physical harm requirement for tort claims provides a basis for verifying worthy claims and eliminating spurious ones by defining the class of persons who actually possess a cause of action, providing a basis for the factfinder to determine whether a litigant actually possesses a claim, and protecting court dockets from being clogged with frivolous and unfounded claims.

     The dissent, and several other jurisdictions, do not agree with this holding, and the court's opinion provides a good discussion of both sides of the issue.

PRODUCTS LIABILITY: Reading a Product Warning Constitutes "Use" of the Product

The Lawletter Vol 38 No 9

Jeremy Taylor, Senior Attorney, National Legal Research Group

     The Court of Appeals of South Carolina recently considered whether a worker who was seriously burned when the chemical sodium bromate caught fire at his workplace could recover against the suppliers of the chemical even though the plaintiff was not "doing anything" with the product at the time of the incident. See Lawing v. Trinity Mfg., No. 5166, 2013 WL 4451075 (S.C. Ct. App. Aug. 21, 2013).  The trial court granted summary judgment to the defendants on the plaintiff's strict liability cause of action and entered judgment for the defendants on the plaintiff's remaining claims.  The trial court ruled that the worker could not recover, because he was not "using" the product at the time it caught fire. The court of appeals reversed.

     The appellate court examined several of the official comments to the Restatement (Second) of Torts § 402A (1965), which is the genesis of strict products liability in numerous states, including South Carolina. Considering the comments together, the court concluded that the legislature intended that the term "user" include persons who foreseeably could come into contact with the dangerous nature of a product. Therefore, a person who examines a product for warnings and other safety information is one whom the seller intends to use that information to avoid the dangers associated with the product and is therefore a person who foreseeably could come into contact with such dangers. A person who reads a warning for this purpose is not a casual bystander. Rather, the person "uses" the product by reading the warning.

     At the time he was injured, the plaintiff was examining bags of sodium bromate for information warning him that it would not be safe for him to work near them. The court held that in this respect, he used the product exactly as the suppliers intended. Because he was a "user" of the product, he was entitled to recover under the theory of strict liability, and the trial court erred in entering judgment for the suppliers.

     Lawing provides yet another example of why it is unwise to make assumptions regarding the possible scope of relief under products liability theories. Although perhaps surprising, it turns out that a person can use a product merely by looking at it. 

PRODUCTS LIABILITY UPDATE: The "Other Property" Exception to the Economic Loss Rule in Tort Claims

July 11, 2013

Jeremy Taylor, Senior Attorney, National Legal Research Group

The Court of Appeals of Wisconsin recently applied the economic loss rule in a products liability action by a homeowner's property insurer against the manufacturer of an allegedly defective water softener that leaked and damaged drywall, flooring, and woodwork in the home.  See State Farm Fire & Cas. Co. v. Hague Quality Water, Int'l, 2013 WI App 10, 826 N.W.2d 412.  The insurer, State Farm, brought only tort claims against the manufacturer.  The manufacturer defended on the basis that Wisconsin's economic loss doctrine precluded recovery under the plaintiff's theories.  The trial court granted the manufacturer's motion for summary judgment.  The court of appeals rejected the manufacturer's argument, holding that the insurer was entitled to proceed under its tort theories.

At the threshold, the court of appeals noted that the economic loss doctrine bars recovery of purely economic losses through tort remedies when the only damage is to the product purchased by the consumer.  Hence, the doctrine does not apply when a defect in the product causes personal injury or damage to "other property."  It was the "other property" exception with which the court was concerned in the case at hand.

The court noted that Wisconsin engages in a two-part analysis to determine whether damaged property constitutes "other property," so as to allow the pursuit of tort remedies.  First, courts consider whether the defective product and the damaged property are part of an "integrated system."  If they are, then the damaged property is considered to be the product itself and is not "other property."  If they are not, the court then examines the expected function of the product and asks whether the purchaser should have foreseen that the product could cause the damage at issue.  If so, then the damaged property is not "other property."  In order to be "other property," the damaged property must survive both tests.

As to the integrated-system test, the court of appeals concluded that the consumer's water softener was not part of an integrated system, because it had a function apart from the drywall, flooring, and woodwork in the home.  In other words, in order to come within the economic loss doctrine, a defective product must be part of a larger system, and if it lacks a function apart from its value in such a system, it is not "other property" for damage to which an action will lie in tort.  The court noted that property has been deemed to be part of an integrated system precluding a tort recovery when, for example, it consisted of cement that was part of pavers that had been damaged, a replacement gear in a printing press, and windows in a home.

