by Mark Bauman | May 12, 2023 | Legal News, Medical Device, Mass Tort and Pharmaceutical Litigation
The Supreme Court of the United States heard argument in several pharmaceutical cases involving the issue of failure to warn consumers about the risks of certain drugs. The petitioners are generic drug manufacturers. The respondents are individual plaintiffs asserting state law failure to warn claims against the generic drug manufacturers. The United States, as amicus curiae, supports the respondents.
The petitioners are facing state law claims that the labels they are using fail to properly warn consumers about the risks associated with the use of their drugs. Several circuit courts of appeal held that the plaintiffs could pursue state law claims because federal law did not preempt those claims.
In front of the Supreme Court, the petitioners argued that respondents cannot pursue state law claims because federal law preempts the state law claims. According to the petitioners, federal law requires generic drugs to have the same warnings as their brand name equivalent drugs. Petitioners concede that they, and all generic drug manufacturers, have a duty to disclose to the Food and Drug Administration adverse results from the use of their drugs. However, since the Hatch-Waxman Amendments require generic drug manufacturers to have the same warnings as their brand name equivalent, generic drug manufacturers do not have a duty to request a change in the language being used on the label. This area, according to petitioners, is under the exclusive authority of the Food and Drug Administration, which is a federal agency. Therefore, state law claims are preempted as the Food and Drug Administration is the agency that controls disclosure of information and warnings provided by drug manufacturers.
Respondents argued that federal law does not preempt the state law claims because petitioners did not submit requests to the Food and Drug Administration to change the labels that were being used by the brand name equivalent drugs. Had petitioners submitted a request to change the labels and the Food and Drug Administration affirmatively rejected the request, then, according to respondents, the state law claims would be preempted. In other words, respondents contend that petitioners had a duty to request a change in the language used in the label and the Food and Drug Administration had to act upon that request before petitioners could assert preemption as an affirmative defense. According to respondents, state law requires an adequate warning to be provided to consumers and if the warning is inadequate, state law requires the petitioners to pursue a change in the label. Since petitioners failed to request a label change, state law still applies to respondents’ claims.
The United States, in support of respondents, argued that the Hatch-Waxman Amendments were designed to facilitate the entry of generic drugs into the market. The Amendments were not designed to absolve a manufacturer of its responsibilities to maintain the safety of the drug and the adequacy of the label after the drug has been entered into the market. According to the United States, there is no conflict between state and federal law until the Food and Drug Administration rejects a request for a label change. It is at that point that preemption would apply. However, until the conflict between state and federal law comes into play, there is no preemption and respondents should be allowed to pursue their state law claims.
by Mark Bauman | May 11, 2023 | Legal News, Medical Malpractice
In an opinion published May 16, 2013, the New Jersey Superior Court, Law Division, of Atlantic County held that a settlement reached in a personal injury case was enforceable; even though it’s proposed Medicare Set-Aside had not been reviewed or approved by the Center for Medicare and Medicaid Services (CMS).
The underlying case of Duhamell, et al. v. Renal Care Group East, Inc., et al., involved a mediated settlement which was reached in September 2012. Several months later, the settlement had yet to be consummated as CMS had not yet made a determination as to the amount of funds for future medical expenses which was to be “set aside,” pursuant to the Medicare Secondary Payer Statute (“MSP”) 42 U.S.C.A. 1395(y)(b)(2). The plaintiffs therefore retained an expert to determine the proper amount of the Medicare Set-Aside and submitted this total to CMS for approval.
In November 2012, the plaintiffs received correspondence from CMS stating that a review of the Medicare Set-Aside was not being provided “due to resource constraints.” This essentially delayed the consummation of the settlement indefinitely, as CMS advised that the present circumstances “[did] not constitute a release or a safe harbor from any obligations under . . . the MSP statute . . . [and that] [a]ll parties must ensure that Medicare is secondary to any other entity responsible for payment of medical items . . . related to the liability settlement . . . .” Upon receipt of this correspondence, the plaintiffs filed a motion with the Superior Court to enforce the settlement and declare that the interests of Medicare had been adequately protected.
