As we ring in the new year, it is time once again to reflect on some of the most significant legal developments for drug and device companies this year. The list below is by no means exhaustive (who could forget the Rule 702 updates that took place this year, which will carry over into 2023?), but provides a brief recap and assessment of five of the most interesting and consequential developments affecting drug and device law in 2022.
- Personal Jurisdiction Reaches the U.S. Supreme Court for the Second Year Running
Last year, the U.S. Supreme Court tackled the nuances of specific personal jurisdiction in Ford Motor Co. v. Montana Eighth Judicial District Court. In 2022, the Supreme Court once again entertained novel personal jurisdiction-related arguments, this time relating to general personal jurisdiction. Following several conflicting outcomes from state courts across the country, the Supreme Court heard oral arguments in Mallory v. Norfolk Southern Railway Co. on November 8 to consider whether a corporation consents to personal jurisdiction in a state by registering to do business there.
The plaintiff/petitioner in Mallory (a Virginia citizen) worked for a railroad company in Virginia and Ohio but sued the company in Pennsylvania, arguing that the company was subject to general jurisdiction in the state because it had registered to do business there and there exists a long history of consent-by-registration laws that pre-dated International Shoe and the ensuing contacts-based personal jurisdiction cases. Mallory v. Norfolk S. Ry. Co., 2018 WL 3025283, at *1–6 (Pa. Com. Pl. May 30, 2018). The Pennsylvania trial court disagreed, reasoning that because Pennsylvania requires out-of-state corporations to register to do business there, the purported “consent-by-registration” was involuntary and, therefore, invalid. Critics of the consent-by-registration theory argue that this interpretation would eviscerate the Supreme Court’s general jurisdiction framework, as set forth in International Shoe and its progeny.
During the November 8 oral arguments, the Supreme Court justices appeared split on the issue, though not along ideological lines. Chief Justice John Roberts and Justice Elena Kagan questioned petitioner’s position and the prospect of upending almost a century of case law that has embraced the post-International Shoe form of personal jurisdiction. Likewise, Justices Brett Kavanaugh and Samuel Alito expressed concern regarding the potential impact petitioner’s position would have on the business community. In contrast, Justices Sonia Sotomayor, Ketanji Brown Jackson, and Neil Gorsuch questioned the likelihood of other states adopting Pennsylvania’s consent-by-registration statutes.
The Supreme Court’s decision is expected sometime next year. By all estimates, 2023 will be just as noteworthy as 2022 and 2021 in terms of personal jurisdiction developments. Litigators will want to keep a close eye on the Supreme Court’s decision.
- Artificial Intelligence in Clinical Decision-making Receives Continued Attention from FDA
The role of artificial intelligence in the drug and device space has received increasing attention over recent years, and 2022 was no different. A number of regulatory agencies across the United States and abroad have weighed in on issues impacting the use of artificial intelligence, such as algorithmic bias and transparency, and the U.S. FDA had no plans to miss out on the regulatory opportunity. Indeed, in late September, FDA issued its Final Guidance regarding Clinical Decision Support (CDS) software, following up on the draft guidance it previously issued in 2019.
The Final Guidance aims to clarify the scope of FDA’s oversight over CDS software used to support the clinical decision-making of healthcare providers, on matters including the diagnosis, treatment, prevention, cure, or mitigation of various diseases and conditions. While FDA has long regulated software that qualifies as a “device” under section 201 of the Federal Food, Drug, and Cosmetic Act, Section 520 of the Act categorically excludes certain software functions from FDA’s oversight. In issuing the Final Guidance, FDA attempted to provide clarity on which CDS software functions fall outside the definition of “device,” and are, therefore, not regulated by FDA as devices under the Act.
According to the Final Guidance, examples of non-device CDS software functions include:
- software functions that match patient-specific medical information to reference information routinely used in clinical practice (e.g., clinical guidelines);
- software functions that provide health care practitioners with available treatment options,
- software functions that provide reminders for preventive care; and
- software functions that analyze a patient’s information and demographics to provide a list of follow-up options for consideration.
In contrast, examples of software functions that FDA considers qualifying as “devices” include:
- software functions that use a patient’s image sets to create an individual treatment plan for review by the health care provider;
- software functions that identify patients with possible diagnosis of issues like opioid addiction based on analysis of patient-specific medical information; and
- software functions that analyze multiple signals (e.g., heart rate, breathing rate, etc.) from wearable products to monitor whether a person is having a particular medical episode (e.g., heart attack of narcolepsy episode).
