United States Judicial Panel on Multidistrict Litigation – January 2019 Hearing Session Preview

The next hearing session of the United States Judicial Panel on Multidistrict Litigation (“JPML”) is scheduled for January 31, 2019 in Miami, Florida. Six matters are set for oral argument to consider motions to transfer each to one centralized district for coordinated pretrial proceedings. The matters set for this session include such hot topics as the massive Marriott data breach and litigation over Valsartan products contaminated with NDMA, a probable human carcinogen.

2018 JPML Year in Review

2018 saw a continuation of the pattern of decreasing motions for consolidation. Only 56 motions for centralization were filed in 2018, the lowest number in at least nine years and less than half of the 121 motions filed in 2009. However, the JPML centralized 28 of these new requests, an increase over the past two years. More actions were involved in those granted motions to centralize, the most in more than nine years. So, while requests to centralize are down, those actions that are centralized involve more lawsuits than in the recent past. MDLs continue to be dominated by products liability and antitrust cases. However, four new intellectual property MDLs were created in 2018.

Matters Set for January 2019 Oral Argument

The following matters are scheduled for oral argument during this first hearing session of the year:

MDL No. 2875 – In Re: Valsartan N-Nitrosodimethylamine (NDMA) Contamination Products Liability Litigation
MDL No. 2876 – In Re: Enhanced Recovery Company, LLC, Fair Debt Collection Practices Act (FDCPA) Litigation
MDL No. 2877 – In Re: Air Crash at Durango, Mexico, on July 31, 2018
MDL No. 2878– In Re: Ranbaxy Generic Drug Application Antitrust Litigation
MDL No. 2879 – In Re: Marriott International, Inc., Customer Data Security Breach Litigation
MDL No. 2880 – In Re: H&R Block Employee Antitrust Litigation

Notable Motions to Transfer

MDL No. 2875 – In Re: Valsartan N-Nitrosodimethylamine (NDMA) Contamination Products Liability Litigation. A class action plaintiff filed for transfer of at least fifteen consumer class action lawsuits and two individual lawsuits arising out of use of the generic drug Valsartan. The lawsuits were filed against manufacturers, distributors, and marketers of Valsartan – a prescription drug used primarily to treat high blood pressure and heart failure – following a July 2018 FDA announcement regarding voluntary recalls of several products containing the active ingredient valsartan after the products were found to contain NDMA, a probable human carcinogen. The moving plaintiff requested transfer to the District of New Jersey, where many of the actions are currently located and which serves to house the headquarters of at least three named defendants.

The main dispute over centralization between the parties in this case appears to be whether consumer class actions seeking solely economic damages and product liability cases requesting personal injury damages should be consolidated. Several of the defendants have opposed the transfer motion; while most defendants agree to transfer of the consumer class actions if the JPML feels it is warranted, they seek denial for the transfer of any individual personal injury claims.

MDL No. 2879 – In Re: Marriott International, Inc., Customer Data Security Breach Litigation. Data breach litigation continues trending in MDL requests for 2019; here, two motions for consolidation and transfer of litigation have been filed over the Marriott International, Inc. and Starwood Hotels & Resorts Worldwide, LLC data breach. The ten lawsuits that had been filed as of December 3, 2018 at the time of filing the motion to transfer has now grown to over 35 lawsuits. Plaintiffs allege Marriott failed to protect its customers’ private information, resulting in four years of hacker access to the reservation system of its hotel chains. Marriott disclosed the data breach on November 30, 2018, acknowledging that the names, addresses, credit card numbers, phone numbers, passport numbers, travel locations, and arrival and departure dates were exposed for up to 500 million customers. The two initial motions both requested transfer and consolidation to the District of Maryland, where Marriott headquarters are located, one alternatively suggesting the District of Massachusetts. Several briefs have subsequently been filed suggesting transfer to Florida, Connecticut, and New York.

