These appeals and cross-appeal are from the second in a series of bellwether trials from the Pinnacle Hip multidistrict litigation ("MDL"), in which several thousand plaintiffs claim injuries from Pinnacle hips manufactured and sold by DePuy Orthopaedics, Incorporated ("DePuy").
Disposing of the two sets of appeals together,
In 2011, the Judicial Panel on MDL ordered centralization of pretrial proceedings in the Northern District of Texas for cases involving the Pinnacle Acetabular Cup System hip implants. The parties agreed to a protocol for bellwether trials and, together, identified a pool of eight cases from which to select the candidates. The first bellwether trial lasted two months and ended in a jury verdict for J & J and DePuy (jointly "defendants"). The district court then jettisoned the seven remaining cases and ordered the parties to prepare ten new ones for trial. Five of those were consolidated, over defendants' objection, for the second bellwether trial, which lasted nine weeks and forms the basis of these appeals and cross-appeal.
At trial, plaintiffs claimed DePuy defectively designed and marketed its MoM implant and that J & J was liable, as a "nonmanufacturer seller," for aiding and abetting and for negligent undertaking. At the heart of the claims lay the contested science of modern hip prosthetics, and we begin with the narrow points of agreement. As outlined in both sides' briefs, prosthetic hips are designed to replicate the hip's ball-and-socket function and typically consist of four components: a stem inserted into the femur, a femoral head attached to the stem (the hip "ball"), a cup implanted into the hip socket (the acetabulum), and a metal liner that fits into the cup and against which the ball articulates.
The briefs and trial transcripts present competing histories on hip-implant technology. Both sides agree the story begins in the 1960s with "first-generation" MoMs, the earliest models to achieve widespread use. The parties further agree that these early MoMs carried certain health risks and were quickly displaced by Sir John Charnley's metal-on-plastic ("MoP") design, long described as the industry's "gold standard."
Here, we reach a fork. Defendants suggest that, in the 1990s, MoP was viewed as the industry's "weak link" because of its tendency to cause osteolysis, bone loss in the area surrounding the implant. When the metal ball articulates against the plastic liner, it generates debris from plastic wear that can cause dissolving of the surrounding bone, which, in turn, can require revision surgery. Defendants, along with several other manufacturers, promoted MoMs in the early 2000s to address this Achilles' heel and offer high-activity patients an alternative that would wear out more slowly than plastic.
Plaintiffs meanwhile tell a less rosy story. They claim defendants hastily reintroduced Ultamet to market, without conducting any clinical tests, for the sole purpose of increasing market share. Medical science had long discovered that plastic-wear debris, and the attendant risk of osteolysis, could be reduced considerably if the plastic liner was "cross-linked," that is, sterilized through radiation. Yet, the theory goes, defendants lured surgeons away from cross-linked plastic's proven success through an intricate misinformation campaign of false advertisements and DePuy-authored academic papers.
On the core issue of marketing and design, the parties waged a war of the experts. Plaintiffs elicited testimony from engineers and medical scientists that Ultamet's MoM design was a producing cause of their injuries and that cross-linked MoP was a safer alternative. They also offered evidence that defendants, before bringing the product to market, were made aware of the considerable, and arguably unjustifiable, risks of MoM. Defendants' experts countered that, although MoP might be better suited to older patients, the risk-benefit calculus for younger, more active patients might still favor MoM. Defendants further maintained they had always been forthcoming with treating physicians about this risk calculus. The district court admitted several pieces of inflammatory character evidence against defendants — including claims of race discrimination and bribes to Saddam Hussein's Iraqi "regime" — reasoning the defendants had "opened the door" by repeatedly presenting themselves as "wonderful people doing wonderful things."
The jury found for plaintiffs on the five above-mentioned causes of action and returned a $502 million verdict. It awarded just $500,000 in economic compensatory damages and $141.5 million in non-economic compensatory damages, and DePuy and J & J were assessed exemplary damages of $120 million and $240 million, respectively. The defendants made numerous post-trial motions — for JMOL on all claims, for dismissal on jurisdictional grounds, and for mistrial. All were denied, save the request that the court apply Texas's statutory exemplary-damages cap, which reduced the $360 million to $9.6 million. Defendants appeal the judgment,
In a companion appeal, defendants request relief from judgment under Federal Rule of Civil Procedure 60(b)(3), based on plaintiffs' counsel's failure to disclose payments to two purportedly "nonretained" experts — Dr. Bernard Morrey ("Morrey Sr.") and Dr. Matthew Morrey ("Morrey Jr."). In preparation for the third bellwether trial, defendants discovered that before the second trial, plaintiffs' counsel Mark Lanier had made a $10,000 donation to a charity of Morrey Sr.'s choosing, that Morrey Jr. had expected to be paid when testifying, and that the doctors had received post-trial payments totaling $65,000. Defendants moved for relief, the court denied the motion, and defendants again appeal.
JMOL is warranted only if "a reasonable jury would not have a legally sufficient evidentiary basis" to find for the nonmovant. FED. R. CIV. P. 50(a)-(1)(B). We review the denial of JMOL de novo, applying "the same standard ... the district court used in first passing on the motion." Nobach v. Woodland Vill. Nursing Ctr., 799 F.3d 374, 377 (5th Cir. 2015) (quotations omitted). DePuy claims plaintiffs' design and marketing claims fail categorically and that Klusmann's and Greer's claims are barred by the relevant statute of limitations.
