California Jury Awards $417 Million Against J&J in Talc Cancer Trial

A jury in Los Angeles today awarded $417 million to a 63-year-old woman who developed ovarian cancer after using the Johnson & Johnson’s talc-based products like Johnson’s Baby Powder for feminine hygiene.

The case is Eva Echeverria v. Johnson & Johnson, No. BC628228 in Los Angeles County Superior Court. The verdict included $70 million in compensatory damages and $347 million in punitive damages.

The jury held J&J liable for failing to warn Echeverria about the cancer risks of using its talcum products, which she started using when was 11. She was diagnosed with ovarian cancer in 2007.

In his opening statement, Escheverria’s attorney Mark Robinson asserted that Johnson & Johnson had known of the alleged link between talc and ovarian cancer for decades, but decided to withhold warnings from the public to protect its image.

During the trial, Jack Siemiatycki, an epidemiologist with the University of Montreal and McGill University, testified about his contributions to the 2006 monograph published by the International Agency for Research on Cancer, which said talc is a possible human carcinogen. He also testified that his stance has changed since then, and that he now thinks that it is more likely than not that talc can cause ovarian cancer.

4 record-setting verdicts

Johnson & Johnson is facing 4,800 talcum powder claims in California, Missouri, New Jersey and Delaware state courts, as well as New Jersey federal court.  Juries have found the company liable four times in record-setting verdicts:

  • In May 2017, a jury in St. Louis state court delivered a bombshell $110,000,000 verdict for the plaintiff, Lois Slemp, age 62, of Virginia. She used J&J’s baby power and Shower to Shower talc products for more than 40 years before she was diagnosed with ovarian cancer in 2012.
  • On October 27, 2016, a jury awarded more than $70 million in damages to Deborah Giannecchini, 62, of Modesto, CA, on her claim that her use of baby powder and other Johnson & Johnson talc products over 40 years caused her ovarian cancer. She was diagnosed with stage 4 ovarian cancer in 2012 and talc was found in her ovaries.
  • In February 2016 a jury awarded $72 million to the family of Jacqueline Fox of Birmingham, AL, who used Johnson’s baby powder for 35 years. She was diagnosed with ovarian cancer in 2013 and died last year.
  • In May 2016, another jury in the same courthouse awarded $55 million to Gloria Ristesund of Sioux Falls, SD. She was diagnosed with cancer in 2011 after using J&J’s talc-based feminine hygiene products for almost 40 years.

 

 

Defense Wins 3rd Xarelto Mass Tort Bellwether in a Row

XareltoA jury in federal court in Missouri returned the third verdict in favor of Janssen Pharmaceuticals and Bayer in a bellwether trial over the blood-thinner Xarelto. The companies are facing 18,000 similar lawsuits charging that the drug causes uncontrollable bleeding.

Juries in the multidistrict litigation docket, MDL 2592 before U.S. District Judge Eldon E. Fallon in the Eastern District of Lousiana, also returned defense verdicts on May 3 and June 12 this year.

The plaintiff Dora Mingo of Summit, Mississippi, alleged under Miss. Code Ann. Sec. 11-1-63 that Xarelto was defectively designed because there is no antidote and that it is unreasonably dangerous because of an inadequate warning to physicians about uncontrollable bleeding.

Mingo, a 69-year-old retired schoolteacher, suffered acute gastrointestinal bleeding and severe blood loss after taking Xarelto for a month in 2015 to prevent blood clotting after surgery. Plaintiff attorney Andy Birchfield of Beasley, Allen, Crow, Methvin, Portis & Miles of Montgomery, AL, said the companies should have instructed doctors to conduct a simple Prothrombin Time (PT) blood test, to assess a patient’s risk of bleeding.

As in the previous trials, the jury returned the verdict after a few hours of deliberation.

Xarelto is Bayer’s best-selling drug and in 2016 it generated $3.41 billion in revenues to the German company. Johnson & Johnson, the parent company of Janssen, reported $2.2 billion in revenues from Xarelto.

The FDA approved the drug in 2011 for patients with a heart rhythm disorder known as atrial fibrillation and to treat the risk of deep vein thrombosis and pulmonary embolisms.

Representing Janssen was Richard Sarver of Barrasso Usdin Kupperman Freeman & Sarver in New Orleans, who was involved in the first Xarelto trial. Bayer was represented by Lyn Pruitt of Mitchell Williams in Little Rock, Arkansas, and Walter T. Johnson at Watkins & Eager in Jackson, Mississippi.

Nexium, Priosec and PrevAcid Mass Tort Litigation Consolidated in New Jersey

The US Judicial Panel on Multidistrict Litigation consolidated 161 proton-pump inhibitor (PPI) products liability lawsuits into new federal MDL No. 2789 in federal court in New Jersey.