This Final Guidance is certainly not the last we’ll hear from FDA as it determines how and to what extent artificial intelligence may be regulated as a medical device. Indeed, FDA has suggested, in an apparent about-face, that it now believes there is a need for an entirely new paradigm of review for devices and software utilizing artificial intelligence. Given the increasing activity in this space over recent years, drug and device litigators should remain plugged in to these regulatory updates and any related litigation.
- Learned Intermediary Updates
The learned intermediary doctrine has long been well-settled law in nearly all 50 states. Because it is often an obstacle to plaintiffs’ warnings-based claims, it is no surprise that plaintiffs continue to challenge the doctrine’s applicability and reach. In 2022, the plaintiffs’ bar lodged two such challenges to the doctrine.
On April 1, the Ninth Circuit Court of Appeals—in its decision in Himes v. Somatics, LLC, No. 21-55517, 2022 U.S. App. LEXIS 8793 (9th Cir. 2022)—asked the California Supreme Court to decide whether, under California law, plaintiffs in a medical device case must show that stronger warnings would have altered a physician’s decision to prescribe treatment or would have made the plaintiff decline treatment.
The plaintiffs sued Somatics for negligence, strict liability, and loss of consortium arising from injuries allegedly sustained from Somatics’s electroconvulsive therapy (“ECT”) product. Himes v. Somatics, LLC, No. 21-55517, 2022 U.S. App. LEXIS 8793, at *2 (9th Cir. 2022). Plaintiffs alleged that Somatics’s “misbranding and failure to warn about certain risks of ECT . . . caused [plaintiffs] their injuries” because “had Somatics given [the plaintiffs’ physicians] warnings about these risks—they would have communicated those warnings to the [plaintiffs] who, in turn, claim they would not have consented to the procedures.”
The district court granted Somatics’s motion for summary judgment, holding “that absent evidence that the stronger warnings would have affected the physicians’ decision to prescribe ECT, the claims fail as a matter of law.” The plaintiffs appealed, arguing that the district court had applied an incorrect causation standard to their claims.
The Court of Appeals held that two of the plaintiffs’ claims failed “regardless of the causation standard applied,” because the treating physician had testified that he did not read the manufacturers’ information or warnings. Therefore, a reasonable jury could not find that the treating physician would have known about any stronger warnings issued by Somatics.
Regarding the remaining plaintiff’s claims, the treater testified that he did pay attention to the manufacturers’ information. There, the court determined that “[t]he resolution of [the] appeal turns on the proper causation standard.” The court accordingly noted that the plaintiff’s claims would fail if the theory urged by Somatics—that a plaintiff must show that stronger manufacturer warnings would have altered the physician’s conduct—was correct. In contrast, the plaintiff’s claims would survive if causation may be established by showing that a physician would have communicated the stronger warning to the patient and that a prudent person in the patient’s position would have declined the treatment after receiving the stronger warning.
Due to the lack of controlling precedent on this causation question, the Ninth Circuit certified the following question to the California Supreme Court:
Under California law, in a claim against a manufacturer of a medical product for a failure to warn of a risk, is the plaintiff required to show that a stronger risk warning would have altered the physician’s decision to prescribe the product? Or may the plaintiff establish causation by showing that the physician would have communicated the stronger risk warnings to the plaintiff, either in their patient consent disclosures or otherwise, and a prudent person in the patient’s position would have declined the treatment after receiving the stronger risk warning?
While the California Supreme Court has not yet answered this question in the context of warnings causation, it has long been settled law in California that manufacturers have no duty to ensure that a warning given to a physician is then relayed to a patient. In Amiodarone Cases, 84 Cal. App. 5th 1091 (2022), the court held that “[u]nder the learned intermediary doctrine . . . [w]arnings directly to patients do not enter the picture” and “the absence of an adequate warning about a prescription drug to a physician [does not] result in a duty to provide a warning to the patient.” Amiodarone Cases may lend helpful insight in determining how the California Supreme Court will answer.
The answer to the question certified to the California Supreme Court has significant implications for drug and medical device manufacturers defending against failure to warn claims, as it may give plaintiffs an alternative avenue for recovery. Drug and device litigators should look out for the California Supreme Court’s answer to this certified question.
