United States: On The Receiving End

We've used the phrase "one-two punch" before in the blog to describe a pair of legal decisions concerning the same product. Usually, our clients have been on the winning side, but that's not always true, particularly in cases coming out of Philadelphia, Pennsylvania. In November, the Pennsylvania appellate courts, in gynecomastia litigation, dealt defendants two significant setbacks.

The first decision was from the Pennsylvania Supreme Court and dealt with an issue we don't cover that much – due to state- and fact-specificity – the statute of limitations. But what went down in In re Risperdal Litigation, ___ A.3d ___, 2019 WL 6139189 (Pa. Nov. 20, 2019) ("IRRL"), involves the realities of mass torts as much as any particular facts, so it's worth discussing. The legal press has indicated that the impact of IRRL will be the resurrection of "thousands" of gynecomastia plaintiffs' cases, and that's why the case is significant.

First off, Philadelphia seems to be just about the only place where this type of gynecomastia litigation has achieved any traction. As other courts have pointed out, the FDA did not even consider this condition to be a "serious" hazard.

Byrd v. Janssen Pharmaceuticals, Inc., 333 F. Supp.3d 111, 122, 124 (N.D.N.Y. 2018). Byrd quoted the FDA's 2014 rejection of a citizen petition – brought by a Philadelphia plaintiff-side lawyer That lawyer sued the FDA over the denial and lost. Sheller, P.C. v. United States Dept. of Health & Human Services, 663 F. Appx. 150, 155 (3d Cir. 2016) ("gynecomastia is not a serious adverse event"; affirming dismissal). See Moots v. Secretary, Dept. of Corrections, 425 F. Appx. 857, 858 (11th Cir. 2011) ("gynecomastia requires only cosmetic treatment"; it is not [a condition] that, if left unattended, poses a substantial risk of serious harm") (citation and quotation marks omitted); D.E. v. Dept. of Public Welfare, 2008 WL 9399228, at *3 (Pa. Commw. Oct. 10, 2008) ("in most cases, gynecomastia spontaneously regresses within three years after its onset"); Schilling v. Ellis Hospital, 906 N.Y.S.2d 187, 189 (N.Y.A.D. 2010) ("a reasonably prudent patient in those circumstances would agree to take that medication despite being informed of the low risk of gynecomastia, which is a treatable, non-life-threatening condition"); Cleveland v. Janssen Pharmaceuticals, 2019 WL 6114719, at *4 (E.D. Cal. Nov. 18, 2019) ("[t]he FDA has characterized gynecomastia as a nonserious risk"); Garcia v. McLean, 2018 WL 1788072, at *11 (Mag. N.D.W. Va. Feb. 22, 2018) ("gynecomastia does not meet the standard to be recognized as a serious medical condition"), adopted, 2018 WL 1785481 (N.D.W. Va. April 13, 2018); Rankins v. Washington, 2017 WL 4364060, at *3 (W.D. Mich. Sept. 29, 2017) ("the absence of physical complications from gynecomastia is not uncommon"); Fryman v. Traquina, 2009 WL 5199257, at *6 (Mag. E.D. Cal. Dec. 23, 2009) ("gynecomastia is a benign condition that does not cause pain"; "it is not physically harmful"), adopted, 2010 WL 624389 (E.D. Cal. Feb. 19, 2010); see also Internet research in Ayoubi v. Altez, 2017 WL 773883, at *4 (N.D. Ill. Feb. 27, 2017), vacated, 729 F. Appx. 455 (7th Cir. 2018) (holding that judges are not supposed to do their own Internet research).

Because plaintiffs making these claims seem to do much better in Philadelphia than anywhere else, thousands of them – recruited almost entirely by lawyer advertising – have flocked to that jurisdiction. Unfortunately, they can do that, because the manufacturer is a Pennsylvania corporation, making general personal available under Daimler AG v. Bauman, 571 U.S. 117 (2014). So the jurisprudential issue is presented how to deal with all of these cases.

