The Appellate Strategist

Insights on appellate issues, trial consultations, and evaluating appeals

A Split Decision on Filing Under a Fictitious Name

By Kirk Jenkins on Posted in Illinois

In its other opinion this morning, the Illinois Supreme Court handed down its decision in Santiago v. E. W. Bliss Co. [pdf]

Santiago is a products liability case (see here for our preview of the opinion). Plaintiff Rogasciano Santiago allegedly entered the United States illegally in 1993, coming to Chicago. After working at two jobs under his true name, he invented an alias, "Juan Ortiz." For the next several years, whenever plaintiff used the Ortiz name, he claimed a false birth date. Plaintiff obtained a state-issued identification card as Ortiz, but he ultimately threw it out; eventually, he became a lawful resident alien. Nevertheless, plaintiff continued to use both identities, creating separate work, medical and financial histories for both. When plaintiff filed his lawsuit, he sued using the name he was known by at the workplace where he was injured — Ortiz. When he finally admitted a year after filing suit that he was not Ortiz, but Santiago, the Circuit Court denied defendants’ motion to dismiss, but certified a two part question: (1) did the trial court have to dismiss as a sanction for deliberately filing a complaint using a fictitious name; and (2) if not, could the plaintiff’s second amended complaint, providing his real name, be dismissed as time barred on the grounds that it could not relate back to earlier complaints, which were null and void because they failed to identify plaintiff by his lawful name?

As in Doe v. White, a divided Court issued multiple opinions. Leading a four-Justice majority, Chief Justice Thomas L. Kilbride affirmed the Appellate Court in part and reversed in part. Relying upon its own opinion in Sander v. Dow Chemical Co. and the 11th Circuit’s opinion in Zocaras v. Castro, the Court held that the trial court could dismiss as a sanction, but only after making strict findings: that there was a clear record of willful conduct, and that lesser sanctions were inadequate to remedy the harm to the judiciary system and the opposing party’s interests. The Supreme Court majority vacated the trial court’s order refusing to dismiss and remanded for application of its two-part test.

The majority reversed the Appellate Court’s determination that the Second Amended Complaint was time-barred. The Court found that pursuant to the relevant statute, 735 ILCS 5/2-616(b), only two factors were needed for relation back to apply: (1) the original complaint was timely filed; and (2) the cause of action asserted in the amended complaint arose out of the same transaction or occurrence. Since the statute did not suggest that a complaint filed under a fictitious name was null and void per se, the Court held that there was no reason the relation back doctrine should not apply.

Justice Lloyd A. Karmeier specially concurred, mostly to address Justice Robert R. Thomas’ dissent. Justice Karmeier argued that the common law cited by the dissent for the proposition that a complaint citing a fictitious name referred to fictitious parties, rather than "generally known as" names. Instead, Justice Karmeier concluded that plaintiff’s misfiling might fall within the ambit of 735 ILCS 5/2-401, which permits amendment to correct misnomer. According to Justice Karmeier, "misnomer" means "nothing more than that a party is styled in other than his or her own name."

Justice Anne M. Burke specially concurred as well. According to Justice Burke, even if the common law had once treated complaints filed under a fictitious name as null and void, 735 ILCS 5/2-401(e) had abrogated that standard by permitting such filings with leave of court.

Justice Robert R. Thomas dissented, joined by Justice Rita B. Garman. Justice Thomas concluded that the plaintiff’s Second Amended Complaint was clearly time-barred, making an answer to the first part of the certified question unnecessary.

According to Justice Thomas, the common law clearly regards complaints filed under a fictitious name as null and void, and since Section 401(e) does not validate such complaints when filed without permission, the common law rule must necessarily remain in effect. Since the original complaint was null and void, there was nothing for the Second Amended Complaint to relate back to, and the amended complaint was time-barred. Justice Thomas noted Justice Karmeier’s argument that the common law rule applies only to entirely fictitious parties, rather than real parties using fictitious names, but argued that the cases made no such distinction. Policy supported barring the complaint as well, Justice Thomas concluded: "deliberately bringing suit under a false or fictitious name without leave of court constitutes a fraud upon the court in my opinion." Finally, the dissent squarely rejected Justice Karmeier’s definition of "misnomer," arguing that the term meant "mistake," and thus, the right of amendment was unavailable to plaintiff.

Potential Liability for Verification of Employment Forms?

