Morrison Foerster’s Class Dismissed blog provides insights, recommendations, and timely reports on the latest defense news, developments, and trends in the most current class actions lawsuits and product liability issues that affect consumer-facing companies. Through Class Dismissed, attorneys from our nationally recognized Consumer Class Action and Products Liability practices offer a real-time assessment of the developments in matters that are shaping the industry. This blog examines the full spectrum of consumer-related class action and product liability lawsuits ranging from false advertising, privacy, consumer product safety, ADA, food misbranding, TCPA, environment, retail, and government actions as well as nationwide and multidistrict litigation class actions.<h2>ABOUT MORRISON FOERSTER</h2>Morrison Foerster is a leading global law firm that transforms complexity into advantage for its clients. Our clients include some of the largest financial institutions, banks, consulting and accounting firms, and Fortune 100, technology, and life sciences companies. Highlighting the firm’s commitment to client service, leadership in market-changing deals and impact litigation, and values-based culture, Morrison Foerster has been repeatedly recognized as one of the top 10 firms on The American Lawyer’s A-List. Year after year, the firm receives significant recognition from Chambers and The Legal 500 across their various guides, including Global, USA, Asia‑Pacific, Europe, UK, Latin America, and FinTech Legal. Our lawyers passionately care about delivering legal excellence while living our values. Morrison Foerster has a long-standing commitment to creating a culture that respects and celebrates differences, while providing an inclusive environment. The firm has achieved Mansfield Certification Plus since 2018 as a result of successfully reaching at least 30 percent women, communities of color, and LGBTQ+ lawyer representation in a notable number of current leadership roles and committees. The firm also has a long history of commitment to the community and society through providing pro bono legal services, including litigating for civil rights and civil liberties, improving public education and fostering the wellbeing of children, advocating for veterans, promoting international human rights, enforcing the right to asylum, and safeguarding the environment.

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Partner

Julie Park protects her clients’ products no matter what kind of product issue they face—whether it is planning for new product development, recalling an existing product, or defending clients against product liability or consumer class actions. Drawing on her deep technical and legal expertise, Julie counsels clients on consumer product safety regulation and pharmaceutical and medical device preemption while also managing complex and multijurisdictional litigation both in state and federal court.

Julie Y. Park

<div class="videoWrapper"><iframe frameborder="0" class="sticky-video" allowfullscreen="1" title="Meet Penny Preovolos, Litigation Partner" src="https://www.youtube-nocookie.com/embed/hv7hYn-Bl7c?rel=0&showinfo=0;vq=hd1080" title="iframe"></iframe></div>Penelope has served as lead counsel in major consumer class actions and antitrust cases for more than 35 years, successfully representing high-profile defendants in antitrust, consumer fraud, and product defect matters. Her clients span a range of industries, including consumer electronics, technology, retail, publishing, food and beverage, cosmetics, and household products. According to Chambers USA, Penelope has a “great reputation for antitrust and product liability work” and is a “superb all-around antitrust lawyer.”Penelope was named the 2019 Antitrust Lawyer of the Year by the Antitrust, UCL, and Privacy Section of the California Lawyers Association. She was co-chair of MoFo’s antitrust practice for 14 years. She has served as chair of the Antitrust and Trade Regulation Section of the State Bar of California and as a member of the Ninth Circuit Advisory Committee on Local Rules and Operations. She is an editor of and frequent contributor to Morrison & Foerster’s <a href="https://classdismissed.mofo.com/">Class Dismissed blog</a>, as well as a frequent speaker about class action and antitrust issues.More About PenelopePenelope clerked for the Honorable Charles M. Merrill, United States Court of Appeals for the Ninth Circuit. She graduated cum laude from Harvard Law School, where she was executive editor of the Harvard Civil Rights – Civil Liberties Law Review. Penelope was a member of Phi Beta Kappa at the University of California, Berkeley. She was awarded the University Medal, the highest undergraduate honor at the university, as well as the English Departmental Citation (awarded to the outstanding graduate in that department).

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Senior Counsel

Penelope has served as lead counsel in major consumer class actions and antitrust cases for more than 35 years, successfully representing high-profile defendants in antitrust, consumer fraud, and product defect matters. Her clients span a range of industries, including consumer electronics, technology, retail, publishing, food and beverage, cosmetics, and household products.

