Mass Tort Defense

EnBanc Oral Argument Set in 9th Circuit Asbestos Case

Sean Wajert — Wed, 15 May 2013 19:00:47 -0500

We have posted before about Henry Barabin, et al. v. AstenJohnson Inc. and Scapa Dryer Fabrics Inc., as a case to watch. Interested readers should note that the 9th Circuit has now set the en banc oral argument in this case for June 25th.

You may recall that plaintiff sued alleging that his 2006 diagnosis of mesothelioma was caused by occupational exposure to asbestos during the more than 30 years he worked at the Crown-Zellerbach paper mill. The trial court originally excluded one of the plaintiffs’ expert witnesses, because of his “dubious credentials and his lack of expertise with regard to dryer felts and paper mills.” But the court later reversed that ruling, after the plaintiff supplemented the record on the expert's credentials, including that he had testified in other cases (in Frye jurisdictions though). The jury found in favor of plaintiffs.

On appeal, the Ninth Circuit panel determined that the lower court had not properly considered all the Daubert factors, and instead had allowed the plaintiff to submit the expert’s "unfiltered testimony" to the jury. “Once presented with the additional information in the Barabins’ response to the motion in limine, at a minimum the district court was required to assess the scientific reliability of the proffered expert testimony ... In failing to do so, the district court neglected to perform its gatekeeping role.”

Our guess is that in setting the case for rehearing, the court is thinking more about the fact that the panel remanded the case for a new trial in light of the court’s 2003 decision in Mukhtar v. California State University, 299 F.3d 1053 (9th Cir. 2002), amended by 319 F.3d 1073 (9th Cir. 2003).

(Note that my partner Mark Behrens was asked to submit an amicus brief on behalf of the Coalition For Litigation Justice, Inc., Chamber Of Commerce Of The United States Of America, NFIB Small Business Legal Center, American Insurance Association, Property Casualty Insurers Association Of America, American Chemistry Council,
And National Association Of Manufacturers.)

New Partner Joins SHB in Philly

Sean Wajert — Mon, 13 May 2013 08:10:40 -0500

Very excited to note for readers the arrival this week of a brand new partner in Shook Hardy's office in Philadelphia (your humble bloggers home base).

Debra S. Dunne, Esq. brings to SHB significant expertise in counseling companies regulated by the Food and Drug Administration. Areas of expertise include everything from compliance and risk-management issues to labeling and marketing to clinical trials, due diligence, training programs, and product recalls. With experience addressing the intersection of unique litigation risks with government safety and regulatory oversight, Debra can provide exceptional strategic guidance and legal counsel to her drug, medical device, food, and cosmetics industry clients.

She has also defended complex product liability claims and has served as science counsel and coordinating counsel in mass tort litigation. Dunne has also written and spoken extensively on prescription-drug marketing and off-label issues, which is where I first met her as co-presenters at a CLE in 2007.

Welcome!

Prop 65 Reforms Proposed

Sean Wajert — Wed, 08 May 2013 21:17:49 -0500

Our readers know how Prop 65 has created numerous issues for product sellers and created much litigation mischief in the hands of overzealous plaintiffs. Interesting that earlier this week, California Gov. Jerry Brown (D) said he now advocates reforms to California's law to frivolous lawsuits that do nothing to protect consumers.

The administration, through the California Environmental Protection Agency, wants to work closely with the state Legislature to revamp Proposition 65 by ending frivolous “shake-down” lawsuits.

Voters approved Proposition 65 in 1986. The measure requires the Governor to annually publish a list of chemicals allegedly "known to the state to cause cancer or reproductive toxicity." If a business in California sells a product containing such chemicals listed by the state in excess of certain levels, the business must provide warnings to users or in the workplace.

The Governor wants reforms to:
• Cap or limit attorney’s fees in Proposition 65 cases.
• Require stronger demonstration by plaintiffs that they have information to support claims before litigation begins.
• Require greater disclosure of plaintiff’s information.
• Set limits on the amount of money in an enforcement case that can go into settlement funds in lieu of penalties.

The administration is worried about "lawyers who bring nuisance lawsuits to extract settlements from businesses with little or no benefit to the public or the environment." Since 2008, nearly 2,000 complaints have been filed by so-called “citizen enforcers.” Goofy suits include litigation against banks for failing to prevent second-hand smoke near their ATM machines.

The devil is always in the details, so it will be important to keep an eye on this.

Drug and Device Seminar Approaches

Sean Wajert — Wed, 08 May 2013 13:42:31 -0500

It is spring time -- although you might not know it from the weather -- and it is time for one of the premier educational and networking conferences for the pharmaceutical and medical device defense bar – the DRI Drug and Medical Device Seminar. Your hosts this year include my partner and Drug and Medical Device Committee Chair Scott Sayler, and my old pal Jeffrey A. Holmstrand, Flaherty Sensabaugh Bonasso PLLC, Wheeling, West Virginia.

The 2013 DRI Drug and Medical Device Seminar will be held May 16-17 in New York City at the Sheraton Hotel in Midtown. Most of my readers are familiar with the Seminar and many routinely attend. Here are just a few highlights of the program this year.

• Judge Arnold New of the Philadelphia Court of Common Pleas will present on recent changes in that busy Court.
• Judge Raymond Lohier of the Second Circuit will speak at the Diversity Luncheon.
• A presentation on how to get the most from Comment K in a medical device case.
• A discussion of the conflict between free speech and off-label promotion.

Observations from the American Tort Reform Association on tough venues.