By Kirk Jenkins on Posted in Illinois

This morning, the Illinois Supreme Court handed down its decision in Doe v. White [pdf].

Doe arises from a teacher sexual abuse case. As explained in detail here, a grade school teacher was disciplined for sexual misconduct by his then-employer, the McLean County School District. Rather than reporting the matter to state authorities, McLean purportedly took a variety of steps to “pass” the teacher to another school district – Urbana – including negotiating a severance agreement which concealed the teacher’s misconduct, creating a falsely positive letter of recommendation and providing a materially false verification of employment form to Urbana. When the teacher abused students at Urbana, the victims and their parents sued the McLean School District and several administrators.

In a majority opinion written by Justice Anne M. Burke, a fractured court affirmed the Appellate Court’s finding that the defendants owed the injured students a tort duty, despite rejecting several grounds cited below. According to the majority, plaintiffs nowhere alleged any affirmative duty to warn Urbana of the teacher’s conduct. Nor did the plaintiffs adequately allege that defendants had a duty to report the teacher’s conduct to state authorities. The majority rejected the Appellate Court’s finding that a false letter of recommendation created a duty as a voluntary undertaking, noting that although the operative complaint alleged that the letter had been created, it never alleged that it had been sent.

Nevertheless, the Court held that a tort duty arose from the McLean administrators’ provision to Urbana of a verification of employment form stating that the teacher had worked for McLean for an entire school year. In fact, the teacher had been suspended twice during the year, and had left McLean before the end of the school year.

Applying the traditional multi-factor test for analyzing the existence of a tort duty, the Court held that it was reasonably foreseeable that the plaintiffs’ injuries would result from defendants’ misrepresentations. Nor was the likelihood of plaintiffs’ injuries remote, since a truthful disclosure of the teacher’s suspensions would likely have been a “red flag” warning Urbana to investigate further. Finally, imposing a duty to complete employment forms with reasonable care did not create an unreasonable burden, nor would any adverse consequences flow from imposing such a burden, according to the Court.

The majority addressed the remaining issues briefly. The public duty rule was inapplicable to the complaint, the Court held, because the plaintiffs neither alleged that the defendants had failed to protect them, or had any affirmative duty to do so. Finally, the majority concluded that the Tort Immunity Act did not immunize defendants’ allegedly willful and wanton conduct.

Doe drew a number of additional opinions. Justice Charles E. Freeman wrote a special concurrence. He emphasized his view that the duty created by the majority opinion was not one to affirmatively inform, but rather a duty to take reasonable care not to present inaccurate information about an individual who might pose a threat to third parties. Justice Freeman further commented that the majority should have taken Doe as a vehicle to finally decide whether the public duty rule remains a viable defense in Illinois, rather than merely concluding that it was inapplicable to the facts.

Justice Rita Garman filed an opinion concurring in part and dissenting in part. Although Justice Garman agreed that a tort duty existed, she concluded that the majority’s discussion of the Tort Immunity Act was at best premature. After a lengthy discussion of the relevant law, Justice Garman concluded that there were potentially viable arguments on which the Tort Immunity Act would apply.

Finally, Justice Lloyd A. Karmeier dissented, with Justice Mary Jane Theis joining. Noting that precedent had long held that there was no private right of action for failure to report under the Abused and Neglected Child Reporting Act, Justice Karmeier characterized the majority’s holding as fashioning a duty to report misconduct by inference – a duty to report facts which would lead the recipient of the report to find the truth. In view of the apparent conflict between the cases interpreting the Act and the majority’s holding, Justice Karmeier criticized the majority for not discussing the Reporting Act. Turning to the majority’s analysis of duty, Justice Karmeier concluded that no duty could arise since it was neither reasonable nor foreseeable that Urbana would rely on the form as the “sole indicator of [the teacher’s] character and his conduct prior to the time he was hired.” Justice Karmeier also concluded that plaintiffs’ injuries were not sufficiently likely to justify imposing a duty.

According to Justice Karmeier, the public duty rule was squarely implicated by the allegations, given plaintiffs’ allegation that defendants breached a duty to protect them. As a result, he argued that the Court should have decided whether the rule remained viable in Illinois. Finally, like Justice Garman, Justice Karmeier disputed the majority’s conclusions that the Tort Immunity Act could not immunize the defendants’ conduct.

When a Plaintiff Sues Under a Pen Name

By Kirk Jenkins on Posted in Illinois

 

Of course, stage names are commonplace in Hollywood. Pen names are relatively common among authors as well.

