Last Friday just prior to the Veterans’ Day weekend, the Food and Drug Administration (FDA) issued a highly anticipated notice of proposed rulemaking which addresses the U.S. Supreme Court’s 2012 decision, PLIVA v. Mensing. The proposal, Supplemental Applications Proposing Labeling Changes for Approved Drugs and Biological Products, was introduced by Dr. Janet Woodcock, director of FDA’s Center for Drug Evaluation and Research, in an FDA Voice blog post. The proposal, according to her, is “intended to improve the communication of important drug safety information about generic drugs to both prescribers and patients.”
As emphasized in a New York Times story about the proposal, “The rule would also pave the way for lawsuits from patients who could now claim that generic companies did not sufficiently warn them of a drug’s dangers.”
As WLF’s Rich Samp argued here last August in Can FDA Lawfully Overrule SCOTUS Generic Drug Preemption Decision Through Regulation?, WLF doubts that FDA has the authority under federal law to take such an action. We look forward to participating in the regulatory process and the accompanying debate that will intensify now that FDA has formally proposed the rule.
Cross-posted by Forbes.com at WLF’s contributor page
As the process of amending the Federal Rules of Civil Procedure (FRCP) enters a critical juncture, most discussion and attention (including here at The Legal Pulse) have deservedly focused on proposed changes to rules governing the pre-trial discovery process. However, one particular proposed change, overlooked for the most part, would require plaintiffs alleging patent infringement to provide more information in their initial complaints. The Advisory Committee on Civil Rules proposes to abrogate Rule 84 and along with it, the sample complaint forms to which the rule refers, including one relating to patent suits: Form 18.
What Is Form 18? This form has become well-known to patent litigants, especially accused infringers. The judiciary created Form 18 in 1938. It permits plaintiffs to provide a bare minimum of information: a jurisdictional statement, general assertion of patent ownership, a claim of infringement, and a request for relief. A complaint crafted in compliance with Form 18 would thus be in accord with another Federal Rule of Civil Procedure, Rule 8, which dictates pleading standards. In its 2007 Bell Atlantic v. Twombly and 2009 Ashcroft v. Iqbal rulings, the Supreme Court found that the then-existing interpretation of Rule 8—that some relief is “possible”—was incorrect and ruled that plaintiffs must demonstrate that its version of the events is “plausible.” The Court pointedly said that Rule 8 “demands more that an unadorned, the-defendant-unlawfully-harmed-me accusation.”
Form 18 Trumps Rule 8. Patent infringement complaints drafted in minimal conformance with Form 18 are decidedly “unadorned.” Defendants are denied fair notice of their alleged violation, a fault which is magnified exponentially in some patent litigation, such as suits brought by “patent-assertion entities.” As stated in a 2011 letter urging the Administrative Office of the U.S. Courts to address Form 18′s flaws:
[Its] limitations are immediately apparent when the template is used—as is frequently the case—to accuse an entire website or channel of commerce of infringing, in some unspecified manner, a method or software patent. Continue reading
As we discussed in an August 15 post, the long and winding road to amending the Federal Rules of Civil Procedure began that day when an Advisory Committee on Civil Rules of the Judicial Conference of the United States began taking comments on its proposal. The amendments focus most prominently on changing what documents are “discoverable” and how judges determine sanctiosn for parties who allegedly fail to preserve documents.
In a WLF Counsel’s Advisory published last week, GlaxoSmithKline Assistant General Counsel Leah Lorber urged interested parties to file comments with the Advisory Committee, which are due by February 15, 2014.
Yesterday, Washington Legal Foundation filed its formal comments with the Advisory Committee. WLF Senior Litigation Counsel Cory Andrews has requested an opportunity to testify before the Committee during its hearing in Washington, D.C. on November 7.