Penelope A. Preovolos

Claudia focuses her practice on the defense of consumer class actions and on complex commercial litigation, including unfair business competition, false advertising, product liability, and privacy matters. She is currently representing numerous consumer goods manufacturers and retailers in false advertising and mislabeling class action lawsuits. Claudia also regularly counsels clients in the food, cosmetics, retail, and technology industries. She represents companies in false advertising disputes before the National Advertising Division (NAD) of the Council of Better Business Bureaus, Inc.<h5>More about Claudia</h5>Claudia is active in MoFo’s pro bono efforts, and recently traveled to El Paso, Texas, to work with families separated and detained at the border. She is also supervising a pro bono collaboration with Equal Rights Advocates, a nonprofit fighting for gender justice in work places and schools across the country. The initiative will help students who have been victims of sexual assault, attempted assault, or harassment find support and seek justice. Claudia is also a board member of Bay Area Legal Aid and a former board member of Equal Rights Advocates. Claudia is an editor and frequent contributor to MoFo’s <a href="https://classdismissed.mofo.com/">Class Dismissed</a> blog, which provides reports about the latest defense news, developments, and trends in class action lawsuits and product liability issues that affect consumer-facing companies. Her perspectives are also respected in the larger legal community: Claudia has published articles about class action and false advertising issues, and is a co-author of Chapter 7 — “Unfair Competition in California Business Litigation 2016” — of The Recorder. She also regularly speaks at conferences on class action and advertising trends. Claudia is currently serving as a Lawyer Representative for the Northern District of California. She received her J.D. degree in 2004 from Berkeley Law (Boalt Hall School of Law), where she was an associate editor of the Berkeley Technology Law Journal.

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Claudia focuses her practice on the defense of consumer class actions and on complex commercial litigation, including unfair business competition, false advertising, product liability, and privacy matters. She is currently representing numerous consumer goods manufacturers and retailers in false advertising and mislabeling class actions.

Claudia M. Vetesi

Alexandra Barlow is a partner in the Litigation Department of Morrison Foerster’s San Diego office.Alexandra litigates product liability matters involving medical devices, pharmaceuticals, consumer products, automobiles, and AI. Alexandra's litigation expertise spans the entire case life cycle in both state and federal courts. She handles all phases of discovery, including fact investigation and expert discovery. Alexandra has taken over twenty-five depositions, including experts, plaintiffs, treating physicians, and third-party witnesses. She drafts and argues motions of all types, including motions for summary judgment, motions to quash, and motions for preliminary injunction.Alexandra has significant trial experience. She has first-chaired a one-week jury trial and second-chaired a five‑week jury trial, both involving multiple claims and witnesses. She also has extensive experience in alternative dispute resolution, representing clients at mediations, mandatory settlement conferences, and early neutral evaluations.Alexandra enjoys tracking developments and keeping her clients updated on product liability and personal injury claims, frequently writing or presenting on emerging areas such as autonomous vehicles and smart devices. Alexandra’s experience also extends to professional liability, warranty claims, eminent domain, and construction law.Alexandra earned her J.D. from the University of San Diego School of Law. While in law school, the San Diego Law Review published her comment on the recovery of damages by plaintiffs in a persistent vegetative state, and she also served as a comment editor. She received her B.A. from the University of California, Los Angeles, where she majored in Political Science and minored in Spanish. A San Diego native, she attended a Spanish immersion school through the eighth grade. Alexandra is active in the San Diego community, advising students at a local college. She is also a member of several legal organizations in San Diego, including Lawyer’s Club, the Association of Business Trial Lawyers, and Wallace Inn of Court.

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Alexandra Barlow is a partner in the Litigation Department of Morrison Foerster’s San Diego office. Alexandra litigates product liability matters involving medical devices, pharmaceuticals, consumer products, automobiles, and AI. Alexandra’s litigation expertise spans the entire case life cycle in both state and federal courts. She handles all phases of discovery, including fact investigation and expert discovery. Alexandra has taken over twenty-five depositions, including experts, plaintiffs, treating physicians, and third-party witnesses. She drafts and argues motions of all types, including motions for summary judgment, motions to quash, and motions for preliminary injunction.

Alexandra Barlow is a partner in the Litigation Department of Morrison Foerster’s San Diego office. Alexandra litigates product liability matters involving medical devices, pharmaceuticals, automobiles, AI, and robotics. Alexandra's litigation expertise spans the entire case life cycle in both state and federal courts. She handles all phases of discovery, including fact investigation and expert discovery. Alexandra has taken over twenty-five depositions, including experts, plaintiffs, treating physicians, and third-party witnesses. She drafts and argues motions of all types, including motions for summary judgment, motions to quash, and motions for preliminary injunction.

