Alert March 22, 2012

Recent Products Liability Decisions

Rader v. Teva Parenteral Medicines, Inc.

Goodwin Procter attorneys defeated a motion for class certification in a case brought on behalf of approximately 60,000 former patients of two Las Vegas endoscopy centers who alleged they were exposed to (but not infected by) blood-borne diseases including Hepatitis C due to the centers’ alleged mishandling of Teva’s prescription anesthetic, propofol.  Rader v. Teva Parenteral Meds., Inc., 276 F.R.D. 524 (D. Nev. 2011).

Among other reasons for denying class certification, the court held that the plaintiff was not an adequate class representative under Rule 23(a)(4) because his decision to abandon emotional distress claims created an “insurmountable conflict between his own interests and that of the class” in that class members would be bound by the plaintiff’s decision not to bring emotional distress claims in the event of a later final judgment.  The court also held that there were individualized causation issues as well, including the need to evaluate whether any individual was treated with Teva’s propofol, the injection practices used to administer the propofol to each person, and whether the person was actually exposed to a blood-borne pathogen. 

Ratliff v. Merck & Co., Inc.

On February 10, 2012, a Kentucky Appellate Court reversed the certification of a class of Vioxx purchasers who alleged that the drug’s manufacturer, Merck, falsely advertised Vioxx’s safety to doctors when it knew the drug was dangerous.  Ratliff v. Merck & Co., Inc., 2012 Ky. App. LEXIS 31 (Ky. Ct. App. Feb. 10, 2012).  The plaintiff sought a class consisting of Kentucky residents “who have purchased and taken Vioxx and who, upon recommendation of the FDA, have contacted or will contact their physician seeking advice regarding their use of Vioxx.”  The proposed class sought to assert claims for violation of the Kentucky Consumer Protection Act and for fraud and unjust enrichment. 

Merck challenged the trial court’s decision to certify a class because, among other reasons, damages for fraud could not be determined without individualized fact finding.  The plaintiffs argued that the trial court had correctly applied a “fraud upon the market” theory wherein certain elements of fraud, including “reliance, ascertainable loss and causal nexus,” could be presumed.  Merck argued that this theory did not apply in the prescription drug context. 

The Court of Appeal agreed with Merck.  The court rejected the application of the fraud-on-the-market theory in the context of a prescription drug case.  It also held that common issues did not predominate because each Vioxx purchaser’s claim required individualized proof of liability and damages, stating that “if the action were tried as a class, after the common questions of Merck’s representations in its marketing campaign were decided, the case would essentially fragment into a series of amalgamated ‘mini-trials’ on each of these individualized questions.”  The court also found that each plaintiff had a different experience with his or her doctor and “may have experienced different effects from the drug as compared to its risks,” which meant that “individualized questions would substantially overtake the litigation.” 

This decision is significant for defendants in prescription drug actions both in its rejection of the fraud-on-the-market theory and its conclusion that generalized evidence could not be used to establish class-wide liability. 

Brandner v. Abbott Laboratories, Inc.

The U.S. District Court for the Eastern District of Louisiana recently denied a motion to certify a class in a products liability action concerning allegedly contaminated baby formula.  Brandner v. Abbott Laboratories, Inc., 2012 WL 195540 (E.D. La. Jan. 23, 2012).  The plaintiff sued Abbott Laboratories after it recalled Similac baby formula following its discovery of beetles in a finished batch of formula.  The plaintiff alleged that her child suffered gastrointestinal problems after ingesting formula from the recalled batch.  She sought certification of a class of Louisiana residents who had purchased Similac during the recall period.   

In denying class certification, the court made three holdings on the issue of predominance that are important to defendants in products liability actions.  First, it held that under the Louisiana Products Liability Act, the plaintiff had to show that “the product was unreasonably dangerous when it left the manufacturer’s control,” which could not be done on a class-wide basis notwithstanding the existence of the recall notice.  Second, the court found that proximate cause could not be proved with general evidence because in order to know whether a particular child was injured as a result of drinking the formula, a “highly individualized” assessment of factors such as “family and medical history; age; gender; [and] diet” was required, which was incompatible with class litigation.  Finally, as to damages, it noted that putting a value on the request for emotional distress damages would require the type of “mini-trials” that the Fifth Circuit advised against in Bell Atlantic Corp. v. AT&T Corp., 339 F.3d 294 (5th Cir. 2003). 

In addition to her claims under the Louisiana statute, the plaintiff also brought a redhibition claim under Louisiana law, which allows a plaintiff to recover economic losses if a product was useless for its intended purpose at the time of sale.  The court found that the redhibition claim failed the predominance and superiority requirements of Rule 23(b)(3) because it required a showing that each class member purchased a contaminated product, which could not be determined without individualized fact finding. 

In re Ford Motor Co.
--Kyle Tayman

In In re Ford Motor Co. E-350 Van Products Liability Litigation (No. II), 2012 WL 379944 (D.N.J. Feb. 6, 2012), the court refused to certify a putative class of individuals who sought damages because their vans were allegedly defective due to the risk of rollover.  The plaintiffs asserted claims for breach of express and implied warranties, violation of state consumer fraud statutes, and unjust enrichment.  In a lengthy opinion, relying in part on Wal-Mart Stores, Inc. v. Dukes, 131 S. Ct. 2541 (2011), the court held that individual issues predominated and denied class certification under Rule 23(b)(2) and (b)(3). 

In conducting a “rigorous analysis” of the Rule 23(b)(3) requirements, the court considered the substantive elements of the causes of action and found that each van owner’s claim raised individualized issues as to the representations the person received, reliance, causation and damages.  For instance, the court found that the rollover risk disclosed in manuals varied throughout the class period so that different van owners received different disclosures and relied on different information; certain plaintiffs knew about the rollover risk and therefore could not prove causation; and the injury requirement could not be proven on a class-wide basis for certain claims.  The court also said that the claims of many van owners were likely time-barred or would require individualized inquires to determine whether the applicable limitations period was equitably tolled, which weighed against class certification. 

The court applied these same findings to deny certification of a class seeking injunctive relief under Rule 23(b)(2).