As to the disappointed-expectations test, the court found that such test did not preclude the insurer's recovery under its tort theories.  This was so, according to the court, because the water softener was neither expected nor intended to interact with the drywall, flooring, and woodwork in the consumer's home.  The alleged failure of the water softener did not have anything to do with the purpose for which it was purchased.  The court observed that under the disappointed-expectations test, the economic loss doctrine precludes recovery if prevention of the risk at issue was one of the contractual expectations impelling the purchase of the defective product.  Because the water softener was not reasonably expected by the consumers to interact with the drywall, flooring, and woodwork of their home, the damage caused by the product was not merely disappointed expectations, and the economic loss rule did not preclude a tort recovery.  In this regard, the court stated that, although foreseeable interaction between the purchased product and the damaged property may be considered as a factor in the disappointed-expectations test, without more it is insufficient to bar a tort recovery.

PRODUCTS LIABILITY UPDATE: U.S. District Court in Texas Considers Numerous Choice-of-Law Issues in Applying Hawaii Substantive Law to Plaintiffs' Claims

February 5, 2013

Jeremy Taylor, Senior Attorney, National Legal Research Group

The U.S. District Court for the Northern District of Texas recently decided numerous choice-of-law issues in a products liability action brought by the family of a deceased helicopter pilot.  See Sulak v. Am. Eurocopter Corp., Act. No. 4:09-CV-651-Y, 2012 WL 4740176 (N.D. Tex. Oct. 3, 2012).  The decedent was a resident of Hawaii and was killed in Hawaii while piloting a helicopter manufactured and distributed by the defendants, who were located in France.  The decedent's family filed their action in Hawaii state court, and the defendants removed it to federal court in Hawaii.  The Hawaii federal court then transferred the action to the federal district court in Texas based on one defendant's insufficient contacts with Hawaii.

In light of the fact that the action ended up in federal court in Texas and that the crash had occurred in Hawaii, the court was faced with numerous choice-of-law issues involving both procedural and substantive questions.  Noting that it had jurisdiction over the lawsuit based upon federal diversity jurisdiction, the court stated that it was required to apply Texas choice-of-law rules to determine whether Texas or Hawaii law governed the plaintiffs' action.  Texas applies the most-significant-relationship test set forth in the Restatement (Second) of Conflict of Laws.  Under that analysis, it is not necessary that a single state's law control all substantive issues.  Each issue is, therefore, considered separately, and the state law that has the most significant relationship to the issue controls.

The court observed that under the Texas most-significant-relationship analysis, the law of the place of the injury governs questions of substantive law unless the policy considerations of the Restatement's choice-of-law principles show that another forum has a more significant relationship with such an issue.  The court contrasted this rule with the principle that the applicable procedural rules are those of the forum.  The court noted the general rule that if a Federal Rule of Civil Procedure or Evidence governs a disputed point, the Federal Rule is to be followed, even in diversity cases.  The court concluded that the Federal Rule of Evidence restricting the admissibility of subsequent remedial measures should govern in strict products liability cases.  The court also held that it would apply the Federal Rule of Civil Procedure governing the impleading of a third-party defendant, rather than Hawaii law governing the liability of third-party defendants, when the issue was not the substantive question of whether a potential third-party defendant was liable, but the procedural question of whether such a defendant could be impleaded.

Turning to the issue of the necessity of expert testimony to prove the existence of a defect in the product, the court noted that under Texas law, courts undertake a choice-of-law analysis only if there is a conflict of laws that actually affects the outcome of an issue.  The court found such a conflict regarding the requirement of expert testimony, in that Hawaii law does not always require such testimony to prove the existence of a product defect but Texas law does when the defect involves technical matters beyond the general experience of the jury.  Section 135 of the Restatement provides that the local law of the forum determines whether a party has introduced sufficient evidence to warrant a finding in his or her favor on an issue of fact.  The court concluded that Texas conflict-of-laws rules include the principle set forth in section 135 and found that the issue of the necessity of expert testimony is a question of the amount of evidence required to establish a defect, which is governed by the law of the forum.  Thus, the plaintiffs were required to present expert testimony to prove that there was a defect in the helicopter.

The court also addressed the issue of whether the plaintiffs were required to prove the existence of a safer, alternative design that would have prevented or significantly reduced the risk of injury.  Pursuant to Texas law, a plaintiff must prove that there was such a safer design.  Under Hawaii law, the existence of a safer design is merely a factor to be applied in determining whether a product was defective.  The court concluded that under Texas conflict-of-laws principles, Texas law applied to the issue because it was also one involving the sufficiency of evidence, pursuant to Restatement § 135.