It was the second, successful try by the plaintiffs. In January, the Panel denied a motion that also sought centralization of the claims. At the time, it cited the small number of filings (only 15), the differing heartburn drugs involved and the need to protect trade secrets among the various defendants.

Since then, the size of the litigation has grown. Further, two defendants, AstraZeneca and Pfizer, had also changed course, and now supported consolidation. There are 34 tag-along actions in addition to the 161 cases consolidated by the Panel.

US District Judge Claire C. Cecchi, who is already managing PPI cases in the district, will oversee the MDL litigation. Heartburn drugs in the MDL:

  • Nexium
  • Nexium 24HR
  • Prilosec
  • Prilosec OTC
  • PrevAcid
  • PrevAcid 24HR
  • Dexilant
  • Protonix

Causes kidney damage

The defendants are AstraZeneca Pharmaceuticals LP, Pfizer, Inc., Wyeth Pharmaceuticals Inc., Wyeth LLC, Wyeth-Ayerst Laboratories, Procter & Gamble Company, Takeda, Novartis Consumer Health, Inc., Novartis Pharmaceuticals Corporation, Novartis Vaccines and Diagnostics, Inc. and Novartis Institute for Biomedical Research Inc.

In the 161 personal injury and wrongful death actions, plaintiffs allege that as a result of taking one or more proton-pump inhibitors (PPIs), they or their decedents suffered kidney injury (e.g., chronic kidney disease (CKD), acute interstitial nephritis, end stage renal disease, or kidney failure). Plaintiffs allege that defendants failed to adequately warn of the negative effects and risks associated with PPIs.

“Although several of the grounds on which we denied centralization in Proton-Pump I remain largely valid, we find that the significantly larger number 6 of involved actions, districts, and counsel, the concomitant increase in burden on party and judicial resources, and the opportunity for federal-state coordination, coupled with most defendants’ change in position to now support centralization, tip the balance in favor of creating an MDL,” the Panel said. “Centralization will facilitate a uniform and efficient pretrial approach to this litigation, eliminate duplicative discovery, prevent inconsistent rulings on Daubert and other pretrial issues, and conserve the resources of the parties, their counsel, and the judiciary,” the Panel said.

New On-Demand Webinar: Summer 2017 Mass Torts Update

Overview:

  • US Supreme Court decision limiting personal jurisdiction for mass torts in state courts. SCOTUS kicks out 592 non-resident plaintiffs.
  • The best path forward for mass tort plaintiffs.
  • 3 Mass torts heading for settlement:
    • Taxotere: 1,272 cases filed before Chief US District Court Judge Kurt D. Engelhardt, in the Eastern District of Louisiana, MDL 2740.
    • IVC filter: 2,342 cases before Chief US District Court Judge Richard L. Young, in the Southern District of Indiana, MDL 2570.
    • Fluoroquinolones (FLQs): 752 cases before Chief US District Court Judge John R. Tunheim in the District of Minnesota, MDL 2642.
  • Case to watch – Xarelto: 17,593 cases filed before US District Judge Eldon E. Fallon, Eastern District of Louisiana, MDL 2592, In re: Xarelto (Rivaroxaban) Products Liability Litigation
  • Using the 5 W’s to generate new business online
    Watch 20now
  • Watch now. It’s free. No registration required.

$300 Million Settlement for Benicar Blood-Pressure Drug

Daiichi Sankyo Company announced a $300 million settlement related to its blood pressure drug Benicar. Despite this, the company admitted no liability for any wrongdoing.

Patients who have been injured by Benicar can take part in the $300 million settlement if they have a retainer in place with a qualified Benicar attorney by August 23, 2017.


See our earlier report Picking 6 Winners in Mass Torts Litigation.


A total of 1,942 lawsuits have been filed in MDL 2606, IN RE: Benicar (Olmesartan) Products Liability Litigation, before US District Judge Robert B. Kugler in New Jersey as of July 15.

Benicar, Benicar HCT, Azor, and Tribenzor are angiotensin II receptor blockers that lower blood pressure associated with hypertension. It is also linked to severe gastrointestinal injuries, including:

  • Sprue-like enteropathy, which has symptoms similar to those of celiac disease.
  • Lymphocytic colitis, microscopic colitis, and collagenous colitis.
  • Patients may suffer from chronic diarrhea, vomiting, nausea, abdominal pain, kidney failure, and significant weight loss.

Starting in January 2014, plaintiffs began filing Benicar-related injury lawsuits, and in March 2015, the Judicial Panel on Multidistrict Litigation created the Benicar MDL. On August 1, 2017, Judge Kugler approved the $300 million settlement.

Patients who experienced Benicar-related side effects can still take part in the settlement, but only if they are represented by a Benicar attorney by the August 23, 2017, deadline.