Other benefits- I am told in-house counsel can attend for FREE, either as a member of DRI or via sponsorship by an outside counsel. FREE wi-fi in the conference room (so, yes, you can multi-task and read this blog.) All of the usual networking events will be in full swing.

For more information or to register, go to http://www.dri.org/Event/20130070.

Federal Court Reaffirms Summary Judgment in NORM Case

Sean Wajert — Sun, 05 May 2013 20:39:38 -0500

A federal court recently reaffirmed its prior ruling that a plaintiff's expert failed to establish causation in a suit alleging increased risk of cancer from radioactive scale deposited inside pipes. See Hill v. Exxon Mobil Corp., No. 11-2786 (E.D. La. 4/30/13).

Plaintiff worked at Tuboscope Vetco International. He alleged he was exposed to radioactive scale
(naturally occuring radioactive materials or "NORM") when he cleaned pipes at work. Hill sued Shell Oil
Co. and Chevron U.S.A. Inc. alleging that these companies sent used pipes containing radioactive scale to Tuboscope to be processed and that he was exposed to the radioactive scale in these pipes.

Earlier this year, the court granted defendants' motion for summary judgment on the grounds that Hill could not prove that he was exposed to radiation attributable to Shell or Chevron. A fundamental cause in fact issue. His evidence only supported general inferences about radiation at Tuboscope but nothing that showed (1) he actually cleaned used pipe containing scale with NORM or (2) that these pipes were attributable to Shell or Chevron. Hill's evidence required an impermissible chain of speculation to find that he was exposed to radiation in these defendants' pipes.

Plaintiff then moved to alter and amend the summary judgment arguing that the court should amend or reconsider its judgment because of new evidence. The court concluded that the new evidence, largely depositions taken after the motion was pending but before it was ruled on, was not grounds for altering the court's judgment.

Defendants argued that these depositions were not the proper basis for a Rule 59(e) motion to amend because the evidence was available before the judgment issued. See Rosenzweig v. Azurix Corp., 332 F.3d 854, 863-864 (5th Cir. 2003). Hill deposed these witnesses before the court issued its judgment, and he apparently made no attempt to supplement the record. Accordingly, this evidence was not "newly discovered." See Russ v. Int'l Paper Co., 943 F.2d 589, 593 (5th Cir. 1991).

Even if this evidence was considered, however, the court noted that plaintiff's motion still would fail. For example, one expert testimony did not establish that Hill was exposed to radioactive scale attributable to Shell and Chevron. No party disputed that new pipe does not have scale, and not all used pipe has scale. Further, not all used pipe with scale contains NORM. The later expert's calculation of the average radiation dose of pipes that do have scale containing NORM does not provide any proof that Hill was actually exposed to (1) used pipes that have scale containing NORM or (2) that these pipes were attributable to defendants. Accordingly, this kind of "new" testimony was irrelevant to proving Hill's exposure to NORM attributable to Shell and Chevron. The evidence did not show that Hill handled defendants' NORM-containing pipes and did not create an issue of material fact. Motion denied.

Summary Judgment for Defendant in Heater Case

Sean Wajert — Tue, 30 Apr 2013 19:28:40 -0500

A federal court granted defendant summary judgment in a products case alleging that a propane heater that exploded was responsible for plaintiff's husband's death. See Ayala v. Gabriel Building Supply, No. 2:12-cv-00577 (E.D. La., 4/26/13).

Plaintiff filed a wrongful death and survival action in state court. Defendants removed the matter and the federal court dismissed plaintiff's claims for negligence, strict liability, and manufacture of an ultra hazardous project, holding that plaintiff's theories of recovery are limited to the Louisiana Products and Liability Act ("LPLA"). Under Louisiana law, the LPLA provides the exclusive remedy against manufacturers in a products liability action. Demahy v. Schwarz Pharma, Inc., 702 F.3d 177, 182 (5th Cir. 2012). To maintain a successful action under the LPLA, a plaintiff must prove: "(1) that the defendant is a manufacturer of the product; (2) that the claimant's damage was proximately caused by a characteristic of the product; (3) that this characteristic made the product 'unreasonably dangerous'; and (4) that the claimant's damage arose from a reasonably anticipated use of the product . . . . " Stahl v. Novartis Pharms. Corp., 283 F.3d 254, 261 (5th Cir. 2002).

Defendants then moved for summary judgment on the basis that the subject heater was not "unreasonably dangerous" under the LPLA. A product can be "unreasonably dangerous" in four ways: (i) in construction or composition; (ii) in design; (iii) for failure to provide an adequate warning; and (iv) for failure to conform to an express warranty.

One of plaintiff's claims was design defect. A product is unreasonably dangerous in design if, at the time the product left the manufacturer's control:
(1) There existed an alternative design for the product that was capable of preventing the claimant's damage; and
(2) The likelihood that the product's design would cause the claimant's damage and the gravity of that damage outweighed the burden on the manufacturer of adopting such alternative design and the adverse effect, if any, of such alternative design on the utility of the product La. Rev. Stat. § 9:2800.56.

Plaintiff failed to present any credible evidence that an alternative design existed that could have prevented plaintiff's injuries. And there was no evidence regarding the burden of adopting the design and
any adverse effect on the utility of the heater. Given the foregoing, plaintiff could not prove that the
subject heater was unreasonably dangerous in design.