Our comments frame the challenges the discovery process pose today for those who are subject to and must manage civil litigation:
The potency of discovery as a leverage weapon has intensified in the past two decades with the explosion of electronic data. The nature of such data, which can be easily and unintentionally deleted, has also given rise to so-called spoliation claims, where one litigant accuses the other of document destruction and urges courts to sanction the alleged offender. The outside costs of litigation for American businesses over the past decade have steadily grown. These costs are disproportionately high in the United States versus the rest of the world.
The comments specifically call on the Advisory Committee to:
- Amend proposed Rule 37(e) to eliminate a stated exception that can swallow the Rule; alter the conduct trigger for sanctions from “willful or in bad faith” to “willful and in bad faith”; move the list of factors to be assessed when evaluating conduct from the Rule to the Committee Note; clarify the standard for when parties must preserve documents; and clarify the prejudice standard that judges will use to impose “curative measures” under the Rule.
- Require that under proposed Rule 26(b)(1), the scope of discovery be “any non-privileged matter that is relevant
and material to any party’s claim or defense.”
- For Rules governing the presumptive numerical limits on discovery devices (depositions, interrogatories, etc.), consider limiting discovery to five “custodians” in the first instance, chosen by the requesting party, and then five more in the second instance; any further discovery would require a showing of good cause.
- Eliminate, as proposed, Rule 84, which through sample forms such as Form 18 used for patent litigation, elevate antiquated requirements over current Supreme Court precedents on pleading standards. In addition, the Committee should add a Committee Note for the Rule on pleading standards, Rule 8, to acknowledge those recent Court precedents.
Cross-posted at Forbes.com’s WLF contributor page
Washington Legal Foundation, along with other organizations, business, and individuals with an interest in the Supreme Court and free enterprise cases before it, watched with great anticipation this morning as the justices issued their first new list of certiorari grants since the Court adjourned last June (the so-called Long Conference). We came away from the big cert grant morning, as likely did many other interested parties, wanting more.
The orders list is here. The grants include a tax case, United States v. Quality Stores addressing whether severance payments made to employees whose employment was involuntarily terminated are taxable. Two other grants relate to the standard of review the U.S. Court of Appeals for the Federal Circuit uses when assessing a district court’s determination that a case is “exceptional” for purposes of imposing attorneys’ fees and other sanctions. Those cases are Octane Fitness v. Icon Health and Fitness and Highmark Inc. v. Allcare Management Systems Inc.
The final cert grant impacting free enterprise is Petrella v. MGM, which involves the movie Raging Bull and the defense of laches against claims of copyright infringement. Marcia Coyle at National Law Journal discussed the interesting facts of the case in a September 16 story.
The bigger story from the big cert grant morning was which petitions the Court did not act on. WLF filed amicus briefs in support of review in a number of the cases, which we’ll indicate below (all noted on SCOTUSblog’s “Petitions we Are Watching” page).
Failure to act on these and other petitions does not mean that the Court cannot reconsider them in a future “conference,” and it does not mean that they have been denied. The Court will be issuing an order list on First Monday, October 7, but that order traditionally has only contained cert denials.
Cross-posted at WLF’s Forbes.com contributor page
With new, strikingly similar class actions being filed seemingly every day, the litigation industry’s crusade against food and beverage companies for “fraudulent” or “misleading” labeling has almost become monotonous. Thankfully, the occasional mini-saga breaks the tedium. The latest involves the humble, though now ubiquitous, Greek yogurt, and a suit against producer Chobani. Kane v. Chobani has had many twists and turns, but with a ruling last week, the plot may be moving to a fulfilling denouement.
Good Enough for Kids. Before getting into the Kane saga, we must note a delicious irony. Contrary to the opinion of Ms. Kane and her unnamed (and unknowing) class of plaintiffs, the federal government is quite a fan of the protein-packed product. The U.S. Department of Agriculture announced in July that it will be purchasing Greek yogurt for schools participating in a federally assisted program that subsidizes school lunches.
