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On October 15, CCL Chief Litigation Counsel Louis Bograd appeared in New Jersey Superior Court, Appellate Division, in Newark to argue for affirmance of an order denying motions to dismiss or for summary judgment in the consolidated In re Reglan Litigation. In both May 2012 and May 2013, Judge Carol Higbee, who was in charge of the consolidated litigation, denied dispositive motions filed by numerous manufacturers of generic metoclopramide on grounds of federal preemption. Judge Higbee ruled that generic drug manufacturers that had not revised their labeling to include warnings approved by the FDA for the Reglan label in 2004 were subject to failure-to-warn claims and that such claims were not preempted. Defendants successfully applied for interlocutory review of those orders, claiming that the trial court’s rulings were incorrect under Buckman Co. v. Plaintiffs’ Legal Committee. CCL Attorney Bograd explained to the Appellate Division that defendants’ arguments were based on a false characterization of plaintiffs’ claims: Plaintiffs were not suing because the labeling on generic metoclopramide violated the federal duty of “sameness” (that the labeling match that of Reglan), but rather for violation of the state law duty to provide consumers of the drugs, and their doctors, with adequate warnings of metoclopramide’s risks. A decision is expected within a few months.

On October 8, the DC Bar Tort Law Section hosted a program entitled, “Life After Stengel: An Update on Preemption Tactics for Drug and Device Lawyers.” The panelists included CCL’s Andre M. Mura, who presented the plaintiff bar’s perspective; Mayer Brown LLP’s Andrew E. Tauber, who presented the defense bar’s perspective; and Ashcraft & Gerel LLP’s Peter Anderson, who moderated. 

CCL’s Robert S. Peck told congressional staffers attending a Supreme Court preview that the term contained no blockbuster cases yet and seemed to have focused on when statutory language is to be given a precise textual meaning or when a rule of reason is to be applied to accomplish congressional intent. One case discussed at the session, sponsored by the Civil Justice Caucus, was Yates v. U.S., where a commercial fisherman was charged with violating the Sarbanes-Oxley Act for destroying undersized fish before he got to port. The Act prohibits the destruction of records, documents and “other tangible things” that are part of an investigation.  The Court must decide whether fish constitute “other tangible things” within the contemplation of the Act. The case recalls last term’s decision in Bond v. U.S., where a woman who painted a toxic chemical onto the mailbox of her neighbor in seeking revenge for having an affair with her husband had been charged with violating the Chemical Weapons Treaty. In Bond, the Court found that the prosecutor had been overzealous in charging the woman with that offense and held that her actions did not amount to use of chemical weapons.

In two other cases discussed at the forum, the Court will decide whether a federal agency’s re-interpretation of one of its regulations requires notice-and-comment rulemaking pursuant to the Administrative Procedure Act before it can be applied. 

In a reply brief filed October 3, CCL told the Indiana Court of Appeals that the State’s brief misunderstands the issue raised in CCL’s challenge to the aggregate cap in the state’s Tort Claims Act.  The State’s brief defended the right of the State to limit its damages on both a per-individual and per-occurrence basis, even if that results in different limits for similarly injured persons.  CCL’s opening brief argued that the differential treatment of claimants constituted a violation of the state constitution’s Equal Privileges and Immunities Clause.

The case arises from the stage collapse at the 2009 Indiana State Fair after a tornado suddenly appeared as crowds were gathered for an evening concert.  Seven people were killed, and another 58 were injured in the incident. The Tort Claims Act limits the State’s liability to $700,000 per person and $5 million per incident. Because of the large number  of people injured, the State attempted to settle claims by distributing the $5 million aggregate cap on a pro rata basis, after allocating $350,000 to every wrongful death claim.  Plaintiff Jordyn Polet, who was offered about $1,600 on a claim estimated to be worth $100,000, was the only claimant who refused the settlement offer. Her offer was then redistributed among the settling claimants, who later received another $6 million appropriated by the legislature after it determined the original $5 million was insufficient. When Polet sought to sue under the Tort Claims Act, the State asserted an affirmative defense, claiming that she lost her cause of action when she refused the settlement offer and that the overall $5 million cap means that the State has expended its entire responsibility, foreclosing further claims.