But can you sue under a pen name? Well – only for a very good reason. Nearly all states have a “fictitious names” statute. In Illinois, the statute is 735 ILCS 5/2-401, and it says that unless a party name is a “misnomer” – an honest mistake – you can only sue under a fictitious name if you file a motion and demonstrate good cause.

So what happens if you skip the motion and sue under a false name? That’s the issue the Illinois Supreme Court will address tomorrow morning in Santiago v. E. W. Bliss Company [pdf].

The plaintiff in Santiago was allegedly injured working with a punch press. In May 2008, he sued a number of defendants who had manufactured the components of the machine. In the complaint, the plaintiff was identified as "Juan Ortiz." Six months later, he filed a First Amended Complaint, again naming the plaintiff as Juan Ortiz. On at least three occasions, plaintiff signed verifications for interrogatory responses as Juan Ortiz.

But the problem was, plaintiff wasn’t Juan Ortiz. In May 2009 — a full year after filing suit — plaintiff was deposed, and conceded that his name was Rogasciano Santiago. The plaintiff testified that he had held several jobs under each name. He used a false birth date as Juan Ortiz and had a state-issued ID card in that name. On the other hand, he had a driving permit as Rogasciano Santiago.

In the weeks following the deposition, Santiago moved for leave of court to file a Second Amended Complaint; the proposed SAC was identical to his First Amended Complaint, but for substituting his real name. Plaintiff’s motion was granted in September 2009.

Defendant moved to dismiss on a variety of grounds, alleging that the original complaint was a fraud on the court, or that the original complaint was null and void, and thus the plaintiff’s Second Amended Complaint — filed after the expiration of the statute of limitations — was time-barred. The court denied the motion, but certified the question of whether (1) under the circumstances, the plaintiff’s complaint had to be dismissed with prejudice as a sanction; or (2) whether the complaint could not relate back to the initial filing, and thus was time-barred.

The Appellate Court wrote that the effect of intentionally filing suit under a false name was a question of first impression.

One by one, the Court reviewed every possible grounds for sanctioning plaintiff. First, sanctions could not be justified as contempt. Plaintiff had not failed to comply with an order and the court’s order contained no purge condition, so civil contempt was out. Nor was criminal contempt possible, since the mere fact of intentionally filing under a false name did not subvert the court’s authority or the administration of justice.

The sanctions could be justified under Supreme Court Rule 137, the Court found. Rule 137 is essentially *Illinois’ Rule 11 — the attorney’s signature on a pleading constitutes a warranty that the pleading is well founded in fact and law. The Court held that sanctions could be justified under Rule 137, and remanded for determination of whether the plaintiff’s attorney knew his real name. The plaintiff’s conduct violated Section 2-401 of the Code of Civil Procedure as well, the Court found. Section 2-401 provides that parties must set forth in their pleading the names of all parties who seek relief. Finally, the Court held that plaintiff could be sanctioned under Supreme Court Rule 213, which governs verification of discovery, and under the court’s inherent authority to control its docket.

The Court harshly criticized the plaintiff’s conduct, writing that in "addition to later willfully failing to properly disclose his true identity in discovery, plaintiff’s very first filing in the circuit court contained a fundamental lie. This is inexcusable." Nevertheless, dismissal was not mandatory. Instead, dismissal as a sanction was discretionary. The Court directed trial courts to consider the rules violated; prejudice; whether a lesser sanction would cure the violation, deter future violations and protect the integrity of the court system.

Having answered the first half of the certified question, the court turned to the statute of limitations. Rejecting the notion that the plaintiff’s conduct was a "misnomer" — a mistake in the caption — the Court held that the plaintiff’s Second Amended Complaint was time-barred. Because the original complaint deliberately filed using a false name was null and void, there was nothing for the amended complaint to relate back to.

A minor bit of intrigue for we Illinois Supreme Court court-watchers: Santiago was originally included in the Court’s upcoming opinions for Thursday, April 19.  Only now, four months later, is the opinion being released. What happened to change the Court’s mind, we will likely never know.

 

Defining the Scope of the Public Duty Rule

By Kirk Jenkins on Posted in Illinois

The Illinois Supreme Court will release two civil opinions tomorrow [pdf]. While we await the opinions, here’s a preview of the first case, Doe v. White [pdf].