Finally, the court turned to the choice-of-law issues regarding the questions of joint and several liability and comparative fault.  The court determined that under Texas conflict-of-laws rules as set forth in the Restatement, the court was required to consider specific qualitative factors to decide which state's law applied, since the general choice-of-law principles did not favor any one state.  Those factors were (1) that the place of the injury pointed to Hawaii, where the pilot worked and lived and where the crash occurred; (2) that the location of the conduct causing the injury was France, where the helicopter was designed and manufactured; (3) that the location of the parties implicated numerous fora; and (4) that the place of the parties' relationship was neutral.

As to the relevant specific factors, the court stated that under the governing Texas principles as set forth in the Restatement, the focus is primarily on balancing the competing interests of the policies of the forum and those of other interested jurisdictions.  Applying this test, the court found that Hawaii law applied to the issues of joint and several liability and comparative fault.  As to joint and several liability, Hawaii had a greater interest in seeing its pure comparative negligence damages policies enforced than Texas had in enforcing its percentage-based negligence scheme.  This was because the accident occurred in Hawaii, the deceased pilot was a resident of Hawaii, and the helicopter was operated and maintained in Hawaii.  Under the circumstances, Hawaii's interest in protecting those within its borders from defective products imported into the state was more substantial than Texas's interest, which arose largely because it was the litigation forum.  The court found that the same reasons favored the application of Hawaii law to the issue of comparative negligence.

Finally, the court determined that the factor protecting justified expectations was neutral because the parties had no expectations that the laws of a particular forum would be applied.  Second, the factor examining the needs of the interstate and international systems did not favor a particular forum.  And third, the factor analyzing certainty, predictability, and uniformity of result was of diminished importance because the parties likely did not give advance thought to the legal consequences of their transactions.

Sulak is thus an instructive decision on many choice-of-law issues that may arise in products liability litigation.  The court aptly discussed and applied the principles contained in the Restatement, which have been incorporated into the choice-of-law rules of most states.  The opinion is also helpful in distinguishing between procedural and substantive law for purposes of conflict-of-laws analysis.

PRODUCTS LIABILITY UPDATE: Sixth Circuit Finds Drug Manufacturer Entitled to Immunity Despite Claims of Fraud on the FDA

September 25, 2012

Jeremy Taylor, Senior Attorney, National Legal Research Group

The U.S. Court of Appeals for the Sixth Circuit recently decided that an immunity defense given to a drug manufacturer by a state statute was preempted by the Federal Food, Drug, and Cosmetic Act ("FDCA").  See Marsh v. Genentech, Inc., Nos. 11-2373, 11-2385, 11-2419, 11-2417, 2012 WL 3854780 (6th Cir. Sept. 6, 2012).  Therefore, the manufacturer's entitlement to immunity had to be analyzed under federal law, despite the existence of an applicable state immunity provision.

The plaintiffs were consumers who alleged that they suffered life-threatening side effects from their use of the defendant's psoriasis drug "Raptiva."  Raptiva worked by suppressing T cells to prevent them from migrating to the skin and causing psoriasis.  However, because T cells fight infection, their suppression has been linked to life-threatening side effects.  Following reports of such effects, including a rare brain infection in patients taking Raptiva, the defendant removed the drug from the market in 2009. 

One of the plaintiffs in the consolidated cases had begun using Raptiva in 2004 and later suffered viral meningitis and a collapsed lung.  She sued Genentech under the theory of strict liability, alleging defective design and failure to warn, and also under the theories of negligence, breach of warranty, and fraud.  She argued that both before and after approval of Raptiva by the Food and Drug Administration ("FDA"), the defendant had known of the dangerous side effects, concealed them from the public, and not included them in the drug's labeling.  The plaintiff further alleged that Genentech had failed to update statements of contraindications, warnings, precautions, and adverse reactions based upon what the defendant knew and that Genentech had negligently failed to comply with various FDA regulations. 