To establish a design defect, plaintiffs had to prove that "(1) the product was defectively designed so as to render it unreasonably dangerous; (2) a safer alternative design existed; and (3) the defect was a producing cause of the injury for which the plaintiff seeks recovery." Casey v. Toyota Motor Eng'g & Mfg. N.A., 770 F.3d 322, 330 (5th Cir. 2014) (citations omitted). Texas law defines a safer alternative design as one that "would have prevented or significantly reduced the risk of the claimant's personal injury ... without substantially impairing the product's utility."
Defendants seek JMOL on three accounts: (1) MoP is a different product, not an alternative MoM design, (2) plaintiffs' design-defect theory is preempted because it conflicts with the goals enshrined in relevant Food and Drug Administration ("FDA") regulations, and (3) medical-device liability is foreclosed by comment k to Restatement (Second) of Torts § 402A. Defendants fail on all three.
Defendants' first contention — that MoP is a different product from MoM — implicates thorny questions of identity and definition, practically impossible to settle in the abstract.
The alternative-design/different-product distinction emerges from two Texas cases, both distinguishable from the present. In Caterpillar, the Texas Supreme Court considered whether a front-end loader with a removable rollover-protection structure ("ROPS") was defectively designed. Id. at 383-85. The court rejected the plaintiff's proposed alternative — in which the ROPS was rendered non-removable — because the non-removable structure would thwart the ROPS's "intended" function of enabling access to "low clearance areas." Id. at 384-85. The court refused to "impose liability in such a way as to eliminate whole categories of useful products from the market." Id. at 385 (emphasis added).
In Brockert, 287 S.W.3d at 769, the Texas Court of Appeals applied this principle in the pharmaceutical context to conclude that an estrogen-only drug was not a safer alternative design to Prempro, a combination of estrogen and progestin, despite that both served "the same general purpose" of treating menopausal symptoms, id. The plaintiff claimed her estrogen-only alternative eliminated the risk of breast cancer introduced by Prempro. Id. The court rejected the argument, explaining that progestin helped "reduce the incidence of endometrial hyperplasia," id. at 770, and that the plaintiff had failed to "explain how Prempro could have been modified or improved" without compromising that function, id. at 771. Thus plaintiff's theory was rejected as a "categorical attack" on the relevant product. Id.
Texas's risk-utility test plainly contemplates that a proposed alternative design might reduce a product's utility — that is, its capacity to perform a function for which it was designed — without rendering the alternative an entirely different product.
Defendants claim to have identified two relevant functional distinctions between MoM and MoP: (a) Metal is more durable than plastic and, therefore, more suitable to younger patients "who often seek not just pain relief but also the ability to resume an active lifestyle"; and (b) metal remedies osteolysis by "eliminat[ing] plastic debris entirely." Neither purported distinction, however, shows MoP to be an "entirely different product" under the above, proper framework. See Brockert, 287 S.W.3d at 770. To the first: Durability is a distinction in degree rather than kind. All hip implants — plastic, metal, or ceramic — are designed with the twin goals of minimizing wear debris and affording maximal longevity. Defendants' own promotional materials characterize both their MoP (AltrX LD) and their MoM (Ultamet XL) as "high stability, low wear" hip implants; they never suggest the latter enables the implantee to perform discrete tasks otherwise impossible with the former. Brockert and Caterpillar are thus distinguishable.
The question then is whether plastic substantially impairs the hip implant's utility along the durability axis. See Bell Helicopter, 594 S.W.2d at 529. And though defendants presented evidence that metal was an "attractive option" for younger patients, plaintiffs presented contrary evidence that cross-linked plastic was preferable "a hundred times out of a hundred" and that it outperformed metal along the survivorship dimension by a wide margin. On this evidentiary record, we cannot conclude, as a matter of law, that MoP substantially impairs the implant's utility in terms of stability and rate of wear.
As for reduction of osteolysis, plaintiffs rightly observe that cross-linked polyethylene was intended to do the same thing. The question then is whether the risk of osteolysis from cross-linked MoP substantially reduces MoM's utility, and the record says not. A DePuy executive conceded that MoM, too, can cause osteolysis, and DePuy seems to have known, when it sold
At oral argument, defendants suggested the different-product/alternative-design question should be decided from the ex ante perspective, when DePuy believed MoM would eliminate osteolysis and substantially out-perform plastic. That those marginal benefits may have failed fully to materialize is ostensibly irrelevant to the inquiry. But defendants cite no cases for this contestable proposition
Defendants draw our attention to several other cases applying the alternative-design/different-product distinction, but
Defendants also cite Hosford v. BRK Brands, Inc., 223 So.3d 199 (Ala. 2016), holding that ionization smoke alarms and dual-sensor smoke alarms are different products. The plaintiffs argued ionization alarms were defective because they "fail to provide adequate warning" of a fire that "begins as ... slow [and] smoldering," id. at 204, and they identified the "more expensive" dual-sensor alarms, which incorporate both ionization and "photoelectric technology," as a safer alternative, id. Applying Brockert and Caterpillar, the court deemed them two different products, based primarily on the wide disparity in price. Id. at 207. That court feared liability would drive the "less expensive [option] from the market ...[,] result[ing] in no smoke alarm being present" in homes like the plaintiffs'. Id.
Here, that empirical judgment is obviously inapposite, given that several plaintiffs were revised to the very alternative they propose. None of defendants' cases counsels reversal on our facts.