Previous Developments. On July 12, Northern District of California Judge Lucy Koh dismissed one of Ms. Kane’s claims but allowed the majority of her complaint to survive. Three days later, Judge Koh denied Kane’s preliminary injunction against Chobani’s sale of products with “evaporated cane juice” on the label. On July 25, she agreed to Chobani’s request to vacate the July 12 order. Then, on August 2, the judge ordered the disqualification of one of Kane’s expert witnesses, but refused to disqualify Kane’s lawyers.
September 19 Order. In last week’s decision, Judge Koh reexamined Kane’s claims that Chobani’s use of the term “evaporated cane juice” (ECJ), its “no sugar added” claims, and its “all-natural” label statements were false or misleading under California law. Continue reading
by Eric G. Lasker and Richard O. Faulk, partners, Hollingsworth LLP
In one of the most infamous – and remarkably honest – statements in American legal history, plaintiffs’ counsel Richard (“Dickie”) Scruggs once described asbestos litigation as a “search for a solvent bystander.” When the statement was made, the asbestos litigation behemoth was plainly running amok and most courts had done little to resolve the “elephantine mass” of asbestos litigation clogging the nation’s judicial system. Company after company turned to bankruptcy to solve a problem that the state courts could not – or would not – address.
Some courts finally recognized ways to use the common law to contain the controversy. In Borg Warner v. Flores, 232 S.W.3d 765 (Tex. 2007), Texas became one of the first states to “draw the line” against claims that “any exposure” to asbestos was capable of causing illnesses – and to require proof that the exposures to each defendant’s product were, in fact, sufficient to cause asbestos-related diseases. Flores required proof that the exposure be a “substantial factor” in causing the illness, and held that “[d]efendant-specific evidence relating to the approximate dose to which plaintiff was exposed, coupled with evidence that the dose was a substantial factor in causing the asbestos-related disease will suffice.” 232 S.W.3d at 773.
This endorsement of “but for” causation was consistent with decades of Texas law – law which has been applied to virtually every type of tort, including product liability. Coupled with legislative reforms, the Flores decision precipitated a remarkable decline in Texas asbestos litigation in Texas. Flores remains controlling in Texas – but lightning can be seen on the horizon. Continue reading
Cross-posted at WLF’s Forbes.com contributor page
In Walker v. R.J. Reynolds Tobacco Co., the U.S. Court of Appeals for the Eleventh Circuit has ruled that even though Florida state courts failed to require plaintiffs to establish from the trial record that a previously tried issue was actually decided in their favor, it would not intervene. The tobacco defendants had argued that the Due Process Clause of the U.S. Constitution bars state courts from departing from their normal procedural rules in such a radical manner. They expected the appeals court to vindicate its earlier ruling in Brown v. R.J. Reynolds Tobacco Co., 611 F.3d 1324 (11th Cir. 2010).
Walker arises in the aftermath of an abortive effort to try all product liability claims against tobacco manufacturers in a single class-action trial. The trial court initially certified a class consisting of all smokers nationwide who had suffered an illness due to smoking. The class was later limited to Florida smokers. Early phases of the trial had gone on for more than a year when an appeal of the class certification order finally reached the Florida Supreme Court.
The Court ruled in its 2006 Engle decision that continuing the case as a class action was “not feasible because individualized issues such as legal causation, comparative fault, and damages predominate.” In other words, the Court did not believe that a single jury could make meaningful factual determinations that would be applicable to each of the thousands of class members. But the Court left open the possibility that some of the factual findings already made by the class action jury could be used in the subsequent lawsuits brought by individual smokers. Continue reading
Featured Regular Expert Column
Frank Cruz-Alvarez, Shook, Hardy & Bacon, L.L.P. (co-authored with Talia Zucker, Shook, Hardy & Bacon, L.L.P.)