The manufacturer moved to dismiss on the ground that it was immune from liability under the Michigan Products Liability Act.  The state Act immunizes drug manufacturers from liability in products liability actions if the allegedly dangerous drug and its label were approved by the FDA and were in compliance with such approval at the time the drug left the manufacturer's control.  The statute contains exceptions to immunity that apply if a manufacturer (1) has intentionally withheld from or misrepresented to the FDA information concerning the drug that is required by the FDCA, and the drug would not have been approved if the information had been accurately submitted, or (2) makes an illegal payment to an official or employee of the FDA for the purpose of securing or maintaining approval of the drug.  The district court granted Genentech's motion to dismiss on the basis that neither statutory exception applied.  Citing Sixth Circuit precedent, the district court noted that federal law preempts state tort claims premised on the Michigan Act's exceptions unless there is a finding by the FDA itself that a manufacturer had committed fraud or bribery.  The district court determined that because the plaintiff did not allege that the FDA had found that the defendant had committed fraud, her claims were preempted. 

The Sixth Circuit affirmed.  Observing that federal law impliedly preempts a state law if the state law creates an unacceptable obstacle to the accomplishment and execution of the full purposes and objectives of Congress, the court noted that the FDCA authorizes the FDA to investigate and to penalize fraud in a drug manufacturer's disclosures or elsewhere in the drug approval process.  The court of appeals stated that unlike a common-law tort claim, a fraud-on-the-FDA cause of action exists solely by virtue of the FDCA's disclosure requirements for manufacturers seeking drug approval.  According to the court, the alleged wrong is inadequate disclosure to a federal agency, rather than breach of the common-law duty to exercise reasonable care.  The court noted that under the Michigan Act, fraud on the FDA is not an independent cause of action, but an exception to the immunity afforded to drug manufacturers if the statutory prerequisites to the exception are satisfied.  However, according to the court, the exception requires proof of fraud committed against the FDA.  Therefore, a plaintiff's fraud argument must be treated as a threshold claim subject to preemption by the FDCA.  Claims based upon federal findings of bribery or fraud on the FDA can defeat a manufacturer's immunity granted by the Michigan Act.  Because the plaintiff alleged no such findings, her fraud-on-the-FDA claim failed.

As to the plaintiff's separate claim that the defendant was not entitled to immunity under the state Act because the defendant did not comply with the FDA approval process, the court of appeals similarly concluded that the plaintiff's claim was preempted by federal law.  According to the court, the plaintiff's allegations that Genentech had failed to comply with the FDCA's postmarketing reporting requirements by concealing the dangerous side effects of Raptiva were premised on a violation of federal law and implicated the relationship between a federal agency and a regulated entity.  The court observed that the plaintiff's claim improperly asked the court to assume a role usually occupied by the FDA.

Finally, the court rejected the plaintiff's argument that under the state Act, manufacturer immunity based upon compliance with FDA approval is merely an affirmative defense, such that the plaintiff was not required to plead noncompliance sufficient to defeat immunity.  The court ruled that even if immunity were an affirmative defense, the manufacturer would be entitled to dismissal of the plaintiff's claims based on immunity.  In so holding, the court stated that although a manufacturer would normally bear the burden of establishing an affirmative defense, the plaintiff's response to the manufacturer's motion to dismiss anticipated the defense of immunity in a way that demonstrated that the plaintiff's response lacked merit.  According to the court, the plaintiff made an argument, which was preempted by the FDCA, that the manufacturer was not in compliance with the FDCA approval process. 

Marsh is an important reminder for both plaintiffs and defendants in defective drug cases that satisfying, or failing to satisfy, the elements of a state products liability immunity statute is governed by federal law, which likely preempts the state immunity provision.

PRODUCTS LIABILITY: State Law Claims Involving Hip Prosthesis Preempted by the Medical Device Amendments to the FDCA

The Lawletter Vol 37 No 3

Jeremy Taylor, Senior Attorney, National Legal Research Group

The U.S. District Court for the Western District of Pennsylvania recently decided a case involving issues of preemption under the Medical Device Amendments ("MDA") to the Federal Food, Drug, and Cosmetic Act ("FDCA").  See Gross v. Stryker Corp., Civ. No. 11-1229, 2012 WL 876719 (W.D. Pa. Mar. 14, 2012).  The case is important because it explains clearly both the grounds upon which a manufacturer may defend on the basis of MDA preemption and the basis upon which a plaintiff may circumvent the preemptive effect of the statute in bringing state tort claims.

In Gross, the plaintiff had received an implantation of an artificial hip prosthesis manufactured by the defendant.  The plaintiff alleged that the device was defective and that the defect had caused him to suffer a serious infection at the operation site, with attendant pain and the necessity of a corrective procedure.  The plaintiff sued under state law theories of strict liability, negligence, and breach of express and implied warranties.