Defendants suggest the design-defect claims are preempted because they "stand[] as an obstacle to the accomplishment and execution of the full purposes and objectives" reflected in the MoM-related regulations of the FDA. See Hines v. Davidowitz, 312 U.S. 52, 67, 61 S.Ct. 399, 85 S.Ct. 581 (1941). Defendants' obstacle-preemption theory fails at two levels, misconstruing both the FDA's objectives with respect to MoMs and the alleged state-law obstacle in its path.
We begin with the federal objective. Before 1976, the Federal Food, Drug, and Cosmetic Act left "the introduction of new medical devices ... largely for the States to supervise." Riegel v. Medtronic, Inc., 552 U.S. 312, 315, 128 S.Ct. 999, 169 L.Ed.2d 892 (2008). Congress stepped in with the Medical Device Amendments of 1976 (MDA) and imposed, for the first time, "a regime of detailed federal oversight," which authorized the FDA to regulate
Before class III devices can be brought to market, they generally must survive the FDA's rigorous premarket approval ("PMA") process, designed to ensure a device's "safety and effectiveness." 21 U.S.C. § 360e(d)(1)(A). That process is "quite time consuming," requiring "an average of 1,200 hours [for] each submission." Buckman Co. v. Plaintiffs' Legal Comm., 531 U.S. 341, 344-45, 121 S.Ct. 1012, 148 L.Ed.2d 854 (2001) (quotation omitted). The statute carves out an exception for "predicate" devices that were on the market before 1976, which can remain in circulation "until the FDA initiates and completes the PMA process." Id. at 345, 121 S.Ct. 1012; see also 21 U.S.C. § 360e(b)(1)(A). And "to avoid the potentially monopolistic consequences of th[e]... exception," the MDA also exempts any "substantial equivalents" of these predicate devices. See Buckman, 531 U.S. at 345, 121 S.Ct. 1012; 21 U.S.C. § 360e(b)(1)(B). These equivalents enter the market through what is known as the "510(k) process," which requires an applicant to show that the device either "has the same technological characteristics as the predicate device" or "is as safe and effective as a legally marketed device." 21 U.S.C. § 360c(i)(1)(A)(i)-(ii).
The 510(k) process does not "denote official approval of the device"; to create a contrary "impression ... constitutes misbranding." 21 C.F.R. § 807.97. The process "provide[s] little protection to the public" because it is "focused on equivalence, not safety." Medtronic, Inc. v. Lohr, 518 U.S. 470, 493, 116 S.Ct. 2240, 135 L.Ed.2d 700 (1996) (quotations omitted). More recently, however, the agency has clarified, in guidance documents, that "principles of safety and effectiveness underlie the substantial equivalence determination in every 510(k) review."
The MDA contains an express-preemption provision that prohibits states from "establish[ing] ... any requirement[] (1) which is different from, or in addition to any [MDA] requirement applicable ... to the device, and (2) which relates to [its] safety or effectiveness." 21 U.S.C. § 360k(a). The clause covers class III, PMA products, Riegel, 552 U.S. at 322-23, 128 S.Ct. 999, but not 510(k)-approved products, id. at 322, 128 S.Ct. 999; Lohr, 518 U.S. at 493-94, 116 S.Ct. 2240.
As relevant here, MoMs were sold before 1976 and have traditionally been treated as pre-amendment class III devices that can be brought to market through the 510(k) process. Ultamet followed
Defendants suggest plaintiffs' theory of liability — that MoMs are "categorically defective" — flouts the FDA's considered judgment that MoMs should not be banned outright but rather regulated, and should remain available, as class III medical devices. That theory fails at two levels.
First, plaintiffs' burden was to show only that Ultamet was defective, not that all MoMs were. And because Ultamet was off the market before the trial, the verdict cannot have thwarted the FDA's objectives in that narrow respect. Defendants reply that plaintiffs' only colorable theory at trial covered the MoM interface writ large. Maybe so, but defendants' position assumes, without any support, that our obstacle-preemption inquiry looks through the verdict and judgment to the arguments that lie beneath them. This seems unlikely, as it is the judgment, and not the parties' assertions, that carries binding effect and the attendant power to disrupt the federal regulatory scheme.
But even under defendants' look-through inquiry, it is not the case that plaintiffs' theory reached all possible MoMs. All would agree that, despite the sweeping language with which plaintiffs presented their case, their claims were impliedly limited to presently available technologies and the adverse health effects they allegedly engender.
This seemingly pedantic point is fatal to defendants' preemption argument. The FDA effectively withdrew all MoMs from the market with its February 2016 final rule and left open a single door in the form of PMA. Arguably, the final rule contemplates the possibility that every MoM then on the market would (and perhaps should) fail PMA. That the FDA chose not to ban MoMs as a class proves no more than that it wished to give manufacturers an opportunity to create MoMs not contemplated by plaintiffs' theory of liability. Unless and until the FDA actually grants PMA to an extant MoM that carries the risks that made Ultamet defective, defendants cannot prove that even plaintiffs' theory of liability obstructs the FDA's regulatory objectives.
Defendants assert plaintiffs' claims are foreclosed by comment k to Restatement (Second) of Torts § 402A:
RESTATEMENT (SECOND) OF TORTS § 402A, cmt. k. The Texas Supreme Court has incorporated § 402A into its common law, New Tex. Auto Auction Servs. v. Gomez de Hernandez, 249 S.W.3d 400, 403 (Tex. 2008), and has considered comment k in the prescription-drug context, Centocor, Inc. v. Hamilton, 372 S.W.3d 140, 165 (Tex. 2012). But it has never expressly extended the immunity rule to medical implants, let alone 510(k)-cleared devices, on either a categorical or a product-by-product basis.
