Companies face an increasingly diverse set of products liability and mass tort challenges that require not only keen insight into developing legal doctrines, but also adept case management and coordination.
Case Management And Coordination. Products liability and mass tort litigation frequently involves hundreds and even thousands of separate cases and plaintiffs, with matters being filed across local, national, and even international jurisdictions. An effective defense requires careful management across a number of fronts. In the federal system, the Judicial Panel on Multidistrict Litigation (JPML) may coordinate pre-trial matters for a given product and transfer cases pending in federal courts across the country to a single federal multidistrict litigation (MDL) judge. An increasing number of states have analogous coordination mechanisms. Coordination between such federal and state proceedings often is important to the orderly and efficient progress of litigation. In addition, international tort litigation in Canada, Australia, Europe, and elsewhere increasingly accompanies U.S. litigation and requires additional defense coordination. High-profile products liability actions may come in tandem with investigations by DOJ and federal agencies, Congress, and State Attorneys General.
Identifying The Right Forum For Litigation. An important threshold question in products liability litigation is “which court will hear the dispute?”
Personal Jurisdiction. For the first time in twenty years, the United States Supreme Court revisited the topic of personal jurisdiction over foreign corporations, issuing two decisions limiting the reach of state court actions. One case addressed an issue of general jurisdiction, limiting state court jurisdiction over foreign subsidiaries of a U.S. corporation for claims based on an accident that occurred abroad and was unrelated to corporate activity in the state. The second case involved a question of specific jurisdiction, reversing a state court’s exercise of personal jurisdiction over a foreign corporation that had not “purposefully availed” itself of doing business in the state or placed goods in the stream of commerce in the expectation that they would be purchased in the state. The Court fractured, however, on the scope of “purposeful availment,” leaving that doctrine unsettled.
Forum Non Conveniens. Products liability plaintiffs sometimes bring litigation outside of the state or country in which an alleged injury occurred, seeking what they view as a more friendly forum in which to litigate their claims. The doctrine of forum non conveniens may provide a basis to dismiss such a lawsuit in favor of resolution of plaintiff’s claims another way—usually in another state, federal, or international forum with greater ties to the controversy. Recent appellate decisions have focused on the adequacy of the alternative means of resolution, even if it is not identical to plaintiff’s preferred forum or is a non-judicial remedy.
Removal From State To Federal Court. Defendants often remove cases filed in state court to federal court, particularly where an MDL proceeding has been established, to allow pre-trial proceedings to be coordinated. Congress expanded federal jurisdiction in certain contexts. The Class Action Fairness Act of 2005 (CAFA) provides for removal of certain class actions, and “mass actions” involving more than 100 plaintiffs, to federal court. Plaintiffs desiring to remain in state court have tested the limits of these provisions, for example, by filing serial 99-plaintiff cases, rather than class actions or 100+ plaintiff cases. The Federal Courts Jurisdiction and Venue Clarification Act of 2011 (FCJVCA) provides a mechanism for defendants to establish the jurisdictional minimum, resolves a split of authority about removal rights in multiple-defendant cases, and places limits on remanding cases involving both federal-question jurisdiction and unrelated state-law claims.
Emerging Discovery Issues
Protecting The Attorney-Client Privilege. Because products liability and mass tort cases often involve multiple jurisdictions, important questions can arise about what privilege law applies, particularly to advice given by in-house company lawyers. For example, when cases are transferred to a single MDL proceeding, the court may address whether to apply federal common law, rather than multiple different states’ law, to determine privilege issues. Questions also can arise about protecting an attorney-client privilege formed outside the U.S. in U.S. litigation, particularly given a recent decision of the European Court of Justice addressing when correspondence of a company with its in-house lawyers is privileged.
Regulatory Expert Witnesses And Foreign Regulatory Determinations. When products are subject to scrutiny by expert government agencies applying complex regulatory requirements, the proper role of regulatory expert witnesses to explain these systems to a jury can raise important questions in litigation. In the pharmaceutical context, for example, courts have placed limits on plaintiffs’ regulatory expert witnesses serving as advocates for plaintiffs’ theory of the case, rather than providing background about how a regulatory scheme works and reliable expert analysis. Significant questions also may arise when products are regulated by different foreign regulators, which may come to divergent conclusions about whether and how a product should be marketed than the U.S. regulator did. U.S. courts have excluded evidence of such foreign regulatory determinations to support U.S. liability on a number of grounds including lack of relevance, given each country’s distinct regulatory standards, and that such evidence poses a danger of unfair prejudice, confusion of the issues, or misleading the jury, and may cause undue delay and waste trial time.
Changes In The Class Action Landscape. Class action litigation can pose a significant threat to business because the costs of litigating, and risks of losing, are so high. Overall, the personal injury class action landscape has improved for defendants in recent years. CAFA now provides a basis to remove many such cases to federal court, and the federal appellate courts have placed increasing limits on the viability of such actions, particularly given plaintiff-specific issues of causation and injury, and differences in state tort law. The Supreme Court’s recent decision striking down class action litigation involving a broad class of employees at Wal-Mart underscores the heavy burden plaintiffs bear to prove “commonality” among class members, requiring that their injury be “the same.” The decision also has reignited arguments about the need for judges to scrutinize expert testimony at the certification stage of class-action proceedings, expressing “doubt” at the lower court’s refusal to do so.
Meanwhile, proposals to introduce class action or “collective redress” mechanisms based in part on the U.S. experience, are being actively considered abroad, including in Europe and Hong Kong.
Preemption And Regulatory Compliance Defenses. Under the Supremacy Clause of the United States Constitution, where there is sufficient tension between federal and state law, federal law may preempt state-law claims in whole or part. Preemption is a highly context-sensitive defense, most likely to apply where an expert federal agency is closely regulating a product. The defense typically turns on the precise terms of the applicable federal law. The Supreme Court has given significant attention in recent years to the circumstances in which federal regulation of a product preempts state-law claims, and has issued opinions addressing the scope of preemption for a number of products, including vaccines, generic and branded drugs, and medical devices.
Some states provide a regulatory compliance defense to compensatory or punitive damages claims against federally regulated products, but purport to take away the defense if the company submitted incomplete information to the agency that affected the agency’s regulatory judgment. There is a split of authority about the extent to which federal law preempts a fact-finder from making this determination, at least where a federal agency itself has not found the disclosures owed to it were improper and material.
Punitive Damages. Over the last fifteen years, the Supreme Court has recognized significant federal constitutional limits on punitive damages. These limits, which apply to state and federal cases, place restraints on considering out-of-state conduct and conduct with no nexus to the plaintiff in determining punitive damages, and limit the ratio between punitive and compensatory damages. Courts continue to weigh the extent to which compliance with federal, state, local, or industry standards constitutes a defense (in whole or part) to punitive damages, by negating the bad intent required for punitive damages, and given the due process principle of fair notice before punishment is meted out.
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Products liability and mass tort litigation in the United States continues to be on the forefront of doctrinal developments and advanced case management techniques.