NATIONWIDE: An Introduction to USA - Nationwide

Nationwide: Product Liability and Mass Torts

Courts have continued to render important decisions in the past year regarding personal jurisdiction and federal preemption, which have significant implications for product liability and mass tort litigation. Additionally, practitioners and commentators have called for amendments to the Federal Rules of Civil Procedure, which, if implemented, would substantially affect multidistrict litigation, through which product liability claims - particularly mass torts involving pharmaceuticals and medical devices - frequently are litigated. Finally, as new technologies evolve and gain traction, product liability law will continue to evolve.

Personal Jurisdiction. 

Due process under the US Constitution requires that defendants have at least "minimum contacts" with the jurisdiction in which they are sued. "General personal jurisdiction" exists when a defendant’s contacts with a state are so substantial and continuous that it may be sued there regardless of whether the challenged conduct occurred in that jurisdiction. In contrast, "specific personal jurisdiction" exists when a defendant’s conduct in the jurisdiction gives rise to the plaintiff’s claims.

In 2017, the Supreme Court rebuffed efforts to relax the requirements for specific jurisdiction in Bristol-Myers Squibb Co. v. Superior Court (“BMS”). In BMS, hundreds of nonresident plaintiffs sued a New Jersey pharmaceutical company in California state court alleging injuries arising from a prescription drug. The Supreme Court 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 nonresident plaintiffs who lived in, purchased, and used the product outside of California could not piggyback on the specific jurisdiction that existed with respect to the resident plaintiffs’ claims. The Supreme Court concluded that the lack of connections between the nonresidents and the forum was determinative of the specific jurisdiction inquiry, and the nonresidents’ claims could not proceed against the defendant in California.

This decision has had a significant impact for defendants who manufacture and sell products nationwide. For example, the Eastern District of Missouri recently rejected plaintiffs’ claims that the court had specific jurisdiction over the pharmaceutical company defendant; plaintiffs argued that such jurisdiction existed because the company had conducted clinical trials and worked on regulatory approval for its products in Missouri. The court found that because the plaintiffs were not injured in Missouri, did not contend they participated in the clinical studies, and were not prescribed the product in Missouri, the link between the activities and plaintiffs’ claims were too attenuated. Similarly, the Illinois Appellate Court recently reversed and remanded a Cook County Circuit Court’s finding that the Illinois court had personal jurisdiction over the defendant in an asbestos case. The court rejected plaintiffs’ arguments that the defendant’s "continuous" activity in Illinois was sufficient to establish specific jurisdiction, finding that there was no alleged connection between the defendant’s activities and the plaintiffs’ allegations.

Several courts have also recently recognized that the holding in BMS applies with equal force in the class action context, and therefore requires dismissal of non-resident putative class members’ claims that have no connection to the forum. Other courts have rejected this argument, however, developing a split of authority that will likely lead to further litigation on this issue.

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 in recent years.

Preemption of Claims Against Manufacturers of Certain Medical Devices.

In 2008, the Supreme Court held that claims against manufacturers of Class III pre-market approved ("PMA") devices are expressly preempted to the extent that they would impose requirements different from federal law requirements. While this ruling, when coupled with implied preemption principles, limits tort liability for most claims related to PMA devices, plaintiffs can still plead a viable "parallel" state-law claim where a PMA 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 devices that do not parallel those imposed by FDA. For instance, the Supreme Court of Arizona recently held that although federal law may impose requirements on a medical device manufacturer to report adverse events to the FDA, no such duty exists under Arizona law, and a state law claim based on a failure to do so is therefore preempted. In reaching this ruling, the court directly rejected a prior Ninth Circuit ruling that “was based on the unsupported premises that ‘Arizona law contemplates a warning to a third party such as the FDA.’” Other courts, on the other hand, have held that similar claims are neither expressly nor impliedly preempted, and this remains a hotly contested issue.

Preemption of Claims Challenging Pharmaceutical Drug Labeling.

Courts have generally held that state law design defect and failure-to-warn claims challenging a pharmaceutical drug’s design or labeling are impliedly preempted if it would have been impossible for the manufacturer to comply with state-law duties without violating federal law.

The First Circuit Court of Appeals, for instance, recently held that a design defect claim was preempted where it would have required "changing the product bottle so as to disperse a different amount of prescription eye solution," a design change that required preapproval from the FDA. However, a federal district court in Louisiana reached a different result 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 manufactures 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, FDA 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 proposal in December 2018, explaining that "the new policy would have resulted in labels for the same drug that varied between different generic manufacturers, for some period of time," which "could have led to consumer and provider confusion."

Multidistrict Litigation.

"When civil actions involving one or more common questions of fact are pending in different [federal] districts," those actions may be transferred to any district for the coordination of pretrial proceedings in one court. 28 U.S.C. 1407(a). This coordination is referred to as "multidistrict litigation" ("MDL"). The purposes of MDLs are to avoid duplication of discovery, prevent inconsistent rulings, and conserve party and judicial resources. As of February 2019, approximately one third of currently pending MDLs involved product liability claims (the largest category of MDLs).

Practitioners and commentators have argued that several aspects of MDLs and the manner in which they are litigated undermine their effectiveness. These include (1) MDLs’ tendency to attract (and failure to weed out) meritless claims, (2) infrequent appellate review of pre-trial decisions, and (3) high pressure to engage in bellwether trials, among others.

To address these issues, industry groups have proposed a variety of Federal Rule revisions. These include requiring claimants to disclose preliminary evidence showing the cause and nature of the injury alleged; allowing mid-case appellate review of decisions on topics that have case-wide implications, such as preemption or expert testimony; barring use of bellwether trials without party consent; and increasing pleading standards to discourage meritless claims.

The hope is that these changes would reduce the burdens that MDLs disproportionately place upon defendants, who usually must expend significant resources to identify and combat these claims, some of which often prove to be meritless. It remains to be seen whether such proposals will gain traction, but they have the potential to help accomplish the goals underpinning the MDL process.

Future Product Liability Claims.

As technologies advance and change at an accelerating pace, new products entering the market may become the subject of future product liability litigation. One such technology involves small unmanned aircraft systems, or drones. With the Federal Aviation Administration only recently issuing its first regulations of commercial drone use in 2016, commentators have noted that drones are poised to have a major economic and societal impact in the commercial market. As this technology becomes more widespread, the potential for product liability risks will likely rise. Indeed, there already have been several high profile incidents caused by amateur drone users, including near collisions with manned aircraft.

Announcements surrounding the development of autonomous drones for use as home delivery services similarly provide the potential for product liability risks arising from collisions or malfunctions causing personal injury or property damage. This technological development, as with other autonomous technologies, will certainly raise complex regulatory and product liability questions in the near future.