Jurisdictions are split on whether medical devices enjoy blanket immunity,
To prevail on their marketing-defect claims, plaintiffs had to show (a) "the warning was defective" and (b) the defect "was a producing cause of the injury." Ackermann v. Wyeth Pharm., 526 F.3d 203, 208 (5th Cir. 2008) (citation omitted). Defendants seek JMOL on three grounds: The relevant warnings were adequate as a matter of law, plaintiffs presented no properly designated warning expert, and they failed to prove causation. We conclude that defendants are entitled to JMOL for want of causation, but only as to Greer's and Peterson's marketing-defect claims.
The adequacy of a warning is generally a question of fact. "However, if a
By defendants' description, plaintiffs all "experienced corrosion and friction wear from their hip implants" and "suffered adverse reactions to that debris." Defendants claim specifically to have warned of these circumstances in the two "Instructions for Use" pamphlets (IFUs) inserted into their acetabular cup and metal liner packages. The cup's IFU warns that "[t]issue reactions, osteolysis, and/or implant loosening caused by metallic corrosion, allergic reactions, or the accumulation of polyethylene or metal wear debris or loose cement particles" are among "the most frequently encountered adverse events ... in hip arthroplasty." The liner's IFU additionally warns of "[s]ubclinical nerve damage ... associated with surgical trauma," "subluxation resulting from importer position and/or muscle and fibrous tissue laxity," "[h]istological reactions [from] exposure to a foreign material," "higher ion release" where "bone cement is not used," and the "potential for release of metallic debris into the joint space." Defendants maintain these warnings reach all of plaintiffs' purported conditions and were therefore adequate as a matter of law.
But in determining whether warnings are adequate as a matter of law, Texas courts subject them to a demanding standard of specificity. In Jordan v. Geigy Pharmaceuticals, 848 S.W.2d 176, 182 (Tex. App.-Fort Worth 1992, no writ), where the plaintiff suffered renal failure from an anti-inflammatory, the court reversed a summary judgment for the defendant on the plaintiff's failure-to-warn claim. It held that the warning at issue — which described "renal pathology in long-term administration to animals" and "overt renal failure ... typically followed by recovery to the pretreatment state" — did not sufficiently address "irreversible renal failure" or "acute renal failure," both suffered by the plaintiff. Id. at 181-82. Plaintiffs' position here is at least as compelling.
As for the cup IFU, it was drafted before the Ultamet liner was ever created, and it addresses only general adverse events relevant to all hip arthroplasty. Assuming Ultamet is defective for the reasons plaintiffs allege, the warning fails to put surgeons on notice as to the distinctive risks that arise from MoM — "metallosis," "pseudotumors," and "tissue necrosis" — or the magnitude of those risks. The liner IFU fairs no better: It fails squarely to address "metal wear debris" that occurs when the metal ball articulates against the metal liner, the underlying cause of plaintiffs' injuries. And, taken in context, its warnings about nerve damage, dislocation, and ion release concern complications not at issue in this case — e.g., surgical trauma and the implant's adaptation to the bone.
Not until after the FDA issued its proposed rule in 2013 did defendants specifically warn about the metallosis, pseudotumors, and tissue necrosis — the sorts of conditions that plaintiffs maintained caused their revision surgery. In short, though defendants' IFUs identified metal debris generally, a reasonable jury could conclude that the warning failed to describe with reasonable specificity the source of the wear-debris problem, the conditions to which it gives rise, and the magnitude of the risk. Texas law requires a closer match than these defendants can show.
Defendants alternatively suggest plaintiffs failed to provide expert testimony that
Defendants claim plaintiffs failed to show the inadequate warning actually caused their physicians to select Ultamet. Under the learned-intermediary ("LI") doctrine, which Texas applies in "medical products liability actions,"
At the threshold, the parties debate the relevance, under Texas law, of "objective evidence" — that is, evidence "that a different warning would have affected the decision of a reasonable doctor." Id. at 171. The Texas Supreme Court referenced "objective evidence" just once, in Centocor, noting that the plaintiffs not only "lack[ed] subjective evidence [about what the particular physician would have done] but presented no objective evidence that a different warning would have affected the decision of a reasonable doctor to prescribe [the relevant drug] for [plaintiff's] condition." Id. (emphasis added). Here, plaintiffs proffered objective evidence in Morrey Jr.'s testimony that, if the full risks of MoM were known to physicians, "they would run to polyethylene."
At least one federal district court has dismissed Centocor's language as dictum
Relevance, however, does not imply sufficiency. In the LI context, causation entails two distinct factual predicates: first, that the doctor would have read or encountered the adequate warning
Take Greer and Peterson. Their treating physicians, Goletz and Schoch, did not testify, and plaintiffs offer no record evidence suggesting the two actually read or encountered defendants' inadequate warnings. On appeal, plaintiffs cite only their own statements for support: Greer testified Goletz told him his "[MoM] would not wear, [and] would last [his] lifetime," and according to Peterson, Schoch said the same "because [Peterson's MoM] wouldn't have any plastic to wear out." But these snippets say nothing of how the doctors came to hold their respective views. Did Schoch and Goletz rely upon defendants' representations in choosing Ultamet, or did they learn of MoM's purported advantages by some other means? If the latter, how would better disclosure have reached the doctors? Not even "objective evidence" can fill these discrete evidentiary voids. The jury was left to guess, and plaintiffs' claims fail as a result. See Pustejovsky, 623 F.3d at 277.