On August 21, 2013, the U.S. Court of Appeals for the Third Circuit, relying on its decision in Marcus v. BMW of North America, Inc., 687 F.3d 583 (3d Cir. 2012), once again vacated a lower court’s decision to certify a class in a products liability action. Carrera v. Bayer Corp., et al., No. 12-2621 (3d Cir. Aug. 21, 2013). In a significant victory for the defense, the Third Circuit reversed class certification because Plaintiff Carrera failed to demonstrate that the class members were ascertainable – a prerequisite to class certification under Federal Rule of Civil Procedure 23.
Plaintiff Carrera commenced this class action against Bayer Corporation and Bayer Healthcare, LLC (“Bayer”) alleging that Bayer falsely and deceptively advertised its product One-A-Day WeightSmart, by claiming that it enhanced metabolism. Id. at 4. Bayer opposed certification largely because without a list of purchasers or documentary proof of purchase, the class could not be ascertained. Id. The lower court certified the class on Plaintiff’s proposal that ascertainability could be achieved through (1) retailer records and sales made with store loyalty rewards cards; and (2) affidavits of class members attesting they purchased the product. Id. at 4-5. Continue reading
Cross-posted at WLF’s Forbes.com contributor page
For several decades, human rights activists have relied on the Alien Tort Statute (ATS) as their vehicle of choice for suing multinational corporations for alleged overseas human rights violations. The Supreme Court’s April 2013 Kiobel decision called into question the viability of many such suits. Several weeks ago, the U.S. Court of Appeals for the District of Columbia Circuit became the latest federal court to respond to Kiobel by retracting a prior, expansive interpretation of ATS jurisdiction. That suit provides a good case study, however, of just how hard it will be, despite Kiobel, for corporate defendants to make these cases go away. Although human rights activists may no longer be able to rely on the ATS, some federal courts are permitting these suits to go forward based on common law claims.
In 2011, the D.C. Circuit had rejected claims by Exxon that the ATS—which grants federal courts jurisdiction to hear tort claims alleging violations of “the law of nations” —does not apply extraterritorially. Doe v. Exxon Mobil Corp. It reversed the district court’s dismissal of ATS claims that Exxon aided and abetted human rights violations by Indonesian soldiers assigned to guard Exxon facilities during a civil war in that nation’s Aceh region. The case was arguably distinguishable from Kiobel, which barred extraterritorial application of the ATS, because the U.S. connections to the case were greater: Exxon is headquartered in the U.S., while the defendant in Kiobel was a foreign corporation. The D.C. Circuit nonetheless last month vacated its 2011 ATS decision in light of Kiobel and remanded the case to the district court. Continue reading
Cross-posted at WLF’s Forbes.com contributor page
Today, the Committee on Rules of Practice & Procedure (“Standing Committee”) of the Judicial Conference of the United States formally released a package of proposed amendments to the Federal Rules of Civil Procedure (“FRCP”) governing the pre-trial discovery process. As has been the case with past efforts to alter the FRCP, the process of preparing these changes has been painstakingly slow and mostly (and perhaps consciously) removed from public view. The six-month public comment period is a critical stop on this long and winding road.
Proposed Amendments. For the second time in less than a decade, the federal judiciary and litigants are pursuing FRCP changes aimed at controlling the explosion of electronically stored documents (aka “e-discovery”). A 2009 study by the American College of Trial Lawyers and the Institute for the Advancement of the American Legal System (“ACTL/IAALS study”) made the case that discovery had become an end unto itself, rather than a means to conduct litigation. A 2010 conference at Duke University addressed this report and the larger problems with the scope, burden, and cost of discovery and document retention.
From that conference and subsequent work by an Advisory Committee on Civil Rules arose a group of changes to the FRCP, including amendments to Rules 1, 26, and 37. The proposed amendments promise progress in addressing the scope of discovery and devising a uniform approach to sanctioning parties for willful failure to preserve documents. Bloomberg BNA published a good overview of the proposal. Continue reading