[Update, July 15, 2013: The Federal MDL court reached the opposite conclusion, denying summary judgment on liability and causation and on punitive damages. Those cases will now proceed to trial.]

In case you missed it, last week I had a guest post up at TortsProf lamenting how recent changes in civil procedure law have created a situation in which judges are frequently deciding complex cases by improperly deciding for themselves what the true facts were, in advance of a jury trial, and sometimes on nothing but the initial complaint.

Unfortunately, we just had another example: the recent order in the NuvaRing litigation consolidated in New Jersey state court dismissing all of the bellwether cases, primarily on causation grounds. It’s not the end of the game — motions for reconsideration will be filed, as will an appeal, and it doesn’t affect the federal court MDL — but it’s disappointing nonetheless. There’s much to complain about (and, on appeal, to reverse), but I’m going to focus on the “learned intermediary” part. First, a little bit of background.

The most popular form of hormonal contraceptives are combined hormonal contraceptives (“CHC”), which use an estrogen (typically ethinyl estradiol) to prevent ovulation and thicken cervical mucus. Estrogen use, however, is correlated with an increased risk of venous thromboembolism, such as deep vein thrombosis, and thus pulmonary embolisms (blood clots in the lungs) and cerebral venous thrombosis (blood clots in the brain), so CHCs add a progestin to counterbalance that risk.

NuvaRing uses desogestrel as its progestin (that’s different from Mirena, which uses levonorgestrel), making it a “third-generation” CHC. Since 1995 — six years before NuvaRing went on the market — it has been known that third-generation CHCs have a significantly higher risk of causing thrombosis and blood clots than second-generation CHCs. As the New Jersey court opinion recounts (based on the plaintiffs’ filings), by the time NuvaRing went on the market in 2001, 15 studies had examined that difference in risk, and 13 of those studies found an elevated risk, ranging between 1.4 times and 4 times greater risk of venous thromboembolism when using NuvaRing. Implants without a hormone added, like Essure, don’t have these same risks.

NuvaRing’s prescribing information and patient insert warned about the general risk of venous thromboembolism when using CHCs, but then hedged on the increased risk with vague, ambivalent language obviously written more for purposes of litigation than for informing patients and doctors about the risks of the product:

The use of combination oral contraceptives is associated with increased risks of several serious side effects, including blood clots, stroke, or heart attack. NuvaRing is not for women with a history of these conditions. The risk of getting blood clots may be greater with the type of progestin in NuvaRing than with some other progestins in certain low-dose birth control pills. It is unknown if the risk of blood clots is different with NuvaRing use than with the use of certain birth control pills.

The risk “may be greater” but “is unknown?” That wasn’t even accurate when NuvaRing was first put on the market, and now, more than a decade later, it is even less defensible: last year, a meta-study of 625 studies published between January 1995 and April 2010 found the risk of venous thromboembolism for CHCs that use desogestrel, like NuvaRing, was about double the risk of second generation CHCs. Yet, the manufacturer (Organon and Merck) have refused to update the label; perhaps it’s because they sell over $600 million worth of NuvaRings every year to over a million women.
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One of the great things about being a lawyer is that, like a sports fan watching a play unfold, you can foresee lawsuits before they’re even filed.

Nutella is delicious, creamy, and chocolaty, but one thing it is not: healthy. That didn’t stop Ferrero, the makers of Nutella, from starting up a healthy-for-kids advertising campaign last year in Europe, as profiled by the nutrition researchers at Obesity Panacea:

Although this may surprise some of our readers, I really like junk food. I eat far too much pizza, I love chicken wings, and Nutella, the original chocolate hazelnut spread, is one of my favourite breakfast condiments (it’s tasty on a bagel, but its unbeatable inside a fresh crepe with whipped cream and bananas). The interesting thing about Nutella is that its commercials seem to suggest that it is some sort of health food.

Now that commercial implies several things. First off, it implies that Nutella is a great source of energy, especially for kids. Well it should be a great source of energy – the first ingredient is sugar. In fact, in a 19 gram serving of Nutella, 11 grams are sugar. Of course that energy won’t last very long before an insulin spike kicks in and makes the kids lethargic, so they are likely to need something more substantial if they plan to "discover the world" for more than an hour or so.