Aoki's and Klusmann's claims are more complex, given that the testimony from their treating physician, Heinrich, contains
In Aoki's case, Heinrich testified he used aSphere, Pinnacle's metal femoral head, because DePuy's "simulator data" suggested it "minimize[d] th[e] wear-in phase" — the immediate post-operative period in which articulation causes "an increased release of ions" — relative to alternative metal head designs. Heinrich "asked" "DePuy people" about "aSphere" and "made the decision" to use the product "based on" their representations. Meanwhile, plaintiffs presented Heinrich with emails suggesting DePuy knew its claims about aSphere were untrue, a deception Heinrich seemed to know nothing about. Heinrich also acknowledged more generally that "J & J[/]DePuy" said nothing of the increased "problems" with MoMs in "2008, 2009, maybe even in 2010."
Klusmann's case presents a similarly mixed bag. He received bilateral MoM implants in 2004 and 2005 and began to experience intermittent pain as early as 2006. Heinrich consistently treated Klusmann with "conservative care" until 2011, when he first recommended revision. In explaining that delay, Heinrich testified that "doing things like checking ion levels and things of that nature" was less common then. Plaintiffs' counsel then read a letter from a DePuy physician criticizing MoMs for their potentially "catastrophic complications" and detailing the proper post-operative detection procedures. He then asked Heinrich, "[I]f DePuy had sent you this information — it certainly would have changed the way you were treating Mr. Klusmann, wouldn't it?" Heinrich offered a qualified replied: "To a certain degree. The only thing I would say is that he put in here that once he has ruled out other issues like back problems, loose implants, tendinitis, then he goes on to this workup. And so from that standpoint, yes, I agree." At the least, this testimony suggests DePuy's omission altered the course of Klusmann's post-operative care.
To summarize: Though Heinrich had general awareness of the possibility that metal wear debris could cause adverse tissue reactions, he seems to have been unaware of (a) the magnitude of the risk, (b) the proper post-operative procedures to be followed with MoM patients who experience pain (Klusmann), and (c) DePuy's misstatements about aSphere's wear-related advantages (Aoki). Additionally, Heinrich relied on disclosures by DePuy's representatives in making his treatment decisions. A reasonable jury could discern causation on two bases. First, Heinrich's mixed messages may have been too equivocal to rebut plaintiffs' objective evidence, cf. Centocor, 372 S.W.3d at 169; and second, the subjective testimony itself — which included evidence of both deception and reliance — likely permitted an inference of causation. Either way, there is nothing unreasonable in the causation findings as to Aoki and Klusmann.
Christopher's case is the most straightforward of the lot. Kearns, his treating physician, testified, "The metal liner, according to the data supplied by the company, through publication and representatives, [could] last much longer than all the other product liners available at the time." Kearns claimed he "got [his] information from" "a DePuy consensus panel," a "brochure that [his] DePuy representative gave [him]," "word of mouth, from [his] partners, and from the literature ...
In short, defendants were entitled to JMOL on marketing-defect claims by Greer and Peterson. That is not so for Aoki, Christopher, or Klusmann.
Defendants suggest Greer's and Klusmann's claims are barred by Texas's statute of limitations, which requires that personal injury suits be filed "not later than two years after the day the cause of action accrues." TEX. CIV. PRAC. & REM. CODE ANN. § 16.003(a). Under Texas's discovery rule, limitations is tolled "until the plaintiff discovers, or through the exercise of reasonable care and diligence should have discovered, the nature of the injury."
Greer and Klusmann received their MoM implants in 2004 and 2005, respectively, underwent revision surgery between 2011 and 2012, and sued within a few months of revision. Defendants claim that both began to experience hip-related pain as early as 2008, placing them on inquiry notice as to potential defects in their implants outside the statutory window. That assertion assumes pain was a "fact" sufficient to motivate an inquiry into the implant's defect. But both the record and Texas caselaw suggest otherwise.
The record shows that despite plaintiffs' and their surgeons' diligence, neither group linked plaintiffs' symptoms to a potential defect in Ultamet for several years post-implant. And Texas caselaw confirms that appellate courts will reverse the factfinder's judgment on the accrual date only where the connection between the treatment decision and the pain is obvious — for example, when the plaintiff or his physician expressly connects the symptom to the allegedly defective product.
J & J claims it was never a proper party because the district court lacked personal jurisdiction over it. The
"This court reviews a district court's exercise of personal jurisdiction de novo," In re DePuy, 870 F.3d at 353, and its underlying "jurisdictional findings of fact" for clear error, In re Chinese-Manufactured Drywall Prods. Liab. Litig., 753 F.3d 521, 529 (5th Cir. 2014). "A factual finding is not clearly erroneous as long as it is plausible in the light of the record read as a whole." Walker v. City of Mesquite, 402 F.3d 532, 535 (5th Cir. 2005) (quotation omitted). The plaintiff "bears the burden of establishing" personal jurisdiction, WNS, Inc. v. Farrow, 884 F.2d 200, 203 (5th Cir. 1989), and though he need only make a prima facie case at the Rule 12(b)(2) stage, his burden escalates to "preponderance of the evidence" "by the end of trial." Travelers Indem. Co. v. Calvert Fire Ins. Co., 798 F.2d 826, 831 (5th Cir. 1986) (citations omitted).