MDL No. 2880 – In Re: H&R Block Employee Antitrust Litigation. This request to transfer and consolidate putative class action lawsuits centers around allegations that H&R Block violated the Sherman Antitrust Act by engaging in conspiracies not to compete for employees and to suppress employee wages. The lawsuits were filed on the heels of a July 2018 letter from 11 state attorneys general to eight national fast food franchisers requesting information about similar “no-poach” agreements in franchise contracts. The state attorneys general cited concern for such agreements limiting the abilities of fast-food and other low wage workers to seek raises and promotions in announcing the request for information. The current lawsuits allege that H&R Block has a policy in its own stores and require its franchisees to execute “no-poach” agreements, resulting in average wages of $10.86 per hour for H&R Block seasonal tax preparers as opposed to an industry hourly wage average of $22.67. H&R Block has opposed the transfer, citing only two jurisdictions where lawsuits have been filed as well as an arbitration agreement that it anticipates will remove at least two of the pending lawsuits.

Check Your Medicine Cabinet: FDA Announces Voluntary Recall for Over-the-Counter CVS Nasal Mist Due to Microbiological Contamination

For the 26.9 million sufferers of sinus pain and pressure, nasal sprays are one of the most recommended and effective methods of relief. But one product, labeled as a CVS brand nasal mist, is being pulled off the shelves. Product Quest Manufacturing, a Florida company that manufactures the product, recommends consumers stop using it immediately and either discard or return the spray to the place of purchase.

On August 8, 2018, the U.S. Food and Drug Administration (“FDA”) announced a voluntary recall of the CVS Health 12 Hour Sinus Relief Nasal Mist. Product Quest Manufacturing found a specific lot of their spray was contaminated with bacteria Pseudomonas aeruginosa. According to Product Quest, “repetitive use of a nasal spray containing a gram-negative pathogen can potentially lead to colonization and subsequent infection which can be life threatening in certain patient populations, such as those with cystic fibrosis or immune-compromised.”

The recalled products can be identified by locating the side panel. The side panels are coded with “Lot 173089J” and “EXP 09/19.” 16,896 units are involved in the recall. The units were sold nationwide.

What is Pseudomonas aeruginosa?

Pseudomonas aeruginosa is the most common strain of the Pseudomonas infection to cause problems in humans. Infections with this type of bacteria are generally treated with antibiotics, although the Centers for Disease Control and Prevention notes that some strains – mostly in healthcare facilities – can be multidrug-resistant. Pseudomonas aeruginosa infections associated with healthcare facilities often cause bloodstream infections, pneumonia, urinary tract infections, and surgical wound infections. Exposure to Pseudomonas aeruginosa is seen in hot tubs and swimming pools. These mild exposures in normally healthy people result in ear infections or skin rashes. Symptoms can also mimic the common cold or flu and include sinus pain and pressure, fever and chills, body aches, light-headedness, rapid pulse and breathing, nausea and vomiting, diarrhea, or decreased urination.

Regulation of Over-the-Counter Medications

As an over-the-counter, or nonprescription, medication the CVS Health 12 Hour Sinus Relief Nasal Mist is sold directly to consumers without a prescription. In 1951, the Durham-Humphrey Amendment to the Federal Food, Drug and Cosmetic Act of 1938 established a legal framework for prescription and non-prescription drugs. The Amendment also authorized the FDA to make this prescription/over-the-counter distinction. The FDA states that medications designated as over-the-counter are generally safe and effective when used as directed. However, just because the FDA presumes over-the-counter drugs are safe does not mean they are free of defects. Being vigilant requires reading warning labels, taking medications as directed and watching for recalls such as this one for the CVS 12 Hour Sinus Relief Nasal Mist.

The FDA announcement directs consumers who have been injured by the nasal mist to report adverse reactions or quality problems to the FDA’s MedWatch Adverse Event Reporting program online at www.fda.gov/medwatch/report.htm, by regular mail or by fax.

If you become ill or are injured by an over-the-counter medication, seek the assistance of a physician or health care provider.

Addicts Not Only Ones Paying Price of Opioid Epidemic

One trillion dollars. That’s how much the country spent on the opioid epidemic between 2001 and 2017, according to a report released by the nonprofit institute Altarum, a consulting group focused on improving public health.