In reply, CCL argues that Polet has an accrued, valid cause of action because the Tort Claims Act unequivocally waived the State’s immunity and that a rejected settlement offer cannot divest her of that claim. Citing the state constitution’s Open Courts provision, the brief indicates that her interest in making a claim vested at the time of the injury and could not be alienated from her by the State’s attempts to settle the case. In response to the State’s claim that its interest in protecting the public fisc overrode all other considerations, CCL’s brief pointed out that this would give the State plenary authority  to set up its tort claims act caps any way it wants, including on a first come, first served basis. Thus, the CCL brief points out, if the day before the present tragedy at the State Fair, only five people were injured when the same stage collapsed and were thus eligible for up to $700,000 in compensation each, the State was free to settle with six of them for $200,000 apiece, and a lone claimant who refused that settlement would still have a cause of action to prove liability and damages above the $200,000 offer because the aggregate cap would not kick in. However, if the stage collapses again the following day after a failure to remedy the previous day’s problem, rendering the negligence more egregious, and 65 more people are injured this time, it is the State’s position that they are free to offer each an even pro rata settlement of less than $77,000 each, redistribute the leftover $77,000 to those willing to settle, and leave the single claimant who refused the settlement without any recourse, solely because the aggregate cap now applies and changes everything. CCL contends that such an approach is inconsistent with the Equal Privileges right.

CCL’s Robert S. Peck is counsel for Polet, along with Anthony Patterson of Indianapolis.  A date for oral argument has not yet been set.

On October 1, CCL filed a petition for review in Hughes v. Pham, urging the California Supreme Court to grant review of the constitutionality of the state’s $250,000 cap on noneconomic damages in medical malpractice cases under the state constitutional right to trial by jury and the separation of powers doctrine. In the trial court, a jury determined that the plaintiffs were entitled to $3.75 million in damages for noneconomic injuries that included permanent paralysis, pain and suffering, and loss of consortium. Applying California’s cap, the trial judge reduced this portion of the jury’s verdict to $500,000: $250,000 for each plaintiff. The court of appeal recently affirmed the trial court’s decision.

The petition for review on the constitutional issues was written by CCL Senior Litigation Counsel Valerie M. Nannery. The petition argues that the court should grant review to resolve the proper interpretation of the state’s “inviolate” right to a jury trial under the California Constitution, a ground on which it has never reviewed the 1975 cap. The court of appeal’s unpublished decision said that the right to a jury trial “may be modified in furtherance of a legitimate state interest,” a standard not employed in any decision of the California Supreme Court when examining whether the jury trial right is violated and demotes the constitutional provision to the status of mere legislation. The petition urges the court to grant review of the constitutional issues to correct the misapplication of its own precedents and to restore the right to jury trial to the inviolate position that the framers expressed.

Though the damage cap is nearly four decades old, the California Supreme Court has never resolved the constitutional issues presented in the petition. The highest courts of other states, including Georgia and Missouri, recently have struck down caps on damages because they violate the same “inviolate” right to a jury trial protected by their state constitutions. It is time for the California Supreme Court to finally resolve these issues, the Petition argues.

In addition to CCL’s Nannery, the plaintiffs are represented by trial counsel David Bricker of Waters Kraus & Paul in Los Angeles, CA and Burt Rosenblatt of Ely, Bettini, Ulman & Rosenblatt in Phoenix, AZ, as well as Steven B. Stevens in Los Angeles, CA on other issues in the appeal. 