The commercial also implies that Nutella is mainly hazelnuts and milk. However, hazelnuts only make up 13% of Nutella, and skimmed milk makes up less than 7%. …

Many Nutella ads, including those on their American website which can be found here, suggest that Nutella is not only a great source of energy, but is also a nutritious way to start your day. What type of nutrients? After sugar, the second most common ingredient in Nutella is palm oil. The same palm oil which is high in palmitic acid, a fatty acid which the World Health Organization claims is convincingly linked to increased risk of cardiovascular disease (see the report here, and skip to page 98 for the info on palmitic acid). In fact, roughly half the calories in Nutella are from sugar, and the other half are from fat. Only about 4% of the calories are from protein. The Nutella website also suggests that Nutella is healthy because it "is made with hazelnuts which are a great source of vitamins." Note that they don’t say that Nutella is a great source of vitamins, because it’s not – a single serving has 0% of the recommended daily intake of Vitamins A and C, and just 10% of the recommended intake of Vitamin E.

 

It didn’t take long for the campaign to come to the United States. Sure enough, watching The Weather Channel one morning (admit it, that’s how you start the day, too), I saw one of these Nutella commercials, started laughing, and told my wife: "they’re going to get sued." Those sort of ridiculous claims are bread and butter — or should I say hazelnuts and milk sugar and palm oil? — to consumer class action attorneys.

Sure enough, the consumer class action was just filed:

The maker of Nutella is the target of a consumer class action filed on Tuesday alleging the company falsely markets its hazelnut spread as healthy for children even though the product is loaded with saturated fat and processed sugar.

Filed in the U.S. District Court for the Southern District of California, the lawsuit alleges that Ferrero USA Inc. violates California consumer protection laws by representing that the spread is a healthy, nutritious and balanced breakfast for children. The name plaintiff, Athena Hohenberg, is the mother of a four-year-old child.

The lawsuit claims violations of California’s laws pertaining to unfair competition and false advertising. It also alleges breach of warranty and seeks injunctive relief and compensatory and punitive damages. The purported class comprises all consumers who purchased Nutella beginning in January 2000.

(The WSJ Law Blog also picks up on it here.) 

The key word is California. A quick review of some consumer fraud class action cases over the past few years show them being dismissed, time and time again, for one reason: "justifiable reliance."

Like Hunt v. US Tobacco Co., 538 F.3d 217 (3d Cir. 2008):

We believe the Pennsylvania Supreme Court has effectively answered the question presented in this case. That Court has categorically and repeatedly stated that, due to the causation requirement in the Consumer Protection Law’s standing provision, 73 Pa. Cons.Stat. § 201-9.2(a) (permitting suit by private plaintiffs who suffer loss "as a result of" the defendant’s deception), a private plaintiff pursuing a claim under the statute must prove justifiable reliance. See, e.g., Schwartz v. Rockey, 593 Pa. 536, 932 A.2d 885, 897 n. 16 (2007) (stating that "the justifiable reliance criterion derives from the causation requirement which is express on the face of section 9.2[, the statute’s private-plaintiff standing provision]"); Toy, 928 A.2d at 202 ("[A] plaintiff alleging violations of the Consumer Protection Law must prove justifiable reliance."); Yocca v. Pittsburgh Steelers Sports, Inc., 578 Pa. 479, 854 A.2d 425, 438 (2004) ("To bring a private cause of action under the [Consumer Protection Law], a plaintiff must show that he justifiably relied on the defendant’s wrongful conduct or representation and that he suffered harm as a result of that reliance."). It has not recognized any exceptions, and has applied this rule in a variety of situations. These include, in Yocca, a claim— like Hunt’s claim here—under the post-1996 catch-all provision. See Plaintiffs[‘] Third Amended Class Action Complaint in Civil Action at 18-19, Yocca, No. GD XX-XXXXXX (Pa.Ct.C.P.2001) (accusing defendant of, inter alia, "[e]ngaging in any other fraudulent or deceptive conduct which creates a likelihood of confusion or of misunderstanding"). The Pennsylvania Superior Court has applied the Supreme 222*222 Court’s standing rule to the post-1996 catch-all provision, see Debbs v. Chrysler Corp., 810 A.2d 137, 156-58 (Pa.Super.Ct.2002); Sexton v. PNC Bank, 792 A.2d 602, 607-08 (Pa.Super.Ct.2002), and our Court has interpreted the rule to apply to all Consumer Protection Law subsections, see Santana Prods., Inc. v. Bobrick Washroom Equipment, Inc., 401 F.3d 123, 136 (3d Cir. 2005). Given this significant authority on statutory standing, we think the Pennsylvania Supreme Court would require justifiable reliance where a private plaintiff alleges deceptive conduct under the post-1996 catch-all provision.