According to the master settlement agreement, the fund will start to be paid out when 95 percent of all eligible litigants and claimants opt into the settlement under various conditions. Once the thresholds are met, claimants who meet specified criteria will receive compensation from the settlement fund.

Construction Worker Recovers $2.7 Million Settlement in Scaffolding Collapse

A 35-year-old construction worker in California recovered a $2.7 million settlement for a severe brain injury he suffered when a defective scaffold he was working on broke apart, causing him to fall 20 feet.

Rosbil Nunez-Aguirre of Orange County, CA, was handing some wooden planks to his coworker when one of the brackets suddenly broke. He broke his jaw and ankle and lost consciousness when he hit the ground.

He was represented by Roger E. Booth, a member of The National Trial Lawyers Top 100 Attorneys, and Carly L. Sanchez of Booth & Koskoff in Torrance, CA.

The plaintiff suffered a profound frontal lobe traumatic brain injury in the 2013 collapse, causing a personality change that made him have fits of anger and destructive behavior. He did not want to leave the house, had difficulty with memory and concentration and was placed in an outpatient program at a rehab hospital for nine months.

The defendants included the distributor of the defective scaffolding — White Cap Construction Supply, Inc. — and its parent company HD Supply, Inc. This particular bracket scaffolding, called the Whalen-Jack, was designed by a contractor in South Dakota who had no background in engineering. He subsequently sold the design to JD Systems, a company that outsourced the manufacture to a facility in China. The defendants sold the bracket scaffolding nationwide.

Plaintiff’s contentions

The case is Nunez-Aguirre v. White Cap Construction Supply, Inc., Case No. 30-2014-00746710-CU-PL-CJC,
Orange County Superior Court. It settled on March 6, 2017.

Plaintiffs contended that the Whalen-Jack was defectively designed and manufactured.  The brackets were supported by two welds, with no redundancy or backup margin of safety, and the design was such that the welds could not be seen or inspected.  If the welds failed (as they did at the time of the incident), the entire structure would come down.  Moreover, the quality of the welding performed in China was poor.

During discovery, plaintiffs’ counsel uncovered the fact that the design of the Whalen-Jack was changed at some point prior to the subject incident, to provide some redundancy in case the critical welds failed.  Plaintiffs contended that this was done specifically to address the very design problem that led to the incident.  Moreover, discovery showed that, despite the design change, none of the old Whalen-Jacks were recalled, and, in fact, old units that were still sitting in warehouses continued to be sold, including the one involved in the incident.

Plaintiffs contended that White Cap and HD Supply) were liable, under strict liability principles, for having sold a defective product.  Moreover, plaintiffs argued that White Cap was negligent because it failed to perform any meaningful due diligence concerning JD Systems or the Whalen-Jack, but nevertheless represented the product as being “safe” and “rugged.”  The principals of JD had no prior experience manufacturing or selling products of any kind and exercised no control over the manufacturing process in China.  White Cap knew that JD’s methods for shipping Whalen-Jacks from China were shoddy and could result in damage to the product.

Defendants’ contentions

Defendants contended that the subject Whalen-Jack bracket was not defective in design or manufacture, as evidenced by the fact that there was no report of any other Whalen-Jack bracket ever failing.  JD Systems performed testing of the product before beginning to sell it in the early 2000’s, and defendants’ mechanical engineer performed testing of an exemplar bracket.  According to the defendants, this testing showed that the Whalen-Jack could withstand repeated use, under normal conditions, without failing.

Defendants contended that the subject bracket failed because of misuse and abuse by plaintiff’s employer, Circle M Contractors.  Defendants’ metallurgist opined that the failure was the result of Mr. Nunez-Aguirre jumping on to the scaffolding just before the failure.  Defendants’ mechanical engineer opined that the failure happened gradually over time, most likely as a result of Circle M employees hitting the bracket with hammers and/or dropping it to the ground when removing it from buildings.  Defendants asserted that there was visible damage to the bracket before the incident and that Circle M should have noticed this damage and removed the bracket from service.

In addition, defendants argued that, as a distributor, they do not have a duty to test every product that they sell or investigate every manufacturer with whom they do business and that they were not aware that there was a pre-incident change in the design of the Whalen-Jack.

Settled on the brink of trial

Mediations were held before Michael Moorhead at Judicate West in February and November 2016, which did not result in a settlement, but the case subsequently settled on the brink of trial through follow-up discussions with Mr. Moorhead.