On September 16, the U.S. Court of Appeals for the Eleventh Circuit heard oral argument in a challenge to a Florida law that went into effect in July 2013 and requires potential medical malpractice plaintiffs to file an authorization that would allow the defense team to conduct ex parte interviews with the plaintiff’s treating physicians, including those from two years before the alleged malpractice incident, beginning during the 90-day period before a lawsuit may be filed and lasting throughout the duration of the suit.  Late last year, U.S. District Court Judge Robert Hinkle declared the Florida statute null and void because it was preempted by the federal Health Insurance Portability and Accountability Act, known as HIPAA.  CCL’s Robert S. Peck argued the case before Judge Hinkle and reprised his argument before the Eleventh Circuit.

Representing the State of Florida, Deputy Solicitor General Diane DeWolf argued that the mandatory authorization required by state law might coerce a plaintiff into giving up privacy rights, but that the State could insist on that requirement to go to court as a condition precedent to filing a lawsuit.  She argued this type of coercion is not unlike other forms of coercion that HIPAA permits.  Eric Bartenhagen, representing the defendant doctor, agreed, claiming that a HIPAA-compliant authorization was a legitimate way for the State to enforce its interests in giving defense counsel equal access to the plaintiff’s doctor that the plaintiff’s lawyer had.

Peck countered these arguments by emphasizing that Congress had made a judgment to set national standards to protect the privacy of private health information and expressly preempted state law unless it was more stringent that federal law in its protection of privacy.  In recognizing that there were legitimate needs for that information, the Department of Health and Human Services wrote specific procedures that had to be followed in judicial proceedings, which included obtaining a court order before inquiries beyond standard discovery could take place.  The authorization procedure adopted by Florida, Peck said, impermissibly by passed the procedures required in judicial proceedings in a manner that no federal court and no state appellate court, save that of Texas, had found that a mandatory authorization was a legitimate alternative to following the specific procedures applicable to judicial proceedings.

The case was taken under advisement.

CCL filed its reply brief in support of its petition for certiorari in Sanchez v. United  States, No. 13-1249, September 4, asking the U.S. Supreme Court to grant full review of this case, which raises the availability of equitable tolling under the Federal Tort Claims Act (FTCA).  At the end of June, the Court granted review in two cases raising the same issue.  In United States v. Wong, set for oral argument on December 10, 2014, the Court will consider whether equitable tolling is available to plaintiffs who filed their original complaint about negligence at the hands of the Immigration and Naturalization Service prematurely, before their administrative complaint had reached disposition, and then again a month after the applicable six-month statute of limitations had expired.  In United States v. June, to be argued the same day, the plaintiff had brought an action against the Federal Highway Administration after it disclosed its earlier decision that a highway barrier, which failed and caused a fatality, had met national standards was erroneous. The disclosure occurred after a two-year statute of limitations had expired.  In both cases, the U.S. Court of Appeals for the Ninth Circuit had found equitable tolling applied to permit the cases to go forward. The United States successfully sought certiorari in both cases, setting up the upcoming arguments in the Supreme Court.

In Sanchez, CCL’s client, a woman, who was a doctor herself, died giving birth because her private doctors allegedly committed malpractice. The case was filed within the three-year statute of limitations applicable in Massachusetts.  However, because the doctors worked for a private community health clinic that received a particular type of federal grant, federal law deemed them federal employees for purposes of any malpractice lawsuit.  Thus, after the case was filed in state court, the United States substituted itself as defendant, removed the case to federal court, and won its dismissal because it was not filed within the two-year statute of limitations applicable to FTCA actions.  The First Circuit affirmed, joining the view expressed by the Seventh Circuit, that medical malpractice lawyers must make efforts to determine whether private doctors can be deemed federal employees, although the opinion acknowledged that this was a “trap for the unwary” and that most efforts to determine federal cloaking of this sort are unlikely to succeed. The United States opposed review – or even the holding of the case during the pendency of Wong and June – because there was no evidence that plaintiffs’ counsel undertook any effort to discover the hidden federal status of the decedents otherwise private doctors.

