FDA’s Final Guidance: “Consideration of Uncertainty in Making Benefit-Risk Determinations in Medical Device Premarket Approvals, De Novo Classifications, and Humanitarian Device Exemptions”

The U.S. Food & Drug Administration (FDA) has released a final guidance document entitled, “Consideration of Uncertainty in Making Benefit-Risk Determinations in Medical Device Premarket Approvals, De Novo Classifications, and Humanitarian Device Exemptions.” This document provides information on how the FDA evaluates uncertainty and the appropriate extent of uncertainty in the benefit-risk determination for medical devices that are subject to premarket approval (PMA).

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Post-BMS, Courts Grapple with the Nexus Between Stream of Commerce Activities and the Plaintiff’s Claim Required for Specific Jurisdiction over Manufacturers in Product Liability Cases

Courts have struggled for decades to define the constitutional limitations on personal jurisdiction over major product manufacturers who sell their products nationwide. The central tension has been determining the validity and potential scope of the “stream of commerce” theory in a world of advancing technology and associated evolution of business operations and practices. That tension is increasing as state courts decide what kind of nexus is required, between a defendant’s “forum-directed” commercial activities and the plaintiff’s claim, to justify the exercise of specific jurisdiction. Specifically, how purposefully forum-directed and how closely tied to the specific claim must the activities be?

Stream of commerce theory posits that a defendant that has placed a product into the nationwide channels of commerce should anticipate that its products will thereby be “swept” into any state and if it causes injury there, it will be subject to suit. In its purest form, the theory collides to some degree with the fundamental limiting requirement that a defendant may be haled into a forum to litigate only where it has “purposely availed” itself of the privilege of doing business by, for example, directing its products into the forum.

The Supreme Court applied the theory to a manufacturer in Asahi Metal Indus. v. Superior Court, 480 U.S. 102 (1987). However, the Court was evenly and sharply divided as to whether placing a product into the stream of commerce, without more, was sufficient to authorize specific jurisdiction where the product allegedly causes an injury, or whether “something more,” some forum-directed activities purposely creating a “substantial connection” with the forum state, was required. A quarter-century later the Court revisited the issue to break the deadlock in J. McIntyre Machine v. Nicastro, 564 U.S. 873 (2011), but again fractured, producing no clear or definitive holding on the subject. Since Nicastro, courts have continued to debate the status and contours of the stream of commerce theory as a means of satisfying the requisite purposeful availment.

Bristol-Myers Squibb Co. v. Superior Court

Meanwhile, the Supreme Court’s seminal 2017 decision in Bristol-Myers Squibb Co. v. Superior Court, 137 S. Ct. 1773 (2017) (BMS) examined the relationship between the defendant’s “purposeful” forum-related activities and the plaintiff’s injury/claim necessary to assert specific jurisdiction over a manufacturer. Hundreds of non-residents filed suit in California against Bristol-Myers for injuries from its drug Plavix®. The Court held that in order for a state to exercise specific jurisdiction, “the suitmust “[arise] out of or [relate] to the defendant’s contacts with the forum.” But the Court’s analysis demonstrated that only those activities having a fairly direct connection to both the forum and the claim are relevant. Bristol-Myers allegedly sold Plavix with deficient warnings in California and elsewhere. The nonresidents’ claims arose out of using prescribed Plavix – but crucially, not in California. Jurisdiction was therefore lacking.

The stream of commerce theory was not discussed in BMS, as the purposeful availment requirement was not contested. But in requiring that the claim bear a tight connection to the defendant’s forum-directed activities, BMS necessarily implies that there must be purposeful forum-directed activities to connect to the claim. Accordingly, the passive, “without more” formulation of stream of commerce theory advanced by one faction in Asahi and barely avoiding explicit rejection in Nicastro, appears to be a “dead letter.”

Justice Sotomayor in dissent observed that Bristol-Myers argued that a defendant’s in-state conduct must actually cause a plaintiff’s claim, adding a footnote that this question “appears to await another case.”

Recent Interpretation of Bristol-Myers

That other case may have arrived. In Bandemer v. Ford Motor Co., 913 N.W.2d 744 (Minn. 2019), the Minnesota plaintiff was injured in Minnesota in a Ford vehicle that was designed, manufactured and originally sold outside the state. Ford argued that Minnesota could not exercise jurisdiction because there was no causal connection between Ford’s Minnesota contacts and the plaintiff’s injury. The Minnesota Supreme Court disagreed. It found BMS (1) inapposite, and (2) inconsequential, as BMS addressed claims by non-resident plaintiffs and did not explicitly require a causal nexus; rather, the Court had framed the nexus issue more broadly, requiring the claim arise out of or relate to the defendant’s forum contacts. Ford’s purposeful acts of selling thousands of cars in Minnesota, including the same make and model at issue, and advertising there, were sufficiently related to plaintiff’s design defect claims as those claims “are about more than one specific car.” So even though the specific car had no direct, purposeful connection between Ford and the forum state, Ford’s business there combined with the local accident was sufficiently “related” to justify jurisdiction.