Plaintiffs’ Experts were Lawrence Kashar, Ph.D., Los Angeles, metallurgy; Glen Stevick, Ph.D., Berkeley, mechanical engineering; H. Ronald Fisk, M.D., Los Angeles, neurology; Barry Pressman, M.D., Los Angeles, radiology; Marcel Ponton, Ph.D., South Pasadena, neuro-psychology; Richard Anderson, Westminster, vocational rehabilitation; Sharon Kawai, M.D., Fullerton, physical medicine/life care planning; Tamorah Hunt, Ph.D., Santa Ana, economics; Martin Breen, Tustin, toxicology.

Defendants’ Experts were Ramesh Kar, Ph.D., Anaheim, metallurgy; Scott Schroeder, Ph.D., Los Angeles, mechanical engineering; Sam Iler, El Cajon, construction safety; Steven McIntire, M.D., Rancho Cordova, neurology; Michael Brant-Zawadski, M.D., Newport Beach, radiology; Thomas Hedge, M.D., Northridge, physical medicine; Alfredo Sadun, M.D., Pasadena, ophthalmology; James Rosenberg, M.D., Woodland Hills, psychiatry; Ari Kalechstein, Ph.D., Los Angeles, neuro-psychology; Mary Jesko, Los Angeles, vocational rehabilitation/life care planning; Mark Cohen, Walnut Creek, economics.

Endo Settles ‘Virtually All Known’ Mesh Suits for $775 Million

law news, legal news, jury verdict, case settlement

Endo International Plc announced that it has reached agreements to resolve virtually all known U.S. vaginal-mesh implants product liability claims for $775 million. Women suing the company accuse it of selling defective devices that caused injuries such as chronic pain, incontinence, bleeding and infection.

The Dublin-based company said it is engaged in discussions to resolve the known remaining U.S. claims at reasonable values. Under the agreements, Endo will make installment payments beginning in the fourth quarter of 2017 and continuing through the fourth quarter of 2019.

Endo’s settlement of the remaining 22,000 mesh suits means the company has now set aside more than $2.6 billion to wipe out cases over the flawed medical devices, according to filings with the U.S. Securities and Exchange Commission.

As part of its second quarter 2017 results, the company intends to increase its mesh product liability accrual by $775 million, which is expected to cover approximately 22,000 U.S. mesh claims, as well as all known international mesh product liability claims and other mesh-related matters.

Endo said it is unaware of any mesh-related matters not covered by the foregoing accrual increase.

“Beginning in the second quarter of 2017, we aggressively executed a settlement strategy in connection with Endo’s mesh litigation. We believe it is a very important milestone for Endo to have reached agreements to resolve virtually all known U.S. mesh product liability claims,” said Paul Campanelli, Endo’s President and Chief Executive Officer. “While it remains possible that additional claims will be filed, we believe today’s announcement will assist most mesh claimants to move forward with their lives and will permit Endo to move forward with an even greater focus on executing against our core strategic priorities,” he added.

Meanwhile, Johnson & Johnson said in SEC filings in February that it was defending 54,800 cases over its pelvic mesh inserts while Boston Scientific said that same month it faced 43,000 mesh claims. Both companies have settled some mesh suits.

Mass Tort Lawsuit Filed over Eliquis for Causing Fatal Internal Bleeding

The estate administrators for a New York man filed a product liability suit against Briston-Myers Squibb Co. and Pfizer Inc., charging that their drug blood-thinning drug Eliquis caused the internal bleeding that killed him.

Raymond Warme of East Hampton, NY, was prescribed Eliquis in April 2014 for atrial fibrillation. Within two months he began having gastrointestinal bleeding which led to his death.

The case, Dawn Dunn et al. v. Briston-Myers Squibb Co., case No. 156043/2017, is filed in New York Supreme Court. The plaintiffs are his daughter Dawn Dunn and his significant other Orla Troy.

Fraud and deceit by Big Pharma companies

The New York lawsuit says, “These representations were made by defendants with the intent of defrauding and deceiving decedent, the public in general, and the medical and healthcare community including decedent’s prescribing doctor, and were made with the intent of inducing [them] to recommend, dispense and purchase Eliquis, all of which evinced a callous, reckless, willful, depraved indifference to health, safety, and welfare of the decedent herein.”

Bristol-Myers and Pfizer’s wrongdoing started in 2010 with the Aristotle clinical study, calculated to get the drug approved by the FDA. During that study, the companies concealed side effects and didn’t report a death, subjects dropping out and dispensing errors, the complaint states.

Employees of the drugmakers also wrote an article published on Aug. 28, 2011, in the New England Journal of Medicine based on the study which the editor-in-chief found to be inaccurate and containing omissions, the suit says.

The FDA said on Feb. 9, 2012, that the companies showed “a pattern of inadequate supervision” and the agency pressed to get more information during the approval process, saying data was missing. The agency also said the label should mention the quality-control issues in the study, according to the suit.

On Dec. 28, 2012, the FDA approved Eliquis to reduce the risk of stroke, blood clots in patients with non-valvular atrial fibrillation.