To prevail under the manufacturing defect (construction or composition theory), Louisiana courts require the plaintiff to (i) set forth the manufacturer's specifications for the product and (ii) demonstrate how
the product materially deviated from those standards so as to render it unreasonably dangerous. Roman v. W. Mfg, Inc., 691 F.3d 686, 698 (5th Cir. 2012). Plaintiff's expert opined that the most probable cause of the fire and the injuries was a propane leak in the subject heater. However, since all non‐ferrous components of the subject heater melted in the fire, he based his opinion on an examination of another heater. He conceded that there was no evidence to suggest the subject heater itself was defective. In fact, the expert admitted that he could not conclusively rule out other potential sources of a propane leak, such as a faulty propane tank or plaintiff's failure to properly secure the fitting. That didn't meet the burden.

To maintain a failure‐to‐warn claim, a plaintiff must demonstrate that the product possessed a characteristic that may cause damage and the manufacturer failed to use reasonable care to provide an adequate warning of such characteristic and its danger to users of the product. Stahl, 283 F.3d at 261. In all cases, however, a manufacture is liable for inadequate warning only if such defect was a proximate cause of the plaintiff's injury. Peart v. Dorel Juvenile Grp., Inc., No. 09–7463, 2011 WL 1336563, at *3 (E.D. La. Apr. 7, 2011). In addition to proving causation in fact, a plaintiff must also demonstrate that the inadequate warning was the most probable cause of his injury. See Wheat v. Pfizer, Inc., 31 F.3d 340, 342 (5th Cir. 1994). Here, Plaintiff failed to meet this burden of establishing causation. Indeed, Plaintiff's expert failed to adequately support a defect, as above, and offered nothing credible to establish a causal connection between the alleged failure to provide an adequate warning and plaintiff's injury.

Hearing Questions EPA Stance on Fracking

Sean Wajert — Sat, 27 Apr 2013 18:14:11 -0500

The House Subcommittee on Energy and Environment held a hearing earlier this week to review federal hydraulic fracturing research activities. The hearing examined research activities by the Environmental Protection Agency (EPA), Department of Energy (DOE) and the Department of Interior (DOI) in an inter-agency effort to “address the highest priority challenges” related to the production of domestic unconventional oil and natural gas resources. Readers may recall we have posted about fracking issues before.

Chairman Lamar Smith (R-Texas) noted a widely publicized handful of unsubstantiated charges that fracking pollutes ground water; the EPA is at the center of this debate, linking fracking to water contamination in at least three cases, only to be forced to retract their statements after further scrutiny.

Members questioned administration witnesses on the objectives of the interagency initiative as they relate to the administration’s regulatory intentions and track record of unsubstantiated attacks on the safety of hydraulic fracturing.

Witnesses included:

Dr. Kevin Teichman, Senior Science Advisor, Office of Research and Development, Environmental Protection Agency
Mr. Guido DeHoratiis, Acting Deputy Assistant Secretary for Oil and Gas, Office of Fossil Energy, Department of Energy
Dr. David Russ, Regional Executive, Northeast Area, U.S. Geological Survey
Dr. Robin Ikeda, Acting Director, Agency for Toxic Substances and Disease Registry, Department of Health and Human Services

The hearing also noted the administration’s interagency working group had committed to release a draft of their research plan by October 2012 and complete the final plan by January 2013. The Administration has yet to even release a draft for public comment.

Energy Subcommittee Chairman Cynthia Lummis (R-Wyo.) noted that her home state of Wyoming is at the center of this issue since the EPA put it in the national spotlight with a “draft” report implying that fracking was somehow responsible for the quality of the water. However, in the days and weeks that followed this announcement, the State of Wyoming, industry, and other federal agencies exposed EPA’s study as deeply flawed.

Environment Subcommittee Chairman Chris Stewart noted that largely as a result of the expanded use of cheap natural gas from 2005 to 2011, the U.S. has decreased its carbon dioxide output more than any other nation, including those countries that have implemented aggressive green energy agendas, such as Germany and Spain. It is perhaps ironic that many of the most passionate advocates for action on climate change also oppose fracking.

Consumer Fraud Claims Denied; Class Decertified

Sean Wajert — Thu, 18 Apr 2013 21:38:29 -0500

A federal court ruled recently for defendant in a proposed class action about the labeling of an iced tea product. See Ries v. Arizona Beverages USA LLC, No. 10-01139 (N.D. Cal., 3/28/13).

We have posted before about plaintiffs' efforts to manufacture consumer fraud class actions out of any aspect of a product label or marketing. Here, plaintiffs brought a class action challenge defendants’ advertising, marketing, selling, and distribution of AriZona Iced Tea beverages labeled “All Natural,” “100% Natural,” and “Natural” because they allegedly contained high fructose corn syrup (HFCS) and citric acid. Problem turns out, plaintiffs could muster no proof the marketing was false.

The Complaint set forth six California state law claims for relief: under the False Advertising Law (FAL) for (1) misleading and deceptive advertising, and (2) untrue advertising; under the Unfair Competition Law (UCL), for (3) unlawful, (4) unfair, and (5) fraudulent business practices; and (6) under the Consumers Legal Remedies Act (CLRA), for injunctive and declarative relief.

The defendants filed a motion for summary judgment and plaintiffs filed a motion for class certification. The court initially certified the class under Rule 23(b)(2) for purposes of injunctive and declaratory relief only. At the close of discovery, defendants made a renewed motion for summary judgment, reviving their argument that the named plaintiffs could not support their claims, and had failed to meet their evidentiary burden of showing that defendants’ beverage labeling practices were unfair or misleading. Defendants further moved for decertification of the class.