The defendant argued that the plaintiff's state law claims were preempted by the MDA.  The MDA contains an express preemptive section, which provides that no State may establish any requirement for a medical device that is different from or in addition to any requirement imposed under the FDCA and that relates to the safety or effectiveness of the device.  See 21 U.S.C. § 360k(a).  The court agreed that the plaintiff's claims were preempted by the MDA.

Initially, the court noted that for a state cause of action to be preempted by the MDA, the medical device at issue must have been subject to specific federal requirements related to its safety and effectiveness and the plaintiff's claim must be premised on state law that imposes different requirements.  The court noted that, generally, state common-law claims contesting the safety and effectiveness of a device that received approval under the premarket approval process ("PMA") conducted by the Food and Drug Administration ("FDA"), such as the hip prosthesis at issue in the case at hand, are subject to express preemption.  This is because questions regarding a device's safety and effectiveness are requirements addressed in the PMA.

The court concluded that the plaintiff's state breach-of-implied-warranty claim imposed a requirement different from or in addition to the federal requirements and, therefore, was preempted by the MDA in light of the fact that Pennsylvania's "below commercial standards" requirement was not the same as the standards imposed by the FDA.  The court similarly concluded that the plaintiff's negligence claim ran afoul of the preemptive reach of the MDA, given that the plaintiff alleged that the defendant had been negligent in placing the device into the stream of commerce when it contained unsafe manufacturing residuals or bacteria.

The court observed, however, that the MDA does not preclude all state law claims against the manufacturer of a medical device.  According to the court, a plaintiff may premise a state claim on an allegation that the manufacturer violated FDA regulations, since the duties asserted by such a claim would parallel, rather than add to, the federal requirements.  In order to state such a claim, a plaintiff may not merely recite that the defendant violated FDA regulations but must set forth facts showing action or inaction in the defendant's efforts to take part in the PMA or to implement its results.  In the case under consideration, the plaintiff failed to state such a claim because he did not allege which precise duty the defendant had violated.  Although the complaint averred that the defendant had breached FDA duties pursuant to current good-manufacturing-practice requirements, the court noted that these do not constitute a formal performance standard for a specific device, with which the manufacturer must comply.

PRODUCTS LIABILITY UPDATE: U.S. Court of Appeals Affirms $16.5 Million Pain and Suffering Award to Injured User of Anti-Inflammatory Drug

June 5, 2012

Jeremy Taylor, Senior Attorney, National Legal Research Group

The U.S. Court of Appeals for the First Circuit recently affirmed a $21.06 million judgment, including $16.5 million for pain and suffering, in favor of a plaintiff who suffered severe injuries resulting from her use of "sulindac," the defendant's generic anti-inflammatory drug.  See Bartlett v. Mut. Pharm. Co., No. 10-2277, 2012 WL 1522004 (1st Cir. 2012).  Sulindac is known to cause a hypersensitivity reaction called Stevens-Johnson Syndrome and a related disease called toxic epidermal necrolysis ("SJS/TEN").  In December 2004, the plaintiff's physician prescribed sulindac under the brand name Clinoril for pain in the plaintiff's shoulder, and the plaintiff's pharmacist dispensed generic sulindac.

According to the court, the consequences for the plaintiff were "disastrous."  The plaintiff developed SJS/TEN early in 2005.  The court noted that TEN is diagnosed when 30% or more of the outer layer of skin on a patient's total body surface area has deteriorated, been burned off, or turned into an open wound.  The plaintiff suffered TEN over 60% to 65% of her body.  She was hospitalized for 70 days, including over 50 days in the burn unit.  She suffered permanent injuries, including permanent near-blindness, esophageal burns, vaginal and lung injuries, and disfigurement.  The plaintiff was unable to have sexual relations or to read, drive, or work.  The plaintiff asserted multiple causes of action against the manufacturer in New Hampshire state court.  The defendant removed the case to the federal district court.  After removal, all claims but the plaintiff's defective-design cause of action were dismissed on summary judgment or voluntarily by the plaintiff.

Initially, the court of appeals noted that under the governing New Hampshire law, the plaintiff, who alleged that sulindac was defectively designed, was required to show that the drug was unreasonably dangerous due to its propensity to cause SJS/TEN.  However, she was not required to establish that there existed an alternative, safer design for the drug.  In reaching this conclusion, the court rejected the manufacturer's argument that a safer alternative is an essential element of a design-defect claim, over and above the existence of an unreasonably dangerous product.  Hence, the district court had correctly permitted the plaintiff to establish that the sulindac was in a defective condition because it was unreasonably dangerous due to its propensity to cause SJS/TEN.  Interestingly, on the eve of trial, the defendant abandoned a potential defense that the drug was unavoidably unsafe but was sold with an adequate warning.

