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On The Case

Zantac generics plaintiffs hope SCOTUS Ford decision rescues claims against brand-name makers

The U.S. Supreme Court’s ruling in Ford Motor Co v. Montana Eighth Judicial District is only a month old, but it’s already a workhorse.

The March 25 decision, which held that state courts in Montana and Minnesota had jurisdiction over product liability claims against Ford even though the company did not directly sell the allegedly defective vehicles at the heart of the suits by state residents, has been cited in 31 cases, according to Westlaw, mostly by trial court judges ruling on defendants’ jurisdictional challenges.

Plaintiffs who took a generic version of the heartburn medication Zantac are putting the Ford ruling to a rather more exotic use. In a brief filed last Friday in the Zantac multidistrict litigation in West Palm Beach, Florida, they argued that the Supreme Court’s Ford ruling has rescued their negligent misrepresentation claims under California and Massachusetts law against brand-name manufacturers of the drug, which, according to plaintiffs, contains a carcinogenic chemical.

Massachusetts and California “innovator liability” laws allow patients who have taken generic versions of a drug to claim that the drug’s originators misrepresented risks in the drug’s labels. (Under federal law, generic drug makers must match labeling from brand-name makers.) The supreme courts of both states have allowed claims under the laws, the California Supreme Court in 2017’s T.H. v. Novartis Pharmaceuticals Corp and the Massachusetts Supreme Judicial Court in 2018’s Rafferty v. Merck & Co Inc.

But last December, the judge overseeing the Zantac MDL, U.S. District Judge Robin Rosenberg of West Palm Beach, dismissed plaintiffs’ innovator liability claims under California and Massachusetts law on jurisdictional grounds (That dismissal was part of a broad decision dismissing a swath of state-law claims.) The judge cited 2018 precedent from the 11th U.S. Circuit Court of Appeals in Waite v. All Acquisition Corp which requires personal injury plaintiffs asserting specific jurisdiction to show that the defendant’s actions within the court’s home state led directly to the alleged injury. Rosenberg ruled that the Zantac plaintiffs hadn’t alleged a causal link between their claims and marketing activities in California and Massachusetts by name-brand Zantac defendants.

The judge allowed plaintiffs to amend their complaint to allege that actions by the brand-name makers in California and Massachusetts caused plaintiffs to take generic Zantac, known as ranitidine. The MDL plaintiffs filed an amended complaint elaborating on their theory that the brand-name defendants’ promotion of the drug in California and Massachusetts expanded demand for the medication, leading to sales of the generic version.

On March 24 – the day before the Supreme Court’s ruling in Ford – brand-name defendants GlaxoSmithKline Plc, Boehringer Ingelheim, Pfizer Inc, Sanofi SA and Patheon NV moved to dismiss the amended innovator liability claims. (That motion was part of a suite of dismissal briefs from the defendants, which deny the medication is unsafe.) In a nutshell, the brand makers argued that they had no role in introducing generic ranitidine into the marketplace in Massachusetts, California or, for that matter, any other state, so plaintiffs cannot establish personal jurisdiction for their innovator liability claims.

“In short, while California and Massachusetts may choose to adopt their own novel tort principles governing companies based there, due process forbids them from applying those laws extraterritorially to hold the out-of-state brand-name manufacturers liable for the sales of other companies’ products,” the defendants’ brief said. “Plaintiffs’ highly attenuated theory of liability leaves them with no basis for specific jurisdiction.”

And then came the Supreme Court’s Ford ruling.

In that decision, as you probably recall, the justices rejected Ford’s theory that in-state residents who were involved in crashes in Montana and Minnesota could not sue in their own state courts because Ford did not design, manufacture or sell the allegedly defective vehicles in those states. (The vehicles involved in the crashes were sold second-hand by previous owners, not directly by Ford through its dealerships.) The Supreme Court unanimously ruled that because Ford was heavily engaged in selling cars and trucks in those states, Montana and Minnesota had jurisdiction to hear the plaintiffs’ cases.

Notably, Justice Elena Kagan said in the court’s majority opinion that plaintiffs must only show a connection between their lawsuit and the defendant’s activities in their state – not, as Ford had argued, that the defendant’s actions within the jurisdiction caused their injuries.

The Zantac MDL plaintiffs seized upon that language to argue that the 11th Circuit’s but-for rule has been displaced. “That law has been entirely overruled by Ford,” they said in last week’s brief.

The Ford jurisdictional test, they said, requires plaintiffs to show that a defendant conducted business within a particular jurisdiction and that the plaintiff’s claims relate to the defendant’s contacts with the jurisdiction. In the Zantac case, they argued, there is no doubt that brand-name defendants engaged in the marketing and promotion of the drug in California and Massachusetts, where they ran ads about the drug and employed sales reps to tout the medication to physicians.

And even though the brand-name defendants did not directly sell generic versions of the drug, plaintiffs argued, their actions relate to plaintiffs’ claims under the California and Massachusetts laws because those claims are for misrepresentation based on the drugs’ labels. It does not matter, in other words, that the defendants did not put allegedly defective generic drugs into the stream of commerce in those states, according to plaintiffs. They are responsible, the plaintiffs allege, for the labels that failed to warn consumers about the drugs’ carcinogenic risk.

I emailed the defense lawyers who signed the March 24 dismissal motion for a response to plaintiffs’ brief: Mark Cheffo of Dechert (for GSK); Andrew Bayman of King & Spalding (for Boehringer); Joseph Petrosinelli of Williams & Connolly (for Pfizer); Anand Agneshwar of Arnold & Porter Kaye Scholer (for Sanofi) and Christopher Carton of Bowman and Brooke (for Patheon). None got back to me.

Lead counsel for the Zantac plaintiffs are Adam Pulaski of Pulaski Kherkher; Tracy Finken of Anapol Weiss; Robert Gilbert of Kopelowitz Ostrow Ferguson Weiselberg Gilbert; and Michael McGlamry of Pope McGlamry. Ashley Keller of Gerchen Keller is leading plaintiffs’ appeal of Rosenberg’s dismissal order from last December at the 11th Circuit.

Opinions expressed here are those of the author. Reuters News, under the Trust Principles, is committed to integrity, independence and freedom from bias.

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