The cost of the crisis trickles both up and down and impacts corporations, governments and insurance companies, as well as families, local businesses and neighborhoods.

“The greatest cost comes from lost earnings and productivity from overdose deaths – estimated at $800,000 per person based on an average age of 41 among overdose victims,” the report states. “This figure is largely made up of lost wages of workers and productivity losses of employers, but it also weighs on government in the form of lost tax revenue. It has increased in recent years as the epidemic has transitioned away from older people to younger ones and from prescription opioids to illicit drugs.”

Opioid Epidemic Results in High Costs to Society

More than 42,000 deaths were caused by opioid overdoses in 2016, according to the U.S. surgeon general’s office. In 2010, the death toll was 21,000. The startling spike spurred the office to take action, with Dr. Jerome Adams issuing an advisory: “Be prepared. Get naloxone. Save a life.” Naloxone is an easily administered nasal spray that quickly reverses the deadly symptoms of an overdose.

“Health care costs related to the opioid crisis reached $215.7 billion from 2001 to 2017,” the report states. “This stemmed largely from emergency room visits to treat and stabilize patients after an overdose, any associated ambulance and Naloxone use required, and related indirect health care costs associated with the increased risk of other diseases or complications.”
And the costs have nowhere to go but up.

“An additional $500 billion is estimated through 2020 if current conditions persist,” the report states.

opioid epidemic

Governing magazine, a nonpartisan news outfit, reports that Middletown, Ohio, spent $1 million-plus on ambulance dispatches for overdoses between October 2016 and October 2017. It also reports that Pennsylvania will spend $5 million this year on naloxone alone. In Nebraska, the epidemic costs $465 per resident. In West Virginia, it costs $4,793 per resident.  The state has one of the highest rates of opioid overdoses in the country.

“The costs build up slowly over time, so you almost don’t even notice it,” Nashville lawyer Mark Chalos told the magazine in an article titled “How Much Is the Opioid Crisis Costing Governments?” “But when our people really started to dig into the budgets, they realized the costs are more significant.”

Geographic Factors in Opioid Epidemic

The American Enterprise Institute, a public-policy think tank, conducted a study on “The Geographic Variation in the Cost of the Opioid Crisis” and found the costs of the opioid epidemic are disproportionate at state and local levels, as exemplified by the Nebraska / West Virginia comparison.

“The types of costs attributable to opioid abuse – health care costs, criminal justice costs, and lost productivity, for example – are fairly well understood, as is the economic impact of the crisis at the national level,” the study states. “However, the economic burden of the opioid epidemic is unevenly distributed across the country, with many communities especially hard hit. As federal, state, and local policymakers and stakeholders seek to curb the epidemic, it is vitally important that they know how these costs are distributed.”

VSL – Value of a Statistical Life – A New Way to Measure Cost of Opioid Epidemic

Enter the White House’s Council of Economic Advisers, or CEA. The federal agency compiled a paper in November 2017 that used a metric called the Value of a Statistical Life, or VSL, to gain insight into the costs of the opioid epidemic. The VSL essentially puts a price tag on one’s willingness to lower his or her death risk. It is helpful for shaping policies and programs that reduce fatalities.

“CEA finds that previous estimates of the economic cost of the opioid crisis greatly understate it by undervaluing the most important component of the loss – fatalities resulting from overdoses,” states the executive summary of the paper, titled “The Underestimated Cost of the Opioid Crisis.” “CEA estimates that in 2015, the economic cost of the opioid crisis was $504.0 billion, or 2.8 percent of GDP that year. This is over six times larger than the most recently estimated economic cost of the epidemic.”

The paper states that though this is the first of its kind to be published, it will not be the last.

“A better understanding of the economic causes contributing to the crisis is crucial for evaluating the success of various interventions to combat it,” it concludes. “CEA will conduct further economic analysis of actual and proposed demand- and supply-side interventions; consider the impact of public programs such as Medicare and Medicaid; and explore the important role of medical innovation in combatting the crisis.”

