Defense Litigation Insider

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Philadelphia Judge Addresses Criticisms of Court’s Asbestos Program

By Peter Faben on Posted in Asbestos Litigation, Litigation Trends

Co-authored by Brian Gross 

CongressThis week, the Honorable John W. Herron, the Administrative Judge of the Trial Division of the Court of Common Pleas of Philadelphia, issued a significant order that attempts to address perceived problems in the Court’s Mass Tort and Asbestos Programs.  The order, available here, enumerates 15 different reforms that will significantly change the way asbestos litigation is handled in Philadelphia County, which is currently listed as number one on the American Tort Reform Foundation’s Judicial Hellhole list.

The reforms include, among other things:

  • A return to all-issues trials, and an end to reverse bifurcation;
  • No exigent trial settings;
  • A requirement that all discovery take place in Philadelphia;
  • Consolidation of cases only in very specific instances; and
  • A limit of no more than two trials per year for any counsel admitted pro hac vice.

Although it is too early to make predictions, one can only imagine that the reforms will lead to a significant reduction in new filings in the Philadelphia court.

Insurers Beware —Massachusetts Supreme Judicial Court Has Final Word on Damages Plaintiffs Are Entitled to Recover For Defendant-Insurers’ Violations of M.G.L. c. 93a and 176D

By Daniel McCarthy on Posted in Litigation Trends, Massachusetts Courts

Co-authored by Brian Gross 

On February 10, 2012, the Massachusetts Supreme Judicial Court found that plaintiffs were entitled to more than $22 million when it held that the damages to which a plaintiff is entitled to recover pursuant to M.G.L. c. 93A and 176D for an insurers’ failure to effect prompt, fair and equitable settlement of claims must be based on the underlying judgment in the plaintiffs’ tort action, and not the loss of use of the sum ultimately offered by the defendant-insurers.  See Rhodes v. AIG Domestic Claims, Inc., — N.E. 2D —-,Mass., 2012 WL 401034 (Mass., February 10, 2012).

The Rhodes case arose out of Rhode’s catastrophic personal injuries when a tractor trailer truck rear ended her car.  Rhodes, her husband and daughter brought a tort action against inter aliaGAF Building Corp. (“GAF”), the company that leased the tractor trailer truck. GAF was insured by Zurich American Insurance Company (“Zurich”) which carried a $2 million primary policy, and National Union Fire Insurance Company of Pittsburgh, Pennsylvania (“National Union”), which carried a $50 million excess umbrella policy. AIG Domestic Claims, Inc. (“AIGDC”) acted as National Union’s claims administrator.

Defendants’ and their Insurers’ evaluation of plaintiffs’ claims and the various settlement offers and demands are detailed at length in the Court’s opinion.  For purposes of this report, it is sufficient to note Zurich tendered its policy limits to AIGDC, but AIGDC’s highest offer prior to trial was $3.5 million, which increased to $6 million at the close of evidence.

After a trial on damages, the jury awarded plaintiffs damages in the approximate amount of $11.3 million, after deducting a co-defendant settlement and adding statutory interest.  The underlying tort action was settled pending appeal, but, plaintiffs’ claims against Zurich and AIGDC for both pretrial and postjudgment violations of Chapters 93A/176D proceeded to bench trial, where the judge found in favor of Zurich, but against AIGDC.  In calculating plaintiffs’ damages pursuant to Chapters 93A and 176D, the trial court andAppeals Courtboth held that plaintiffs’ damages are based on plaintiffs’ lost use of the funds.

On further appeal, the Massachusetts Supreme Judicial Court disagreed and held that the plain language of the Massachusetts Legislature’s 1989 amendments to Chapter 93A provides that the damages for knowing and willful violations of Chapters 93A and 176D committed by insurers are calculated by doubling or trebling the amount of the underlying judgment – in this case $11.3 million.

While the SJC’s decision invites the Legislature to consider expanding the range of permissible damages to be awarded for such cases, it is clear that under current law, liability insurers face significant risk in their claims handling practices, particularly where the underlying matter involves clear liability and potential for significant damages.