Plaintiffs' principal jurisdictional theory is "stream of commerce." That doctrine recognizes that a defendant may purposely avail itself of the protection of a state's laws — and thereby will subject itself to personal jurisdiction — "by sending its goods rather than its agents" into the forum. Nicastro, 564 U.S. at 882, 131 S.Ct. 2780. In Asahi Metal Industry Co. v. Superior Court of California, Solano County, 480 U.S. 102, 107 S.Ct. 1026, 94 L.Ed.2d 92 (1987), neither Justice Brennan nor Justice O'Connor could marshal a majority on the question whether mere awareness that a product will be sold in the forum state suffices to support jurisdiction under the stream-of-commerce doctrine. The issue divides the circuits, with ours having embraced Justice Brennan's more expansive view. See Choice Healthcare, Inc. v. Kaiser
J & J insists that it cannot be subject to personal jurisdiction because DePuy — its executives, engineers, and salespeople — and not J & J, played the principal role in developing and selling the Ultamet. Preliminarily, it cannot be, as J & J suggests, that nonmanufacturing parents categorically lie beyond the stream of commerce no matter the nature of their contributions. Personal jurisdiction does not turn on labels or relative connection to the forum.
J & J's role in Ultamet's design, promotion, and sale demonstrates that J & J significantly contributed to the product's placement into the stream of commerce.
These factors also distinguish J & J's role from the passive parent-subsidiary relationship that we have held insufficient to support jurisdiction.
Accordingly, J & J's significant role in placing the Ultamet into the stream of commerce with the expectation that it would be purchased by consumers in Texas rendered J & J amenable to suit for injuries caused by the Ultamet in Texas. The district court properly exercised personal jurisdiction over J & J.
J & J avers that the claims against it — aiding and abetting, nonmanufacturer seller, and negligent undertaking — all fail on the merits. We agree with J & J only as to aiding and abetting.
Plaintiffs' cause of action for aiding and abetting derives from Section 876(b) of the Restatement (Second) of Torts, which provides that, "[f]or harm resulting to a third person from the tortious conduct of another, one is subject to liability if he ... knows that the other's conduct constitutes a breach of duty and gives substantial assistance or encouragement...." The Texas Supreme Court "has not expressly decided whether Texas recognizes a cause of action for aiding and abetting,"
But that debate is beside the point. When sitting in diversity, a federal court exceeds the bounds of its legitimacy in fashioning novel causes of action not yet recognized by the state courts.
Plaintiffs offer two responses, neither persuasive. First, they suggest treating the state courts' abstention as a de facto rejection would effectively eviscerate the Erie analysis.
Plaintiffs also cite three Texas cases,
J & J challenges plaintiffs' "nonmanufacturer seller" claim. Section 82.003(a) of the Texas Civil Practice & Remedies Code declares that "[a] seller that did not manufacture a product is not liable for harm caused to the claimant by that product unless the claimant proves" one of seven exceptions. Question 3 of the jury charge asked whether J & J was a "nonmanufacturing seller" under section 82.003 and then whether J & J satisfied the requirements of either of two exceptions to that immunity — whether it "participate[d] in the design" of the Ultamet and whether it "actually kn[e]w of" a defect in the Ultamet. The jury answered yes to both questions.
J & J claims "nonmanufacturer seller" is an affirmative defense rather than a standalone cause of action. The verdict proves that J & J could be found guilty under one of the exceptions to the affirmative defense, but only if it had also been found liable for a standalone cause of action such as design or marketing defect. It claims no such finding was made — ergo, the nonmanufacturer-seller charge was "bizarre" and "meaningless."
But J & J creates confusion from whole cloth. The first two questions in the jury charge concerning design and marketing defects focus on the product, rather than the conduct or identity of the responsible parties,
J & J maintains that plaintiffs' negligent-undertaking claim fails for insufficient evidence. Negligent undertaking requires a finding that (1) J & J undertook to perform services that it knew or should have known were necessary for plaintiffs' protection (here, a duty to design Ultamet for safe use and to regulate its marketing, sale, and distribution); (2) J & J failed to exercise reasonable care in performing those services; and (3) plaintiffs or their physicians relied on J & J's performance, or J & J's performance increased plaintiffs' risk of harm. Nall v. Plunkett, 404 S.W.3d 552, 555-56 (Tex. 2013). Disagreement lies primarily at the first prong: Plaintiffs recite J & J's laundry list of Ultamet-related contacts, which J & J dismisses as "typical of a parent-subsidiary relationship" and thus insufficient to "disregard the corporate form."
Texas caselaw reveals no precise control threshold a parent must cross before undertaking a duty to its subsidiary's customers. Texas courts have made clear that mere possession of "the authority to compel" a subsidiary is not enough — the parent "must actually" exercise that authority in a manner relevant to the undertaking inquiry.
The gap between these two poles is wide, and there is little guidance. Nothing J & J points to in Texas law suggests "primary authority for maintaining safety" is necessary to sustain an undertaking claim. Given that plaintiffs have identified several instances in which J & J actually exercised its veto authority, especially in the marketing context, we cannot say every "reasonable" juror reviewing J & J's role in Ultamet's design, marketing, and distribution would find that J & J had not undertaken a duty to Ultamet users.