In urging the Court to take the case nevertheless, CCL’s Robert S. Peck argued that the issue of deemed federal status was distinct and more prevalent than the bases for equitable tolling at issue in Wong and June, that the United States and First Circuit had asserted a requirement for maximum feasible diligence, rather than the proper reasonable diligence standard, that reasonable diligence was met by the extraordinary effort that is required to bring a medical malpractice case, as the Second and Third Circuits had recognized in similar cases, and that there should be no requirement to mount efforts that will only prove futile to claim equitable relief. To require more, the brief argued “borders on requiring extreme diligence or, more likely, clairvoyance.”

The case is scheduled for review by the Court on September 29, during what is known as the “Long Conference,” where the justices review petitions accumulated over the summer.  

In an unpublished opinion issued on August 22, California’s Fourth District Court of Appeal, Division Two, upheld the state’s $250,000 cap on noneconomic damages in medical malpractice cases against constitutional challenges based on the state constitutional rights to trial by jury and equal protection, and the separation of powers doctrine.

The most problematic part of the opinion is the court’s analysis of the California Constitution’s self-described “inviolate” right to a jury trial. The court of appeal said that the right to a jury trial “may be modified in furtherance of a legitimate state interest,” a standard that has never been used by the California Supreme Court when examining whether the jury trial right is violated and demotes the constitutional provision to the status of legislation. The court’s analysis ignores what was preserved when the right to jury trial was placed in the state constitution, secure from legislative intrusions. The court of appeal’s decision stands in stark contrast with recent decisions from the highest courts of other states that also have an “inviolate” right to a jury trial protected by their state constitutions.

The appeal came after a jury determined that the plaintiffs were entitled to $3.75 million in damages for noneconomic injuries that included permanent paralysis, pain and suffering, and loss of consortium. Under California’s cap, the trial judge reduced this portion of the jury’s verdict to $500,000: $250,000 for each plaintiff.

The plaintiffs are represented by CCL’s Valerie M. Nannery, David Bricker of Waters Kraus & Paul in Los Angeles, CA, Burt Rosenblatt of Ely, Bettini, Ulman & Rosenblatt in Phoenix, AZ, and Steven B. Stevens in Los Angeles, CA. 

On August 15, the Alabama Supreme Court reaffirmed, 6-3, its 2013 ruling in Wyeth, Inc. v. Weeks that the manufacturer of a brand-name prescription drug may be held liable for misrepresentation to a person who has been injured by the equivalent generic drug as a result of his physician’s reliance on the brand-name manufacturer’s representations. After the court had agreed to rehear the case, CCL submitted an amicus brief on behalf of the American Association for Justice in support of reaffirmance, coauthored by CCL Chief Litigation Counsel Louis Bograd and Mobile, Alabama attorney David Wirtes. Today’s opinion largely tracks the argument in the AAJ amicus brief. 

The Alabama Supreme Court began its analysis by noting that plaintiff Weeks’ claim was for misrepresentation, not a products liability action: “This is not a claim that the drug ingested by Danny was defective; instead, it is a claim that Wyeth fraudulently misrepresented or suppressed information about the manner in which (i.e., the duration) the drug was to be taken.” The Court then concluded that Weeks’ claim satisfied all of the traditional elements of fraudulent misrepresentation under Alabama law. The Court first determined that it was reasonably foreseeable that Weeks’ physician would rely on Wyeth’s representations in prescribing the generic equivalent: 

the labeling for a generic drug is required by federal regulations to be the same as the labeling for the brand-name drug. Therefore, an omission or defect in the labeling for the brand-name drug would necessarily be repeated in the generic labeling, foreseeably causing harm to a patient who ingested the generic product. A brand-name manufacturer is well aware of the expiration of its patent and well aware that a generic version of the drug will be made when that patent expires. It is recognized that generic substitutions are allowed in all 50 states. A brandname manufacturer could reasonably foresee that a physician prescribing a brand-name drug (or a generic drug) to a patient would rely on the warning drafted by the brand-name manufacturer even if the patient ultimately consumed the generic version of the drug.