Alexandra Barlow

Adam J. Hunt is a partner in the Litigation Department of Morrison Foerster’s New York office. His practice focuses on complex litigation, with an emphasis on class action and commercial litigation.Mr. Hunt has extensive experience representing consumer products companies, financial institutions, and technology firms in class action cases and complex commercial disputes before state and federal trial courts, as well as in arbitrations. Clients seek Mr. Hunt’s counsel for his creative, strategic thinking in high-stakes, high-profile matters. He has represented clients facing claims under false advertising, antitrust, and privacy laws throughout the country, securing wins at the pleading stage, summary judgment, and trial, in addition to negotiating favorable settlements, often early in the case. Representative experience includes successfully securing rulings dismissing two putative false advertising class action cases against one of the best-known consumer electronics companies in the world; obtaining a complete win on summary judgment for a major shipping and logistics company in a multimillion-dollar commercial dispute; appearing as counsel at trial for a leading financial institution in a $100 million commercial dispute, winning a bench trial verdict; and prevailing on motions to dismiss false advertising class actions against a leading Greek yogurt company.Mr. Hunt is also an editor of the firm’s <a href="https://classdismissed.mofo.com/" target="_self">Class Dismissed blog</a>, which provides insights, recommendations, and timely reports on the latest defense news, developments, and trends in the most current class action lawsuits that affect consumer-facing companies.Mr. Hunt maintains an active pro bono practice and is the recipient of the New York State Bar Association’s 2017 President’s Pro Bono Service Award for the First Judicial Department, the 2018 Public Service Award from New York University School of Law, and Morrison Foerster’s Kathi Pugh Award for Pro Bono Services.Mr. Hunt received his B.A. with honors from Swarthmore College and his J.D. cum laude from New York University.

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Adam Hunt is a partner in the Litigation Department of Morrison Foerster’s New York office. His practice focuses on complex litigation, with an emphasis on class action and commercial litigation.

Adam Hunt

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Alexandra Preece Barlow

Adam J. Hunt

The Future of Section 230: Protection Against Product Liability Claims?

New Wave of PFAS Legislation Aimed at Consumer Products

CPSC Releases Annual Report on Deaths and Injuries Involving Nursery Products

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Lower courts’ inability or refusal to confine cases to their proper fora compels the Supreme Court to spend precious docket space restating the rules governing personal jurisdiction.The Due Process Clauses of the Fifth and Fourteenth Amendments limit courts’ authority to exercise personal jurisdiction over defendants. Personal jurisdiction comes in two varieties: general and specific. A court with general jurisdiction over an out-of-state defendant can “hear any and all claims against” that defendant, but only if the defendant’s affiliations with the forum state “are so constant and pervasive as to render it essentially at home” there. Daimler AG v. Bauman, 134 S. Ct. 746, 751 (2014) (internal quotation marks and brackets omitted). On the other hand, a court may exercise specific jurisdiction over an out-of-state defendant only when the claims at issue “arise out of or relate to” the defendant’s in-state activities.  Burger King Corp. v. Rudzewicz, 471 U.S. 462, 472 (1985) (internal quotation marks omitted). While those standards might sound clear enough, state and lower federal courts have continued to reach conflicting results. And, in recent years, the Supreme Court has repeatedly found it necessary to intervene. See Bristol-Myers Squibb Co. v. Superior Court, 137 S. Ct. 1773 (2017); <a href="https://media2.mofo.com/v3/assets/blt5775cc69c999c255/bltff54e1cc26bc883c/627314f1deee7329767e75f8/170601-personal-jurisdiction-high-court.pdf">BNSF Railway Co. v. Tyrrell</a>, 137 S. Ct. 1549 (2017); <a href="https://media2.mofo.com/v3/assets/blt5775cc69c999c255/bltb7cc7b4056e4a1eb/627314f623c6cf2a1c3af4e7/140225-walden-v-fiore.pdf">Walden v. Fiore</a>, 134 S. Ct. 1115 (2014); <a href="https://media2.mofo.com/v3/assets/blt5775cc69c999c255/blt06e1d49763ee892b/627314f65f7b601eaaebcf3e/110629-stream-of-commerce-theory.pdf">Goodyear Dunlop Tires Operations, S.A. v.Brown</a>, 564 U.S. 915 (2011); <a href="https://media2.mofo.com/v3/assets/blt5775cc69c999c255/blt06e1d49763ee892b/627314f65f7b601eaaebcf3e/110629-stream-of-commerce-theory.pdf">J. McIntyre Machinery, Ltd. v. Nicastro</a>, 564 U.S. 873 (2011) (plurality opinion).Read our<a href="https://www.mofo.com/resources/insights/200121-us-supreme-personal-jurisdiction-ford.html?utm_source=publications&utm_medium=email"> client alert.</a>

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Brian Matsui co-chairs Morrison Foerster’s Appellate and Supreme Court practice. Brian is a go-to appellate advocate for sophisticated clients in complex appeals nationwide. 