The court next addressed the defendant's assertion that the plaintiff's state law claim was preempted by the Federal Food, Drug, and Cosmetic Act ("FDCA").  Citing the Supreme Court's conclusion in Wyeth v. Levine, 555 U.S. 555 (2009), that Congress did not intend Food and Drug Administration ("FDA") oversight to be the exclusive means of ensuring drug safety and effectiveness, the court of appeals extended the holding of Wyeth, which involved a failure-to-warn claim, to the design-defect claim at issue in the case under consideration.  In so doing, the court noted that in a later decision, the Supreme Court had created an exception to Wyeth for failure-to-warn claims against generic drug manufacturers, on the theory that Congress wanted to reduce medical costs by spurring the manufacture and marketing of generic drugs and that requiring a generic drug manufacturer to pay damages under state law would suppress the development of such drugs, given that a generic drug manufacturer cannot alter the approved labeling of the brand-name drug.  The Bartlett defendant argued that this exception should also apply to design-defect claims involving generic drugs because the manufacturer of such a drug similarly cannot alter the composition of the brand-name drug.  The court observed, however, that while the defendant could not legally make sulindac with another composition, it could choose not to manufacture and sell the drug at all.  According to the court, the FDCA might permit States to tell the defendant that it should not be manufacturing the drug if the applicable risk-benefit analysis weighs against making and selling the drug.  Although it noted that such an analysis is second-guessing the FDA, the court returned to the fact that Wyeth resolved the conflict against general preemption.  On balance, the court of appeals concluded that the Wyeth Court had adopted a general, no-preemption stance, and said that it is up to the Supreme Court to decide whether the exception to the absence of preemption is to be extended to design-defect claims involving generic drugs.

The court of appeals further concluded that the district court did not commit plain error in instructing the jury that it could consider the FDA's requirements for drug labels in determining whether the warning on the allegedly defective sulindac mitigated the drug's unreasonably dangerous condition.  The court also held that the district court did not plainly err in failing to instruct the jury that the manufacturer could not legally change the drug's label.  The court noted that the jury instructions made clear that the label was relevant to the design-defect claim since, although unalterable by the defendant, the label's arguable inadequacies put limits on the extent to which the drug's dangerousness was offset by adequate warnings.

As to the issue of damages, which figured so prominently in the case, the court recounted the plaintiff's "truly horrific" injuries in affirming the largest damages award in New Hampshire history.  The plaintiff's burn surgeon described her time in treatment as "hell on earth."  2012 WL 1522004, at *10.  Moreover, the permanent damage she suffered was severe.  In light of these facts, the court found that the outcome of the case was "not surprising" or, with respect to sulindac, "patently alarming."  Id.  The court noted that sulindac is a recognized and leading cause of SJS/TEN and that the drug carries other risks as well.  In light of the evidence, the jury's award of $16.5 million for pain, suffering, and loss of enjoyment of life was not excessive.

PRODUCTS LIABILITY: Federal Law Preempts Texas Fraud-on-the-FDA Rebuttal Statute

The Lawletter Vol 36 No 11

Jeremy Taylor, Senior Attorney, National Legal Research Group

The U.S. Court of Appeals for the Fifth Circuit recently decided a case involving the issue of federal preemption of a state products liability statute requiring a plaintiff in a failure-to-warn case against a drug manufacturer to assert that the manufacturer withheld material information from the Food and Drug Administration ("FDA") or misrepresented such information to the agency.  See Lofton v. McNeil Consumer & Specialty Pharms., No. 10-10956, 2012 WL 579772 (5th Cir. Feb. 22, 2012).  The family of a man who died of a severe autoimmune allergic reaction after taking the defendant's over-the-counter drug, Motrin, brought an action against the manufacturer, alleging that the defendant had failed to warn consumers about the risk of such severe autoimmune reactions to the drug.  The plaintiffs sued under Texas state law, alleging negligence and strict products liability.