That’s not a problem by itself, except that many courts have held that you simply can’t have a class action where the claims include justifiable reliance as an element. I think those rulings are crazy — of course you can show, by a preponderance of evidence, that members of a class relied on false advertising, it’s just a question of degree and thus a question for the jury — but it’s the law in a lot of places.

But not California, which has a lot of exceptions to the rule, including an exception that presumes consumers rely, to some extent, on written advertising. Hence the Nutella suit being brought in California first; California’s one of the best places to file it.

Which really makes you wonder about the quality of other state’s laws. Those state’s technically make false advertising illegal, but it’s a hollow remedy, since it’s never enforced. Without the ability to create a class action, no consumer class action lawyer would spend thousands of hours and dollars fighting a case worth no more than a single jar of Nutella.


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The Limited Scope Of Inventors’ and Creators’ Rights Under Copyright, Trademark, and Patent Infringement Law

The business lawsuits actually filed, and defamation lawsuit not filed, surrounding Mark Zuckerberg and Facebook have inspired some of my more popular posts. But there is one litigious part of the Facebook story that I did not cover,

Insurance-Funded Congressional Representatives Again Try To Deny Justice For Patients Injured By Medical Malpractice

Some bad ideas just will not go away. A few days ago The Pop Tort noted that the new, anti-patient Congress was holding hearings on medical malpractice liability. If they had listened to the excellent testimony of Joanne Doroshow, Executive Director of the Center for Justice & Democracy, they would have realized that injured patients need more, not less, legal protection.

But the “hearings” were a sham anyway, and a few days later the insurance-backed members of Congress introduced a new plan to strip away the rights of medical malpractice victims.

Phil Gingrey (R-GA11) ran unopposed last election, but that did not stop health services companies, HMOs, hospitals, pharmaceutical companies, medical device companies, and insurance companies from contributing nearly $500,000 to his “campaign.”

It seems like he is ready to pay them back. As his press release trumpets:

Senior Health Subcommittee Member Phil Gingrey, M.D. (R-Ga.), House Judiciary Committee Chairman Lamar Smith (R-Texas), and Congressman David Scott (D-Ga.) today introduced The HEALTH Act (H.R. 5), a bill that includes meaningful medical liability reforms to lower the cost of health care while strengthening the doctor-patient relationship.

The press release has little by way of facts, except for this whopper: “According to the Harvard School of Public Health, 40% of malpractice suits filed in the U.S. are ‘without merit.’”

That’s funny, since I actually read the Harvard study on medical malpractice, and it said:

The researchers analyzed past malpractice claims to judge the volume of meritless lawsuits and determine their outcomes. Their findings suggest that portraits of a malpractice system riddled with frivolous lawsuits are overblown. Although nearly one third of claims lacked clear-cut evidence of medical error, most of these suits did not receive compensation. In fact, the number of meritorious claims that did not get paid was actually larger than the group of meritless claims that were paid. …

“Some critics have suggested that the malpractice system is inundated with groundless lawsuits, and that whether a plaintiff recovers money is like a random ‘lottery,’ virtually unrelated to whether the claim has merit,” said lead author David Studdert, associate professor of law and public health at HSPH. “These findings cast doubt on that view by showing that most malpractice claims involve medical error and serious injury, and that claims with merit are far more likely to be paid than claims without merit.”

Most claims (72%) that did not involve error did not receive compensation. When they did, the payments were lower, on average, than payments for claims that did involve error ($313,205 vs. $521,560). Among claims that involved error, 73% received compensation.Overall, the malpractice system appears to be getting it right about three quarters of the time,” said Studdert. “That’s far from a perfect record, but it’s not bad, especially considering that questions of error and negligence can be complex.” The 27% of cases with outcomes that didn’t match their merit included claims that went unpaid even though the injury was caused by an error (16%); claims that were paid but did not involve error (10%); and claims that were paid but did not appear to involve a treatment-related injury (0.4%).

The title of the study’s own press release was “Study Casts Doubt on Claims That the Medical Malpractice System Is Plagued By Frivolous Lawsuits.” Who are you going to believe, a paid-for Congressman or your lying eyes?

The study did not find that 40% of medical malpractice lawsuits were without merit. The study found that one-quarter of medical malpractice victims did not recover compensation, while, at most, only one-tenth of successful claims involved injures not caused by medical malpractice — and the plaintiffs in those cases received far less than the plaintiffs who had injures which even a panel of doctors thought were caused by medical malpractice.