 

California Supreme Court Says Equipment Manufacturers Not Liable For Injuries Caused By Asbestos-Containing Replacement Parts

By Carrie Lin on Posted in Asbestos Litigation, California Courts, Litigation Trends, Products Liability

Co-authored by Brian Gross 

Navy ShipAfter years of inconsistent rulings in the trial and appellate courts, the California Supreme Court recently decided the issue of whether plaintiffs in asbestos litigation may pursue claims against equipment manufacturers for injuries caused by asbestos-containing replacement component parts they neither manufactured nor supplied. For the reasons below, the Court expressly rejected this theory of liability and affirmed judgment in favor of equipment manufacturers Crane Co. and Warren Pumps (O’Neil v. Crane Co., California Supreme Court Case No. S177401).

Procedural History of Case

This opinion originated from a wrongful death personal injury asbestos case first filed in Los Angeles Superior Court. Plaintiffs alleged that the Decedent was exposed to asbestos-containing gaskets, packing, and insulation materials found in or on the Defendants’ pump and valve products when Decedent served aboard ship in the United States Navy. Although the evidence demonstrated that Defendants’ products incorporated asbestos-containing component parts, it was undisputed that the Defendants did not manufacture or supply the asbestos-containing gaskets and packing actually found in or on the equipment at the time of Decedent’s exposure.

At trial, the Superior Court granted Defendants’ non-suit motions.  In doing so, the Superior Court ruled thatCalifornia’s strict liability and negligence law did not support imposition of liability for harm caused by another manufacturer’s product. The Second District Court of Appeal reversed the trial court’s decision.

California Supreme Court Ruling

On final appeal, the California Supreme Court reversed the Court of Appeal decision and affirmed the trial court judgment in favor of Defendants.  In so doing, the Court re-affirmed the general rules that a manufacturer cannot be held strictly liable for defects in another entity’s product, and that a manufacturer has no duty to warn of risks arising from another manufacturer’s products.

Impact of O’Neil Decision on California Asbestos Litigation Going Forward

The O’Neil decision will likely have a significant impact on asbestos litigation going forward. Although the decision does not entirely eliminate liability for all pump, valve, or other equipment manufacturers, it certainly limits the factual scenarios under which they may be held liable. Accordingly, California asbestos litigation counsel may anticipate the following:

  • An increased litigation focus on the remaining pool of asbestos replacement part manufacturers, such as gasket, packing and insulation manufacturer defendants
  • An increase in litigation against the direct suppliers of gasket, packing, and insulation materials (largely due to fact that many of the insulation, gasket, and packing defendants are now bankrupt)
  • Finally, because the O’Neil opinion leaves open the possibility that an equipment manufacturer may be held liable upon a showing that it ”substantially participated” in creating a harmful combined use of its product with asbestos-containing replacement parts, equipment manufacturers should anticipate that certain Plaintiffs firms will pursue and develop this theory of liability against them through the pre-trial discovery process.

 

 

Forward Progress: Court Creates MDL for Lawsuits Related to Concussions Against the National Football League

By Michael R. Brown on Posted in Litigation Trends, MDL

Co-authored by Brian Gross 

NFL footbal;Just in time for the Super Bowl, the United States Judicial Panel on Multi-District Litigation (JPMDL) issued an order on January 31 which creates an MDL for the various cases filed by former National Football League (“NFL”) players against the league, in which those former players allege that the NFL acted negligently with regard to players’ brain injuries and intentionally concealed the links between football and concussions.  The decision by the Panel consolidates the cases before United States District Court Judge Anita Brody in the United States District Court for the Eastern District of Pennsylvania inPhiladelphia, the court where three of the more than a dozen lawsuits are pending, including the first case filed against the NFL.

In support of its decision to consolidate the cases, the Panel held that

[t[he subject actions share factual issues arising from allegations against the NFL stemming from injuries sustained while playing professional football.”