In reviewing this issue of first impression, the court held that the correspondence from CMS did not have “the force and effect of law,” and that generally, “settlement of litigation ranks high in our public policy.” Noting that there was no other policy or procedure with regard to settlement for determining Medicare’s interests in future medical expenses, the court ruled that the “notions of fairness and public policy” dictated that the settlement at issue should be enforced. Taking into account the testimony of plaintiff’s expert regarding the proposed set-aside amounts, the court found these totals to be “both reasonable and reliable,” such that “Medicare’s interests [had] been adequately protected pursuant to the MSP.”
by Mark Bauman | May 10, 2023 | Legal News, Medical Malpractice
In an opinion issued May 6, 2013, Philadelphia County Judge Mark I. Bernstein upheld a $78.4 million verdict that was awarded in a medical malpractice case approximately one year ago. Among several issues raised on appeal, it was determined that the total amount of a jury’s future damages award, not the cost of an annuity, was the proper basis for calculating attorney fees for the plaintiff’s firm.
The underlying case of Nicholson-Upsey v. Touey, et al. involved a child who suffered a loss of oxygen during a delay in her delivery, resulting in the development of quadriplegic cerebral palsy. During labor, the obstetrician, also a defendant in the case, declared the child dead after he was unable to detect a fetal heart beat on ultrasound. Over an hour later, another ultrasound was performed and revealed the presence of heart beat. While delivery was performed immediately thereafter, the child was born with significant deficits. During the course of trial, evidence was introduced showing that the ultrasound equipment used to detect the fetal heart beat was inadequate. In May 2012, the jury rendered a verdict against the defendant hospital for $78.4 million, one of the highest awards ever recorded in Philadelphia County. The hospital appealed on multiple grounds, including several issues regarding delay damages and the calculation of attorney fees which were deemed by the court to be “issues of first impression.”
In addressing the calculation of attorney fees, Judge Bernstein took note of the Medical Care Availability and Reduction of Error (MCARE) Act, stating that the fees were to be made in a lump sum payment as opposed to a periodic disbursement based on the accrual of future medical costs. As the jury’s award was based largely on the child’s future medical expenses, the award for attorney fees had to be based on the present value of their total amount, i.e. the sum of money which would equate to the cash total of all future medical costs, if paid on the date of verdict. To find the present value, a “discount rate” of 2.96% was applied to the total amount of future damages, thereby reducing the award to $29.8 million. Under their contingency fee agreement, it was therefore calculated that the plaintiff’s firm was entitled to $9.9 million of the $29.8 million award.
Counsel for the defendant hospital argued that since the MCARE Act allowed the child’s future medical expenses to be funded by an annuity, the same annuity should also be used to pay the attorney fees for the plaintiff’s firm. However, Judge Bernstein rejected this position, noting that a qualified funding plan, engineered to pay out only for the life of the child, could significantly benefit the defendant hospital in the event of the child’s “early demise.” Under the MCARE Act, while such circumstances would effectively halt the hospital’s payment toward the child’s medical costs, so too would they put a stop to any payments made toward attorney fees. According to Judge Bernstein, the latter scenario was not an intended purpose of MCARE Act, which was instead designed to curtail insurance industry costs and prevent windfalls to plaintiffs.
In addition to his ruling on the calculation of counsel fees, Judge Bernstein upheld the award of delay damages made under Pennsylvania Rule of Civil Procedure 238. Noting that such damages were to be based on the present value reduction of the jury’s award, the delay damages total of $2.5 million was deemed appropriate.
by Mark Bauman | May 9, 2023 | Legal News, Medical Malpractice
In an opinion filed April 10, 2013, the Honorable Rosalyn K. Robinson of the Philadelphia County Court of Common Pleas held that a pediatric cardiologist in New Jersey could be sued in Philadelphia, Pennsylvania, given that 1) the defendant physician had sufficient minimum contacts with Pennsylvania, and 2) the statutory basis for venue in Philadelphia was constitutional.
The underlying case of Nees v. Anderson, M.D., et al. involved a claim for medical negligence against a defendant physician who treated a child for a heart murmur over the course of almost a decade. When the child was thirteen years old, an exercise stress test was ordered by the physician due to complaints of shortness of breath. While the test allegedly revealed cardiac abnormalities, plaintiff claimed that the physician failed to place any restrictions on the child’s athletic activities. Soon thereafter, the child collapsed and died while playing roller hockey.