Mass torts present a "mass" problem with respect to the statute of limitations. As we discussed, New Jersey law has responded to this problem with a special choice of law rule for mass tort litigation plaintiffs – New Jersey law will always apply. In re Accutane Litigation, 194 A.3d 503, 506 (N.J. 2018). If plaintiffs don't like it, they can "bring suit in the state where they reside . . . and probably enjoy the benefit – if it is a benefit – of their own state law." Id. Pennsylvania has not gone that route, so the trial court (later affirmed by the intermediate appellate court) chose another way to achieve a global resolution. The court recognized a global accrual date for all gynecomastia claims, "ruling . . . that any claim filed after June 31, 2009, must be dismissed on statute of limitations grounds based upon the cumulative effect of medical literature, newspaper articles and attorney advertising present by that point in time." IRRL, 2019 WL 6139189, at *3. This had been done before in other mass torts. IRRL mentioned three of them, involving the drugs Vioxx, Seroquel and Avandia. Id. at *14. We would add the Orthopedic Bone Screw litigation, where "a universal date of discovery" that turned out to be "outside the applicable [one-year] statute of limitations" resulted in dismissal some 1500 plaintiffs' suits. Maestas v. Sofamor Danek Group, Inc., 33 S.W.3d 805, 809 (Tenn. 2000).

In IRRL, the global accrual date adopted by the lower courts closely corresponded to the advent of plaintiff-side attorney advertising.

2019 WL 6139189, at *14 (citation omitted).

In IRRL, however, the Supreme Court disagreed with the courts below and held that the evidence for the asserted global accrual date was insufficient to toll Pennsylvania's discovery rule in every case:

IRRL, 2019 WL 6139189, at *14-15.

The Pennsylvania Supreme Court did not state that this information was insufficient as a matter of law to satisfy the discovery rule, only that individualized adjudications would be required:

Id. at *15.

So, what now? If that quantum of evidence isn't enough globally, is it enough for particular plaintiffs? It may well be. "We do not suggest that [defendants'] contention that [plaintiffs] were aware of their injuries in 2002 and 1998 is incorrect. Rather, we conclude only that given that the evidentiary record here is entirely undeveloped." Id. at *9. The alternative the court seems to envision is individual discovery in all of the returning cases. Since IRRL itself involved only two plaintiffs, and they were both Pennsylvania residents, id. at *2-3, the Pennsylvania Supreme Court didn't have any mass tort considerations directly before it.

That obviously means a lot more work for lawyers. The idea of a "universal" or "global" discovery date (like New Jersey's choice of law decision) was an attempt to ameliorate this. At minimum, this discovery will involve review of all plaintiffs' medical records for knowledge of risks that plaintiffs would have had access too, depositions of the plaintiffs' parents/guardians (both plaintiffs in IRRL were minors), and treaters (for what they informed the parents/guardians and when).

Also, as the Supreme Court's repeated references indicate, attorney advertising will be a key issue. Both of the plaintiffs' suits in IRRL were prompted by attorney advertising. 2019 WL 6139189, at *3. If our prior experience with tobacco litigation is any indication, the use of advertising historians to establish on exactly what media programs/internet websites drug-related advertisements ran, combined with discovery of plaintiffs' parents/guardians viewing history of mass and Internet media, will have to be involved. Since only the plaintiffs' side knows precisely where they ran their advertisements, this could make for some interesting discovery.

What can't be allowed to happen is, with IRRL precluding one attempt at managing the volume of discovery of a mass tort, the plaintiffs proposing their own shortcuts that deny defendants the right to take the individualized discovery, and to make the individualized record, that the Supreme Court envisioned. This has happened before in Philadelphia. Cf. Rost v. Ford Motor Co., 151 A.3d 1032, 1054 (Pa. 2016) (declaring Philadelphia practices that formerly required consolidated trials in mass tort cases to be "error").

We also note that one way that some of the "mass" could be removed from this litigation would be by more rigorous enforcement of the standards for interstate forum non conveniens. While the particular plaintiffs in IRRL were Pennsylvanians, we expect that most of the returnees will be litigation tourists. Since they can't be forced back to their states of residence by personal jurisdiction, the only alternative is discretionary forum non conveniens motions. In a recent case involving another defendant unfortunately incorporated in Pennsylvania and a litigation tourist plaintiff, the court pointed out that, when interstate (as opposed to intrastate) forum non conveniens is raised, "[a] plaintiff's choice of forum is entitled to deference, but to a somewhat lesser degree when the plaintiff's residence and place of injury are located somewhere else." McConnell v. B. Braun Medical Inc., ___ A.3d ___, 2019 WL 5203925, at *3 (Pa. Super. Oct. 16, 2019). The defendant lost in in McConnell, but that (like IRRL in a different context) was due to an insufficient record. Properly supported forum non conveniens motions (if possible on sets of facts we don't know) could find a receptive judicial audience, should "thousands" of returning cases involve litigation tourist plaintiffs having no good reasons, beyond dollar signs, for burdening Philadelphia courts and taxpayers. Forum non conveniens motions, backed by facts providing the judges running the Philadelphia Complex Litigation Center what McConnell says they need, might accomplish what personal jurisdiction can't in that litigation.