As the Panel found, plaintiffs in all of the cases allege that the NFL and other defendants intentionally and fraudulently misrepresented and/or concealed medical evidence about the short and long term risks of repetitive traumatic brain injury and concussions.  The plaintiffs also allege that the NFL failed to warn players that they risked permanent brain damage if they returned to play too soon after they sustained a concussion.  The allegations go beyond mere negligence to assert intentional wrongdoing on the part of the NFL.  In fact, the Complaint in the most recently filed case explicitly alleges a conspiracy among the NFL and its thirty-two teams to conceal information about the cause and effect relationship between brain trauma sustained during NFL games and long term brain damage.  In addition, the Complaint paints a picture of the NFL as a business where players’ health is sacrificed in favor of profits, and as a league which promotes a culture where players under-report injuries in order to retain their place on the roster.

There has been increased public awareness of the health issues facing former NFL players in the past couple of years.  The issue was of central importance in the collective bargaining negotiations last spring.  As players learn new information, they are becoming increasingly vocal on the subject.  For example, former Green Bay Packer running back Dorsey Levens has spent the last year promoting public aware through a documentary entitled “Bell Rung” and by producing a stage play about the issue.

It will be interesting to see how the NFL proceeds with its defense.  The league has already filed motions to dismiss on the grounds that they are barred by the players’ collective bargaining agreements.  It is also likely that should the court fail to dismiss the cases, the NFL will rely heavily on the players’ “assumption of the risks” associated with playing football.  Pursuant to that defense, there is no duty to protect players from risks that are “inherent” in the sport; for example, being hit by an opposing player in football or by a golf ball on a golf course.  There are, however, exceptions to this rule for intentional conduct.  If the plaintiffs can prove that the NFL concealed information about the risks, they may just prevail.

Breaking News: Pfizer Birth Control Recall

By Sarah M. Knoff on Posted in Pharmaceutical and Medical Devices, Products Liability

Co-authored by Brian Gross 

 

birth controlOn Wednesday, February 1, 2012, the pharmaceutical manufacturer Pfizer recalled approximately 1 million packets of birth control pills.  According to a statement issued by the company, the active and inactive pills may have been misplaced within the packets, causing users to erroneously take the placebo pills instead of the active pills.  Although one million packets were recalled, according to Pfizer, only about 30 packets may have actually been affected.

 

While this error will not place a woman in any physical danger, it obviously increases her risk of pregnancy.  In its statement, Pfizer encourages all women who take the affected lots to switch to other non-hormonal forms of birth control and to consult with their physician as soon as possible.

All of this begs the question, what liability, if any, may Pfizer have for unintended pregnancies which stem from Pfizer’s packaging error.  While “wrongful pregnancy” cases generally arise in the context of medical malpractice, such as where a party undergoes a sterilization procedure but still conceives a healthy child, a plaintiff who unintentionally gets pregnant as a result of this packaging error may have a similar claim.  Plaintiffs in the typical “wrongful pregnancy” case, are generally entitled to the costs associated with:

  1. the unsuccessful medical procedure which led to the pregnancy;
  2. any medical complications: and
  3. delivery of the child.

The plaintiff may also be entitled to damages for pain and suffering, lost wages, and loss of consortium.  Plaintiffs cannot, however recover the cost of raising the child.  Wasdin v. Mager, 274 Ga.App. 885, 619 S.E.2d 384 (Ga.App., 2005).  The rationale being that a parent cannot be said to have suffered an injury in the birth of a child.  Id.

What differentiates the potential case against Pfizer from these other “wrongful pregnancy” cases, however, is that Pfizer, and other manufacturers of birth control pills, warn those who use the pill that it is not 100 percent effective in preventing pregnancy.  In fact, according to the Centers for Disease Control, birth control pills are only between 92 and 99 percent effective in preventing pregnancy when taken correctly.  As a result, it may be difficult for a potential plaintiff to prove that her pregnancy was caused by any negligence on the part of Pfizer.  It will also be interesting to see how a jury may value the damages associated with an unintended pregnancy. One thing is for sure, this is not likely to be the last we hear of this issue – in other words, stay tuned.