Brian R. Matsui

Brian Matsui is a partner in Morrison Foerster’s Appellate and Supreme Court practice. For nearly 20 years, Brian has been a go-to appellate advocate for sophisticated clients in complex appeals nationwide. Clients turn to Brian for his substantial experience in patent appeals in the Federal Circuit. He has argued more than 10 times in that Court, winning appeals from both district courts and the Patent Trial and Appeal Board. Brian excels at applying significant legal principles to complex technologies in a way that distills them for the Court. He has done so for companies in a myriad of industries, including mobile device manufacturers, pharmaceutical companies, medical device companies, memory manufacturers, movie studios, and software companies.

Brian Matsui

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Start Your Engines: The U.S. Supreme Court Will Yet Again Review the Constitutional Limits of Personal Jurisdiction in a Pair of Cases Involving Ford Motor Company

Start Your Engines: The U.S. Supreme Court Will Yet Again Review the Constitutional Limits of Personal Jurisdiction in a Pair of Cases Involving Ford Motor Company

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Lower courts’ inability or refusal to confine cases to their proper fora compels the Supreme Court to spend precious docket space restating the rules governing 

On June 7, 2019, an en banc Ninth Circuit panel affirmed certification of a nationwide settlement class and held, 8-3, that class certification criteria are applied less strictly in a settlement context.[1]  Hyundai II preserves the ability to certify nationwide settlement classes while maintaining more demanding requirements for litigation classes.  As noted in our earlier post, the prior panel decision,[2] which denied certification, sent class action lawyers into a tizzy, creating concerns about the viability of nationwide class settlements.  Hyundai II reversed course, holding that the predominance requirement differs in a settlement context because there is no need to consider the manageability of individual issues at trial.Case BackgroundAs we discussed in our previous post, a flurry of class actions were filed nationwide after the EPA launched an investigation regarding complaints that Hyundai and Kia had overstated the fuel efficiency of some of their vehicles.  The MDL panel consolidated the cases before Judge Wu in the Central District of California, and Judge Wu granted plaintiffs’ motion for certification of the settlement class.  The three-judge panel in Hyundai I vacated the trial court’s decision, holding that the Rule 23(b)(3) predominance inquiry required a choice-of-law analysis, as well as proof of classwide deception, essentially identical to what is required for certification of a litigation class.On July 27, 2018, the Ninth Circuit granted en banc review of the panel decision.Predominance Analysis  Hyundai II held that Rule 23(b)(3) predominance factors must be considered in light of the reason for which certification is sought—litigation or settlement.  Citing the Supreme Court’s decision in Amchem,[3] the Ninth Circuit held that in the settlement context, manageability problems created by the need to resolve individual issues at trial are not a concern because no trial will occur.  Instead, the focus is on the Rule 23 provisions intended to protect absent class members by blocking “unwarranted or overbroad class definitions.”Individual Issues Regarding Exposure and Reliance Did Not Defeat Predominance for a Settlement ClassIn Hyundai II, the Ninth Circuit concluded that common issues predominated regarding exposure and reliance, because so-called “Monroney stickers” containing the alleged fuel efficiency misrepresentations were present on every new car.  The Objectors-Appellants argued that the class of used-car purchasers may not have seen the “Monroney stickers” because they were not required to be displayed on used cars.  The trial court had rejected this argument on the basis that the alleged misrepresentations were part of a nationwide, concerted marketing effort.  The Hyundai II panel, however, did not decide whether Hyundai’s and Kia’s advertising was substantial enough to support an inference of reliance under the Tobacco II standard in a litigation context.<a name="_ftnref4" href="#4033971-v3-Hyundai_-_Ninth_Circuit_Article.docx">[4]</a>  Rather, the court limited its decision to the settlement context and concluded that the potential individual issues would apply only to a subset of the class and thus did not defeat predominance for the settlement class overall.  