Similarly, in Ford Motor Co. v. Montana Eighth Judicial District Court, 395 Mont. 478 (2019), the Ford at issue was not manufactured, designed or originally sold in Montana. Ford mounted the same causal nexus requirement argument. The Montana Supreme Court disagreed and held that because the accident occurred in Montana, Ford sells products that it expects will cross state lines, and Ford serves the local market, Montana courts could exercise specific jurisdiction.

Both opinions found BMS of little significance in a case involving residents injured within the state, notwithstanding the holding in Walden v. Fiore, 134 S. Ct. 1115 (2014), that the due process inquiry must focus on defendant’s activities directed at the forum, and not the plaintiff’s linkage between the defendant and the forum. Both courts honed in on the “related to” verbiage to relax the required nexus between activities and claim, even though Bristol-Myers’s contacts with California were similarly “related” to the claims and were deemed too disconnected to support specific jurisdiction in BMS. Both opinions seem generally inconsistent with the comparatively rigorous connection between forum-related activities and the plaintiffs’ claims required by BMS.

So the exercise of specific jurisdiction based largely on the manufacturer’s activities in the general stream of commerce retains vitality for the moment, notwithstanding BMS. But Ford is expected to petition for certiorari in both cases. At some point in the not-too-distant future, the U.S. Supreme Court will have to deliver additional, more definitive guidance on the quality of the relationship between a manufacturer’s forum activities and a plaintiff’s claim required to support specific jurisdiction. Perhaps it also will take the opportunity to make explicit the rejection of the pure, foreseeability-based notion of stream of commerce theory.

Biotin Supplement Suit Dismissed on Preemption Grounds

A California federal judge tossed a proposed class action against allegedly “worthless” biotin dietary supplements on preemption grounds earlier this week, citing the Ninth Circuit’s recent decision in Dachauer v. NBTY, Inc., 913 F.2d 844 (9th Cir. 2019).

In Greenberg v. Target Corp., et al., the plaintiff filed a putative class action alleging that labeling for Target’s Up & Up brand of biotin dietary supplements was misleading under California’s Unfair Competition Law (UCL) and Consumer Legal Remedies Act (CLRA).

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The FDA Is in the Doghouse

An unusual pet food case filed this summer in the District Court of Colorado has a pet food manufacturer as the plaintiff rather than a defendant. Lystn, LLC v. FDA, No. 1:19CV01943 (D. Colo. July 5, 2019).

There have been numerous reports of lawsuits involving allegedly contaminated pet food filed against pet food manufacturers or distributors by pet owners claiming that they were deceived by pet food labels and suffered harm either as a result of paying a premium for the food or because their pets were sickened by the food. In contrast, on July 5, 2019, a raw pet food company, Lystn, LLC, brought a civil action against the FDA seeking declaratory and injunctive relief. The complaint challenges the FDA’s ability to enforce what Lystn characterizes as “a nationwide zero-tolerance standard for Salmonella presence in pet food that is unsupported by science and ultra vires of powers properly delegated to it by Congress.”

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There Are Two Sides to Every Product Label

As we have reported in our previous blog posts (“Beware the “Influencer”” and “The Price of Natural Cosmetics”), courts continue to wrestle with challenges to manufacturers’ claims that their products are “all natural.” Recently, California’s Central District Court added to the growing volume of decisions in this space. In Robinson v. Unilever United States, Inc., 2019 WL 2067941 (C.D. Cal. Mar. 25, 2019), the Court was tasked with resolving “100% natural” claims and “made with 100% natural” ingredients claims. The Robinson decision provides some insight into what types of “natural” claims may be permitted by trial courts and how they are reigning in consumer class actions.

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Authenticating Social Media Evidence at Trial

Social media is ubiquitous in our cyber-connected world. For many, the first thing a person does when they wake up, and the last thing that person does when they go to bed is read, post, or otherwise interact with platforms such as Facebook, Twitter, Instagram, LinkedIn, and the like. For litigants in a lawsuit the potential to unwittingly post something online that is not thought through or carefully composed can be a trap. Attorneys look at social media presence in their quest for evidence, and discovery requests for social media posts are commonplace in deposition notices, preservation requests, fact sheets, interrogatories, and requests to produce.

