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From Health Law Daily, December 7, 2017

District court erred in limiting discovery based on misreporting claims

By Vanessa M. Cross, J.D., LL.M.

In an appeal by plaintiffs seeking to recover for alleged injuries sustained from Merck Sharp & Dohme Corp., FKA Merck & Co., Inc (Merck) products, the Ninth Circuit vacated and remanded a California district court’s order that dismissed the complaint due to preemption when the plaintiffs requested additional discovery due to misreporting and under-reporting issues. The Ninth Circuit never reached the issue of whether Merck met the "clear evidence" burden for preemption, but instead vacated and remanded the case for abuse of discretion holding the district court misapplied Buckman Co. v. Plaintiffs’ Legal Committee to significantly limit discovery (Adams v. Merck Sharpe & Dohme Corp., December 6, 2017, per curiam).

Buckman. The Ninth Circuit held that the district court misapplied Buckman in two ways: (1) the district court relied on Buckman to impermissibly circumscribe discovery in which the plaintiffs sought to compel, and (2) the district court relied on Buckman to deem the plaintiffs’ newly discovered evidence "irrelevant" to the court’s preemption analysis at the summary judgment stage.

In Buckman, the plaintiffs alleged that use of orthopedic bone screws in their spines led to their injuries, and that the consulting firm assisting the screws’ manufacturer to secure regulatory approval made fraudulent representations to the FDA. The U.S. Supreme Court held that plaintiffs’ state-law claims were impliedly preempted by federal law because plaintiffs’ state-law "fraud-on-the-FDA" claims conflicted with the FDA’s responsibility to police fraud consistent with its judgment and objectives. The Buckman Court reasoned that a critical element to the plaintiffs’ case arose from federal law.

Preempting discovery. The Ninth Circuit held that the district court abused its discretion when it relied on Buckman to limit plaintiffs’ discovery. The district court acknowledged that the Merck allegations were not predicated upon a fraud-on-the-FDA basis. The district court, however, asserted that "fraud-on-the-FDA type allegations" were being asserted when plaintiffs raised misreporting and under-reporting as a justification for additional discovery. Based on this analysis, the district court denied the plaintiffs motion to compel discovery of adverse event source documents and databases as irrelevant and burdensome. The court also relied upon Buckman to preclude consideration of "new safety information" the plaintiffs uncovered in the discovery they were allowed to conduct.

In its finding of abuse of discretion, the Ninth Circuit found that plaintiffs asserted common-law, failure-to-warn claims arising from a state-law duty that paralleled a similar claim in another case in which the Ninth Circuit held preemption did not apply. While limiting the disposition of its decision as not appropriate for publication or as precedent except as provided by Ninth Circuit Rule 36-3, in vacating and remanding the case back to the district court, the Court sent a clear message that an expansive application of Buckman to limit discovery would not be favorably reviewed upon appeal.

The case is No. 15-56997.

Attorneys: David Charles Frederick (Kellogg, Hansen, Todd, Figel & Frederick, PLLC) for Jean Adams. Maurita Elaine Horn (Williams & Connolly LLP) for Merck Sharp & Dohme Corp. f/k/a Merck & Co. Inc. Amy Jean Laurendeau (O'Melveny & Myers LLP) for Amylin Pharmaceuticals, Inc. Jeffrey Michael Goldman (Pepper Hamilton LLP) and Robert Mont Howard (Latham & Watkins, LLP) for Eli Lilly and Co.

Companies: Merck Sharp & Dohme Corp. f/k/a Merck & Co. Inc.; Amylin Pharmaceuticals, Inc.; Eli Lilly and Co.

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