United States Judicial Panel on Multidistrict Litigation – March Hearing Preview

The next hearing session of the United States Judicial Panel on Multidistrict Litigation (“JPML”) is scheduled for March 29, 2018 in Atlanta, Georgia.  Ten matters are set for oral argument to consider motions to transfer each to one centralized district for coordinated pretrial proceedings, covering a variety of hot topics. The hearing session will cover two data breach matters, a bitcoin exchange issue, and two patent litigation consolidation requests.

Overview of January 2018 Hearing Session

Following the January 25, 2018 hearing session in Miami, Florida, the JPML issued transfer orders centralizing cases and creating new Multidistrict Litigation (“MDL”) in seven out of the thirteen new petitions:

  • MDL No. 2809 – In Re: Onglyza (Sexagliptin) and Kombiglyze XR (Saxagliptin and Metformin) Products Liability Litigation (Transferred to the Honorable Karen K. Caldwell, Eastern District of Kentucky)
  • MDL No. 2814 – In Re: Ford Motor Co. DPS6 Powershift Transmission Products Liability Litigation (Transferred to the Honorable André Birotte, Jr., Central District of California)
  • MDL No. 2816 – In Re: Sorin Heater-Cooler System Products Liability Litigation (No. II) (Transferred to the Honorable John E. Jones, III, Middle District of Pennsylvania)
  • MDL No. 2817 – In Re: Dealer Management Systems Antitrust Litigation (Transferred to the Honorable Amy J. St. Eve, Northern District of Illinois)
  • MDL No. 2818 – In Re: General Motors Air Conditioning Marketing and Sales Practices Litigation (Transferred to the Honorable Matthew F. Leitman, Eastern District of Michigan)
  • MDL No. 2819 – In Re: Restasis (Cyclosporine Opthalmic Emulsion) Antitrust Litigation (Transferred to the Honorable Nina Gershon, Eastern District of New York)
  • MDL No. 2820 – In Re: Dicamba Herbicides Litigation (Transferred to the Honorable Stephen N. Limbaugh, Jr., Eastern District of Missouri)

Matters Set for Oral Argument

The following matters are scheduled for oral argument during the March 29 hearing session:

  • MDL No. 2822 – In Re: First Databank Prescription Information Litigation
  • MDL No. 2824 – In Re: Gold King Mine Release in San Juan City, Colorado, on August 5, 2015
  • MDL No. 2825 – In Re: Alteryx, Inc., Customer Data Security Breach Litigation
  • MDL No. 2826 – In Re: Uber Technologies, Inc., Data Security Breach Litigation
  • MDL No. 2827 – In Re: Apple Inc. Device Performance Litigation

The former Bitcoin exchange called Mt. Gox is the subject of a pending consolidation motion.

  • MDL No. 2828 – In Re: Intel Corp. CPU Marketing Sales Practices and Products Liability Litigation
  • MDL No. 2829 – In Re: Mt. Gox Bitcoin Exchange Litigation
  • MDL No. 2830 – In Re: Uniloc USA, Inc., and Uniloc Luxembourg, S.A., HPE Portfolio Patent Litigation
  • MDL No. 2831 – In Re: AM Retail Group, Inc., Fair Labor Standards Act (FLSA) and Wage and Hour Litigation
  • MDL No. 2832 – In Re: Liquid Toppings Dispensing System (‘447) Patent Litigation

Notable Motions to Transfer

MDL No. 2827 – In Re: Apple Inc. Device Performance Litigation. A class action plaintiff in the Northern District of California filed for transfer of actions across the country against Apple, Inc. The petition for transfer states that the actions sought to be consolidated and coordinated all deal with Apple “throttling” the performance of older model iPhones following the release of the iOS 10.2.1 operating system. The “throttling” allegedly involved automatically slowing down iPhone system performance to use less energy and conserve battery when the OS detected a battery that was not working well. The lawsuits allege that Apple failed to inform consumers that it was purposefully slowing down its devices, or to provide a promised fix to the problem; ultimately, the lawsuits claim consumers were denied the opportunity to make an informed decision about whether to buy a new iPhone or a much less expensive replacement battery.