The system works imperfectly, but so does every system — including our medical system, which costs the economy a minimum of $20 billion just in treating medical (iatrogenic) injuries. When you recognize that our entire medical malpractice liability system costs under $5 billion a year, you realize that, all in all, our medical malpractice liability system is downright cheap, and is compensating victims of medical negligence for only a fraction of their damages.

Even if we put aside the fact that, for every dollar spent on compensating the victims of medical negligence, more than $5 dollars in damage was caused by medical negligence, it bears repeating that the overall costs of compensating injured patients is so small that it the medical malpractice liability system does not restrict access to health care. Similarly, malpractice lawsuits have not been shown to change of physician behavior — so-called “defense medicine” — even in high-risk, high-liability cases like obstetricians’ decisions to perform c-sections when the baby shows signs of fetal distress.

I could go on — like how Gingrey’s proposal of “non-economic caps” would slam the courthouse doors shut on all but a few injured patients, and even then only those patients who were earning high incomes when they were injured or died — but I think the burden of proof here should lie with the people, like Gingrey, saying there’s a “medical malpractice crisis.” So far, he can’t muster anything more than a lie about the Harvard study.


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[UPDATE: The lawyer called me and asked to "restart" our relationship, including by removing the more provocative elements, so I did. Water under the bridge.]

Yesterday I received an email which said:

Pursuant to New Jersey Rule of Court 1:4-8, please allow this correspondence to serve as notice that Defendants intend to file

Some of the largest cases involve medical malpractice cerebral palsy. A recent medical malpractice case from the bought-yourself-an-appeal department:

Citing multiple trial errors, a New Jersey appeals court has reversed an $18.9 million verdict against an obstetrician whose delay in ordering a Caesarean delivery a jury found to have caused cerebral palsy in

I’ve posted many times before about the economic realities of medical malpractice liability. Via The Pop Tort, a new study commissioned by the the Society of Actuaries has revealed the economic cost of medical malpractice in America:

SCHAUMBURG, Ill., (Aug. 9, 2010)–Findings from a new study released today estimate that measurable medical errors cost the U.S. economy $19.5 billion in 2008. Commissioned by the Society of Actuaries (SOA) and completed by consultants with Milliman, Inc., the report used claims data to provide an actuarially sound measurement of costs for avoidable medical injuries. Of the approximately $80 billion in costs associated with medical injuries, around 25 percent were the result of avoidable medical errors.

"This report highlights a singular opportunity for both improving the overall quality of care and reducing healthcare costs in this country," says Jim Toole, FSA, CERA, MAAA and managing director of MBA Actuaries, Inc. "Of the $19.5 billion in total costs, approximately $17 billion was the result of providing inpatient, outpatient and prescription drug services to individuals who were affected by medical errors. While this cost is staggering, it also highlights the need to reduce errors and improve quality and efficiency in American healthcare."

Medical errors are a significant source of lost healthcare funds every year. For example, the study found that $1.1 billion was from lost productivity due to related short-term disability claims, and $1.4 billion was lost from increased death rates among individuals who experienced medical errors. According to a recent SOA survey, which identified ways to bend the national healthcare cost curve, 87 percent of actuaries believe that reducing medical errors is an effective way to control healthcare cost trends for the commercial population, and 88 percent believe this to be true for the Medicare population.

"We used a conservative methodology and still found 1.5 million measureable medical errors occurred in 2008," says Jonathan Shreve, FSA, MAAA, consulting actuary for Milliman and co-author of the report. "This number includes only the errors that we could identify through claims data, so the total economic impact of medical errors is in fact greater than what we have reported."

(Emphases added.)

Compare that nearly $20 billion cost — a conservative estimate limited to the ascertainable economic harm, excluding any pain, suffering, embarrassment, humiliation, or mental anguish, caused by avoidable medical errors — to the mere $4.694 billion paid out to medical malpractice plaintiffs in 2008 (see Exhibit D).

That is to say, payouts to malpractice victims amount to less than one-quarter of the economic damage caused by the malpractice itself.

If someone told you that oil companies only paid twenty-three cents for every dollar of damage they negligently caused through avoidable oil spills, what would you say?

If someone told you that car, airplane or boat companies only paid twenty-three cents for every dollar of damage they negligently caused through defective designs and manufacturing, what would you say?

If someone told you that fast food companies only paid twenty-three cents for every dollar of damage they negligently caused through avoidable food poisoning, what would you say?

If someone told you that consumer appliance companies only paid twenty-three cents for every dollar of damage they negligently caused through electric shorts that caused fires, what would you say?

Would you say there was a liability "crisis" caused by an "explosion" of "frivolous" litigation?

Or would you say those companies weren’t living up to their responsibilities?


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