Law

Any time you find yourself drawing an analogy to asbestos lawsuits, you know you're in trouble.   We have too often heard plaintiff lawyers or, worse, judges advocate for borrowing procedures from asbestos litigation.  Almost always those procedures would make it easier for plaintiffs to 'prove' little things like product identification, and would abridge defendants' rights to seek certain discovery or file motions.  If the symbol for the legal system is a scale, the symbol for the asbestos docket should be a meat-grinder.  We had the experience earlier in our career of representing a tertiary asbestos defendant that really and truly had nothing to do with any harm inflicted on any asbestos plaintiff.  It should never have been sued.  But after the actual asbestos manufacturers went bankrupt, enterprising plaintiff lawyers sued any and every entity in sight so as to keep the asbestos gravy train rolling.  Instead of winding down to extinction or at least to something with narrowly circumscribed limits, asbestos litigation entered second and third waves of opportunistic litigation. It is like what Hannah Arendt said about totalitarian regimes, how they constantly need to find new enemies and scapegoats.  Asbestos litigation became a bizarre, parallel legal system, more characterized by (bad) social engineering than coherent rules and procedures.  Our encounter with the asbestos maw was relatively brief.  We represented a company that made components for automobile brakes.  Mind you, the company did not use or touch asbestos at all.  After the products entirely left our clients' hands, somebody else would add the asbestos.  When we pointed out that fact to the plaintiff lawyers, they still insisted that we must pay a nuisance exit fee.  When we sought to file a motion with the court, we were advised that the asbestos docket permitted no such motions until the eve of trial.   Good system, huh?

We do not know a whole lot of the facts behind the New England Compounding Pharmacy MDL, but the first opinion we have seen from it (there will doubtless be many more) gave us an ugly asbestos flashback.  The MDL stems from allegations that the New England Compounding Center (NECC) produced a contaminated medicine that caused people to suffer from fungal meningitis.  NECC recalled the medicine.  It then surrendered its pharmacy license, ceased production of all medical products, and filed for bankruptcy.  The plaintiffs steering committee filed actions against NECC, naturally enough, and also filed actions against affiliated entities and individuals.  The plaintiffs also filed complaints against not-so-affiliated entities and persons, including hospitals, clinics, and doctors.  This is where we started thinking about asbestos cases.  If there must be a remedy for every wrong, does that mean the remedy can be collected from someone who did nothing wrong?   The NECC opinion we are looking at today, In re New England Compounding Pharmacy, Inc. Products Liability Litigation, MDL No. 13-02419-RWZ (D. Mass. Jan. 13, 2015), provides an interesting snapshot.  This particular opinion relates to actions where plaintiffs alleged that Illinois medical providers played a role in administering the contaminated NECC medicine, thereby causing injuries.  The claims were for medical negligence, violation of the Illinois Consumer Fraud and Deceptive Business Practices Act, failure to warn, strict product liability, and punitive damages.  

The good news for the defendants was that the court dismissed the strict liability claim, because that theory could apply only if the defendants were predominantly providing a product rather than a service.  The court, quite sensibly, concluded that the medical providers were predominantly providing a service rather than a product.  But the rest of the opinion was bad news for the defendants.  The defendants made an argument that rings true to our admittedly biased ears: that physicians have no duty to regulate pharmacies and drug manufacturers.  But the court concluded that the master complaint passed muster because it alleged that the defendants had a duty to exercise reasonable care to ensure that the drugs they administered  to patients were procured from drug companies that complied with pharmaceutical laws, made safe and effective drugs, and utilized proper quality control, safety, and sterility measures.  Wow.  The plaintiffs also alleged that physicians must take care that the drugs administered were not contaminated, and must inform plaintiffs of the sources of drugs (especially if there was "an unaccredited, mass producing, out of state, compounding pharmacy, unregulated by the FDA ... and the dangers associated therewith").  That is a fairly breathtaking litany of duties for doctors.  The complaint also alleged that the defendants "deceptively concealed" information about the source of the medicine and failed to inform patients that they were being administered "an unsafe, unreasonably dangerous drug compounded by NECC."    Those allegations were deemed enough to make out claims for negligence, consumer fraud, and failure to warn.  Moreover, because the complaint said that the defendants went beyond mere inadvertence and, instead, constituted such utter disregard for the rights of others as to amount to "complete neglect for the safety of patients," and that the defendants "willfully and knowingly failed to abide by consumer safety regulations and withheld important safety information from patients," the claims for punitive damages could go forward.

The court did cite TwIqbal, but certainly did not appear to apply the standard with any rigor.  As a result, the plaintiffs have gotten away with very vague, very broad allegations that rip large holes in the duty envelope.  It will be interesting to see what sort of proof the plaintiffs have that the doctors actually knew what was going on at the compounder.  Are these defendants now on the hook because they really were negligent, or merely because they were next?

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Posted By Steve McConnell to Drug and Device Law at 1/27/2015 02:19:00 PM

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