MDL No. 2832 – In Re: Liquid Toppings Dispensing System (‘447) Patent Litigation. One of two proposed patent litigation MDLs set for argument during this session, this matter involves defendants’ request to transfer over twelve actions involving competing franchises that offer frozen treats and flavored, shaved ice from specially-designed trucks to one MDL.  Kona Ice, Inc. advertises that its trucks are “entertainment vehicles” whose best feature is the “Flavorwave,” a row of self-service taps that dispense flavors that go over shaved ice. Kona Ice, Inc. filed several lawsuits in September 2017 against franchisees of Tikiz Franchising, LLC alleging infringement of its patent related to the design of the Kona Ice truck.

MDL No. 2826 – In Re: Uber Technologies, Inc., Data Security Breach Litigation. Data breach litigation continues trending in MDL requests; here, two plaintiffs move for transfer of litigation over the Uber Technologies, Inc. data breach to the Northern District of California. As of the day prior to the March hearing session, the proposed MDL had 21 associated actions – at least twelve of which are putative class action lawsuits. Plaintiffs allege that Uber and other defendants violated state consumer protection statutes, breached express and implied contracts as well as its fiduciary duties and covenants of duty to act in good faith and fair dealing by failing to protect the private information of its 57 million customers and drivers. Even more egregious are allegations that Uber engaged in efforts to hide the breach and failed to reveal it to the public until 2017.

Sorin Stöckert 3T Heater-Cooler Bacteria Lawsuits Coordinated in Pennsylvania

On February 1, 2018, lawsuits filed in federal district courts around the country against Sorin Group USA, Inc., Sorin Deutschland GmbH, and LivaNova PLC began the process of being transferred to Harrisbug, Pennsylvania for coordinated proceedings in an MDL, or multidistrict litigation. Multidistrict litigation is often utilized to streamline complex cases where many plaintiffs have been injured by a drug, medical device, consumer product, or incident (such as the BP oil spill, hotel fires, airline crashes, etc.).  The Sorin heater-cooler bacteria lawsuits stem from infections allegedly caused by the Sorin Stöckert 3T Heater-Cooler device, a machine that helps regulate a patient’s body temperature during cardiothoracic surgery.

The First Attempt at Coordination Denied in Early 2017

In March 2017, the Judicial Panel on Multidistrict Litigation held a hearing on the first effort to coordinate then-pending Sorin cases into an MDL. The Judicial Panel on Multidistrict Litigation is the group of federal court judges that determine whether multidistrict coordination is necessary.

In the first petition, a group of plaintiffs asked that the cases be re-assigned to a federal judge in South Carolina.  The initial request for coordination included fifteen individual lawsuits filed in South Carolina as well as North Carolina, Iowa, South Dakota, and Pennsylvania.  The Defendants vigorously opposed the establishment of an MDL initially.  They argued that there were too few cases pending, that the parties were already informally coordinating with success, and that the cases were too dissimilar to benefit from coordinated discovery – especially since the Defendants contended that discovery would be focused on the actions of the hospitals and surgeons with regard to their use of the heater-cooler devices in individual surgeries rather than more generic issues focused on the presence of a general defect in the heater-cooler products that were sold around the world.

The Judicial Panel denied the request for coordination in an April 5, 2017 order. The Panel found that the individual federal lawsuits pending around the country were already moving at an acceptable pace and the judges assigned to the fewer than 20 individual lawsuits could coordinate informally and still achieve the desired efficiencies regarding discovery and prosecution of the cases.

It is speculated that the Judicial Panel denied this initial request for coordination due to the relatively small number of cases pending at the time as well as the fact that some of the cases had been pending for quite some time and were quite advanced in pretrial proceedings.  In most instances where the Judicial Panel has granted an MDL and ordered national coordination, there are at least 50 lawsuits pending, and most MDLs involve thousands of individual lawsuits.