Doe arises from a sexual abuse case against a second-grade teacher in Urbana. The victims and their mothers sued not only the Urbana school district and various administrators, but also the McLean County School District – the teacher’s previous employer. According to the operative complaint, administrators in McLean County knew that the teacher had abused students, and nevertheless (1) failed to report him to the state Department of Children and Family Services; (2) created a falsely positive letter of recommendation; (3) entered into a severance agreement with the teacher concealing the abuse; (4) falsified information on the verification-of-teaching experience form McLean sent Urbana; and (5) failed to inform Urbana administrators of the teacher’s conduct. Only the plaintiffs’ claims against McLean are at issue before the Supreme Court: willful and wanton conduct, fraudulent concealment, conspiracy and breach of fiduciary duty.

The case raised a host of issues below – including whether the Abused and Neglected Child Reporting Act (325 ILCS 5/1 et seq.) includes a private right of action – but primarily, the defendants relied on the public duty rule. The public duty rule is a common law principle which essentially says that no individual standing can state a cause of action against a governmental actor for failure to do his or her job appropriately. Originally fashioned to protect police officers, fire fighters and other first responders, the underlying theory is that the governmental actor owes a duty to the public as a whole, not to any individual citizen. Over time, the “special duty exception” to the rule developed, which creates a duty where the governmental actor is uniquely aware of the particular danger to which the plaintiff is exposed, the actor is guilty of specific affirmative acts or omissions, and the injury occurs while the plaintiff is under the direct and immediate control of the governmental entity. The trial court dismissed Doe pursuant to the public duty rule.

The Appellate Court reversed. It was unnecessary to reach the special duty exception, the Court held; the public duty rule never applied in the first place. The plaintiffs’ allegations, according to the Court, were not analogous to a failure to perform a routine governmental duty adequately, harming the general public; rather, the plaintiffs alleged that the defendants had recklessly created the specific danger complained of.

As a general rule, there is no tort duty to protect another from the criminal act of a third party, but the Court held that at least two exceptions to this general principle created a duty in Doe: “voluntary undertaking” under Section 324A of the Restatement (Second) of Torts, and “negligent misrepresentation involving risk of physical harm” pursuant to Section 311.

Even if the Supreme Court stops there, the opinion will shed interesting light on a variety of tort doctrines under Illinois law.  But watch to see whether the Court takes up an invitation issued by the Appellate Court in dicta from the final two paragraphs of its opinion.

The “state-created danger” doctrine is a theory developed almost entirely in the Federal courts.  The doctrine holds that a governmental entity can be liable where it has affirmatively placed a person in a position of danger he or she would not have otherwise faced, and as a result the person is injured by a third party.  The Appellate Court acknowledged that neither the Illinois appellate courts nor the United States Supreme Court had ever adopted the doctrine, but suggested that Doe might provide an appropriate vehicle for the Illinois Supreme Court to do so.

Join us back here later today for a preview of the second upcoming opinion, Santiago v. E. W. Bliss Co. [pdf].

Rosa v. TASER Int’l, Inc.: Keeping Hindsight Bias Out of Failure-to-Warn Claims

By on Posted in Products Liability

The Ninth Circuit has provided product manufacturers some potent ammunition in their ongoing efforts to keep hindsight bias from infecting the scope of their constructive knowledge in failure-to-warn claims. In defending such claims, manufacturers often struggle to define what risks associated with their products were “knowable” from the scientific literature (and thus within the scope of their constructive knowledge) at the time their products allegedly caused injury. Plaintiffs attempt to compound this difficulty by presenting pre-injury scientific literature that does not address the product – or even the injury – at issue, but instead vaguely pertains to the product’s mechanism or the injury’s pathology. Their experts then rely on hindsight in opining that the manufacturer should have “put the pieces together” to draw a causal conclusion the scientific literature only reached later.

This tactic renders the Ninth Circuit’s recent opinion in Rosa v. TASER Int’l [pdf] a welcome development for product manufacturers, particularly those litigating in California. — F.3d —, 2012 WL 2775006 (9th Cir. Jul. 10, 2012). In affirming summary judgment in favor of TASER, the Court held that scientific articles that do not link their findings regarding the injury at issue to the product at issue are not sufficient to constitute constructive knowledge that the product could cause that injury. Neither are articles that actually do associate the injury with the product, but as an untested hypothesis – especially if they are not publicly-available. Indeed, Rosa strongly suggests that only articles that are publicly available prior to the alleged injury and articulate a scientifically-validated causal link between a manufacturer’s product and the plaintiff’s injury will trigger the manufacturer’s duty to warn of that injury. By insisting that a manufacturer’s constructive knowledge is only informed by scientific literature that explicitly and concretely links its product to the plaintiff’s injury, the Ninth Circuit has essentially foreclosed plaintiffs’ tactic of importing hindsight bias into their interpretation of the relevant literature.