Moreover, the potential individual issues would “primarily implicate trial management issues, which we do not consider when conducting a predominance analysis for a settlement class.”Variations in State Law Did Not Defeat Predominance for a Settlement ClassHyundai II rejected the objectors’ argument that, in the settlement context presented, Mazza v. American Honda Motor Co., 666 F.3d 581 (9th Cir. 2012), required the district court to address variations in state law affecting claims by used car purchasers.  While a party litigant could “timely invoke the law of a foreign state,” here, no objector had presented an adequate choice-of-law analysis, or argued that differences between the consumer protection laws of all fifty states precluded certification of a settlement class.  As such, the district court was not obligated to address choice-of-law issues, and the Ninth Circuit would not decertify the class for lack of such an analysis.Moreover, the Ninth Circuit held that Mazza was “readily distinguishable.”  There, unlike in the case before the court, the foreign law proponent had “exhaustively detailed the ways in which California law differs from the laws of the 43 other jurisdictions,” and showed how applying the facts to those disparate state laws made “a difference in this litigation.”  The en banc panel emphasized that:  “Importantly, the Mazza class was certified for litigation purposes.  The prospect of having to apply the separate laws of dozens of jurisdictions presented a significant issue for trial manageability, weighing against a predominance finding.”Finally, Hyundai II concluded that application of California law did not violate due process notwithstanding that, under Virginia law, Virginia residents’ claims might be time-barred if they opted out.  Significantly, the Ninth Circuit held that the Virginia objector was free to opt out, but “could not opt out on behalf of anyone else.”  The decision thus eliminates the threat sometimes made by objectors to opt out an entire subclass.Settlement Approval Was Otherwise ProperUnlike a number of recent Ninth Circuit decisions that have been notably critical of the details of class settlements, the en banc panel in Hyundai II rejected a variety of challenges to the settlement and settlement procedures.  It held that both the long form and short form notices were proper.  The long form notice adequately described the terms of the settlement and informed settlement class members that additional compensation could be received.  The short form notice “was designed to be, as the name suggests, short.”  It satisfied its “primary purpose” of alerting class members to the settlement; it provided a high-level overview of the process (including critical dates), and explained where class members could obtain additional information and claim forms.Hyundai II also rejected the argument that claim forms were not necessary and that the claim forms were overly burdensome.  Although the participation rate of lump sum claimants was only 23 percent, the Ninth Circuit noted that it had approved class action settlements “where less than five percent of class members filed claims.”  Finally, the Ninth Circuit found no evidence of collusion between class counsel and the automakers, noting that there was no “clear sailing” provision, no reversion of unclaimed funds to the defendants, and no disproportionate distribution of settlement funds to class counsel.DissentIn her dissent, Judge Ikuta, who authored the original panel decision, largely adopted the analysis contained in that decision.  The dissent argues that settlement classes are not different, and that the trial court should have done a full choice-of-law analysis, as would have been required for a litigation class.TakeawaysHyundai II reaffirms that, in appropriate cases, nationwide settlement classes can be certified under a less stringent standard than litigation classes.  At the same time, the decision is cabined to the settlement context and preserves intact the far more demanding predominance analysis required for certification of a litigation class.________________________________________________________________[1] In re Hyundai and Kia Fuel Economy Litig., 2019 WL 2376831 (June 6, 2019) (“Hyundai II”).[2] In re Hyundai and Kia Fuel Economy Litig., 897 F.3d 1003 (9th Cir. 2018) (“Hyundai I”).[3] Amchem Products Inc. v. Windsor, 521 U.S. 591 (1997).[4] In re Tobacco II Cases. 46 Cal. 4th 298 (2009).