“Defendants overstated the efficacy of Eliquis with respect to preventing stroke and systemic embolism, failed to adequately disclose to patients that there is no drug, agent, or means to reverse the anticoagulation effects of Eliquis and that such irreversibility would have life-threatening and fatal consequences,” the suit says.

Two years later in 2014, more than 1,000 adverse event reports were filed with the FDA in that year alone, including at least 100 deaths, and more than 6,000 adverse event reports in 2015 consisting of hemorrhaging / gastrointestinal hemorrhaging. Yet the companies never strengthened their label.

Third Circuit Revives 5,000 Broken-Bone Cases in Fosamax Litigation

Edward Braniff of Simmons Hanly Conroy LLC in New York

The Fosamax ruling is good news for plaintiff attorney Edward Braniff of Simmons Hanly Conroy LLC in New York.

Handing plaintiffs a major success, the Third Circuit US Court of Appeals revived 5,000 product liability cases involving the osteoporosis drug Fosamax, ruling that federal preemption of state-law claims is a question of fact for a jury to decide, not a question of law for a judge.

The ruling in In re Fosamax Products Liability Litigation, Case No. 14-1900 et al, decided March 22, 2017, is a major setback for Merck and other Big Pharma companies that seek to torpedo patient claims in summary judgment motions, by arguing that:

  1. State-law failure-to-warn lawsuits are pre-empted by federal law
  2. When there is “clear evidence” that the FDA would not have approved a warning label that the plaintiffs claim is necessary.

On the other hand, the ruling is a boon to plaintiff lawyers who are striving to preserve their lawsuits against preemption attacks that have nothing to do with the merits of the case.

What is “clear evidence”?

The US Supreme Court Opinion created confusion about the preemption issue in Wyeth v. Levine, 555 U.S. 555 (2009). The ruling says that state-law failure-to-warn claims are preempted by federal law when there is “clear evidence” that the FDA would not have approved a label change. “This standard is cryptic and open-ended, and lower courts have struggled to make it readily administrable,” the Third Circuit commented.

Resolving the issue, the Third Circuit held that “The meaning of “clear evidence,” as Supreme Court usage confirms that the term is synonymous with “clear and convincing evidence.” The latter is a well-recognized intermediate standard of proof—more demanding than a preponderance of the evidence, but less demanding than proof beyond a reasonable doubt.”

Furthermore, the appeals court ruled:

  • Whether the FDA would have rejected a label change is a question of fact for the jury.
  •  At the summary judgment stage, the court cannot decide for itself whether the FDA would have rejected a change, but must instead ask whether a reasonable jury could find that the FDA would have approved the change.
  • A mass tort MDL is not a class action. Merck’s actual burden at the summary judgment stage was to prove that there is no genuine dispute in every single MDL case that plaintiffs’ doctors would have continued to prescribe Fosamax even if a fracture warning had been added to the Adverse Reactions section before May 2009.

The successful argument to the Third Circuit was made by plaintiff attorneys Edward Braniff of Simmons Hanly Conroy LLC in New York, Michael E. Pederson of Weitz & Luxenberg in New York, and Donald A. Ecklund of Carella Byrne Cecchi Olstein Brody & Agnello in Roseland, NJ.

Fosamax causes thigh fractures

Beginning in 2010, hundreds of plaintiffs filed personal-injury suits against the drug manufacturer Merck Sharp & Dohme, alleging that the osteoporosis drug Fosamax caused them to suffer serious thigh bone fractures.

Each Plaintiff brought a state-law tort claim alleging that Merck failed to add an adequate warning of the risk of thigh fractures to Fosamax’s FDA-approved drug label. Many Plaintiffs also filed additional claims including defective design, negligence, and breach of warranty. Plaintiffs’ suits were consolidated for pretrial administration in a multi-district litigation in the District of New Jersey. Following discovery and a bellwether trial, the District Court granted Merck’s motion for summary judgment and dismissed all of Plaintiffs’ claims on the ground that they were preempted by federal law.

Plaintiffs’ suits were consolidated for pretrial administration in a multi-district litigation in the District of New Jersey. Following discovery and a bellwether trial, the District Court granted Merck’s motion for summary judgment and dismissed all of Plaintiffs’ claims on the ground that they were preempted by federal law.

Fosamax is a treatment for osteoporosis, but plaintiffs claim that the drug actually increases the risk of thigh bone fractures. Plaintiffs claim that while stress fractures typically heal on their own, “some Fosamax users who develop insufficiency fractures have reduced bone toughness, and Fosamax prevents the normal repair of the fracture.” According to Plaintiffs, these patients may then go on to develop what are known as “atypical femoral fractures”: severe, non-traumatic, low energy complete fractures of the femur.