The court noted that factual predicate for each of plaintiffs’ claims was that the beverages were falsely labeled as “all natural” despite allegedly containing HFCS and citric acid. So plaintiffs had to show that HFCS and citric acid are indeed not natural; and also that accordingly they were entitled to restitution. In their opposition to the motion for summary judgment, plaintiffs did not offer any credible evidence that HFCS is artificial and thus rendered the beverage not natural. But plaintiffs had no credible evidence, relying primarily on the fact the ingredients were allegedly patented. But they cited no legal authority supporting their contention that if the process to produce an ingredient is patented, that fact, in and of itself, automatically renders it artificial and no natural. This was, the court observed, merely an extension of their rhetoric that HFCS is artificial because it “cannot be grown in a garden or field, it cannot be plucked from a tree, and it cannot be found in the oceans or seas of this planet.” The deposition testimony they cited, even when read in the light most favorable to plaintiffs, did not satisfy their evidentiary burden. It certainly did not demonstrate that it is probable that a significant portion of the consuming public could be confused by the “all natural” labeling of defendants’ products. Rather than showing that defendants were attempting to engage in unfair competition by capitalizing on any such confusion, the testimony indicated that everything in the beverages is natural, and that defendants even included labels specifying that they contain all natural tea without preservatives, artificial color, and artificial flavor to clarify that to theoretically confused customers.

On the restitution issue, the court noted there must be evidence that supports the amount of restitution necessary to restore to the plaintiff, meaning the difference between what the plaintiff paid and the value of what the plaintiff received. Plaintiffs had no such evidence to support their prayer for restitution and disgorgement. Plaintiffs offered not a scintilla of evidence from which a finder of fact could determine the amount of restitution or disgorgement to which plaintiffs might be entitled if this case were to proceed to trial. This failure alone provided an independent and sufficient basis to grant defendants summary judgment.

The court also found that plaintiffs' failures undermined the finding of adequacy of representation under Rule 23(a)(4). The class was therefore decertified. One wonders why it was certified in the first place.

The class was decertified, the motion for summary judgment was granted, and a motion to exclude expert opinion testimony was denied as moot.

Discovery of Expert Communications At Issue

Sean Wajert — Thu, 11 Apr 2013 21:31:53 -0500

Here is one to watch for our readers who practice in Pennsylvania. The state Supreme Court has before it the issue of discovery of communications between lawyers and their expert witnesses. See Carl Barrick v. Holy Spirit Hospital of the Sisters of Christian Charity, et al., No. 76 MAP 2012 (S.Ct. Pa.).

Barrick filed suit against Holy Spirit Hospital and Sodexho Management Inc. alleging personal injuries in the cafeteria of Holy Spirit Hospital. An orthopedic surgeon who treated Barrick for injuries sustained from the accident was also named as an expert witness. One of the defendants subpoenaed Barrick’s medical chart and other records, but the Doctor's medical center withheld some records which allegedly were trial preparation materials under Pennsylvania Rules of Civil Procedure.

The defendant filed a motion to compel, and after the trial court conducted an in camera review, the court ordered the release of the materials to the defendants. This was in line with some state cases that suggested work product protections in Pennsylvania are not as strong as under the federal rules. The plaintiff appealed, and a panel of the Superior Court upheld the ruling in 2010. The issue was then reconsidered by the Superior Court sitting en banc, which ruled that the Pennsylvania Rules of Civil Procedure did not compel the disclosure of such communications between attorneys and their expert witnesses. Arguably this ruling offered more protection than the federal rules do. It also made an interesting contrast with Rule 4003.5 which, upon cause shown, gives state courts some ability to compel experts to do more than the basic response to interrogatories regarding their anticipated testimony at trial.

The 8-1 majority reasoned that Pa.R.C.P. 4003.5 controls discovery regarding expert testimony, and it specifies that a party cannot directly serve discovery requests upon a non-party expert witness. Discovery regarding testimony of an expert other than through a defined set of interrogatories must be made upon the showing of good cause to the court, not through a subpoena. Here, the correspondence sought by the defendant did not fall into the area of interrogatory permitted under Rule 4003.5(a)(1).

Following the en banc ruling, defendants appealed. The issue before the supreme court now is whether the superior court’s holding “improperly provides absolute work-product protection to all communications between a party’s counsel and their trial expert.”

No Purchase, No Standing

Sean Wajert — Tue, 09 Apr 2013 21:28:38 -0500

Earlier this month a federal court reaffirmed that a named class representative in a proposed consumer class action against Ghirardelli Chocolate Co. lacked standing to assert claims about products he never bought. See Miller v. Ghirardelli Chocolate Co., No. 12-04936 (N.D. Cal. 4/5/13). We have posted before about plaintiffs overreaching in consumer fraud class actions. If a tree falls and no one is there, does it make a sound? If you never bought and used a product, how can you bring a “consumer” claim?

Plaintiff Scott Miller allegedly bought a package of “Ghirardelli® Chocolate Premium Baking Chips –Classic White” and then, on behalf of himself and other consumers, sued the Ghirardelli
Chocolate Company, complaining that defendant somehow deceived customers into thinking that this and four other products contained “artificial” or “imitation” ingredients, in violation of United States Food and Drug Administration (“FDA”) and state regulations.

Readers may know that Ghirardelli is one of America’s longest continuously operating chocolate manufacturers (more than 150 years) and that it is one of very few American manufacturers that make chocolate starting from the cocoa bean through to finished products. Ghirardelli accepts
only the highest-quality beans, rejecting as many as 30% of the beans that are offered it. Ghirardelli roasts the cocoa beans in-house to ensure the company’s signature flavor profile is consistently maintained in all chocolate products.