 

SOPA/PIPA Update: Congress To Suspend SOPA

By Kenneth R. Costa on Posted in Litigation Trends

Co-authored by Brian Gross 

Stop SOPA

Earlier today we published an article discussing the SOPA Blackout and outlining the major considerations and impact of both SOPA and PIPA. We have just learned that House Judiciary Committee Chairman Lamar Smith, (R-Texas) has issued a press release announcing the Senate’s decision to postpone consideration of this legislation until there is a wider agreement on a solution.

 

In the release Chairman Smith declared:

 “I have heard from the critics and I take seriously their concerns regarding proposed legislation to address the problem of online piracy. It is clear that we need to revisit the approach on how best to address the problem of foreign thieves that steal and sell American inventions and products.

So for now at least, it appears that the people have spoken. We will continue to monitor and report with updates of interest to our readers.

SOPA Bill H.R. 3261.IH 

Protect IP Act (PIPA) 

 

The Average User’s Guide To SOPA & PIPA: Kim Kardashian, Doodles and Why You Should Care

By Kenneth R. Costa on Posted in IP Litigation, Litigation Trends

Co-authored by Brian Gross 

Wikipedia SOPA BlackoutIf you’re like me (and 375 million others), then you use Google as your primary search engine, and like most Google users, we are accustomed to seeing the occasional “Doodle” in place of the familiar Google logo. In case you didn’t know, Doodles are the spontaneous and fun changes that Google makes to its logo to celebrate holidays, anniversaries and other historic milestones. But on January 18th, Google users did not find a colorful Doodle, instead the familiar Google logo was shrouded in black. The reason? Well, there are two actually; SOPA (Stop Online Piracy Act) and PIPA (Protect IP Act, Senate Bill 968). These twin bills are currently before the House and Senate, and if passed would provide prosecutors of the Justice Department greater powers to combat foreign-based websites that facilitate pirated content to users in the United States. On its face, this goal appears righteous enough. However, opponents of the these bills, including internet powerhouses like Wikipedia, Twitter, Facebook, WordPress and Google claim that if passed these laws will “jeopardize freedom and shift power of the independent web into the hands of corporations.” 

Wednesday’s internet SOPA Black Out, which included not only Google’s grim logo but a complete block of the Wikipedia website was the first coordinated effort by the aforementioned opponents in an effort to promote public awareness and understanding of exactly what these bills will do to inhibit people’s access to online information; and it may have actually worked to some degree, on Wednesday United States Senator Ron Wyden (D-OR) tweeted “Anti- #PIPA, #SOPA traffic has temporarily shut down our website.” That wasn’t the only fallout from the blackout, it appears that many of the politicians who originally supported these bills are now publically announcing their opposition. A recent article posted by Time Magazine’s online blog Techland reported that after the blackout

at least 10 senators and nearly twice that many House members have announced their opposition.

However, proponents of the bills still remain, and while there are already laws in place to help combat online piracy such as the Digital Millennium Copyright Act (DCMA) of 1998, these proponents are claiming that these new bills will target the “rogue” websites that avoid US copyright law and are currently out of DCMA’s reach.  So what does all this mean for law abiding citizens who don’t engage in online pirating? Plenty actually.

Consider the following:

  • Because the wording contained in these bills is vague and the penalties steep for any site accused of “enabling or facilitating piracy”, there exists the very real potential for abuse – even being associated with a “rogue” site may be enough to land you in trouble with Uncle Sam.
  • Taken one step further, it is possible that blogs or sites where you can post ideas – even kitchen recipes – could land you in jail for a maximum of 5 years under the current versions of these laws!
  • SOPA and PIPA build a framework for future restrictions and suppression, and ultimately seeks to regulate the free expression and publishing of independent ideas on the web.  According to the Electronic Frontier Foundation (EFF), SOPA would break the internet, kill job creation, and potentially stop the innovation of the next twitter or tumblr.
  • On the other hand, internet piracy costs US companies about $135 billion every year, with the largest bite coming out of the entertainment industry.   (Even Kim Kardashian recently tweeted about SOPA!)
  • Under the new regime of SOPA/PIPA anyone found guilty of streaming copyrighted content without permission 10 or more times within six months should go to jail.

