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NATIONWIDE: An Introduction to USA - Nationwide

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Nationwide: Product Liability and Mass Torts

Courts have rendered important decisions in the past year regarding personal jurisdiction, federal preemption, and admissibility of expert causation testimony, which have significant implications for product liability and mass tort litigation. Moreover, as new technologies gain traction, product liability law will continue to evolve.

Personal Jurisdiction. Due process requires that defendants have at least “minimum contacts” with the jurisdiction in which they are sued. “General personal jurisdiction” exists when a defendant has such a substantial connection to a jurisdiction that it may be sued there regardless of whether the challenged conduct occurred in that jurisdiction. Typically, only the defendant’s state of incorporation or principal place of business will satisfy this high bar. “Specific personal jurisdiction” exists when a defendant’s specific conduct in the jurisdiction gives rise to the plaintiffs’ claims.

In 2017, the Supreme Court decided Bristol-Myers Squibb Co. v. Superior Court and rebuffed efforts to relax the requirements for specific personal jurisdiction. In this case, hundreds of non-resident plaintiffs sued a New Jersey pharmaceutical company in California state court alleging injuries arising from a prescription drug. The Court easily found that the California court had specific jurisdiction over the pharmaceutical company with regard to plaintiffs who lived in, purchased, or were prescribed the drug in California, because their injuries arose out of the company’s conduct in that state. But the Supreme Court held that non-resident plaintiffs who lived in, purchased, and used the product outside of California were not allowed to piggyback on the specific jurisdiction that existed with respect to the resident plaintiffs’ claims. The Court concluded that the lack of connections between the non-residents and the forum was determinative of the specific jurisdiction inquiry. This decision has had a significant impact for defendants who manufacture and sell products nationwide, helping defeat attempts to sue them in forums in which they are not located and to which plaintiffs’ claims have little connection.

Federal Preemption. Where state and federal law conflict, state law is preempted under the Supremacy Clause of the Constitution. Preemption may be expressed in an explicit provision of federal law (“express preemption”) or implied by the structure and scope of the federal regulatory scheme (“implied preemption”). Preemption with respect to medical devices and pharmaceutical products has continued to evolve:

Express Preemption of Claims Against Manufacturers of Certain Medical Devices. In 2008, the Supreme Court held that claims against manufacturers of Class III premarket approved (“PMA”) devices are expressly preempted to the extent that they would impose requirements different from federal law requirements. While this ruling limits tort liability for most claims related to PMA devices, plaintiffs can still plead a viable “parallel” state law claim where a premarket approved medical device deviated from a federally imposed, device-specific requirement in violation of federal and state law. Courts, however, have continued to reject attempts to impose state tort law requirements on a device or its labeling that are beyond those imposed by FDA. For instance, district courts in North Carolina and Connecticut recently dismissed design defect and failure to warn claims because the product at issue was a Class III PMA medical device, and allowing those claims would impose standards that were different from, or in addition to, FDA requirements. Other courts, however, have diverged from these analyses and rejected arguments that claims regarding Class III PMA devices are expressly preempted, suggesting that preemption will continue to be a hotly contested issue.

Preemption of Claims Challenging Pharmaceutical Drug Labeling. Courts have generally held that state law failure to warn claims challenging a pharmaceutical drug’s labeling are impliedly preempted if it would have been impossible for the manufacturer to comply with the state law duty to modify the labeling without violating federal law.

Recently, the California Court of Appeals held that a plaintiff’s design defect claim was preempted where it sought changes that would have altered the drug’s chemical composition and required preapproval by the FDA. However, a federal district court in Louisiana came to a different conclusion in another case, finding that design defect claims were not preempted because, in that case, state and federal law were “complementary.” The court reasoned that Louisiana imposes a duty on all manufacturers to consider feasible, alternative designs, and that federal law does not prevent a manufacturer from complying with this state duty before seeking FDA approval.

Preemption of Claims Challenging Generic Drugs. Generic drug manufacturers have successfully invoked impossibility preemption by arguing that federal law requires generic medications to carry warnings identical to brand-name equivalents, making it impossible for a generic drug manufacturer to unilaterally add warnings. In 2013, the FDA had proposed a rule that would have permitted generic drug manufacturers to change labels through a “changes-being-effected” process that is currently available only to brand-name manufacturers. The FDA, however, withdrew the rule in September 2017, and it is not certain whether the rule will be re-introduced.

Courts have also continued to explore whether plaintiffs injured by generic drugs may assert claims against the brand manufacturer on a theory of “innovator liability”, even where the brand manufacturer did not make the product. Plaintiffs argue that even though state law claims against generic manufacturers are preempted, manufacturers of brand-name drugs retain the ability to unilaterally supplement their warnings pending FDA approval. No federal circuit court has recognized this theory of liability, and most courts have rejected these claims, finding no duty owed or no causal connection between the defendant and plaintiff’s injuries. However, the California Supreme Court recently recognized this theory, unanimously holding that brand-name manufacturers owe a duty to warn consumers who use generic drugs. Although it is too soon to tell whether this is a new trend, it represents a potentially significant expansion of liability for the pharmaceutical industry.

Expert Causation Testimony. The majority of jurisdictions require expert testimony for a plaintiff to satisfy his or her burden of proof on whether the product caused the alleged injury. To ensure that expert testimony is based on a reliable methodology, courts apply rigorous standards for admissibility, and the exclusion of expert testimony can have a significant impact on litigation at any phase. The Second Circuit Court of Appeals affirmed a district court ruling excluding plaintiffs’ experts because the testimony was not reliable, and further granted summary judgment based on the plaintiffs’ admissible evidence. And a California state court granted judgment notwithstanding the verdict, finding that the plaintiff’s expert used an improper methodology, and thus failed to present evidence that the product was the probable cause of her cancer.

Future Products Liability Claims. New products and emerging technologies may be susceptible to a variety of product liability claims. The first lawsuit against a manufacturer of a driverless car was recently filed, and there has been significant media attention involving the first known pedestrian death involving a driverless car. Driverless cars will continue to raise complex regulatory questions, and questions for determining liability as between individual drivers, software designers, and manufacturers. At the intersection of technology and health, three-dimensional printing is having significant impacts in the health care industry, including on medical devices. But if these health-related 3D objects do not function as intended, medical device companies using this technology may face litigation. In December 2017, the FDA issued guidance on 3D printing, and federal and state regulations will continue to evolve.