Miller filed suit in San Francisco County Superior Court, and Ghirardelli removed to federal
court and moved to dismiss the complaint. The court initially agreed that Miller lacked standing for products he had not purchased. At oral argument, however, plaintiff argued that the branding on the label meant that – under the FDA regulations and standards – the alleged harm was identical across product lines, and that established standing as to products he never used. Miller filed an amended complaint and Ghirardelli again moved to dismiss.

Hard as it may be to believe, there are a few cases that suggest that a plaintiff who does not purchase a product nonetheless may have standing if the products and alleged misrepresentations were substantially similar. E.g., Astiana v. Dreyer’s Grand Ice Cream, Inc., No. C-11-2910 EMC, 2012 WL 2990766, at *11 (N.D. Cal. July 20, 2012). But certainly where the alleged misrepresentations or accused products are dissimilar, courts tend to dismiss claims to the extent they are based on products not purchased. E.g., Larsen v. Trader Joe’s Co., No. 11-cv-5188-SI (Docket No. 41) (N.D. Cal. June 14, 2012), the court found that the plaintiffs lacked standing to bring claims based on products they did not purchase (wide range of Trader Joe’s products (cookies, apple juice, cinnamon rolls,biscuits, ricotta cheese, and crescent rolls). See also Stephenson v. Neutrogena, No. C-12-0426 PJH, 2012 U.S. Dist. LEXIS 1005099, at *1 (N.D. Cal. Jul. 27, 2012) (plaintiff brought suit over six Neutrogena Naturals products but had only purchased the purifying facial cleanser).

Even under the Astiana approach, here the products were too different: they look different; they have different uses (baking chips, drink powders, and wafers); they have different labels and different representations on packaging, and they are marketed and sold differently in that, for example, some are sold alongside each other, and some are sold in commercial markets and others in consumer markets. The logo, which plaintiff put so much emphasis on, was relatively unimportant considering the varying products, packaging and representations, and markets. Logos cannot be dispositive of what a product is and that a consumer determines what a product or characterizing flavor is by reviewing the label. Finally, the identity of the commodity here under FDA regulations was “white chocolate,” not “chocolate” as in the logo. That in turn means that a determination of standing required an examination of the entire label, and again, the five products and the alleged misrepresentations were not sufficiently similar.

Supreme Court Decides Comcast

Sean Wajert — Thu, 04 Apr 2013 21:13:26 -0500

The Supreme Court weighed back in on the issues of class certification last month in Comcast v. Behrend, No. 11-864 (U.S. 3/27/13). Writing for the majority, Justice Scalia stated that the class had been improperly certified under Fed. R. Civ. P. 23(b)(3)'s predominance prong, in an opinion that bears careful scrutiny for our readers, but probably did not cover as much ground as some thought it would when cert was granted (no further guidance on Daubert at the class stage).

Plaintiffs brought a class action antitrust suit, under Rule 23(b)(3), claiming Comcast subscribers in the Philadelphia area were harmed because of a specific Comcast strategy that allegedly lessened competition and would lead to higher prices. Comcast allegedly “clusters” their cable television operations within a particular region by swapping their systems outside the region for competitor systems inside the region. Plaintiffs offered several theories as to why this alleged approach harmed them: it allowed Comcast to withhold local sports programming from its competitors, resulting in decreased market penetration by direct broadcast satellite providers; it allegedly reduced the level of competition from “over-builders,” companies that build competing cable networks in areas where an incumbent cable company already operates; it reduced the level of “benchmark” competition on which cable customers rely to compare prices; and it allegedly increased Comcast’s bargaining power relative to content providers.

The District Court ruled that plaintiffs had to show that the “antitrust impact” of the violation could be proved at trial through evidence common to the class and that the damages were measurable on a class-wide basis through a “common methodology.” The trial court then certified the class, but accepted only one of the four proposed theories of antitrust impact. The Third Circuit affirmed, noting again its artificial separation of class and merits issues: we "have not reached the stage of determining on the merits whether the methodology is a just and reasonable inference or speculative." The court of appeals concluded that Comcast's attacks on the merits of the methodology had "no place in the class certification inquiry.”

Of course class certification is a procedural step, not the occasion to decide which side has the winning case, but in recent years the Supreme Court has been telling the lower courts that the line between merits and certification is not such a bright line. The Third Circuit ran afoul of this admonition when it refused to entertain arguments against the damages model that bore on the propriety of class certification simply because they might also be pertinent to the merits determination. A certifying court may have to probe behind the pleadings before coming to rest on the certification question; certification is proper only if the trial court is satisfied, after a rigorous analysis, that Rule 23’s prerequisites have been satisfied. Such an analysis will frequently overlap with the merits of the plaintiff ’s underlying claim because a class determination generally involves considerations that are enmeshed in the factual and legal issues comprising the plaintiff ’s cause of action. A District Court cannot refuse to evaluate evidence at the class certification stage just because that same evidence relates to the merits of the claims. In so doing, the Court made clear that the rigorous analysis discussed in Wal-Mart Stores v. Dukes, 131 S. Ct. 2541 (2011), applies to both the Rule 23(a) factors and the Rule 23(b) prerequisites.

The figures that plaintiffs' expert used were calculated assuming the validity of all four theories of antitrust impact originally proposed, and did not delineate the differences between the allegedly supra-competitive prices prices attributable to over-builder deterrence, and the prices caused by other economic factors. To ignore that would reduce the Rule 23(b)(3) predominance requirement to a nullity. The questions of individual damages calculations here would inevitably overwhelm questions common to the class in this antitrust case; the plaintiffs' model fell far short of establishing that damages were capable of measurement on a class-wide basis. Thus, the Court made clear that plaintiffs must offer a method sufficient to calculate damages on a class-wide basis in Rule 23(b)(3) class actions or risk losing certification.