Energy Drink Manufacturer

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Computer Power Management System Litigation

Run Them Sweet, LLC v. CPA Global Limited

Online Billing Practices Class Action

Lipitor Antitrust Litigation

American Booksellers Association v. Barnes &amp; Noble, Inc.


Penelope has served as lead counsel in major consumer class actions and antitrust cases for more than 35 years, successfully representing high-profile defendants in antitrust, consumer fraud, and pro

Penelope Preovolos

Ninth Circuit’s En Banc Hyundai Decision: Less Strict Standard For Settlement Classes

On June 7, 2019, an en banc Ninth Circuit panel affirmed certification of a nationwide settlement class and held, 8-3, that class certification criteria are app

Ninth Circuit’s En Banc Hyundai Decision: Less Strict Standard For Settlement Classes

The United States Supreme Court finally clarified its 11-year-old “clear evidence” standard for pharmaceutical preemption.  In its much-anticipated opinion delivered by Justice Breyer, the Court unanimously reversed the Third Circuit’s holding that questions of pharmaceutical preemption should be decided by juries.  Merck Sharp & Dohme Corp. v. Albrecht et al., No. 17-290, slip op. (U.S. May 20, 2019) (“Albrecht”).  However, those who had criticized the Third Circuit’s opinion were left wanting more—the limited holding does not reach the issue of whether plaintiffs’ claims against the manufacturer were preempted.BackgroundOver 500 patients sued Merck alleging they suffered atypical femoral fractures, a rare type of stress fracture affecting the thigh bone, after using Merck’s Fosamax drug.  They claimed that Merck failed to disclose these risks on the drug label.  Merck countered that FDA had rejected or would have rejected its proposed addition to the drug label.  As a result, Merck said it could not comply with both federal drug labeling requirements and its duty to warn under state law.  In these circumstances, Merck argued, the federal law and regulations preempt the patients’ state‑law claims such that Merck should not be held liable for failing to disclose the stress fracture risks to consumers.Merck based its argument on years of back-and-forth discussions with FDA about whether Fosamax could cause these types of stress fractures.  In 1995, when FDA first approved Fosamax, the label did not include the fracture warning because—at that time—the risk was still theoretical.  After more than a decade of post-market surveillance, Merck sought preapproval to add these risks to its Fosamax label in 2008.  FDA rejected Merck’s proposed change.  Not until 2011 did FDA agree to add language to the Fosamax label disclosing the risks of atypical femoral fractures.Beginning in 2010, hundreds of patients filed lawsuits that were eventually consolidated in a multidistrict litigation in the District of New Jersey.  The district court granted Merck’s summary judgment motion on the ground that the patients’ state-law failure to warn claims were preempted by federal law.  The Third Circuit reversed, finding that the preemption question involved factual disputes the jury should have resolved and that Merck needed more evidence to meet the “clear evidence” standard set forth in Wyeth v. Levine to establish its preemption defense.Defining Wyeth’s “Clear Evidence” StandardIn 2009, the Supreme Court issued the first of several important pharmaceutical preemption decisions in Wyeth v. Levine, 555 U.S. 555 (2009).  There, a Vermont jury found that Wyeth failed to provide an adequate warning that direct injection of its Phenergan drug created a significant risk of harm to patients.  The Vermont Supreme Court agreed, finding no preemption.The U.S. Supreme Court affirmed.  In doing so, the Court explained that unless a drug manufacturer can show “clear evidence” that FDA would not have approved a change to its drug label, a court cannot conclude that it was impossible for the drug manufacturer to comply with both federal drug labeling requirements and state-law duty to warn requirements.  In other words, to succeed on this type of impossibility preemption defense, a drug manufacturer has to provide clear evidence that FDA considered the risk and made an affirmative decision to either (a) not change the label or (b) prohibit the manufacturer from strengthening its warning.However, what constituted “clear evidence” under Wyeth remained unclear until now.  Post-Wyeth, courts have struggled to apply the undefined clear evidence standard to determine if the FDA would have rejected a proposed warning change that was never submitted.In Albrecht, Merck had sought preapproval from FDA to strengthen Fosamax’s warnings, but that proposal was rejected.  When Fosamax users brought state-law failure-to-warn claims, Merck argued that the claims were preempted by federal law because the FDA had rejected Merck’s proposed changes to the Fosamax label.The Court clarified that “clear evidence” means “evidence that shows the court that the drug manufacturer fully informed the FDA of the justifications for the warning required by state law and that the FDA, in turn, informed the drug manufacturer that the FDA would not approve a change to the drug’s label to include that warning.”  This definition dispels the notion that the “clear evidence” standard is an evidentiary standard, as some district courts had interpreted it to be.But whether the FDA’s action in Albrecht satisfies the standard is left open.  The Court did not actually reach the preemption question.Preemption Questions Must Be Decided by the JudgeNext, the Court held that judges, not juries, must decide the question of whether state-law failure-to-warn claims are preempted by the Federal Food, Drug, and Cosmetic Act and related labeling regulations.  This includes whether there is clear evidence that FDA would not have approved the warning that state law requires.  The Court reasoned that resolving questions of agency disapproval often requires legal skills to understand an agency decision within the applicable regulatory framework.  The Court acknowledged that the preemption issue typically involves factual disputes but that these factual questions are “subsumed within an already tightly circumscribed legal analysis.”Key Takeaways<ul><li>Justice Thomas joined the opinion but wrote separately to say that Merck’s preemption defense failed. Why?  Because Merck relied on FDA response letters as evidence that Merck could not have strengthened its warning.  According to Justice Thomas, an FDA response letter cannot have preemptive effect because it is “not a final agency action with the force of law.”  His concurrence is surprising given that he wrote the majority opinion in PLIVA, Inc. v. Mensing, 131 S. Ct. 2567 (2011), holding that certain generic pharmaceutical failure-to-warn claims are preempted.</li><li>Justice Alito, joined by Justices Roberts and Kavanaugh, also wrote separately. He would have found preemption here and suggested that the Third Circuit should find “clear evidence” that the FDA would not have approved Merck’s label.  Justice Alito cited the record showing that FDA was deeply involved in the stress fracture issue for years, and that the agency has a statutory duty to require label changes upon learning new evidence warranting a change.  Under these circumstances, Justices Alito, Roberts, and Kavanaugh would have found preemption.</li><li>Defendants should welcome this clarity on the “clear evidence” standard, which relieves them of the confusing pseudo-evidentiary burden that some lower courts had applied.</li><li>Although the opinion may disappoint by not reaching the preemption question, Justice Alito’s concurrence provides drug manufacturers a roadmap for satisfying the “clear evidence” standard.</li><li>Given the favorable—albeit limited—holding, defendants should feel emboldened to assert a federal preemption defense in other areas beyond pharmaceuticals.</li></ul>