Following denial of the MDL petition in April, plaintiffs’ lawyers around the country continued to work together to engage in informal cooperation and the sharing of resources in the hopes of achieving some of the same efficiencies that can be achieved through MDL proceedings without experiencing the delays that are also, unfortunately, part of the MDL process.  In the months that followed, additional individual lawsuits were filed in state and federal courts and trial preparation continued in the filed cases.

New Cases Lead to a Second Petition – and a JPML Change of Heart

stockert 3t heater cooler bacteria

In a surprising turn of events in November 2017, the Defendants filed a motion to establish an MDL and coordinate the litigation.  It is unusual for the Judicial Panel to grant such a motion when they have already denied coordination, but second requests are often made.  In its petition, Sorin and LivaNova noted that it was facing 40 individual lawsuits at that time, including the 26 that were pending at the time of the initial request for coordination plus additional personal injury and wrongful death cases filed involving heater-cooler-induced mycobacterium infections in Alabama, California, Colorado, Florida, Georgia, Illinois, Indiana, Kentucky, Michigan, Minnesota, New York, and Tennessee.  Some plaintiffs filed briefs opposing the manufacturers’ coordination request due to concerns that the establishment of an MDL might delay cases that had been pending for several years and were approaching trial dates, while others supported the renewed request. The Judicial Panel heard arguments for and against the motion in late January of 2018.

On February 1, 2018, the Judicial Panel issued an order granting the Defendants’ request.  This order established MDL No. 2816, known as In Re: Sorin 3T Heater-Cooler System Products Liability Litigation (No. II), and transferred all pending federal court cases to Judge John E. Jones, III, a federal court judge in Scranton, Pennsylvania.  Judge Jones was already presiding over other Stöckert 3T cases, including the Whipkey case which should be the first heater-cooler case to be tried before a jury in 2019.  Judge Jones recently held an introductory phone conference with the attorneys involved in the 40 filed cases and is expected to hold some preliminary hearings in the coming weeks.

In addition to the federal court cases, there are also several cases concurrently pending in state court venues, primarily in Pennsylvania, Iowa, and California.  Many of these cases involve local defendants, including the hospitals.  Most of the federal court cases are solely focused on product liability claims against the heater-cooler manufacturers and do not include claims against the hospitals, as it is believed that the hospital and surgical personnel acted appropriately with regard to use and attempts to clean the heater-cooler device given the information that they were provided by the manufacturers as well as the challenges in being able to properly decontaminate the heater-cooler system due to its inherent design defects.

Nontuberculous Mycobacterium (NTM) Infections

Currently, most of the pending cases involve patients who developed M. chimera mycobacterium infections after undergoing a surgical procedure (usually a heart or transplant surgery) where a Stöckert 3T heater-cooler device was utilized.  It is estimated that several hundred thousand patients may have undergone procedures and potentially been exposed to contaminated water that circulates through this medical device.

Over the past 12 months, many hospitals have written to patients to alert them to this potential exposure, although not all hospitals have yet to do so.  It is believed that Sorin has the majority of the market share for heater-cooler device sales in the United States, which is why so many patients were potentially exposed.  The good news is that the actual number of patients that have been diagnosed with confirmed mycobacterium infections suspected to have been caused by contaminated aerosolized water coming from the Stöckert 3T heater-cooler devices is relatively small.

While the reported governmental investigations have focused on the M. chimera mycobacterium, other forms of non-tuberculous mycobacterium infections have been reported in the FDA’s MAUDE database as coming from the Stöckert 3T heater-cooler devices.   These other non-tuberculous mycobacterium infections include but are not limited to, the following:  M. abscessus, M. chelonae, M. fortuitum, M. gordonae, M. intracellulare, and M. kansasii.

In the coming months as the state court and MDL proceedings move into the expert witness discovery phase, more efforts will be focused on identifying the precise species that are non-tuberculous mycobacterium that can be scientifically and legally linked to use of the Sorin 3T heater-cooler devices.