That's one.

The second seriously adverse Pennsylvania decision in the same litigation occurred six days later in A.Y. v. Janssen Pharmaceuticals Inc., ___ A.3d ___, 2019 WL 6317403 (Pa. Super. Nov. 26, 2019). While IRRL was the end of the appellate line, A.Y. can, and deserves to be, appealed further. A compensatory-damages-only "judgment of $70 million," id. at *1, in a case involving an injury that elsewhere in the country – including by the FDA − isn't even considered "serious"? Somebody needs to get real. So, the sheer excessiveness of this verdict cries out for a new trial. That verdict is apparently "30 times larger than the next largest compensatory verdict in Philadelphia." Id. at *22.

Indeed, A.Y. may well be the largest product liability verdict in Pennsylvania history to survive appeal. A $55,000,000 crashworthiness verdict was affirmed in American Honda Motor Co. v. Martinez, 2017 WL 1400968, at *1 (Pa. Super. April 19, 2017) (unpublished), but that plaintiff was a quadriplegic, and non-economic damages were "only" $25 million. Id. Cf. Tuski v. Ivyland Café, 2004 WL 4962363, at *24 (C.P. Philadelphia Co. Dec. 22, 2004) ($50 million compensatory award to quadriplegic plaintiff held excessive); Harker v. Chan, 2018 WL 3599734, at *15 (W.D. Pa. July 27, 2018) ($43,750,000 compensatory award to permanently disfigured plaintiff held excessive). The only Pennsylvania verdict we know of that is larger was $78 million for obstetrical malpractice leading to quadriplegic cerebral palsy from birth. See Nicholson-Upsey v. Touey, 2012 WL 3067501 (Pa. C.P. Philadelphia Co. May 4, 2012).

As already discussed, gynecomastia is not even a serious injury. Several of the cases we cited above discussed surgery as providing a permanent fix. E.g., Rankins, 2017 WL 4364060, at *3 ("Surgical removal of excess breast tissue is effective but rarely necessary."). See also Schulman v. Group Health Inc., 833 N.Y.S.2d 62, 64 (N.Y.A.D. 2007) (ordering insurer to pay for gynecomastia surgery). "Compensatory damages are to compensate for the full extent of the injury sustained, and the award should be limited to compensation alone." Moorhead v. Crozer-Chester Medical Center, 765 A.2d 786, 790 (Pa. 2001). Plainly A.Y. verdict carries a punitive element, and should be reversed for that reason alone. A new trial wouldn't even be a significant expenditure of additional resources, since the cross-appeal already requires a second, punitive damages trial. A.Y., 2019 WL 6317403, at *23.

A.Y. is something of a muddle and it's not clear whether the court was applying Pennsylvania or Tennessee law. We don't know anything about Tennessee, but we have dealt with excessiveness issues in Pennsylvania. In the surviving portion of Foley v. Clark Equipment Co., 523 A.2d 379 (Pa. Super. 1987) (a product liability ruling in Foley having nothing to do with excessiveness was later overturned), the Superior Court offered a formula against which excessiveness claims should be judged:

Id. at 394-95. The "legal rate" in Pennsylvania is 6% simple interest. 42 Pa. C.S. §8101; 41 P.S. §202. Just the interest at the "legal rate" on A.Y.'s $70 million non-economic damages verdict is $4.2 million per year. As in Foley, just the annual interest on the noneconomic damages dwarfs any conceivable earning capacity that plaintiff A.Y. could have. Prior panel decisions of the Superior Court are "binding precedent," A.Y., 2019 WL 6317403, at *23, but A.Y. doesn't even cite Foley. The Foley formula demonstrates how grossly excessive the verdict in A.Y. truly is. One year's interest on that verdict, alone, would earn that physically unimpaired plaintiff much more money than most people earn in a lifetime. Its punitive nature shines like a beacon.