In 2013, Merck reached a separate settlement of $27 million with 1,200 Fosamax users who suffered necrosis of the jawbone.

Defective Product Class Actions: California Versus Florida

By William C. Ourand, Esq. • Newsome Melton, P.A. Reprinted from the Winter 2016 issue of The Trial Lawyer Magazine.

California has long been a common battleground for class action disputes. And there are many good reasons for this; most notably, California has a robust body of consumer protection law that lends itself well to class action litigation. In recent years, however, Florida has emerged as an ever-growing presence in the class action world, particularly with respect to automotive defect class actions. This trend, in turn, has given rise to a burgeoning body of Florida consumer protection law that has unique advantages and disadvantages when compared with California law.

This article will begin by discussing recent class action cases pursued in Florida, will then move into a comparative analysis of the consumer protection laws governing class action suits filed in California and Florida, and will conclude by offering suggestions as to how to proceed when presented with the option of pursuing a class action involving consumers from each state.

Recent Florida Class Actions

Because each state has its own unique set of consumer protection laws and judicial precedent, is typically impossible to certify a national consumer fraud class in a product defect case. Accordingly, consumer advocates must pick and choose their battles wisely, as smaller states may not have a sufficient number of aggrieved consumers to help level the playing field through the class action mechanism. With a growing population of just under 20,000,000 people, Florida is one of the most populous states in the nation. It is unsurprising, then, that Florida courts, particularly the U.S. District Court for the Southern District of Florida, have become an increasingly common battleground for class action litigation.

Recent examples of major automotive consumer fraud class action cases filed in Florida include:

  • Batista v. Nissan North America, Inc., which involves an alleged defect that causes the continuously variable transmissions (“CVTs”) in certain Nissan Pathfinders and Infiniti QX60s to violently shake, impairing those vehicles’ ability to accelerate. The case was filed in the Miami Division of the Southern District of Florida in December 2014 by our firm in partnership with two other firms. The Court recently entered preliminary approval for a nationwide settlement class of all current and former owners and lessees of 2013–2014 Nissan Pathfinders and 2014 Infiniti QX 60s. Batista v. Nissan North America, Inc., Case No.: 1:14-cv-24728, D.E. 151 (S.D. Fla. 2016). 
  • Sanchez-Knutson v. Ford Motor Co., which involves an alleged defect that causes carbon monoxide to seep into the occupant cabin of certain Ford Explorers. In October 2015, Judge Dimitreleous of the Southern District’s Fort Lauderdale Division certified a class of all consumers who purchased or leased 2011–2015 Ford Explorers in Florida. In doing so, the Court accepted, “for purposes of class certification,” the plaintiff’s proposed “conjoint” damages model, which is “an analytic survey method used to measure customer preferences for specific features of products.” Sanchez-Knutson v. Ford Motor Co., 310 F.R.D. 529, 539 (S.D. Fla. 2015). The case was set to begin trial in early August 2016, but the parties reached a settlement agreement, which has been presented to the Court for approval. The proposed settlement would cover everyone who purchased or leased a 2011–2015 Ford Explorer in the United States. Sanchez-Knutson v. Ford Motor Co., 0:14-cv-6134, D.E. 416 (S.D. Fla. 2016).
  • Carriuolo v. General Motors Co., which involves an alleged misrepresentation as to the safety ratings for the 2014 Cadillac CTS. The Eleventh Circuit Court of Appeals recently affirmed the certification of a class of Florida consumers who purchased the vehicles, joining ranks with a growing number of circuits that have allowed for so-called “price premium” or “overcharge” classes even after the latest wave of SCOTUS decisions narrowly construing Rule 23. See Carriuolo v. GM Co., 823 F.3d 977 (11th Cir. 2016). This case is currently set for trial in early 2017. Carriuolo v. GM Co., Case No.: 0:14-cv-61429, D.E. 99 (S.D. Fla. 2016).

Additionally, Judge Moreno of the Southern District of Florida is currently presiding over the massive Takata airbag multi-district litigation (“MDL”). The consolidation of the MDL in Florida’s Southern District serves as a powerful testament to the Southern District’s ability to oversee complex litigation. Additionally, given the egregious nature of the exploding airbag inflator defect, it appears likely that the MDL litigation will generate favorable Florida consumer protection precedent.

The UCL And CLRA Versus FDUTPA

The primary statutes driving consumer fraud claims in California are the Unfair Competition Law (“UCL”) and the Consumer Legal Remedies Act (“CLRA”). Florida’s corollary law is the Unfair and Deceptive Trade Practices Act (“FDUTPA”). Although there is a far greater body of law construing the UCL and CLRA, recent FDUTPA decisions have staked out the boundaries of what constitutes a cognizable and classable FDUTPA claim. This portion of the article will summarize several key distinctions between these two bodies of law.

