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On Friday, September 11, CCL Chief Litigation Counsel Louis M. Bograd argued in the US District Court for the Southern District of California that no federal preemption defense warrants summary judgment against more than 1,000 plaintiffs who have developed pancreatic cancer as a result of their use of incretin mimetic drugs manufactured or distributed by defendants Merck, Eli Lilly, Amylin, and Novo Nordisk as treatment for Type 2 diabetes. The motions were heard in connection with the ongoing MDL proceeding before Judge Battaglia in the District Court and the ongoing JCCP proceeding before Judge Highberger in California state court. Both judges presided over the four-hour hearing, which involved three separate summary judgment motions relating to the affirmative defense of federal preemption. Bograd argued that there was no “clear evidence” that the FDA would have rejected a properly supported Changes Being Effected Supplement to add the risk of pancreatic cancer to the approved labeling for the defendants’ incretin mimetic drugs. Both courts took the motions under advisement and are expected to rule in the coming months.

On September 8, CCL filed an amicus brief on behalf of the American Association for Justice in the U.S. Supreme Court urging the Supreme Court to dismiss the case of Spokeo, Inc. v. Robins, No. No. 13-1339, a putative class action with broad implications for consumers, employees and others whose federal statutory rights may have been violated, because it fails to provide a basis to answer the question presented on certiorari.

Spokeo collects publicly available information about individuals and packages it for sale to prospective employers and other customers. Thomas Robins, brought this putative class action, alleging that Spokeo’s report on him falsely indicated that he was older, better educated, employed, wealthier and married. Robins asserted that Spokeo’s failure to take reasonable measures to ensure accuracy violated the Fair Credit Reporting Act, which allows statutory damages of $100 to $1,000 per willful violation. Spokeo argued that Robins showed no “real-world” damages because the false information actually portrayed him more favorably. The Ninth Circuit held that violation of Robins’ statutory right under the FCRA was sufficient to create standing, regardless of actual injury in fact.

The Supreme Court granted review of the question whether Congress may confer Article III standing upon a plaintiff who suffers no concrete harm, based on a bare violation of a federal statute.

AAJ’s amicus brief, authored by CCL Senior Counsel Jeffrey R. White, suggested that the Court dismiss the Petition in this case as improvidently granted. The statutory violation was not the publishing of false information, but the absence of reasonable procedures for accuracy, required by 15 U.S.C. § 1681e(b). The publishing of false information was the concrete harm the FCRA was intended to prevent by imposing an accuracy requirement. Thus this case does not squarely present the Court with the issue whether Congress can confer standing on a plaintiff who has suffered no concrete injury.

Moreover, the principle that a plaintiff must demonstrate injury-in-fact in addition to violation of a statutory duty is one that the Court has fashioned for public law cases, such as the enforcement of environmental regulation. It has never been a requirement of Article III standing that a plaintiff asserting a private cause of action demonstrate injury in addition to the violation of a legal duty owed to the plaintiff.

In three decisions issued simultaneously, the U.S. Court of Appeals reversed the dismissal of lawsuits for violations of the federal Fair Housing Act brought by the city of Miami, Florida against Bank of America, Citigroup and Wells Fargo.  The Center for Constitutional Litigation represented Miami in the appeal, with CCL President Robert S. Peck and Valerie Nannery writing the bulk of the brief as part of a larger litigation team. Peck argued the case in the Eleventh Circuit.

The case stems from lawsuits brought by Miami over lending practices that steered minority borrowers to more expensive loans than they otherwise qualified for, which, according to the complaint’s allegations, disproportionately resulted in foreclosures, eroding the city’s tax base and engendering added police, fire and other expenses in the newly blighted neighborhoods. A federal district court judge had dismissed the actions, claiming that the city lacked standing to initiate the lawsuit, had failed adequately to allege that the banks’ actions were a proximate cause of the city’s injuries, and did not allege any of the predatory loans taking place within the statute of limitations. On all three conclusions, the Eleventh Circuit held that the district court was wrong. Relying on U.S. Supreme Court precedent, the Court found that the city was an appropriate plaintiff who fell within the “zone of interests” contemplated by the FHA. It further held that, because the FHA sounded in tort law, the city’s allegations were sufficient to show that the banks’ loan practices would foreseeably cause the alleged injuries. Finally, it held that the city had demonstrated that it was not futile to permit the city to file an amended complaint capable of meeting the statute of limitations.