The second challenge to the learned intermediary doctrine took place on the other side of the country, where the Eleventh Circuit certified two questions to the Alabama Supreme Court:
- Consistent with the learned intermediary doctrine, may a pharmaceutical company’s duty to warn include a duty to provide instructions about how to mitigate warned-of risks?
- May a plaintiff establish that a failure to warn caused his injuries by showing that his doctor would have adopted a different course of testing or mitigation, even though he would have prescribed the same drug?
Blackburn v. Shire U.S., Inc., No. 1210140, 2022 Ala. LEXIS 91, at *1 (Sept. 30, 2022) (to be published in So. 3d).
The Alabama Supreme Court answered the first certified question in the affirmative, holding that a prescription drug manufacturer has a duty to warn of a drug’s known side effects and a duty to provide instruction on the safe use of the drug. The dissent says that this holding is a dangerous intrusion into the physician-patient relationship and that the Alabama statutory authority and precedent upon which the plaintiff relies “does not establish that prescription-drug manufacturers have a duty to instruct physicians on how to mitigate risks.”
Regarding the second certified question, the Court held that a “plaintiff may establish causation by showing that his or her physician would have adopted a different course of testing or mitigation, even though the physician would have prescribed the same drug.” This holding is contrary to the principles of causation, deemphasizes the decision of the physician to prescribe the drug, and weakens the learned intermediary doctrine.
As we can see, the plaintiffs’ bar continues to mount challenges to the learned intermediary doctrine. Drug and device litigators should expect to see more on this topic in 2023.
- Henrietta Lacks Litigation
This year brought us new developments in the Henrietta Lacks litigation, which raises ethical and legal questions of interest for many drug and device companies. At the heart of the case are the issues of ownership of one’s own body, the troubled racial history of medical research, and whether a benefit conferred upon the defendant can be ongoing such that the statute of limitations does not bar a plaintiff’s unjust enrichment claim.
In late 2021, the estate of Henrietta Lacks filed a Complaint (the Complaint) for unjust enrichment against Thermo Fisher Scientific “for its choice to profit from the unlawful conduct of Johns Hopkins’ doctors.” Compl., Dkt. 1, Estate of Lacks v. Thermo Fisher Sci., Inc., No. 21-cv-2524 (D. Md. filed Oct. 4, 2021) (Court Listener) (Lacks v. Thermo Fisher Scientific Inc., 1:21-cv-02524 – CourtListener.com).
The Complaint alleged that, in the 1950s, doctors at Johns Hopkins Hospital harvested Ms. Lacks’ cells without her consent. Ms. Lacks’ harvested cells were the first known “immortalized” human cell line, meaning that her cells survived and could be reproduced indefinitely in laboratory conditions. The Complaint alleged that defendant Thermo Fisher Scientific “has continued to mass-produce and sell Ms. Lacks’ bodily tissue for its own profit without permission of Ms. Lacks’ Estate” even after the origins of the cell became widely known.
Plaintiff sought various forms of relief, including a disgorgement of profits made by commercializing Ms. Lacks’ cell lines; an order permanently blocking Thermo Fisher from using the cell lines without permission; an imposition of a constructive trust on cells Thermo Fisher possess, all related intellectual property, and proceeds related to the cells’ use; and reasonable costs and attorneys’ fees.
On December 16, 2021, Thermo Fisher Scientific filed a motion to dismiss, arguing that: (1) Maryland’s three-year statute of limitations barred plaintiff’s action; (2) even if the action was not time-barred, the Estate of Ms. Lacks did not—and could not—allege an underlying tort to support its unjust enrichment claim; and (3) the Complaint failed to plead that Thermo Fisher Scientific was not a bona fide purchaser for value as is required to support an unjust enrichment claim under Maryland Law.
The District Court of Maryland held a hearing on May 17, 2022, but no formal ruling was made. Instead, there has been at least one status conference since the hearing and the plaintiffs have, as of the date of this article, amended the Complaint twice. The transcript from the hearing suggests that Judge Boardman was skeptical of the need to support an unjust enrichment claim with an underlying tort. Clearly, there is significant dispute about whether and how to apply the applicable limitations period. Based on the modifications made in connection with the amended Complaints, it is clear that the Court is interested in the allegations surrounding whether Thermo Fisher can be a bona fide purchaser.