 FDUTPA Is Not Limited to Safety Defects

Most consumer fraud claims involving defective products revolve around an omissions theory—specifically, that the manufacturer failed to disclose a defect, and as a result, the consumer did not get what was paid for. For such a claim to be actionable under the UCL and CLRA, the plaintiff must show that the defendant was under a duty to disclose, which typically requires showing that the defect was “material.” The materiality inquiry, in turn, generally revolves around whether the defect poses a safety hazard. See Myers v. BMW of N. Am., LLC, 2016 U.S. Dist. LEXIS 140768 (N.D. Cal. Oct. 11, 2016); Lassen v. Nissan N. Am., Inc., 2016 U.S. Dist. LEXIS 139512 (C.D. Cal. Sep. 30, 2016).

In contrast, courts applying FDUTPA have specifically rejected a “safety hazard” requirement in omissions cases. See Matthews v. Am. Honda Motor Co., 2012 U.S. Dist. LEXIS 90802 (S.D. Fla. June 6, 2012) (rejecting the defendant’s argument that the plaintiff’s FDUTPA claim should be dismissed because the defect at issue did not pose a safety hazard, and explaining that the “argument derives from case law interpreting California’s consumer fraud statute . . . and FDUTPA is not so limited”). Instead, the plaintiff in a FDUTPA case must simply show that the defect diminishes the product’s value such that the failure to disclose the defect would be likely to mislead a consumer acting reasonably at the time of purchase. Id. As a practical matter, this distinction means that cosmetic defects—like paint discoloration and delamination—can form the basis for a valid FDUTPA claim, even if they could not meet the safety hazard analysis that often drives UCL and CLRA cases. Id.

FDUTPA Does Not Require Pre-Sale Awareness or Knowledge of the Defect

To “properly allege an actionable omission” under the UCL and CLRA, the plaintiff must allege “that the defendant knew of the defect at the time a sale was made.” Myers v. BMW of N. Am., LLC, 2016 U.S. Dist. LEXIS 140768, at *9 (N.D. Cal. Oct. 11, 2016). To meet the pre-sale knowledge requirement, plaintiffs often rely upon a combination of consumer complaints posted online, data from the National Highway Traffic Safety Administration (“NHTSA”), and technical service bulletins addressing the issue. See Butler v. Porsche Cars N. Am., Inc., 2016 U.S. Dist. LEXIS 114239 (N.D. Cal. Aug. 25, 2016). Of course, manufacturers do not always issue timely bulletins, and defects are not always well documented in NHTSA databases. Unfortunately, it can be difficult for the plaintiff— without access to discovery—to find other evidence to substantiate the defendant’s awareness of the defect. See Grodzitsky v. Am. Honda Motor Co., No. 2:12-cv-1142-SVW-PLA, 2013 U.S. Dist. LEXIS 33387, at *18 (C.D. Cal. Feb. 19, 2013) (granting the defendant’s motion to dismiss, and reasoning that the plaintiff’s references to online complaints and “speculative” allegations about the defendant’s pre-sale testing and internal data were insufficient to establish pre-sale awareness of the defect).

Conversely, “FDUTPA does not require [the defendant] to have subjective knowledge of alleged defects in order for [the plaintiff] to state a viable FDUTPA claim.” Gavron v. Weather Shield Mfg., 819 F. Supp. 2d 1297, 1302 (S.D. Fla. 2011). This is because Florida precedent makes it clear that, for purposes of FDUTPA, “a deceptive act occurs when there is a representation, omission, or practice that is likely to mislead the consumer acting reasonably in the circumstances, to the consumer’s detriment.” Id. (citations and quotations omitted). And as such, FDTUPA “focuses on whether an act is deceptive, not whether a defendant knew that the allegedly violative conduct was occurring.” Id.

The CLRA Has a Discovery Rule; FDUTPA Does Not

The UCL has a four-year statute of limitations, and the CLRA has a three-year statute of limitations. Cal. Bus. & Prof. Code § 17208; Cal. Civ. Code § 1783. California courts have extended the common-law discovery rule to both UCL and CLRA claims. See Philips v. Ford Motor Co., 2015 U.S. Dist. LEXIS 88937 (N.D. Cal. July 7, 2015). Under California’s common law discovery rule, a “claim accrues and the limitations period beings to run when a plaintiff has information of circumstances to put him on inquiry or if he has the opportunity to obtain knowledge from sources open to his supervision.” Id. (emphasis in original).