While the case was pending in the Eleventh Circuit, other federal district court judges presiding over similar allegations filed by the City of Miami Gardens had stayed the cases. Those cases will now likely move forward.  CCL is part of the legal team in the Miami Garden cases, as well as in cases brought by the city of Los Angeles, California, where it is handling appeals from summary judgment in the Ninth Circuit.

Arguing that the First District Court of Appeals gave too narrow a reading to various state constitutional provisions in conflict with binding precedent, the Center for Constitutional Litigation filed a jurisdictional brief in the Florida Supreme Court, asking it to review the decision. The Florida law, enacted in 2013, requires prospective medical-malpractice plaintiffs to waive their privacy rights with their treating physicians and authorize the putative defendant and the defendant’s litigation allies to interview those physicians without the plaintiff or plaintiff’s lawyer present. The Florida Supreme Court has previously held that the practice was intrusive and likely to produce information unrelated to the lawsuit that remains protected information under confidentiality statutes.

The brief, written by CCL President Robert S. Peck, argues that the appellate court erroneously held that the Florida Supreme Court intended to allow the legislature to supplement the types of discovery the court itself authorized when it promulgated the rule that governs presuit discovery in medical-malpractice cases. Precedent holds that when a statute conflicts with a rule of procedure promulgated by the Supreme Court, the statute must yield. In addition, the brief argues that the First District mistakenly interpreted Florida’s constitutional guarantee of access to the courts to require a complete abolition of a cause of action before it can be violated, an argument the Florida Supreme Court expressly rejected in 1987. Finally, the brief contends that Florida’s strong constitutional right of privacy is violated a law that does not narrowly require a waiver only to the extent that can be justified in the context of a lawsuit. The defendants and the State of Florida are expected to file briefs in opposition.

In a very significant ruling regarding the First Amendment rights of pharmaceutical companies, Judge Paul Engelmayer of the Southern District of New York ruled that the FDA may not pursue misbranding charges against a drug company for communicating truthful, nonmisleading information about unapproved “off-label” uses of its products. Amarin Pharma Inc. v. FDA (Aug. 7, 2015). While the pharmaceutical industry was busy celebrating its newfound ability to engage in off-label promotion, CCL Chief Litigation Counsel Lou Bograd commented that they should be careful what they wish for: “The First Amendment Ruling in the Amarin Pharma case is a double-edged sword, with huge implications for preemption doctrine, especially for the impossibility preemption defense to generic drug failure-to-warn claims.” As Bograd told Law360 in its article, “Amarin’s Off-Label Victory Opens Door to More Injury Claims,” “If it’s the case that drug companies have the First Amendment right to make truthful statements about off-label uses, and the FDA cannot prohibit them, then it follows that they would have the First Amendment right to truthfully communicate the risks of their products even if that information isn’t on the label of the brand-name products.”

On August 6, 2015, the U.S. Court of Appeals for the Ninth Circuit held that, to qualify as a “mass action” under the Class Action Fairness Act, making an action filed in state court eligible for removal to federal court, a plaintiff must affirmatively propose a joint trial with other similar cases. In Briggs v. Merck Sharp & Dohme, the appellate court unanimously reversed a trial-level decision that had found federal jurisdiction under CAFA over five separate suits originally filed in California state courts. The Ninth Circuit decision adopted in toto the positions advocated by CCL Chief Litigation Counsel Louis Bograd in support of plaintiffs. The Court first agreed with plaintiffs on a threshold jurisdictional question, holding that a petition for leave to appeal filed within 10 days of the denial of a motion for reconsideration is timely. Turning to the merits, the Court of Appeals ruled that a “proposal” for joint trial under CAFA must be made to a court with the authority to effect the relief requested and, therefore, statements made in federal court cannot constitute such a “proposal.” The panel also ruled that a plaintiff who files a coordination petition that specifically says it is not for a joint trial does not trigger CAFA. Finally, the court ruled that a proposal for bellwether trials in a state mass tort proceeding is not a proposal for joint trials. The Briggs ruling provides clear guidance for plaintiffs who wish to keep their mass tort cases in state court. CCL’s co-counsel in this appeal included Ryan Thompson of Watts Guerra LLP, Hunter Shkolnik of Napoli Bern Ripa Shkolnik LLP, and John Restaino of Restaino Siled LLD.