In the alternative, defendants request a new trial based on irrelevant and prejudicial evidence. A district court can grant a new trial if it finds "the verdict [was] against the weight of the evidence, the damages awarded [were] excessive, the trial was unfair, or prejudicial error was committed in its course." Smith v. Transworld Drilling Co., 773 F.2d 610, 613 (5th Cir. 1985) (discussing FED. R. CIV. P. 59(a)). We review that decision for abuse of discretion, "especially" where, as here, the motion "ha[s] been denied." Knight v. Texaco Inc., 786 F.2d 1296, 1299 (5th Cir. 1986) (citations omitted). Because the errors are sufficiently egregious, multiple, and prejudicial to pierce the usual deference, we order a new trial.
We begin with the most problematic evidence: the bribes paid by non-party J & J subsidiaries to the "henchmen" and "regime" of Saddam Hussein in Iraq. In 2011, J & J entered into a Deferred Prosecution Agreement ("DPA") in which it "admit[ted], accept[ed], and acknowledg[ed] that it [was] responsible for" violations of the Foreign Corrupt Practices Act committed by non-party affiliates. One of the alleged violations involved bribes by two such affiliates to the Iraqi government, then under Hussein's control. In the middle of trial, the court ordered DePuy to produce a Federal Rule of Civil Procedure 30(b)(6) corporate representative to testify before the jury at length about the DPA. Plaintiffs' counsel then mentioned it several times, including during closing arguments.
The district court allowed these repeated references to Hussein and the DPA because defendants had supposedly "opened the door" by eliciting testimony on their corporate culture and marketing practices. This justification is strained, given that J & J owns more than 265 companies in 60 countries, and the Iraqi portion of the DPA addresses conduct by non-party subsidiaries.
"[T]he Rules of Evidence do not simply evaporate when one party opens the door on an issue."
The Rule 404(b) question lends itself to just one reasonable resolution. During closing arguments, Lanier suggested unequivocally that the jury treat the DPA not as impeachment, nor even as otherwise-inadmissible rebuttal evidence offered "curatively,"
Indeed. Lanier tainted the result by inviting the jury to infer guilt based on no more than prior bad acts, in direct contravention of Rule 404(b)(1). That alone provides grounds for a new trial.
Plaintiffs insist the DPA was admissible because it went to defendants' "intent, knowledge, plan, motive, and opportunity." But that suggestion is as dubious as it is vague. The record makes plain that the DPA and Hussein were "wafted before the jury to trigger their punitive instinct."
A general instruction at the close of trial was "grossly inadequate under the circumstances." McPhee, 731 F.2d at 1153. Lanier's statement was among "the last thing[s] the jury heard before retiring to deliberate," United States v. Polasek, 162 F.3d 878, 887 (5th Cir. 1998), and a colossal verdict followed. Because the taint is unmistakable, the verdict cannot stand.
Lanier coupled his impermissible references to Saddam Hussein with hearsay allegations of race discrimination. While questioning DePuy's president, Andrew Ekdahl, Lanier read the following excerpts from a resignation letter by a former DePuy employee: "I will never understand the humor in a joke about me eating KFC, and yet blamed for my inability to forge relation-ships with people that find this humor funny. I'm tired of `over-hearing' the word `N-i-g-g-e-r' or words like it...." And, to quote counsel, "she goes on and on and on." Before the letter was read, defendants objected on hearsay and Federal Rule of Evidence 403 grounds and, after a lunch recess, moved for a mistrial. The court overruled the objections and denied the motion. As with Hussein, reference to a "filthy ... racial email" resurfaced once more during Lanier's closing argument, in his explanation of why J & J had participated in Ultamet's design and knew of its defects.
Plaintiffs again suggest defendants placed their character in issue by describing DePuy as an employee-friendly workplace. See Croce v. Bromley Corp., 623 F.2d 1084, 1092-93 (5th Cir. 1980). But even if that were so, the letter is valid impeachment only if introduced to prove the matter asserted: that racism infected DePuy's workplace culture. That is impermissible hearsay.
Plaintiffs posit that the letter was admissible under Federal Rule of Evidence 801(d)(2)(D), as a statement by an employee on a matter within the scope of employment. But Rule 801(d)(2)(D) does not apply to resignation letters, where the employee is no longer "inhibited by [his] relationship with the principal." Young v.
In their companion appeal,
The story begins in August 2015, when, in preparation for the second bellwether trial (Aoki), plaintiffs' counsel made expert disclosures listing Morrey Sr. and Morrey Jr. as expert witnesses "who ha[v]e not been retained or specially employed to provide expert testimony in this litigation."
The Aoki trial began January 11, 2016. Plaintiffs claim Morrey Sr. first agreed, and was called on, to testify two weeks after the trial had already begun.
Morrey Sr. was a compelling witness. He walked the jury through the history of MoP and MoM designs and explained that he used MoP, a safer alternative, on all his patients, including Billy Graham and former-President George H.W. Bush. During both the direct and redirect, Lanier repeatedly emphasized Morrey Sr.'s independence — reflected in his peer-reviewed work, royalty-collection practices, and continuing-education lectures — and contrasted that independence with the purportedly biased and self-interested work of DePuy's doctors.