Fertility Center Litigation

Fitbit

MicroPort

Leading Healthcare, Pharmaceutical, and Medical Device Company

Lethal Injection Matters – Major Pharmaceutical Company

Pain Pump Matters – Large Pharmaceutical Company

Major Technology Company

Leading Chemical Company

Security Device Company

In re Air Crash Near Peixoto de Azevedo, Brazil

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Erin Bosman is chair of MoFo’s Class Actions and Mass Torts Practice Group and is a founder and co-head of the Artificial Intelligence Group. Clients value her business strategy, seeking her comprehensive counsel throughout the product life cycle, especially in high-stakes litigation and product recalls.

Erin M. Bosman

Erin Bosman is chair of MoFo’s Class Actions and Mass Torts Practice Group and is a founder and co-head of the Artificial Intelligence Group. Clients value her business strategy, seeking her comprehensive counsel throughout the product life cycle, especially in high-stakes litigation and product recalls.

Erin Bosman

An orthopedic implant company

A children&rsquo;s monthly subscription service product

A fertility company

A major technology company

A smart fitness equipment company

Julie Park provides analytic and strategic counsel for issues in product life cycle, product liability and defective products, consumer class actions, and more.

Julie Park

Julie Park | Product Liability Lawyer

Supreme Court Decides Prescription Drug Preemption Case in Favor of Drug Manufacturer

The United States Supreme Court finally clarified its 11-year-old “clear evidence” standard for pharmaceutical preemption.  In its much-anticipated opinion deli

Supreme Court Decides Prescription Drug Preemption Case in Favor of Drug Manufacturer

The Supreme Court’s decision in Lamps Plus, Inc. v. Varela made it clear that an arbitration agreement must explicitly contemplate and provide for class arbitration, building on a line of pro-arbitration rulings from the Supreme Court over the past decade, including American Express Co. v. Italian Colors Restaurant, Stolt-Nielsen, S.A. v. Animal Feeds Int’l Corp., and AT&T Mobility LLC v. Concepcion. We analyze the Supreme Court’s decision and discuss their ongoing commitment to traditional arbitration.Read our <a href="https://protect-us.mimecast.com/s/qRxIC4xYV2fMAQg6CBNqhI">client alert</a>.

Adam Hunt is a partner in the Litigation Department of Morrison Foerster’s New York office. His practice focuses on complex litigation, with an emphasis on class action and commercial litigation.

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Lamps Plus, Inc. v. Varela: The Supreme Court Clarifies that Clear Consent is Necessary for Class Arbitration

U.S. Supreme Court’s Decision to Review a Pair of FTCA Cases Could Spell a Sea Change in FTC’s Enforcement Authority

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The Supreme Court’s decision in Lamps Plus, Inc. v. Varela made it clear that an arbitration agreement must explicitly contemplate and provide for class arbitra

Lamps Plus, Inc. v. Varela: The Supreme Court Clarifies that Clear Consent is Necessary for Class Arbitration