In an amicus curiae brief on behalf of the American Association for Justice, CCL urged the Supreme Court to reject a broad expansion of an ERISA plan’s authority to demand that its insured repay health benefits after obtaining a tort recovery. The case is Montanile v. Board of Trustees of the National Elevator Industry Health Benefit Plan, Docket No. 14-723.

Robert Montanile was injured in a car crash by a drunk driver. He was a participant in the Elevator Industry multi-employer ERISA health plan, which paid his initial medical expenses of $121,044. The plan required participants and beneficiaries to reimburse the plan out of any third-party recovery, regardless of whether the victim was made whole by the tort recovery and without any plan contribution to fees owed the attorney who obtained the recovery. Montanile retained a trial lawyer who obtained a financial settlement of his claims against the other driver. He also retained an experienced ERISA attorney to reach an accommodation with the plan. When negotiations reached an impasse, the attorney released the funds, after payment of the attorneys’ fees, to the client. The plan later sued for reimbursement. By that time, however, Montanile had spent most of the funds on other bills and living expenses.

The district court found that the plan could hold Montanile personally liable to repay the entire $121,044 out of any other assets he might have. The Eleventh Circuit affirmed, agreeing with the majority of circuits that, after the participant has received a tort recovery, dissipation of the funds does not erase the contractual obligation to reimburse the plan. The Ninth Circuit has held to the contrary, as has the Eighth Circuit, in a case in which CCL successfully represented a participant’s attorney sued by an ERISA plan for reimbursement. Treasurer, Trustees of Drury Indus., Inc. Health Care Plan & Trust v. Goding, 692 F.3d 888, 896-97 (8th Cir. 2012). The Supreme Court granted certiorari to resolve the conflict.

The AAJ amicus brief, authored by CCL Senior Counsel Jeffrey R. White, urged reversal. A basic tenet of the Court’s jurisprudence is that ERISA limits fiduciaries suing for “appropriate equitable relief” to those remedies typically available from equity courts. The Court made clear in Sereboff v. Mid Atlantic Medical Services, Inc. in 2006 that a plan could impose an equitable lien by agreement on the specific fund obtained from the tortfeasor, but the legal remedy of personal liability for breach of contract was not available. The majority rule allowing reimbursement from the participant’s general assets is based on a misreading of a statement in Sereboff that a plaintiff relying on a lien by agreement need not “trace” the property back to the plaintiff. At common law, an equitable lien survived only as long as the property remained intact. If the debtor dissipated the specified fund, the creditor was left with only a legal claim for breach of contract. AAJ’s brief also anticipated the argument often advanced by ERISA administrators and insurers that reimbursement is essential to keeping premiums low. In fact, there is no indication that reimbursements are factored into ratesetting by plans. Moreover, reimbursements amount to a vanishingly small percentage of ERISA plan premiums. To the contrary, broad expansion of ERISA reimbursement will likely increase plan costs by removing the financial incentive for many injured victims to hold tortfeasors accountable.

Responding to a letter sent to the U.S. Court of Appeals for the Eleventh Circuit by Wells Fargo Bank about last week’s U.S. Supreme Court decision in Texas Dep’t of Housing and Commun. Affairs v. The Inclusive Commun. Proj., Inc., No. 13-1371, 576 U. S. ____ (2015), CCL President Robert S. Peck advised the Court that rather than prop up arguments made by the bank the decision fully supported CCL’s client, the City of Miami. In Inclusive Communities, the Supreme Court held that the Fair Housing Act (FHA) authorizes disparate impact claims, and thereby rejected the bank’s argument that disparate impact claims may not be made under the FHA. Under the high court’s decision, valid disparate impact claims challenge practices that have a “‘disproportionately adverse effect on minorities’ and are otherwise unjustified by a legitimate rationale.”

