Litigation in the Medical Device Industry
Pat Fogarty, AdvaMed’s Deputy General Counsel and Senior Vice President of Legal, sat down with industry observer Jack Kalavritinos to discuss the current landscape of litigation in the medical device industry. Here is a transcript of that conversation:
Let’s start with medical device litigation generally, what are the most recent trends? It seems like every time I turn on the television I see a trial lawyer advertisement for suing medical device manufacturers. Why does it appear that device manufacturers are being targeted?
That’s a smart observation. There has been a fundamental shift in personal injury litigation over the past decade that has turned personal injury law into a big business. Medical device manufacturers are being targeted along with pharmaceutical, auto and some other manufacturers. The major difference is that the personal injury lawyers are being backed by Wall Street money to develop slick marketing campaigns to recruit plaintiffs and generate claims. The ads are also very sophisticated, with some looking like official FDA alerts. They can be highly misleading.
What we have found is that often the people responding to these ads are perfectly happy with their medical devices. The devices work well, but they are misled to thinking there has been a recall or that there are heightened risks. So, they respond to an ad or click on an internet banner. The lawyers’ goal is to stockpile hundreds or thousands of these claims in hopes the sheer quantity of claims—even though most of the cases would never succeed if they saw the inside of a courtroom—will pressure the companies to settle. We have a website called “Responsible Advertising for Patient Safety” to educate the public and policymakers about these problems.
I know that efforts have been underway in several states to address this trend so citizens are not misled into filing lawsuits?
Yes. In the past couple of years, we have been working with other health care and civil justice groups to enact state laws that would provide a needed check on misleading trial lawyer advertisements. Texas, Tennessee, and West Virginia enacted legislation responding to common misleading lawsuit advertising practices in 2019 and 2020. In 2021, Indiana adopted similar legislation. We expect additional states to enact similar laws in the future and will be there to support these efforts.
What about all of this Wall Street money? It seems odd that businesses are set up to finance lawsuits. What can be done about it?
Great question. This phenomenon is generally called “third party litigation financing” and it is changing mass tort litigation away from being about individual people and cases. It is now a multi-billion industry, from small investors buying interests in a lawsuit to large hedge funds and private equity companies purchasing an interest in a broad portfolio of cases. In addition to manufacturing litigation, this financing also makes it more difficult for device manufacturers and consumers to resolve legitimate disputes they may have. The financiers pull the strings.
The goal right now is to make sure that patients and the courts know if there is big money behind a bunch of claims. Some people have no idea. In 2018, Wisconsin became the first state to enact legislation requiring a party’s initial disclosure of any third party litigation funding agreement. In 2019, West Virginia adopted a similar disclosure requirement for consumer lending lawsuits. In 2021, the U.S. District Court of New Jersey adopted a local rule requiring such disclosures.
We also are actively supporting efforts before the Advisory Committee on Civil Rules, asking the federal courts to require these disclosures as part of the Federal Rules of Civil Procedure. In September 2021, AdvaMed joined with a bunch of other groups in submitting a letter to the Committee on Rules of Practice and Procedure encouraging consideration of such a rule amendment. We will be continuing to push these efforts in 2022.
What kind of trends are we seeing in the courtroom? Can you talk about the big case in New Jersey – I know the industry has been very active.
The most important device-specific case is happening in New Jersey. The state’s Supreme Court will be hearing a pair of cases against Bard and Ethicon where the key issue is whether evidence that the manufacturers received the U.S. Food and Drug Administration’s clearance before bringing their mesh devices to market is admissible. Plaintiffs’ lawyers have been trying to get juries to decide these key liability issues as if the FDA does not exist. The New Jersey Appellate Division held that withholding this evidence can deprive defendants of a fair trial.
This issue—whether evidence that a manufacturer received clearance from the FDA to market a device through the 510(k) process—has been a priority for AdvaMed over the past few years. We filed an amicus brief in these cases and our counsel at Shook Hardy & Bacon was given time to argue the case in the Appellate Division.
After a couple of negative rulings, we are starting to see things turn around and hope the NJ Supreme Court will rule in our favor in 2022. As we have explained, courts can trust juries with this evidence and understanding why FDA cleared a device for market is critical for deciding whether a manufacturer should be liable for how it brought that device to market.
What other trends are affecting medical device liability? Is there anything folks should know about or help advocate?
The goal of civil litigation is to see that justice is done, but one continual problem is that courts are not ensuring the reliability of expert testimony in medical device cases. Too often, plaintiffs’ lawyers get experts to present plausible-enough-sounding theories for how a medical device is supposedly defective, but those theories are not grounded in sound science. Trial courts at the federal level and in many states are supposed to act as “gatekeepers” to ensure that experts based their opinions on sufficient data and reliable principles and methodology, but few do.
AdvaMed is working with a coalition of groups to educate courts on proper gatekeeping and amend Federal Rule of Evidence 702, which governs the admissibility of expert evidence. These amendments would clarify that the proponent of expert testimony bears the burden of establishing its admissibility by a preponderance of the evidence and an expert shall not assert a degree of confidence in an opinion that is not derived from sufficient facts and reliable methods.
Another issue impeding justice, as discussed above, is the stockpiling of claims that are generated through advertising and often have no merit. When faced with a massive number of claims, the federal courts form multi-district litigations (MDL) to consolidate the pre-trial proceedings of all cases involving a single device. In an effort to make sure this system works properly, we are advocating for early case assessments so claims that have no merit can be dismissed and the courts can focus on only those cases where there are real disputes.
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