When the Court does rule, it will likely be the first to address these legal issues in the context of harvesting and replicating human cells. Drug and device litigators should keep an eye on this case in 2023, as the Court’s ruling could set a new legal standard and lay the foundation for future unjust enrichment cases revolving around the widely used HeLa cell line.
- European Collective Redress Updates
“Globali[z]ation and digitali[z]ation have increased the risk of a large number of consumers being harmed by the same unlawful practice” and “[w]ithout effective means to bring unlawful practices to an end and to obtain redress for consumers, consumer confidence in the internal market” of the EU “is reduced.” A new E.U. Directive aims to correct this issue by providing a baseline from which collective action frameworks will be implemented by EU member states. Although the Directive does not go so far as to introduce U.S.-style class actions and coordinated proceedings in Europe, it does represent a significant shift in the consumer rights landscape of the EU.
In 2020, the European Parliament formally endorsed the text of a new collective actions legislation, “Directive (EU) 2020/1828 of the European Parliament and of the Council of 25 November 2020 on Representative Actions for the Protection of the Collective Interests of Consumers and Repealing Directive 2009/22/EC” (November 24, 2020), which provides the potential for collective consumer lawsuits to the European Union.
The deadline for each of the 27 EU member states to adopt and publish the laws, regulations, and administrative provisions necessary to comply with the Directive is December 25 of this year, as enforcement of the Directive by EU members is scheduled to commence on June 25, 2023.
The Directive aims to “boost consumer confidence, empower consumers to exercise their rights, contribute to fairer competition and create a level playing field for traders operating in the internal market.” To accomplish this, the Directive strikes a “balance between improving consumers’ access to justice and providing appropriate safeguards for traders to avoid abusive litigation that would unjustifiably hinder that ability of businesses to operate in the internal market.”
Under the Directive, qualified entities may bring representative lawsuits on behalf of consumers against “traders” for violations of “the provisions of Union law [set forth] in Annex I” of the Directive. Annex I includes a limited list of 66 EU laws, including those related to general consumer law, data privacy, energy, financial services, telecommunications, travel and tourism, and environment and health. Qualified entities may represent groups of consumers from several EU member states in a single lawsuit before an EU member state’s national court.
Under the Directive, member states must implement at least one procedural mechanism for representative actions. Through these representative actions, the Directive permits qualified entities to seek (1) “redress measures”—“such as compensation, repair, replacement, price reduction, contract termination or reimbursement of price paid”—and (2) “injunctive measures” including definitive and provisional measures to cease or prohibit a practice.
The Directive also “cover[s] both domestic and cross-border infringements, in particular where consumers affected by an infringement live in Member States other than the Member State in which the infringing trader is established” as well as “infringements that have ceased before the representative action is brought or concluded, since it might still be necessary to prevent the repetition of the practice by prohibiting it, to establish that a given practice constituted an infringement or to facilitate consumer redress.”
The losing party bears the cost of the litigation. According to the Directive, individual consumers generally “should not pay the costs of the proceedings” under the Directive, but “in exceptional circumstances, it should be possible to order individual consumers concerned by a representative action for redress measures to pay the costs of the proceedings that were incurred as a result of those individual consumers’ intentional or negligent conduct,” such as “the prolonging of proceedings because of unlawful conduct.”
Qualified entities may receive funding from third parties unless there is a conflict of interest. Regarding discovery, courts must be able to order the defendant or third parties to disclose additional evidence that is within the defendant’s or third parties’ control.
Finally, all settlements in representative actions must be approved by the court. The court will not approve the settlement if “the conditions of the settlement cannot be enforced or the settlement would be contrary to mandatory provisions of national law.”
Several differences between U.S.-style class actions and the Directive include the following: (1) only entities representing consumer interests will be able to bring a class action; (2) the scope of the representative actions is limited to infringements affecting consumers; (3) the restriction on sources of funding for consumer representative entities; and (4) the lack of special process—like class certification phase—found in the U.S. It is possible that the collective redress actions permitted by the Directive may encourage qualified entity litigants to explore the breadth and reach of various EU laws, and perhaps even seek to apply them in ways previously unseen.
As collective redress suits commence after June 2023, traders facing such suits should look to how U.S. defendants have managed class action and mass tort litigations when analyzing how to achieve efficiencies and smart strategies in these new, broader-reaching lawsuits.
As we wave goodbye to 2022 and say “Cheers!” to 2023, we look forward to the interesting (and hopefully positive!) legal developments to come to the world of drug and device law.
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