Ninth Circuit re Stengel: Back to the (En) Banc

By on Posted in Federal

As we noted here, the Ninth Circuit Court of Appeals’ decision in Stengel v. Medtronic Inc. (676 F.3d 1159 (9th Cir. 2012)) left plaintiffs who sue the manufacturers of pre-market approved devices precious little in the way of potential state-law claims that are not expressly preempted by Riegel or impliedly preempted by Buckman. In fact, the majority of the three-judge panel recognized the exceedingly narrow window it had created by volunteering state-law manufacturing defect claims in response to plaintiffs’ anticipated complaint: “Are there any non-preempted state-law claims left?” It appears that the majority of non-recused active judges in the Ninth Circuit may find the Stengel opinion’s answer insufficient: On July 25th, it voted to rehear the case en banc, prohibiting citation to the original opinion in the meantime, per usual. — F.3d —, 2012 WL 3039710 (9th Cir. Jul. 25, 2012). The hearing will take place during the week of September 17th. 

Attorneys Fees Applications and Appeals: The Timing Effect

By on Posted in Federal

Federal Rule of Civil Procedure 54(a) allows a claim for attorney’s fees and other nontaxable costs to be made by motion in most cases. Such fees may be recoverable by statute or pursuant to a contract between the parties. In some cases, attorney’s fees are recoverable as a sanction for litigation misconduct. Consequently, fee motions play a prominent role in the post-trial practice.

Such fee motions raise a number of questions for the appellate process. We will explore some of these questions in a series of posts.

Does the fee application extend the time to appeal the judgment?

Generally, the answer is no. Rule 58(e) provides that a fee motion does not permit a delay in the entry of judgment or extend the time for perfecting appeal. Hence, litigants contemplating an appeal must file a timely notice of appeal even if a motion for fees remains pending in the district court. The district court does have the authority to order that the fee motion has the same effect upon the appellate timetable as a motion for new trial or to amend judgment under Rule 59, but such an extension is not automatic. A litigant who wants an extension must specifically request it and obtain an order from the court.

Illinois Supreme Court in the News: 7/1-15

By Kirk Jenkins on Posted in Illinois

Coverage of the Court in the news and blogs is light with the Court on its summer hiatus between terms. Bethany Krajelis of The Madison St. Clair Record reported on Republican leaders’ petition for reconsideration of the Court’s order dismissing their constitutional challenge to the redistricting maps drawn by the Legislature. By Court rule, such challenges must be heard in the first instance by the Supreme Court.

The Republicans originally filed their challenge back in February, but the petition immediately hit a roadblock when the Court ordered briefing on whether the challenge — filed eight months after redistricting maps were approved — was timely. In early June, a 4-3 majority of the Court dismissed the petition in a brief order. According to the leaders’ petition for reconsideration, the dismissal order conflicts with Reynolds v. Sims, a landmark United States Supreme Court election law precedent which — according to the Republican leaders — holds that courts should be reluctant to toss redistricting challenges because of the possibility of disrupting imminent elections. The Republicans also point to newly discovered evidence as a basis for reconsideration, citing an expert report concluding that the redistricting maps unfairly favor Democratic candidates.

On July 6, the Supreme Court unanimously reversed the Appellate Court in People v. Hackett, wihch arose from a DUI stop in Will County. Mike Moen and Brian Mackey reported on the story for WNIJ Public Radio, and Kerry J. Bryson of the Office of the State Public Defender in analyzed the opinion for Illinois Lawyer Now.

 

Will Daubert Become Part of Class Certification Hearings?

By Kirk Jenkins on Posted in Class Actions

In the closing days of its term, the Supreme Court announced that it had granted certiorari in Comcast Corporation v. Behrend, setting up what is certain to be a major battle over expert testimony and class certification hearings.

Behrend arises from what appears to be the largest certified class in history – more than two million former and current subscribers to Comcast’s cable services in the Philadelphia metropolitan area. According to the complaint, Comcast violated Sections 1 and 2 of the Sherman Act by pursuing a strategy of anticompetitive clustering – deliberately buying up cable systems in geographic areas where Comcast already has a significant foothold while selling or trading away cable systems where the carrier’s holdings were less concentrated. According to the plaintiffs, Comcast’s clustering deterred entry by “overbuilders” – companies who deliberately enter a market where another cable provider is already established.