Social media is subject to Rules of Evidence principles, including relevancy, authenticity, hearsay, and the probative value of evidence in light of its potential for unfair prejudice. Lorraine v. Markel Am. Ins. Co., 241 F.R.D. 534 (D. Md. 2007). Of these, authentication at trial is thought to be the “greatest challenge.” Hon. Paul W. Grimm, et al., Authentication of Social Media Evidence, 36 Am. J. Trial Advoc. 433, 439 (2013). Authentication of social media evidence is more complicated than showing a witness a printout with an account name and photo alongside the commentary − and for good reason. As the Third Circuit has recognized, social media evidence presents special challenges because of “the great ease with which a social media account may be falsified or a legitimate account may be accessed by an impostor.” United States v. Browne, 834 F.3d 403 (3d. Cir. 2016).
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FDA Final Guidance Document “Risk Evaluation and Mitigation Strategies: Modifications and Revisions Guidance for Industry”

On July 9, 2019, the U.S. Food & Drug Administration (FDA) released the final guidance document “Risk Evaluation and Mitigation Strategies: Modifications and Revisions Guidance for Industry,” which provides information regarding “changes to approved risk evaluation and mitigation strategies (REMS),” the application process for proposed changes to REMS, and “how the FDA will process submissions.”

Not every pharmaceutical product approved by the FDA requires a REMS. “A REMS is a required risk management plan that uses tools beyond the prescribing information (the package insert) to ensure that the benefits of certain drugs outweigh their risks.” Following a REMS submission, an application holder might be inclined to submit proposed changes, or the FDA might require the submission of proposed changes. Application holders who find themselves in either position may turn to this final guidance document for direction.
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The Trend Toward MDLs in Products Cases

A review of multidistrict litigation (MDL) statistics confirms the increasing percentages of federal cases being consolidated into MDLs. According to the Judicial Panel on Multidistrict Litigation (JPML) website, as of June 2019, 202 MDLs were pending in 46 different federal districts, in 32 different states, before 160 different transferee judges. California boasts the largest number of MDLs, with 30. New York State is close behind with 26. The 141,721 cases included in these MDLs represent more than 50 percent of the federal civil docket. More than 30 percent (or 70 MDLs) of the pending MDLs are products liability cases, a significant increase from 16 percent in 2005. And, of the 70 MDLs, more than 50 are litigations involving pharmaceutical products and/or medical devices. These numbers highlight the increase in the frequency with which products liability cases are being coordinated in MDL proceedings.

The MDL statute enacted in 1968 allows for the transfer of cases “involving one or more common questions of fact … pending in different districts” to “any district for coordinated or consolidated pretrial proceedings.” 28 U.S.C. § 1407(a). After an MDL is established, later-filed cases involving the same questions of fact are seamlessly transferred to the MDL as tagalong cases. The efficiencies seen in MDL proceedings since 1968 have caused the MDL docket to grow dramatically. In the early years, the “caseload was relatively flat—in the late 1970s and throughout the 1980s, the Panel averaged only around 40 [consolidation] motions per year.” Emery G. Lee III et al., “Multidistrict Centralization: An Empirical Examination,” 12 Journal of Empirical Legal Studies,  211, 221 (2015). By the 1990s, the MDL caseload was growing rapidly. Today, the JPML reports that it considers more than 55 motions per year on average, and as of the end of 2018, MDLs accounted for 52 percent of all civil cases pending in federal court.
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Products in a New Dimension: Manufacturing Considerations for 3D-Printed Products

Since its advent more than 30 years ago, the 3D printing market has grown, and will continue to expand for a myriad of reasons, including sustainability and reduced energy consumption. As the process, including the applicable technology, becomes more cost-effective, its widespread use continues to increase across many industries, such as aerospace and defense, energy, architecture and construction, automotive, food/culinary, consumer products and health care.

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The CPSC Releases Framework of Safety for the Internet of Things

The rapidly developing technology of interconnected software allows consumers to reach new heights of convenience and efficiency. We can start our dinner remotely, listen to our music in every room in the house, track and log our heart rate and step count, and program our coffeepot to be ready for us in the morning. This technology sometimes is called the Internet of Things (IoT), which describes the interconnectedness of devices via the internet. These devices can exchange data between themselves to coordinate a variety of helpful functions. While this technology is exciting and signifies many positive new directions for consumer products, manufacturers should be aware of the potential risks that come with creating such products.

To that end, the U.S. Consumer Product Safety Commission (CPSC) released a Framework of Safety for the IoT (the CPSC Framework) in January 2019. The CPSC Framework provides “technology-neutral best practices to ensure consumer product safety” and to prevent “death, physical injury or illness” resulting from the use of IoT products. It is not intended to address privacy or confidentiality. While general in tone, the CPSC Framework is intended to assist with an “active approach” to safety rather than a reactive one in this quickly growing industry.

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