FDUTPA has a four-year statute of limitations. Fla. Stat. § 95.11(3)(f). And unlike UCL and CLRA claims, “[a] FDUTPA claim accrues at the time of purchase or lease of a product, not upon discovery of an alleged defect.” Speier- Roche v. Volkswagen Grp. of Am., Inc., 2014 U.S. Dist. LEXIS 59991 (S.D. Fla. 2014) (“It is well-settled there is no ‘delayed discovery rule’ applicable to FDUTPA claims.”). However, a plaintiff may still be entitled to toll the statute of limitations if he or she can plead and prove fraudulent concealment. See Licul v. Volkswagen Group of Am., Inc., 2013 U.S. Dist. LEXIS 171627, at *7 (S.D. Fla. 2013).

California Has a Catalyst Fee Statute; Florida Does Not

California law provides that “a court may award attorneys’ fees to a successful party against one or more opposing parties in any action which has resulted in the enforcement of an important right affecting the public interest….” Cal. Code Civ. Proc. § 1021.5. This statute is a codification of the so- called “catalyst fee” theory, which is an “exception to the general rule that each party to a lawsuit bears its own attorney’s fees.” Macdonald v. Ford Motor Co., 142 F. Supp. 3d 884, 890 (N.D. Cal. 2015). This statute allows the plaintiff to recover attorney’s fees if it is shown that the defendant issued a recall or undertook some other action in response to a UCL or CLRA class action. Id. Moreover, the statute applies to actions filed in both federal and state courts. Id.

Florida does not have a similar catalyst fee statute. Instead, FDUTPA simply contains a “prevailing party” attorney’s fee provision. Fla. Stat. § 501.2105(3). The courts have so far not expressly resolved the issue of whether a defendant must pay for the plaintiff’s attorney’s fees in a case where the defendant issues a recall to address a defect that is also the subject of pending FDUTPA class action litigation. In such circumstances, the defendant may argue that it should not be required to pay attorney’s fees on the grounds that the plaintiffs did not secure a final order on the merits. This argument would likely be premised on Supreme Court and other federal precedent construing prevailing party attorney’s fees provisions in various federal statutes. See Orlando Communs. LLC v. Cellco P’ship, 2015 U.S. Dist. LEXIS 103214 (M.D. Fla. July 22, 2015) (discussing Supreme Court precedent on whether and when a court may award “prevailing party” attorney’s fees). Given the difference in the nature and scope of the federal statutes addressed in that precedent, we believe that such arguments are incorrect, and would vehemently argue that fees should be awarded to ensure that the state law policy objectives underlying FDUTPA are achieved. However, this argument is more difficult to make than it would be in California due to the lack of a specific catalyst fee statute.

It Is Harder for The Defendant to Obtain Attorney’s Fees Under California Law

The UCL lacks any fee-shifting provision, and as such, a prevailing defendant must typically look to the CLRA if it wishes to seek attorney’s fees from the plaintiff. The CLRA, in turn, only permits the court to award “[r]easonable attorney’s fees … to a prevailing defendant upon a finding by the court that the plaintiff’s prosecution of the action was not in good faith.” Cal. Civ. Code § 1780(e). “Courts have uniformly constructed this language as requiring a subjective test.” Corbett v. Hayward Dodge, Inc., 119 Cal. App. 4th 915, 924 (2004). As explained by the courts, “good faith, or its absence, involves a factual inquiry into the plaintiff’s subjective state of mind.” Id. (emphasis in original). Accordingly, the defendant has the burden of establishing that the plaintiff acted in subjective bad faith in filing the lawsuit. Id.

FDUTPA, on the other hand, simply states that “[t]he trial judge may award the prevailing party the sum of reasonable costs incurred in the action plus a reasonable legal fee for the hours actually spent on the case as sworn to in an affidavit.” Fla. Stat. § 501.2105(3). Under this provision, “[o]nce a trial court has determined that a party is a prevailing party under FDUTPA, it then has discretion to award attorney’s fees and costs after considering various equitable factors….” Chow v. Chak Yam Chau, 640 F. App’x 834, 838 (11th Cir. 2015). Those factors include, but are not limited to, a consideration of whether the claim was filed in bad faith, or alternatively, whether the claim was frivolous even in the absence of subjective bad faith. Id.  

While California has been the traditional forum for class action disputes, emerging precedent from Florida and the Eleventh Circuit has shown that FDUTPA can be a very powerful tool for consumer advocates. As set forth above, courts applying FDUTPA have embraced the conjoint damages analysis, and have certified cases involving “overcharge” theories. Additionally, a comparison of California and Florida law reveals that FDUTPA may be the better choice in cases where the defect does not have a clear safety implication, or where there is a lack of public documentation to establish the defendant’s pre-sale knowledge of the defect. On the other hand, the UCL and CLRA may be better tools to employ in cases involving older products, where there is a chance that the defendant may issue a recall during the pendency of litigation, or where there is a higher likelihood that the defendant may prevail and request attorney’s fees from your client.