In this blogger’s opinion, the consequences of passing SOPA/PIPA as they are currently structured would impact our ability to share and obtain independent knowledge in ways that we can’t even conceive of yet, because we won’t have access to the ideas that will help conceive them.

We will continue to track the progress of these bills and report updates to our readers as they develop.

Massachusetts Court Extends Mensing to Bar Failure To Warn Claims Against Generic Drug Distributors

By Jonathan F. Tabasky on Posted in Litigation Trends, Massachusetts Courts, Pharmaceutical and Medical Devices, Products Liability

Co-authored by Brian Gross 

Generic Drugs

In June of 2011, the United States Supreme Court ruled that makers of generic drugs cannot be sued for failing to warn consumers of the possible side effects of their products if they copy the exact warnings used by their brand-name equivalents.  See Pliva, Inc., et al. v. Mensing, 131 S.Ct. 2567 (2011).  In Mensing, the plaintiffs took a generic form of the drug Reglan for several years, and alleged that the manufacturers were liable under state tort law for failing to provide adequate warning labels, despite mounting evidence that long term use carries a risk of tardive dyskinesia far greater than what was indicated on the label.

 The majority of the Court found that, although State law placed a duty directly on all drug manufacturers to adequately and safely label their products, federal drug regulations prevent generic manufacturers from independently changing safety labels which would add or strengthen a contraindication, warning, or precaution.

Where it is impossible to comply with state and federal law, the Supremacy Clause of the United States Constitution controls, and pursuant to the doctrine of preemption, state law must give way.  The majority distinguished the Court’s holding in Wyeth v. Levine, 129 S.Ct. 1187 (2009).  In that case, the federal law in question permitted a brand-name drug manufacturer to unilaterally strengthen its warning without prior FDA approval.

Now, for the first time, a Massachusettsjudge has applied Mensing to bar failure to warn claims arising out of the distribution of generic drugs.  See Stevens v. Community Health Care, Inc., 2011 WL 6379298 (Mass.Super.).  In Stevens, the plaintiff alleged that DAVA Pharmaceuticals, Inc., (“DAVA”) failed to adequately warn, in accordance with Massachusetts law, of the harmful interaction between the generic drug Clarithromycin and Methadone. Relying on the Mensing decision, DAVA moved for summary judgment.  Superior Court Judge Thomas R. Murtagh granted the motion, and held that, although DAVA was a distributor of the generic drug in question and not the manufacturer, it too had no ability to change labeling or warnings.  As a result, like a generic manufacturer, DAVA could not be subject to liability in connection with a state law claim premised on failure to warn theories.  In a related ruling, Judge Murtagh also rejected Stevens’ motion for leave to add Abbott Laboratories, Inc., the brand manufacturer, to the suit due to the earlier plaintiff’s strategic decision to not do so.

We predict that the Mensing decision will continue to have significant ramifications on pharmaceutical litigation in state courts throughout the United States, as only 25% of all prescription drugs dispensed in this country are brand name drugs.  If you would like to discuss these cases and their potential impact upon future litigation, please visit the Product Liability Defense page for contact information.

 

‘Twas the Night Before Trial – Bankruptcy Claims Forms and the Danger of Non-Disclosure

By Peter Faben on Posted in Asbestos Litigation, Delaware Courts, Litigation Trends

Co-authored by Brian Gross 

Last Minute Appeal

Filing claims with asbestos personal injury bankruptcy trusts is a double-edged sword for plaintiffs.  While plaintiffs (particularly those diagnosed with mesothelioma) can recover hundreds of thousands of dollars from such trusts, bankruptcy claims and the forms associated with those claims can have a significant effect on a plaintiff’s legal action.  Not only can the recovery from bankruptcy trusts be used to off-set verdicts against non-settling defendants, but in states where liability can be apportioned to non-parties, the claims forms are also strong evidence that defendants can use to prove the fault of bankrupt entities to the jury.  Thus, the disclosure and production of bankruptcy trust forms is often a hot-button issue in asbestos litigation.