Does the Hobbs Act require district courts to accept the Federal Communications Commission’s legal interpretation of the Telephone Consumer Protection Act?  That is the question the United States Supreme Court will consider in PDR Network, LLC v. Carlton & Harris Chiropractic Inc., Docket No. 17-1705.  On November 13, 2018, the Supreme Court granted certiorari in the case following the Fourth Circuit’s decision to vacate a lower court decision regarding what constitutes an “advertisement” under the TCPA.BackgroundIn Carlton & Harris Chiropractic, Inc. v. PDR Network, LLC, et al., Case No. 3:15-cv-14887, 2016 WL 5799301 (S.D.W.V. Sept. 30, 2016), plaintiff alleged that PDR Network had sent a single fax to plaintiff’s office in violation of the TCPA.  The fax offered the recipient a free “Physician’s Desk Reference eBook.”  PDR filed a motion to dismiss, arguing that the fax was not an advertisement because it did not offer anything for purchase or sale.  The district court agreed.  The court found that an “advertisement” under the TCPA required the fax to have a commercial aim.  The fax at issue, however, exhibited no commercial aim.In so ruling, the court declined to defer to an FCC order interpreting the TCPA’s definition of “unsolicited advertisement,” which had concluded that a message that promoted goods or services at no cost is an unsolicited advertisement.  The court found that the Hobbs Act did not require deference to the FCC’s interpretation of an unambiguous statute.  Because the definition of “advertisement” was clear and easy to apply, the FCC was not due “substantial deference” under Chevron U.S.A., Inc. v. NRDC, 467 U.S. 837, 843 (1984).  Even if it did defer to the FCC’s interpretation, the district court found, the fax was not an advertisement, because the fax did not “promote” anything.The Fourth Circuit Vacates and RemandsPlaintiff appealed the district court’s dismissal of its claim, arguing that the district court erred in declining to defer to the FCC’s 2006 rule.  Specifically, plaintiff argued that the Hobbs Act, 28 U.S.C. § 2342 et seq., required the district court to defer to the FCC’s interpretation of the term “unsolicited advertisement.”  And to the extent that the district court had interpreted the FCC rule, plaintiff argued that the district court erred by reading the rule to require the fax have a commercial aim to be considered an advertisement.  The Fourth Circuit agreed and vacated the district court’s judgment.  Carlton & Harris Chiropractic, Inc. v. PDR Network, LLC, 883 F.3d 459 (2018).First, the Fourth Circuit determined that the Hobbs Act deprives district courts of jurisdiction to consider the validity of orders like the FCC’s 2006 Rule.  The Court noted that, in a typical case of statutory interpretation where an agency rule is involved, the Chevron framework requires a court to first ask whether the underlying statute is ambiguous (step one).  Where a statute’s meaning is clear on its face, the inquiry ends and the unambiguous meaning controls.  But the Hobbs Act, the Fourth Circuit found, precluded the district court from even reaching step one.  The Hobbs Act, which provides a mechanism for judicial review of certain administrative rules by federal appellate courts, stripped jurisdiction from the district court regarding the issue.  As such, the district court had acted beyond the scope of its authority by refusing to defer to the FCC rule and instead applying the Chevron analysis.Second, the Court found that the district court’s reading of the 2006 FCC Rule as requiring a fax to have a “commercial aim” to constitute an advertisement was at odds with the plain meaning of the Rule’s text.  Instead, under a natural reading of the text of the FCC Rule, the Rule was clear: faxes that offer free goods and services are advertisements under the TCPA.  As such, the Fourth Circuit vacated the district court’s judgment and remanded the case.Judge Thacker dissented, arguing that, contrary to the majority’s opinion, the district court had not determined the validity of the 2006 FCC Rule simply by engaging in step one of the Chevron analysis.  Invalidation of the FCC Rule only could have occurred at step one if the court found the agency’s construction was in conflict with the unambiguous statutory language.  Here, there was no such finding.  Because the district court concluded that the TCPA was unambiguous, it therefore did not need to defer to the 2006 FCC Rule.  And in reaching its conclusion, it did not “determine the validity” of the rule, but instead assumed the Rule was valid and used the Rule to bolster its interpretation of the TCPA.  As such, the district court had not exceeded the Hobbs Act’s jurisdictional bounds.  Judge Thacker also interpreted the statutory language of the TCPA and found that the TCPA was ambiguous because it suggested two competing interpretations of “advertisement”: one that required a commercial aim and one that did not.  Moving to step two of the Chevron analysis, Judge Thacker concluded that the 2006 FCC Rule required a commercial aim and was entitled substantial deference because it was a “permissible” construction of the TCPA.PDR Petitions for a Writ of CertiorariFollowing the Fourth Circuit’s decision, PDR Network filed a petition for a writ of certiorari asking the Supreme Court to resolve the Circuit split regarding whether the Hobbs Act strips courts of jurisdiction to engage in a Chevron analysis and requires automatic deference to an agency’s order even if there has been no challenge to the validity of such order.  The petition also asked the Supreme Court to consider whether the FCC’s 2006 Order created a per se rule that faxes that “promote goods and services at no costs” qualify as an “advertisement” under the TCPA or whether courts must require a commercial nexus to a firm’s business for a fax to qualify as an “advertisement.”The Supreme Court granted certiorari, but limited certiorari to the first question of whether the Hobbs Act required the district court in this case to accept the FCC’s legal interpretation of the TCPA.  The Supreme Court’s decision will either open or close doors to arguments regarding interpretation of the TCPA.