Comcast’s cert petition in Behrend set the case up as a straightforward application of the Court’s landmark 2011 decision in Wal-Mart Stores, Inc. v. Dukes, where the Court announced that class certification is proper only if the trial court is satisfied, “after a rigorous analysis,” that the requirements for class certification have been proven – even if plaintiffs will be required to prove the same propositions again in order to prevail on the merits at trial. Dukes was handed down against a background of earlier lower court holdings applying a lesser standard, often certifying classes based only on a determination that class representatives would likely be able to establish the prerequisites for class certification later, at trial. These cases took their cue from the Supreme Court’s apparent bar in Eisen v. Carlisle & Jacquelin against inquiring into the merits at the class certification stage. But the Dukes court dispatched Eisen in a footnote, dismissing the relevant language as “purest dictum.” Comcast asked for summary reversal in Behrend, arguing that the Third Circuit had ignored Dukes and resurrected Eisen, disregarding Comcast’s various merits arguments on a variety of Rule 23 issues.

The Court seems to have been deadlocked about what to do with Behrend for several weeks, relisting the case from conference to conference no less than seven times. Ultimately, the justices reached a compromise, granting cert on a single question: whether a district court could certify a class without deciding whether the plaintiffs had introduced admissible evidence, including expert testimony, to show that awarding damages on a class-wide basis is practical. In other words, when an expert’s testimony is crucial to the plaintiffs’ Rule 23 arguments – which it will generally be in antitrust, if not in most class actions – must the parties and the court have a full-blown Daubert proceeding before a class can be certified?

"We are really expecting this to be the big one," Ankur Kapoor of Constantine Cannon told the Philadelphia Inquirer after cert was granted. "The legal journals will be writing about it for years." Lawyers at Mayer Brown LLP agreed, writing that the issue is of "extraordinary importance to businesses defending themselves against class actions of all stripes." Seyfarth Shaw’s Workplace Class Action blog agreed, writing that the opinion in Behrend "could have wide-ranging impact on class actions, including those in the workplace arena." Cozen O’Connor’s Class Action Defense Review, on the other hand, predicted that Behrend would not have the profound impact of Dukes and the Court’s other class action landmark of 2011, AT&T Mobility v. Concepcion.

There’s no question a Circuit split has developed in the years immediately before and after Dukes on the question of how to handle expert testimony. As the petitioners in Behrend pointed out, the Seventh Circuit has held at least twice that district courts must make a definitive ruling on the Daubert inquiry at the class certification stage if the plaintiff’s compliance with Rule 23 depends on the admissibility of the expert’s testimony — most recently in Messner v. Northshore University Healthsystem, and earlier in American Honda Motor Co. v. Allen. The Ninth Circuit endorsed a full-blown Daubert analysis in Ellis v. Costco Wholesale Corp. The Eleventh Circuit agreed in Sher v. Raytheon Co., following Allen in an unpublished opinion.

But on the other hand, there is the Eighth Circuit’s opinion in In re Zurn Pex Plumbing Products Liability Litigation, filed only two weeks after Dukes. The Eighth Circuit failed to take up the Supreme Court’s heavy hint in Dukes that Daubert was fully applicable to class certification hearings, affirming a district court’s "tailored" determination that expert testimony was sufficiently reliable "in light of the existing state of the evidence" to justify certifying a class. After all, the Eighth Circuit pointed out, class certification was "inherently tentative," and a full Daubert inquiry could not be justified at such an early stage.

Given the Supreme Court’s dicta in Dukes and the apparent compromise at the cert stage, it seems likely that the Court will reject the Eighth Circuit’s approach in Zurn Pex, as it should. Class certification is a crucial stage in class action litigation, particularly in antitrust cases. Designing an econometric model which reliably predicts damages on a classwide basis is an enormous challenge and, as the cert petition in Behrend observes, "most cases will be on the fast track to settlement shortly after class certification." Although plaintiffs may press for more discovery pre-certification if courts are required to conduct full-blown Daubert inquiries before certification, this seems like a reasonable price to pay in order to defeat meritless class actions early. Although some have worried that courts which approve expert testimony at the certification hearing will decline to reconsider at the close of discovery, this seems unlikely, given the discovery and factual development likely to occur in the interim. All in all, Behrend is likely to be an important battle at the Supreme Court, and a worthy sequel to the Court’s opinion in Dukes.