More recently, in another purely non-economic case, a "$26,600,000 jury award of damages . . . was excessive − if not punitive − and clearly beyond what the evidence warrants." Polett v. Public Communications, Inc., 2016 WL 3154155, at *3 (Pa. Super. June 6, 2016) (en banc) (citation and quotation marks omitted). All of the four judges in Polett who agreed the verdict was excessive still sit on the Superior Court; only the lone dissenter has taken senior status. Conversely, none of the Polett judges also sat on A.Y. Since, a finding of excessiveness is appropriate "[w]here the jury's verdict is so contrary to the evidence as to shock one's sense of justice," Kiser v. Schulte, 648 A.2d 1, 4 (Pa. 1994), finding some new judges with consciences that may be "shocked" by this verdict would be very good idea.

Another questionable aspect of A.Y. is its preemption ruling. Once again, the opinion is less than pellucid, this part being mostly a succession of block quotes from this and that prior opinion, making it difficult to follow either the defendants' arguments or the court's rationale. Apparently the defendants argued impossibility preemption – that "it was impossible for [defendants] simultaneously to comply with its federal and state-law obligations regarding [drug] labeling of pediatric gynecomastia risks." 2019 WL 6317403, at *6 (internal quotation marks omitted). There are a lot of subsidiary problems with A.Y., such as continued reliance on a "presumption" against preemption, id. at *6, after Merck Sharp & Dohme Corp. v. Albrecht, 139 S. Ct. 1668 (U.S. 2019), demoted it back to a mere "assumption"; and substantial reliance on Hassett v. Dafoe, 74 A.3d 202, 210 (Pa. Super. 2013), an extreme outlier generic preemption decision that hasn't been followed by a single court anywhere else in over five years. But we'll ignore those and try to cut straight to the chase, as we see it.

The defendants' preemption argument to us seems like a sound one, particularly since Albrecht declared preemption to be a matter of law, rendering the court's critical reliance on plaintiffs' expert witness, A.Y., 2019 WL 6317403, at *8, unnecessary. The defendants' position is characterized as an "off-label use defense," id., which means that the argument is undoubtedly similar to the post we wrote here, pointing out the following two FDA provisions:

21 C.F.R. §201.57(c)(6)(i) (emphasis added).

21 C.F.R. §201.80(e) (emphasis added). The references in §201.57 to sections 201(n) (21 U.S.C. §321(n)) and 502(a) (21 U.S.C. §352(a)) of the FDCA are to general provisions relating to misbranding.

Since only the FDA can "require" warnings about off-label uses, that places the warning claims in question outside of the FDA's CBE regulation (which does not expressly extend to off-label uses in any event), and puts them squarely within the "independence principle" enunciated by PLIVA, Inc. v. Mensing: "when a party cannot satisfy its state duties without the Federal Government’s special permission and assistance, which is dependent on the exercise of judgment by a federal agency, that party cannot independently satisfy those state duties for pre-emption purposes." 564 U.S. 604, 623-24, (2011). Oddly, A.Y. nowhere cites to either this principle or, indeed, to Mensing itself (also absent is Mutual Pharmaceutical Co. v. Bartlett, 570 U.S. 472 (2013), which reinforced Mensing). This complete failure to come to grips with contrary, controlling precedent casts serious doubt on A.Y.'s rationale.

What A.Y. does hold – albeit briefly and without analysis – is that the FDA's regulatory scheme back in 2003 (when the minor plaintiff was first prescribed the drug) was different than it is now:

2019 WL 6317403, at *8. This is the key point. If drug companies were free to add warnings (or other information) about off-label uses at their leisure, then A.Y. would be right : (1) the "independence principle" would be satisfied, (2) defendants would be within the scope of the FDA's CBE regulation; and (3) the only preemption argument available would be "clear evidence" under Albrecht and Wyeth v. Levine, 555 U.S. 555 (2009), which is a "demanding defense." 2019 WL 6317403, at *6.