The Court next rejected Wyeth’s argument that it could not be liable because it made no representations at all to the plaintiff:

Wyeth's argument completely ignores the nature of prescription medication. The Weekses cannot obtain Reglan or any other prescription medication directly from a prescription-drug manufacturer. The only way for a consumer to obtain a prescription medication is for a physician or other medical professional authorized to write prescriptions (i.e., a learned intermediary) to prescribe the medication to his or her patient. This Court has adopted the learned intermediary doctrine, which provides that a prescription-drug manufacturer fulfills its duty to warn users of the risk associated with its product by providing adequate warnings to the learned intermediaries who prescribe the drug and that, once that duty is fulfilled, the manufacturer owes no further duty to the ultimate consumer. When the warning to the prescribing health-care professional is inadequate, however, the manufacturer is directly liable to the patient for damage resulting from that failure.

Finally, the Alabama Supreme Court rejected the argument that Wyeth owed no duty to the user of a generic drug. Under Alabama law, the Court declared:

there is a duty not to make a false representation (1) to those to whom a defendant intends, for his own purposes, to reach and influence by the representation; (2) to those to whom the defendant has a public duty created by statute or pursuant to a statute; and (3) to those members of a group or class that the defendant has special reason to expect will be influenced by the representation.

Wyeth clearly owed a duty to the Plaintiff under this standard.

The issue came to the Supreme Court on a certified question from the U.S. District Court for the Middle District of Alabama. The case will now return to that court for further proceedings.

Representing the Tort Trial and Insurance Practice Section (TIPS) as its senior delegate, CCL President Robert S. Peck successfully presented three resolutions to the American Bar Association House of Delegates during the bar’s annual convention in Boston, winning overwhelming support for the importance of the right to a jury trial, making greater efforts to increase professionalism among lawyers, and promulgating clear and timely procedures for obtaining disqualification of judges who may have an appearance of impropriety.

On August 10, at the end of the first day of the House meeting, Peck moved a resolution that recognizes the fundamental nature of the jury-trial right and opposed its suspension or delay for fiscal reasons.  In arguing in favor of the resolution, Peck quoted a 1986 decision of the Ninth Circuit, that held that “the availability of constitutional rights does not vary with the rise and fall of account balances in the Treasury.” Armster v. U.S. District Court, 792 F.2d 1423, 1430 (9th Cir. 1986). The decision came after the Administrative Office of the Courts advised courts to suspend civil jury trials for fiscal reasons. In recent years, courts have faced severe budgetary restraints.  Several states and localities have responded to the financial crisis by suspending civil jury trials. The resolution urges court systems to find other ways to maintain fiscal integrity. The resolution passed without opposition.

The following day, Peck moved two other resolutions. The first commended the American Civil Trial Bar Roundtable’s “White Paper on Increasing the Professionalism of American Lawyers,” which surveys the many innovative programs conducted around the country to heighten the professional conduct of lawyers, including efforts to encourage greater civility in litigation. The resolution also encouraged those who might consider such programs to look at the White Paper and other sources for ideas.  The second resolution Peck moved on August 11, which had the endorsement of the Conference of Chief Justices (CCJ) and cosponsorship of the ABA Judicial Division, urged states and territories to adopt clearly articulated, transparent and timely procedures to ensure that judges disqualify themselves in instances where conflict or bias or other grounds exist to warrant recusal in order to assure fair and impartial judicial proceedings.  The resolution went on to state that, when a judge denies such a motion to recuse, procedures should exist for review of the decision by an authority independent of the judge who is the subject of the recusal motion. In presenting the resolution, Peck noted that the chief justice of Arizona, as a result of the effort to craft a resolution with the participation of the CCJ, had appointed a task force to fill in gaps in Arizona’s existing procedures.

During the ABA Convention, Peck also participated meetings of the TIPS Council and a special reception held in honor of the Supreme Court Fellows Alumni Association, of which he is a former president.