CAFA Local Exception Rejected

Sean Wajert — Tue, 02 Apr 2013 21:10:24 -0500

A federal court in Georgia ruled last week that a proposed class action alleging injury from chemical exposures was properly removed under the Class Action Fairness Act of 2005. See Anderson v. King America Finishing Inc., No. 1:11-cv-2258-JEC (N.D. Ga., 3/25/13).

Plaintiffs alleged that defendant King America Finishing released a toxic chemical into the Ogeechee River from its manufacturing plant in Dover, Georgia. According to plaintiffs, the toxic chemical release caused damage to surrounding land downstream from the Dover plant. In addition, plaintiffs claimed that certain individuals who swam in the Ogeechee River suffered from physical injuries due to the release. Plaintiffs filed a class action complaint in Fulton County Superior Court. They purported to represent a property damage class defined to include “[a]ll possessors of property affected, directly or indirectly, by [the May, 2011] release of chemicals into
the waters of the Ogeechee River.” One named plaintiff also purported to represent a personal injury class defined to include “[a]ll persons who have been exposed, directly or indirectly, with the waters of the Ogeechee River that had been contaminated by the Release.”

Defendants removed the case to federal court pursuant to the Class Action Fairness Act (“CAFA”), 28 U.S.C. §§ 1332(d) and 1453. CAFA generally provides for the removal of any class action in which there is: (1) minimal diversity, (2) at least 100 putative class members and (3) $5 million in alleged damages. 28 U.S.C. §§ 1332(d)(2) and 1453. It was undisputed that these requirements were met in this case. Plaintiffs conceded that all of the named plaintiffs were diverse from defendant, that the putative class exceeded 100 members, and that the claims exceeded $5 million in damages.

Nevertheless, plaintiffs filed a motion to remand the case to state court, based on the “local controversy” exception to CAFA jurisdiction, which provides for the remand of a class action that “uniquely affects a particular locality to the exclusion of all others.” Evans v. Walter Indus., Inc., 449 F.3d 1159, 1164 (11th Cir. 2006). Specifically, a “local controversy” is defined by CAFA as a class action in which: (1) greater than two-thirds of the class members are citizens of the state in which the action was originally filed, (2) at least one “significant” defendant is a citizen of the state in which the action was filed and (3) the principal injuries alleged in the action were incurred in the state in which the action was filed. 28 U.S.C. § 1332(d)(4)(A).

Defendants did not dispute elements 2 and 3. The argument among the parties centered on the two-thirds requirement. Under CAFA, plaintiffs bear the burden of proving that the exception applies. In order to meet their burden on the two-thirds requirement, plaintiffs had to present evidence from which a court could credibly adduce that more than two-thirds of the purported class members were Georgia citizens. Plaintiffs used tax and voter registration records, reference to the Secretary of State’s Corporation website, and interviews of personal injury class members who were determined by interview to be Georgia citizens, to just get over the threshold.

The court rejected their calculations, finding no sound evidentiary basis for including several of these groups in the calculation. For example, with regard to the legal entities, the Secretary of State’s website merely lists a Georgia office address for each entity. The website does not indicate that any of these entities have their “principal place of business” in Georgia. In addition to the evidentiary issues with the numerator in plaintiffs’ equation, there were serious questions about the denominator as well. Both the property and the personal injury classes were defined broadly in the complaint to include all land and persons directly or indirectly allegedly impacted by the May, 2011 release. Given that broad definition, the property class likely included many more members than the 900 or so landowners in the particular geographical area chosen by plaintiffs’ attorneys for their showing. Likewise, there could be many more individuals who were “indirectly” injured by the release than the 20 potential class members interviewed by plaintiffs. The court could not simply speculate about the citizenship of these unaccounted for class members.
Accordingly, the court denied the plaintiffs' motion for remand.

Daubert Decision to Watch in Ninth Circuit

Sean Wajert — Sat, 30 Mar 2013 06:10:08 -0500

Here's one to watch. The Ninth Circuit last week said it will rehear the case of a paper mill employee whose $9.4 million mesothelioma verdict was vacated by a panel of the appeals court. The court noted in a one-page order that it will rehear the case en banc, but did not provide any specifics. See Henry Barabin. et al. v. AstenJohnson Inc., No. 10-36142 (9th Cir.); Henry Barabin, et al. v. AstenJohnson Inc. and Scapa Dryer Fabrics Inc., No. 11-35020 (9th Cir.).

We can certainly speculate, of course, and our guess is that the reason for the decision does not relate directly to the evidentiary issue the panel had when, in November, it overturned the award after finding that the trial court failed to adequately assess the reliability of the plaintiffs' expert testimony.

Readers may recall that plaintiff sued alleging that his 2006 diagnosis of mesothelioma was caused by occupational exposure to asbestos during the more than 30 years he worked at the Crown-Zellerbach paper mill. The trial court originally excluded Kenneth Cohen, one of the plaintiffs’ expert witnesses, because of his “dubious credentials and his lack of expertise with regard to dryer felts and paper mills.” But the court later reversed that ruling, after the plaintiff supplemented the record on the expert's credentials, including that he had testified in other cases (in Frye jurisdictions though). The jury found in favor of plaintiffs.

On appeal, the Ninth Circuit determined that the lower court had not properly considered all the Daubert factors, and instead had allowed the plaintiff to submit the expert’s "unfiltered testimony" to the jury. “Once presented with the additional information in the Barabins’ response to the motion in limine, at a minimum the district court was required to assess the scientific reliability of the proffered expert testimony ... In failing to do so, the district court neglected to perform its gatekeeping role.”