We had to learn how to access the "historical" C.F.R. in Westlaw order to evaluate this argument, since A.Y. is not, in fact, "accurate." A.Y. both misnamed the relevant regulation (which involves "pediatric use," not "pediatric care"), and miscited only snippets from the wrong subsections. In 2003, §201.57(f)(9)(i), did not contain the word "hazard." Instead, the actually relevant section provided:

201.57(f)(9)(vi) (2003) (containing the word "hazard"). This drug was approved for a number of pediatric indications in 2006. A.Y., 2019 WL 6317403, at *2 (approval for "irritability associated with autistic disorder in children and adolescents (between the ages of 5 and 16), including symptoms of aggression towards others, deliberate self-injuriousness, temper tantrums and quickly changing mood"). The opinion does not directly state whether the 2006 pediatric indications included the minor-plaintiff's treatment, but we think so, given that the conduct being treated sounds similar. Id. at *3 ("Attention Deficit Hyperactivity Disorder" and "Oppositional Defiant Disorder"); at *15 ("biting, hitting, smashing windows out with his fist, persistent fighting with other children, refusal to follow instructions at school or at home, and on one occasion breaking a chicken's back"). If the treatment were still off-label in 2006, it would then be governed by a different section (assuming no regulatory changes through 2006), §201.57(f)(9)(v) (2003) (governing off-label use "for a particular pediatric population"). However, the relevant "hazard" language was identical in both subsections.

So the question becomes, is gynecomastia a "specific hazard" that would fall within either §§201.57(f)(9)(v-vi) back in 2003? A.Y. skips right over this critical point, its parade of block quotes nowhere addressing it. Why? Because of what we discussed above. The FDA has never considered gynecomastia a "serious" hazard warranting a warning. That's what the cases we cited at the outset are about, and that's why a Philadelphia plaintiff-side lawyer took the extraordinary step of not only filing a citizen petition to try to change this – but also trying to sue the FDA when it denied its position. Back in 2003, the same overall regulation limited the scope of warnings to "serious" hazards or risks:

21 C.F.R. §201.57(e) (2003) (emphasis added). The same is true of off-label use – "a use not provided for under the 'Indications and Usage' section of the labeling":

Id. (emphasis added). Note the "required by the [FDA]" language. Back in 2003 – as now – the FDA reserved to itself whether to require warnings about off-label uses. The Mensing independence principle applies, and thus the claim is preempted without regard to Levine and "clear evidence."

Thus, the defendants were correct, and the A.Y. decision was not, about whether the defendants had the ability to make a label change concerning an off-label use in 2003 without FDA prior approval. That being the case, most of the A.Y. discussion, including the block quotes from Albrecht, are simply inapposite. Plaintiffs could never put the defendants inside the terms of the CBE regulation in the first place. Therefore the "clear evidence" standard, whatever it might mean after Albrecht, doesn't apply. Rather, the Mensing independence principle should govern A.Y. because applicable FDA regulations in 2003 mandated that an off-label warning can only be "required by" the FDA and thus the manufacturer could not act independently. After Albrecht, moreover, all this is a question of law, not of fact for either juries to decide or for either sides' experts to offer opinions.

So we have two aspects in which we think A.Y. was quite erroneous – liability and damages. If we wanted to prolong this post, we could also take issue with: (1) repeated reliance on preempted claims of fraud on the FDA (id. at *12) (Kessler fraud on the FDA testimony); *20 ("[i]nstead of submitting this information to the FDA . . . Defendants withheld and concealed the results"); (2) misreading of the Tennessee damages cap statute (id. at *20-21) (equating a state statutory spoliation exception with production of materials to the FDA governed solely by federal law), or (3) the exclusion of evidence of conduct by the minor plaintiff indicative of possible bullying behavior, while simultaneously seeking millions in damages for being "bullied." Compare Id. at *15 (minor plaintiff described as engaging in biting, hitting, fighting, vandalism, insubordination, and animal cruelty), with id. at 23-24 (claims of being bullied). However, these issues are either evidentiary, and thus arguably governed by an abuse of discretion standard, or involve a Pennsylvania court misinterpreting another state's law. As such they are less clear-cut or significant than the glaring errors we have discussed above.

That's number two. So while we have to admit that Pennsylvania plaintiffs landed two stinging appellate blows within a week of each other in different aspects of the same litigation, it's still time for the next round.

This article is presented for informational purposes only and is not intended to constitute legal advice.