The court of appeals noted that under Texas statutory law, there is a rebuttable presumption that a drug manufacturer is not liable for failing to warn about the risks of its product if the FDA has approved the warnings or information furnished in the sale of the drug.  The Texas statute allows a plaintiff to rebut this presumption by establishing that the manufacturer withheld from, or misrepresented to, the FDA required information material and relevant to the performance of the product and that the manufacturer's act was causally related to the plaintiff's injury.  The defendant manufacturer raised the Texas statutory presumption of nonliability as an affirmative defense, and the district court determined that the prerequisites to the presumption were satisfied because the manufacturer had complied with all FDA requirements governing the labels of the drug.  The district court then held that the rebuttal portion of the statute was preempted by federal law.  The court concluded that the Supreme Court's decision in Buckman Co. v. Plaintiffs' Legal Committee, 531 U.S. 341 (2001), extended preemption to fraud-on-the-FDA claims involving drugs, and noted that the FDA had rejected a 2005 Citizen's Petition requesting that the FDA strengthen labeling requirements for the defendant's drug.  Because the plaintiffs were asking the court to reach a conclusion opposite to that reached by the FDA, the district court determined that the Texas rebuttal statute that potentially allowed such claims was preempted.

The court of appeals affirmed.  The court found that the Texas rebuttal statute was a fraud-on-the-FDA provision.  According to the court, the rebuttal statute eliminates the presumption that a drug manufacturer is not liable only in cases where the defendant committed the same fraud that federal law empowers the FDA to punish and to deter.  The court observed that state tort claims are impermissible if they exist solely by virtue of disclosure requirements contained in the Federal Food, Drug, and Cosmetic Act.  The court concluded that in cases like the one under consideration, where the FDA has not found fraud, the threat of imposing state liability on a drug manufacturer for committing fraud on the FDA intrudes on the competency of the FDA and its relationship with regulated drug manufacturers.  The court held, therefore, that the Texas rebuttal statute is preempted unless the FDA has itself found fraud on the part of a drug manufacturer.

PRODUCTS LIABILITY UPDATE: Fifth Circuit Reverses District Court's Judgment That Hip Replacement Claims Were Preempted by Medical Device Amendments

February 21, 2012

Jeremy Taylor, Senior Attorney, National Legal Research Group

The U.S. Court of Appeals for the Fifth Circuit recently ruled that some state law claims by a patient who had allegedly received a defective hip replacement survived federal preemption.  See Bass v. Stryker Corp., No. 11-10076, 2012 WL 266985 (5th Cir. Jan. 31, 2012).  The plaintiff sued the company that had designed, manufactured, and marketed a hip prosthesis that malfunctioned after it was surgically implanted into the plaintiff's body.  He brought his action in the U.S. District Court for the Northern District of Texas under various theories, including strict products liability, negligence, breach of warranty, and violation of the Texas Deceptive Trade Practices Act.  The defendant moved to dismiss, arguing that all of the plaintiff's claims were preempted under Medical Device Amendments ("MDA"), 21 U.S.C. § 360k(a), to the Food, Drug & Cosmetics Act ("FDCA").  The defendant asserted that the state law claims were preempted in light of the U.S. Supreme Court's interpretation of the MDA's preemptive reach in Riegel v. Medtronic, Inc., 552 U.S. 312 (2008).  The district court granted the manufacturer's motion to dismiss on the basis of preemption.  The Fifth Circuit reversed in part, concluding that certain of the plaintiff's causes of action survived MDA preemption.

The court of appeals first noted that a state tort claim to recover for injuries allegedly caused by a medical device is preempted if (1) the federal government has established requirements applicable to the device, and (2) the claims are based on state law requirements that are different from or in addition to the federal requirements and that relate to safety and effectiveness.  Devices that are approved through the premarket approval ("PMA") process of the Food and Drug Administration ("FDA") automatically satisfy the federal-requirements prong of MDA preemption.  The court of appeals found that the district court had correctly determined that the hip replacement device at issue was subject to the PMA process and, for that reason, satisfied the federal-requirements element of preemption.

The court then noted, however, that the preemption provision of the MDA does not prevent a State from providing a damages remedy for claims grounded upon violation of the FDA regulations pertaining to a medical device.  According to the court, state duties in such a case are parallel to, rather than in addition to, the federal requirements.  In order to plead a valid parallel claim beyond the reach of MDA preemption, a plaintiff's allegations must be plausible within the meaning of the rules governing a motion to dismiss.  The court concluded that the plaintiff had sufficiently pleaded parallel claims insofar as his claims were based upon manufacturing defects resulting from a violation of the FDA regulations.  The court noted that the plaintiff had alleged that his injury had been caused by the hip replacement's failure to attach to his bone because the component at issue had been adulterated in violation of specific FDA regulations.  The court explained that if a plaintiff pleads that a manufacturer of a Class III Medical Device, which are all subject to the PMA process, failed to comply with either the specific processes and procedures approved by the FDA or the Current Good Manufacturing Practices promulgated by the FDA and that such failure was the cause of the plaintiff's harm, then the plaintiff has pleaded a sufficient parallel claim for purposes of MDA preemption.