Our guess is that the court is thinking more about the fact that the panel remanded the case for a new trial in light of the court’s 2003 decision in Mukhtar v. California State University, 299 F.3d 1053 (9th Cir. 2002), amended by 319 F.3d 1073 (9th Cir. 2003). One of the concurring opinions questioned the rule from that case that requires the court to vacate and remand for a new trial, as opposed to deciding on the need for a new trial after making a new Daubert determination. From where we sit, the court had it right in 2003 and this time too. To remand for an evidentiary hearing post-jury verdict undermines Daubert's requirement that some reliability determination must be made by the trial court before the jury is permitted to hear the evidence. Otherwise, instead of fulfilling its mandatory role as a gatekeeper, the district court clouds its duty to ensure that only reliable evidence is presented with impunity. A post-verdict analysis does not protect the purity of the trial, but instead creates an undue risk of post-hoc rationalization. This is hardly the gatekeeping role the Supreme Court envisioned in Daubert and its progeny. The rule in Mukhtar gives trial courts a real and important incentive to be proper, active gatekeepers.

Upcoming Mass Tort Seminar

Sean Wajert — Thu, 28 Mar 2013 06:36:41 -0500

Readers may be interested in the upcoming "2nd Annual Mass Torts Forum: A Roundtable for
Judges and Lawyers." Co-hosted by the Temple University, Beasley School of Law, and set for May 23, 2013, at The Ritz-Carlton Hotel, Philadelphia, hometown of your humble blogger.

This seminar (more info here) attracts plaintiffs counsel (such as Dianne Nast, Roda & Nast), defense counsel (such as Mark Cheffo, Skadden) and Judges, including Hon. Cynthia Rufe, U.S. District Court, E.D. Pa.

The agenda includes panels on Mass Tort Coordination and state and federal cooperation; E-discovery issues; Trial Issues, including bellwether trial selections; Hot Topics in Mass Torts, such as innovator liability in pharmaceutical cases; Mass Tort Resolution, including the difficulties with medical liens; and Scientific Evidence in Mass Tort Cases, including joint science hearings.

The best news: a closing Cocktail Reception.

ACI Chemical Products Liability Seminar

Sean Wajert — Fri, 22 Mar 2013 21:01:03 -0500

My new firm (Shook Hardy & Bacon) is co-sponsoring the 4th Annual ACI’s Chemical Products Liability and Environmental Litigation conference. This program brings together a faculty of outside attorneys directly involved in significant toxic tort litigation, as well as industry in-house counsel and the nation’s leading jurists with on-point chemical products experience. This essential litigation forum is designed to educate practitioners—both in-house and outside counsel—on the leading trends in chemical products liability and environmental litigation. This includes experts from Chevron, Chevron Philips Chemical, The Dow Chemical Company, Dow AgroSciences, Georgia Gulf Corp., Marathon Petroleum, PPG Industries, Praxair, Solvay North America, and many more.

You humble blogger has the privilege of moderating a panel on '"In-House Perspectives: Controlling Costs When Preparing and Trying Cases." We hope to focus on

Building a trial team, including managing a multi-law firm team that has been “knitted” together
Responding to plaintiffs’ forum shopping by tailoring trial management strategies to fit mass tort, class action, or one-off cases
Settlement issues
Strategizing expert selection
Controlling the discovery process to help minimize costs

Looking forward to the conference on 4/30 in Chicago.

DRI Product Liability Seminar

Sean Wajert — Wed, 20 Mar 2013 20:48:55 -0500

Your humble blogger will be attending the annual DRI Products Liability seminar early next month in Maryland.

DRI is one of the leading organizations of defense attorneys and in-house counsel. Membership in DRI provides access to resources and tools for attorneys who strive to provide high-quality, balanced and excellent service to their clients and corporations. DRI is host to more than 25 substantive committees whose focus is to develop ongoing and critical dialogue about areas of practice.

This seminar from 4/3-5, will include a variety of panels on all things products, including: Using Technology to Pick the Right Jurors featuring fellow Philadelphia-based lawyer Pat Sweeney; Navigating the CPSC: Advice from the Trenches on databases, investigations, reporting, and recalls, led my old pal John F. Kuppens; and Crisis Management and Recall Planning:
Complying with Governmental Oversight; and an interesting talk on Ethical Lessons from Lincoln, how the life and writings of “Honest Abe” provide meaningful lessons on professionalism
and ethics for lawyers today.

Duke Organizing Special MDL Conference

Sean Wajert — Fri, 15 Mar 2013 07:00:05 -0500

Here is a conference opportunity worth thinking about for our readers who work on MDLs.

The Director of the Duke Law Center for Judicial Studies notes that they are looking for additional experienced lawyers from diverse areas of practice to attend an invitation-only conference, addressing the “Future of MDL” on May 2-3 in Washington DC area. The Panel on Multi-District Litigation is addressing pressing issues affecting their responsibility and is seeking input from knowledgeable lawyers at the conference.

The conference is to bring together outstanding panels of academics, MDL Panel members, and experienced private practitioners who, along with the other conferees, will critically examine what works and what maybe does not work in MDL procedures. The upcoming conference is designed to give experienced lawyers the opportunity to make a difference by making their views known on pressing issues directly to some of the key officials responsible for administering the MDL system.