Sacred Exclusivity: The Ninth Circuit Steers (Well) Clear of the FDA

By on Posted in Federal

The Supreme Court’s opinion in Buckman Co. v. Plaintiffs’ Legal Committee, 531 U.S. 341, 349-50 (2001), recognizes that any attempt by a plaintiff to enforce the FDCA is preempted by federal law, because Congress entrusted all such enforcement efforts to the sole discretion of the FDA.  In 2010, the Ninth Circuit’s PhotoMedex opinion held that Buckman not only private attempts to enforce the FDCA, but also any attempt by a plaintiff to prove that a medical device manufacturer violated the FDCA because such an attempt would require the court to usurp or second-guess the FDA’s enforcement decisions – in the absence of a determination of such a violation by the FDA itself.  PhotoMedex, Inc. v. Irwin, 601 F.3d 919, 928 (9th Cir. 2010).  Thus, PhotoMedex clearly suggested that Buckman would not prevent a plaintiff from proving an FDCA violation where the FDA had already determined that such a violation had occurred.

But the Ninth Circuit’s Stengel opinion, issued earlier this year, muddied the waters.  In Stengel v. Medtronic, Inc., 676 F.3d 1159 (9th Cir. 2012), plaintiffs sought to avoid Buckman preemption of their state law failure-to-warn claim premised on FDA regulations because there the FDA had already determined that the defendant had violated the FDCA.  Thus, the plaintiffs argued, the Court could safely find an FDCA violation without preempting or undermining the FDA’s enforcement authority.  The Ninth Circuit, however, rejected this argument, noting that Buckman was concerned not only with judicial second-guessing of the FDA’s determinations, but also with avoiding the “extraneous pull” that state-law claims would exert on the FDA’s Congressionally-mandated exclusive jurisdiction.  In short, the Stengel Court seemed to withdraw the “prior FDA decision” exception to Buckman preemption it had recognized in PhotoMedex only two years earlier.

The Ninth Circuit had a chance to revisit the scope of Buckman preemption in its recent Pom Wonderful opinion.  Pom Wonderful LLC v. Coca-Cola Co., 679 F.3d 1170 (9th Cir. 2012).  Therein, the Court held that Pom Wonderful’s Lanham Act challenges to the naming and labeling of Coca-Cola’s “Pomegranate Blueberry Flavored Blend of 5 Juices” were preempted under PhotoMedex.  Interestingly, the Court’s characterization of PhotoMedex appeared to broaden its focus to accommodate the Stengel result by emphasizing PhotoMedex’s concern for “the authority Congress entrusted to the FDA” and “ the regulatory regime put in place by the FDA.”

This gloss on PhotoMedex allowed the Pom Wonderful Court to find preemption regardless of the presence or absence of FDA enforcement efforts (though it was careful to retain discretion to amend its view in future opinions depending on “the particular circumstances of the case”).  Thus, though Coca-Cola appeared to have complied with FDA regulations, it was not “mere compliance with the FDCA or with FDA regulations” that preempted Pom Wonderful’s claim.  Nor did it matter that the FDA had not undertaken any enforcement action against Coca-Cola.  What really mattered was that it was the FDA – not the civil courts – that was entitled to act or refrain in these areas, as it saw fit.  In other words, the Court rested preemption primarily on deference to the FDA’s exclusive authority, and resulting expertise, to regulate the matters entrusted to its oversight.  Indeed, the Court denied there was any room for civil litigation of the matters at all: “In the circumstances here, the appropriate forum for Pom’s complaints is the FDA.”

The reliance on PhotoMedex for complete abstention from litigation touching FDA-regulated matters is emblematic of the Court’s subtle expansion of that case’s import.  It is not a case about waiting for the FDA to make a determination before allowing the matters under its regulatory purview to be introduced into a civil claim.  Rather, “PhotoMedex teaches that [civil litigation] may not be used as a vehicle to usurp, preempt, or undermine FDA authority” and therefore “courts must generally prevent private parties from undermining, though private litigation, the FDA’s considered judgments.”  Thus is Stengel reconciled, not to the fact-specific inquiry in PhotoMedex, but rather to its overarching deference to the Congressionally-mandated exclusivity of the FDA’s purview.

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