Wells Fargo’s June 29^th letter focused on dicta in the decision that reminded litigants that reliance on statistical disparity alone was insufficient. Instead, it said that a “robust causality requirement” requires pleadings to connect a defendant’s “policy and a disparate impact.” Peck pointed out that Miami’s Complaint did precisely that with extensive allegations of bank policies that produced the statistical disparities.

Peck argued the case before the Eleventh Circuit on May 19, while also arguing similar lawsuits on appeal that day on behalf of Miami against Bank of America and Citigroup. The three cases remain under advisement.

CCL today asked the Minnesota Supreme Court to review the decision of the Minnesota Court of Appeals in Angeles, et al. v. Medtronic, Inc., a group of six consolidated appeals of suits brought by persons injured as a result of their surgeon’s use of Infuse Bone Graft, a recombinant DNA protein, in their spinal surgeries. The FDA never approved Infuse for use in spinal surgery, except in a limited number of anterior procedures when used in conjunction with the LT-CAGE, a capped device designed to keep the Infuse protein from leaking into the spinal cavity and causing catastrophic bony overgrowth. Medtronic nevertheless aggressively promoted the use of Infuse in other spinal surgeries, without the LT-CAGE leading directly to plaintiffs’ injuries. The Minnesota Court of Appeals dismissed most of plaintiffs’ products liability claims against Medtronic on grounds of preemption and also dismissed plaintiffs’ fraud claims as inadequately pled, because plaintiffs could not identify the precise Medtronic misrepresentations that induced their surgeons to use Infuse in their surgeries.

CCL has now asked the Minnesota Supreme Court to review both of those rulings. CCL argues that plaintiffs’ products liability claims are not preempted both because there are no federal requirements applicable to Infuse when used in spinal surgery without the LT-CAGE, and also because plaintiffs’ state-law claims parallel federal requirements prohibiting the promotion and sale of misbranded and adulterated products. As for plaintiffs’ fraud claims, CCL argues that the Court of Appeals applied a stricter pleading standard than the one that the Minnesota Supreme Court itself adopted in Hardin County Savings Bank v. Housing & Redevelopment Authority of Brainerd, where the Court held that plaintiffs pleading fraud need only “plead facts underlying each element” of their fraud claims. CCL Chief Litigation Counsel Louis Bograd represents plaintiffs, along with GoldenbergLaw PLLC and the Fluegel Law Office, both of Minneapolis, and the Branch Law Firm in Albuquerque, New Mexico.

In response to a request from the U.S. District Court for the Northern District of Florida, CCL today submitted a legal memorandum in Pye v. Fifth Generation, Inc. distinguishing misrepresentation claims brought against the manufacturers of Tito’s Handmade Vodka, based on the product’s claim to be “Handmade,” from similar claims against the makers of Maker’s Mark Bourbon. District Court Judge Robert Hinkle had recently dismissed such claims against Maker’s Mark and asked plaintiffs to explain why the same reasoning shouldn’t lead to dismissal of their claims. In its memorandum, CCL Chief Litigation Counsel Louis Bograd explained that there were important factual distinctions between the two cases, which have already led at least one other court to uphold misrepresentation claims against Tito’s Vodka. In particular, the Maker’s Mark bottle gives content to its claim to be “Handmade” by explaining that it was distilled in small batches under close supervision, assertions that plaintiffs in the Maker’s Mark case had not disputed. By contrast, the Tito’s Vodka label claims suggests that it is “Handmade” because it is “Crafted in an Old Fashioned Pot Still,” but plaintiffs allege that that representation is also false and misleading. Thus, a reasonable consumer may be misled by the claim on Tito’s label to be handmade, even if a consumer of Maker’s Mark cannot be.