In light of this analysis, the court concluded that the only strict liability claims that survived MDA preemption were the plaintiff's manufacturing defect claims premised on the defendant's alleged violations of FDA regulations and requirements.  The plaintiff's warning claims, by contrast, imposed a requirement in addition to those approved by the FDA, i.e., a duty to warn consumers if a device is adulterated.  For the same reason, the court held that the MDA preempted the plaintiff's negligence causes of action to the extent that they were premised upon a failure to warn.  However, insofar as the plaintiff alleged negligence in manufacturing the device, such allegations constituted parallel claims that did not impose requirements different from or additional to those imposed by the FDA, and, for that reason, they survived preemption.

As to the plaintiff's cause of action for breach of implied warranty, the court explained that such a claim is not preempted if a plaintiff alleges that the device manufacturer violated federal requirements and the plaintiff can demonstrate a causal nexus between that violation and the breach of implied warranty.  If, however, a plaintiff alleges that the defendant breached the implied warranty despite its compliance with FDA requirements, then the claim is preempted by the MDA.

The court employed a similar analysis with respect to the plaintiff's cause of action under the state Deceptive Trade Practices Act.  According to the court, the MDA preempted the plaintiff's cause of action to the extent that the plaintiff's claims relied upon misrepresentations by the defendant, in that such a cause of action is essentially one for a failure to warn, which is preempted by the FDA warning requirements.  However, to the extent that the claim was based on a breach of the implied warranty, it would be permitted to proceed to the extent that it was founded upon violations of the federal requirements.

PRODUCTS LIABILITY: Determining Federal Preemption in a State Tort Passenger Seatbelt Action

The Lawletter Vol 36 No 5

Jeremy Taylor, Senior Attorney, National Legal Research Group

The New York Court of Appeals recently addressed the issue of federal preemption in a case brought by bus passengers alleging that the bus in which they had been riding was defective because it did not have passenger seatbelts.  See Doomes v. Best Transit Corp., N.Y. Slip Op. 07256, 2011 WL 4916002 (N.Y. Oct. 18, 2011) (subject to revision before publication).  The plaintiffs were injured when the bus veered across the highway and rolled over several times after the driver fell asleep and lost control of the vehicle.  The passengers brought a products liability action against the manufacturer who had completed the construction of the bus, asserting that the defendant had breached the warranty of fitness for ordinary purposes by failing to install passenger seatbelts in the bus.  The bus had a seatbelt for the driver, as required by the Federal Motor Vehicle Safety Standards ("FMVSS").  The FMVSS do not, however, require passenger seatbelts in a bus.  The manufacturer appealed a verdict in the plaintiffs' favor, arguing that the state law claims grounded upon the absence of passenger seatbelts were preempted by the federal regulations.  The appellate division reversed the judgment in favor of the plaintiffs, and the court of appeals granted the plaintiffs leave to appeal.  The court of appeals reversed the judgment of the appellate division on the question of preemption.

The court of appeals noted that state tort claims may be preempted by federal law by either express or implied preemption.  As to express preemption, the court noted that preemptive intent is discerned from the plain language of a statute.  Implied preemption, by contrast, may be found either when the federal legislation is so comprehensive in scope that it is inferable that Congress wished to fully occupy the field of its subject matter, or when state law conflicts with the federal law.  Such a conflict may be found (1) when it is impossible for a private party to comply with both state and federal requirements, or (2) when state law stands as an obstacle to the accomplishment and execution of the full purposes and objectives of Congress.  The court found that the National Traffic and Motor Vehicle Safety Act ("the Act"), under which the FMVSS were preempted, did not expressly preempt state products liability law, because the Act's saving clause, in conjunction with the statute's preemptive provision, permitted the maintenance of common-law claims.

As to implied preemption, the court held that the plaintiffs' state law claims were not preempted under the principle of field preemption, because the Act was not intended to encompass the entire scheme of motor vehicle safety guidelines.  Regarding conflict preemption, the court held that the requirement under the FMVSS for driver seatbelts in buses does not preempt claims that a bus was defective because it did not come equipped with passenger seatbelts.  According to the court, the relevant regulations are "absolutely silent" as to a requirement for passenger seatbelts.  Thus, it is not impossible for a bus manufacturer to comply with both the federal standard, requiring a driver's seatbelt, and the principle articulated in the plaintiffs' claims, that seatbelts should have been installed for passengers, as well.
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