Policing Bad Claims In Consolidated Litigation: Part 2

With the proliferation of consolidated litigation in recent years, various courts have lamented the lack of scrutiny often given to individual cases prior to filing in a class action or multidistrict litigation. Given the structure of these mass proceedings, individual claims frequently do not get meaningfully assessed. Against this backdrop, recent federal court decisions demonstrate courts’ increased willingness to police meritless claims by assessing whether counsel’s pre-suit investigation was adequate.

The first part of this article examined the obligation to conduct a pre-suit investigation under Rule 11 of the Federal Rules of Civil Procedure, and reviewed what different courts have said in recent years about meritless claims in mass litigation.

This part will discuss the importance of conducting plaintiff interviews, gathering basic information, avoiding language copied from dissimilar complaints and other issues.

Given the recent pronouncements of courts on the lack of scrutiny applied to individual cases in consolidated litigation, plaintiffs counsel should pay strict attention to Rule 11’s requirements prior to filing suit, particularly in a consolidated litigation, and defense counsel should be aware of the circumstances under which plaintiffs counsel’s efforts fall short of Rule 11’s requirements such that sanctions may be warranted. While the analysis is a factual determination that varies to some extent by jurisdiction, an examination of recent cases provides general guidance.

To read the full text of this article by Duane Morris attorneys Danielle N. Bagwell and Anne A. Gruner, please visit the Duane Morris website.

Policing Bad Claims In Consolidated Litigation: Part 1

With the proliferation of consolidated litigation in recent years, various courts have lamented the lack of scrutiny often given to individual cases prior to filing in a class action or multidistrict litigation. Given the structure of these mass proceedings, where claims are often resolved on a global level, with payout determined by the number of filings, individual claims frequently do not get meaningfully assessed.

This process has an obvious inherent risk of including meritless individual cases. Against this backdrop, recent federal court decisions demonstrate courts’ increased willingness to police meritless claims by assessing whether counsel’s pre-suit investigation was adequate.

The requirement that counsel conduct a meaningful pre-suit investigation is derived from Rule 11 of the Federal Rules of Civil Procedure. Rule 11 states that by filing a pleading, counsel represents that, to the best of their knowledge “formed after an inquiry reasonable under the circumstances,” the legal theories are warranted by existing law or nonfrivolous argument, and the factual contentions have evidentiary support or will have evidentiary support after a reasonable opportunity for further investigation.

To read the full article by Duane Morris attorneys Danielle N. Bagwell and Anne A. Gruner, please visit the Duane Morris website.

Counterfeit Cosmetics: Fake Beauty, Real Danger

On Jan. 30, the U.S. Government Accountability Office issued a report on the threat of counterfeit products to consumers.[1] Among other things, the report highlighted the prevalence of counterfeit cosmetics on popular e-commerce websites such as Amazon.com Inc. and eBay Inc., noting that 13 out of 13 samples purchased from third-party sellers with exceptional approval ratings were fake.[2]

In the age of e-commerce, counterfeit cosmetics present a growing challenge — not only do they pose significant health risks to consumers, but they raise serious legal concerns for brand manufacturers, distributors and retailers.

A Growing Problem

It is no secret that personal care is big business. According to a report commissioned by the Personal Care Products Council and prepared by PricewaterhouseCoopers, the U.S. personal care industry — which encompasses color cosmetics, perfumes, moisturizers, shampoos, hair color and deodorants — was alone responsible for $236.9 billion in gross domestic product in 2013.[3]

As of January 2018, individual spending on personal care products was forecast to grow at an annual compounded rate of four percent between 2018 and 2022.[4] Yet, as cosmetics sales have steadily increased, so too have sales of counterfeit cosmetics.[5]

To read the full text of this article by Duane Morris attorney Kelly Bonner, please visit the Duane Morris website.

Why Sales Rep Witness Tampering Accusations Matter

It is not often that the testimony or circumstances surrounding sales representatives take center stage in a products liability trial involving prescription drugs and medical devices. However, two recent cases involving allegations of improper witness contact by pharmaceutical and medical device sales representatives have brought this issue to the forefront.

They provide a glimpse of the consequences that can arise from such allegations, including putting counsel in the crosshairs of a government inquiry and, perhaps equally damaging, diverting precious trial resources. Examination of these cases provides an overview of why these witnesses may be targeted in witness tampering claims, the extremely serious regard with which courts have considered accusations of witness tampering and how, moving forward, accusations of such impropriety — whether well-founded or not — may become a more likely scenario that can have significant unwanted consequences.

The Recent Case Examples

Recent trials involving DePuy Orthopaedics Inc.’s Pinnacle hip and Janssen Pharmaceuticals Inc.’s Xarelto blood thinner products illustrate how counsel can attempt to capitalize on sales representatives’ unique role as an intermediary between defendant manufacturers and physicians — who may also be witnesses — by testing the propriety of communications with those sales representatives, who might be parties to the litigation themselves and defended jointly by the manufacturer’s defense counsel. Both cases involve accusations that defense counsel inappropriately used sales representative communications to influence the testimony of a physician witness.

The DePuy Example

In a recent trial involving the DePuy Pinnacle hip product pending in the United States District Court for the Northern District of Texas (In re: DePuy Orthopaedics Inc. Pinnacle Hip Implant Product Liability Litigation, Case No. 3:15-cv-03489-K), the plaintiffs’ counsel made accusations of witness intimidation and tampering arising out of communications between a company sales representative and a physician witness.

To read the full text of this article by Duane Morris attorneys Ryan J. O’Neil and Anne A. Gruner, please visit the Duane Morris website.

Consultant Contracts Can Create California Connection

In a recent decision in a DePuy ASR hip system case (DellaCamera et ux. v. DePuy Orthopaedics Inc. et al., No. CJC-10-004649, Proceeding No. 4649 (Calif. Super. Ct., San Francisco Cty. Nov. 1, 2017), a California Superior Court held that it has specific personal jurisdiction over nonresident defendants DePuy Orthopaedics Inc. (DePuy), Johnson & Johnson and Johnson & Johnson Services Inc. (Johnson & Johnson) for nonresident Connecticut-based plaintiffs’ claims on the basis that DePuy and Johnson & Johnson entered into consulting contracts with two California-resident surgeons on the design of the metal-on-metal hip implant device at issue.

This ruling bears noting in the wake of recent landmark personal jurisdiction decisions, including Bristol-Myers Squibb Co. v. Superior Court of California, San Francisco Cty., 582 U.S. ___, 137 S. Ct. 1773 (2017), BNSF Ry. Co. v. Tyrell, 581 U.S. ___, 137 S. Ct. 1549 (2017), and of course Daimler v. Bauman, 134 S. Ct. 746 (2014), which have armed defendants with tools to limit plaintiff forum shopping by obtaining favorable dismissals for lack of both specific and general personal jurisdiction.

In DePuy, the court latched onto the fact that the nonresident defendants intentionally contracted with in-state consultants who participated in the design of the hip implant product at issue, and that design was part and parcel of plaintiffs’ product liability causes of action. DePuy is not necessarily a novel approach to questions of specific jurisdiction, but it is a relative outlier in the context of the overall trend of cases restricting the ability of plaintiffs to “forum shop” and litigate outside of jurisdictions where defendants are not located and plaintiffs were not actually injured.

Thus, DePuy may foreshadow a new area of focus in which plaintiffs seek to subject defendants to suit in jurisdictions where consulting agreements and other targeted activities are directed, and which are alleged to give rise to plaintiffs’ causes of action.

To read the full text of this article by Duane Morris attorney Anne Gruner, please go to the Duane Morris website.