Information on the “Future of MDL” conference, including the agenda and faculty, is posted here. All who get invited to register for the conference are expected to actively participate during discussions. If any of our readers are interested in being invited to the conference you can send Ann Yandian at Duke (ann.yandian@law.duke.edu) a short description of your MDL experiences, and indicate your areas of practice, number of years practicing law, and which side of the “v” you typically represent.

As an aside, the Duke Law Center for Judicial Studies has as its mission advancing the study of the judiciary through interdisciplinary scholarship and cooperative thinking from multiple perspectives, including judges, researchers, teachers, theorists, and practitioners.

Update on Mass Tort Rules in Busy Court

Sean Wajert — Wed, 13 Feb 2013 09:46:17 -0500

We posted before about potentially important changes in the administrative rules for Philadelphia's busy mass tort system. General Court Regulation No. 2012-01 represented the first general overhaul of the Complex Litigation Center’s practices in many years. The order was designed to revise and streamline the conduct of mass tort litigation in Philadelphia in a number of ways. The order noted the pronounced upward trend in mass tort filings in this court, and the fact that the court’s disposition rate had not kept pace with filings; thus, a significant backlog developed. The order noted the impact of past policy which invited the filing of cases from other jurisdictions. A "dramatic increase in these filings" occurred after the court’s leadership invited claims from other jurisdictions.

In a recent report to the mass tort bar, Administrative Judge Herron of the Philadelphia Court of Common Pleas noted a significant percent reduction in mass tort filings from 2011 to 2012. There were 70% fewer filings in 2012 than 2011. The overall inventory of mass tort cases declined by about 12%. Out-of-state filings declined slightly by percentage, and discovery disputes also declined, while settlement activity reportedly increased. The court thus indicated that the revised protocols would be continued.

While there are a number of factors that could impact filing rates, the decline in filings is significant, and it is hard to escape the conclusion that new protocols must have had some impact. Judge Herron labeled the changes an "exceptional result" leading to a much more manageable number for the court. Of the 2012 filings, 489 were pharmaceutical cases and 327 were asbestos, according to the court statistics.

The court also disposed of more cases than new cases were filed, contributing to the decease in inventory. The new protocols encourage mediation of cases before former state and federal judges.

Advisory Board

Sean Wajert — Tue, 12 Feb 2013 07:15:16 -0500

Your humble blogger is pleased to note that Law360 has announced the formation of its 2013 Product Liability editorial advisory board. Yours truly was named to the editorial advisory board for Law360 Product Liability.

The purpose of the editorial advisory board is to offer ideas and feedback on Law360's coverage and to offer insight on how the publication can best shape future coverage to serve readers. Happy to try to help fellow practitioners through this forum as well as here at MassTortDefense.

Class Denied in Credit Card Claim

Sean Wajert — Wed, 06 Feb 2013 07:21:56 -0500

A federal court in California last week denied certification of a proposed class of Nike store customers. Gormley v. Nike Inc., No. C-11-893-SI, (N.D. Cal., 1/28/13). The issue, interestingly, was typicality.

Plaintiffs in these consolidated cases brought putative class actions on behalf of themselves
and a class of consumers, alleging that defendants violated the Song-Beverly Credit Card Act of 1971, by requesting and recording the ZIP codes of credit card customers through Nike’s “Information Capture Policy.” Plaintiffs alleged that Nike implemented and maintained a policy whereby its cashiers were trained to follow the “EPOC manual” under which cashiers were prompted with a pop-up box on their screen to enter the customer’s ZIP code. The screen on the sales register that allowed the cashier to input a customer’s ZIP code did not appear until after the credit card was authorized and the receipt was printing. If a customer declined to provide a ZIP
code, Nike’s cashiers entered any alphanumeric combination. In support of class certification, plaintiffs submitted evidence that, during the class period, Nike’s ZIP code request policy was allegedly implemented at every Nike retail store in California, and ZIP codes were requested and recorded during approximately 561,179 transactions.

The plaintiffs sought to represent a class of all those consumers who Nike requested a ZIP code from in conjunction with a credit card transaction in a retail store in California from February 24, 2010, to February 24, 2011. Defendants raised a number of arguments against class certification, including noting that the proposed class definition appeared to be "fail-safe." But the issue that the court focused on was typicality. Rule 23(a)(3) requires the named plaintiffs to show that their claims are typical of those of the class. To satisfy this requirement, the named plaintiffs must be members of the class and must possess the same interest and suffer the same injury as the class members. Gen. Tel. Co. of Sw. v. Falcon, 457 U.S. 147, 156 (1982). The typicality requirement may be satisfied when each class member’s claim arises from the same course of events, and each class member makes similar legal arguments to prove the defendant’s liability. Rodriguez v. Hayes, 591 F.3d 1105, 1124 (9th Cir. 2010).

Although in the past many courts have found the typicality requirement is not stringent, the court here followed the recent trend, and held that plaintiffs had not demonstrated that they were typical of the class they seek to represent. The consolidated complaint challenged Nike’s “Information Capture Policy,” and yet all of the named plaintiffs testified that their experiences were not fully consistent with that policy. For example, some testified that cashiers asked them for their ZIP codes before providing them with their receipts and merchandise. However, under the Nike policy that is the subject of this lawsuit, cashiers were prompted to request ZIP codes after giving customers their receipts and merchandise. The court read the governing statute as prohibiting merchants from requesting personal identification information as a condition precedent to accepting payment by a credit card, Thus, as the legality of Nike’s policy depends on whether a consumer would perceive the store’s request for a ZIP code as a condition of the use of a credit card, the timing of that request is clearly relevant.

Accordingly, the Court found that the named plaintiffs were not typical of the class they seek to
represent, and denied class certification on this ground.