Suit was filed in the Philadelphia County Court of Common Pleas. The named defendants included the defendant physician along with his employer, the Children’s Hospital of Philadelphia (CHOP). Preliminary objections were subsequently filed on behalf of the defendant physician. The objections stated that the physician defendant was not subject to jurisdiction in Pennsylvania because his office, patient population, and residence were confined to New Jersey. The defendant further alleged that venue in Philadelphia was improper as the statutory basis for this location was unconstitutional.
To address the issue of jurisdiction, the court turned to the Pennsylvania Long Arm Statute, which provides jurisdiction over a defendant if he or she has the sufficient “minimum contacts” with the forum state (in this case, Pennsylvania). Pursuant to the statute, the defendant’s contacts with the forum state must be 1) related to plaintiff’s claim, and 2) derived from significant and purposeful activities by the defendant within the forum state. Under this framework, the court held that the physician defendant had the necessary contacts with Pennsylvania to bring him under the jurisdiction of the courts in Pennsylvania. Notwithstanding the physician’s obvious connections to New Jersey, the court noted that the physician purposely designated his office as a “CHOP Specialty Care Center.” As a result, there was a significant likelihood that patients, including the decedent child, would seek out the physician’s services due to his affiliation with CHOP and its reputation as a well-regarded Pennsylvania institution. The court also considered other factors such as the physician’s practice of referring the decedent child to affiliated sites in Pennsylvania when additional testing was required, as well as his practice of sending bills and health insurance payments from a Pennsylvania address.
Once the necessary minimum contacts were established, the court held that the exercise of jurisdiction in Pennsylvania was consistent with notions of fair play and substantial justice. In this regard, trial in Philadelphia placed no undue burden on the defendant physician, as he already traveled to the city to teach at the University of Pennsylvania’s medical school. Additionally, because the question of his liability was closely tied to the liability of a Pennsylvania hospital, the court recognized that Pennsylvania had a clear interest in adjudicating the case.
With regard to the physician’s second argument regarding venue in Philadelphia, the court looked to Pennsylvania Rule of Civil Procedure 1006(a.1), enacted in 2002, which requires a medical malpractice case in Pennsylvania to be brought within the county in which the treatment at issue took place. According to the court, this Rule had created problems for litigants attempting to sue a physician in Pennsylvania for a cause of action that arose out-of-state, in effect leaving them without a proper venue in which to bring their claim. Given the restriction this placed upon these litigants’ substantive rights, the court noted that a provision was added to the rule in 2011 which barred its application to such out-of-state claims.
Examining the constitutionality of Rule 1006(a)(1) under the “rational basis test,” the court held that the rule furthered a legitimate state goal by closing a loophole where a lack of proper venue stripped injured parties of their right to bring suit in Pennsylvania. As such, Judge Robinson deemed the rule constitutional and the physician’s preliminary objections were overruled in their entirety.
by Mark Bauman | May 8, 2023 | Legal News, Medical Malpractice
At the request of the Montgomery County Court of Common Pleas, the Montgomery Bar Association has reconstituted the former Davenport Dispute Resolution Center into the new Alternative Dispute Resolution Program. Hearings will now be conducted at the newly constituted Center for Mediation and Arbitration, focusing on cases in which the praecipes for trial readiness have not yet been filed.
While the new ADR program is entirely voluntary, both bar association officials and the Center’s arbitrators believe it will provide considerable assistance with reducing the court’s pre-praecipe inventory, particularly with regard to personal injury cases that have been lingering on the docket. While the bar association has expressed interest in handling other civil cases aside from personal injury, notable results have already been observed, with the amount of trial ready civil cases reduced by as much forty five percent in 2012.
According to bar association officials, the Center for Mediation and Arbitration will seek to continue these results by working more closely with insurance carriers to bring cases into mediation. In addition, because many of the ADR panel members are “business leaders” in mediation and arbitration in Montgomery County, they are familiar with local jury pools and are aptly equipped to address the difference in value often attributed to Montgomery County cases, particularly as compared to those in Philadelphia County. Finally, while the Center has increased the rates that the arbitrators charge though the bar association’s imprimatur, the Center’s arbitrators believe that its expenses are still cost-effective as opposed to other ADR programs.