 

That was no more evident than in the recent Delaware case June Montgomery v. American Wire & Steel Corp., C.A. No. N09C-11-217 (Del. Super.), which was scheduled to start trial on November 7, 2011.  Although one defendant – Foster Wheeler Energy Corporation – was still active in the case as of November 7, the trial never occurred.  The reason?  On the afternoon of November 6, just hours before opening arguments, plaintiff’s counsel for the first time disclosed the existence of and produced 20 bankruptcy trust claims forms.

An examination of the timeline and events surrounding plaintiff’s counsel’s egregious “Hail Mary” move should serve as a cautionary tale to any attorney who may consider testing the resolve of the Delaware Superior Court in regard to compliance with Standing Order No.1:

The Email at the Eleventh Hour (Literally)

  • At10:53 pmon Saturday, November 5, plaintiff’s counsel emailed counsel for Foster Wheeler and disclosed that not only were bankruptcy trust claims, in fact, filed on plaintiff’s behalf, but plaintiff was already paid on two of those claims.
  • The next day, plaintiff’s counsel produced a total of 20 bankruptcy trust claims forms that were submitted on plaintiff’s behalf.
  • Foster Wheeler immediately filed a motion with the Court in which it sought sanctions, under Rule 37 of the Delaware Superior Court Civil Rules, in the form of a dismissal of plaintiff’s action due to plaintiff’s failure to comply with the Court’s Standing Order No. 1 for asbestos actions.

The Court’s Reaction

  •  At11:48 a.m.on November 7, a judicial action form was filed on the docket with the following notation – “From Office Conference Heard Before Ableman, J. on11-07-11- Trial Did Not Take Place This Date- See Attached”
  • Foster Wheeler filed its opening brief in support of dismissal pursuant to Rule 37 on December 7.

While the Court has not issued a final decision on the issue, the action the Court did take on November 7 speaks volumes.  Compliance with the Delaware Superior Court’s Standing Order No. 1 is a essential for all parties, and bankruptcy trust claims forms, which are critical and highly relevant pieces of discovery, must be produced.  While the Court’s reaction to the events in Montgomery is not likely to end the wrangling that frequently occurs with respect to the production of bankruptcy trust claims forms, it should stand as a stark warning to plaintiffs that the stakes associated with withholding these claims forms are higher than they might have anticipated.

Food Safety: Assessing The Future Of Third-Party Auditors

By Javier F. Flores on Posted in Foodborne Illness

Co-authored by Brian Gross 

A company’s interest in protecting its brand by providing a safe product to consumers, in conjunction with the increased regulatory requirements set forth under the Food Safety Modernization Act (FSMA) require that entities active in the food supply chain take appropriate measures to verify that their suppliers comply with Current Good Manufacturing Practices (cGMPs).   It is incumbent upon every business involved in the food supply chain to perform its own due diligence with respect to its suppliers, including, confirming FDA registration, making Freedom of Information Act (FOIA) requests for documentation generated or retained during FDA inspections of suppliers’ facilities, reviewing suppliers’ Food Safety Control plans, Hazard Analysis and Critical Control Point (HACCP) plans and/or Allergen Control Programs, and conducting regular audits of their facilities.  Not every business, however, has the internal expertise to personally audit their suppliers’ facilities.  Furthermore, the current market demands, in which consumers expect local, organic foods, means that many businesses must purchase their products from a larger, more diverse group of suppliers.  This creates an issue because many businesses lack the resources to perform regular audits of all their suppliers’ facilities.  Companies cannot rely upon the FDA to audit their suppliers, as it lacks the funding necessary to audit food processing companies both domestic and abroad with the regularity necessary.   In fact, the FSMA only requires that the FDA inspect domestic high-risk facilities once by 2016, and at least every three years thereafter.  Third-party audits provide a cost-efficient alternative which, if properly regulated, can ensure a high quality of food without the insurmountable costs associated with having to individually audit each supplier.  For that reason, third-party audits will inevitably play a larger role in future food safety.

The failures of the third-party audit system are well documented.
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