His son, Morrey Jr., also an orthopaedic surgeon, performed Greer's revision surgery and evaluated Klusmann. Before Morrey Jr.'s testimony, defendants moved to exclude any testimony that would exceed his role as a treating physician. During arguments on the motion, Lanier emphasized how "very important" it was "for the Court to know and the record to reflect that Dr. Morrey was properly and
Long after the Morreys had exited the scene, Lanier reminded the jury of their compelling pro bono testimony, which he contrasted repeatedly with the "bought testimony" of defendants' paid experts. For example, when defense expert pathologist Scott Nelson claimed he was compensated "like all experts," Lanier seized the opportunity: "Dr. Matt Morrey wasn't compensated. Bernard Morrey wasn't compensated.... For him to say —." The court cut short and quickly sustained the objection. And again on cross, Lanier returned to the subject, reminding the jury that "Dr. Morrey, Sr.... the one that put in President Bush's metal-on-poly hips ... came and testified here, on his own." Additionally, the Morreys featured prominently in Lanier's closing statement: "Dr. Morrey senior, no expense coming to this courtroom, not a paid witness." And again:
The jury was instructed that it could "consider any bias evidence that the expert witness has been or will be paid for ... reviewing the case and testifying." As between "real life" and "bought testimony," it chose the former by a margin of $502 million.
But that choice was a false one, manufactured entirely by Lanier. During preparation for the third bellwether trial, details emerged suggesting that (a) Morrey Sr. had directed a $10,000 donation to his alma mater before trial, (b) Morrey Jr. had expected compensation from the start, and (c) both received sizeable sums after the verdict. The revelations began when plaintiffs' counsel chose to bring back the Morreys and redesignate them as traditional expert witnesses for the next trial. After shifting designations, plaintiffs produced two letters from Lanier, both dated April 7, 2016, thanking the Morreys for their "pro bono" testimony at the Aoki trial and enclosing generous checks — $35,000 to Morrey Sr. and $30,000 to Morrey Jr.
The checks raised red flags. And so defendants' counsel questioned Morrey Sr. during a deposition about whether he had received "any other compensation" for his testimony. His reply revealed, for the first time, the existence of the donation: "[Lanier and I] had a preliminary discussion, and a check was given to a charitable organization[,]... St. Rita's Catholic School in Fort Worth."
A similarly striking revelation emerged during Morrey Jr.'s deposition. He told defendants' counsel that he had expected payment from the start and had even inquired of plaintiffs' counsel about how to receive payment. Rather than rebuffing that request as inappropriate, plaintiffs' team told Morrey Jr. "don't worry about
Misrepresentations in hand, defendants moved for relief from judgment under Rule 60(b)(3), which affords redress in cases of "fraud ..., misrepresentation, or misconduct." FED. R. CIV. P. 60(b)(3). The district court denied the motion. It found no "agreement for compensation" at the time of trial; and it reasoned that, regardless, defendants had "not shown how evidence of [p]laintiffs' experts receiving a fraction of the compensation of [d]efendants' experts would have produced a different result at trial."
Defendants had a heavy burden, in the district court, to show by clear and convincing evidence that plaintiffs had engaged in misrepresentation that prevented defendants from fully and fairly presenting their case. Wilson v. Thompson, 638 F.2d 801, 804 (5th Cir. Unit B 1981). Our review is doubly deferential: We consider the trial court's factual findings to the contrary for clear error, id., and we reverse only if its clear-error judgment constitutes abuse of discretion, Hesling v. CSX Transp., Inc., 396 F.3d 632, 638 (5th Cir. 2005). This is the rare case in which counsel's deceptions were sufficiently obvious, egregious, and impactful to penetrate the layers of deference that would ordinarily shield against reversal.
The district court misstated the substantive test under Rule 60(b)(3). The inquiry is not whether the misrepresentation altered the result,
Now, to the question whether Lanier, knowingly or unknowingly, misled the jury in representing repeatedly that the Morreys had neither pecuniary interest nor motive in testifying. The facts speak pellucidly: The pre-trial donation check, Morrey Jr.'s expectation of compensation, and the post-trial payments to both doctors are individually troubling, collectively devastating.
Consider first the check to St. Rita's. In December, Lanier and Morrey Sr. met at the latter's house, they discussed the contents of his testimony, and Lanier made a donation to a charity of Morrey Sr.'s
In his defense, Lanier asserts the date of the donation "confirms [it] was a `thank you' for time spent with [plaintiffs' counsel] rather than a promise by [Lanier] to make a charitable contribution in exchange for Dr. Morrey's testimony." Before interrogating this story, let us speak plainly: Lawyers cannot engage with a favorable expert, pay him "for his time," then invite him to testify as a purportedly "non-retained" neutral party. That is deception, plain and simple. And to follow that up with post-trial "thank you" check merely compounds the professional indiscretion.
As for counsel's explanation, we cannot rule out the possibility Lanier believes what he says. But our inquiry turns on the various actors' conduct and what it reasonably suggests, rather than self-serving ex-post statements as to state of mind. A lawyer would not make a $10,000 donation to an expert's charity of choice — a "gift" for his time — without realizing the "gift" would likely induce subsequent testimony.
Granted, the record includes no evidence that Lanier stated expressly that the donation came with strings attached. But sometimes, in matters of persuasion, what goes without saying is best left unsaid. Take Lanier's post-trial checks. At oral argument, he acknowledged those thank-you payments were designed to induce the Morreys to testify at the next bellwether trial, despite never expressly making that request. The pattern leaves little doubt about the desired effects of the donation.
Morrey Jr.'s expectation of payment is equally troubling. Lanier claims Morrey Jr. did not necessarily expect payment "by the Plaintiffs," and even if he had, Lanier and crew were not "mind-readers" and cannot be expected to have divined Morrey Jr.'s secret wishes. Such suggestions require a suspension of common sense. As Morrey Jr.'s deposition makes clear, his expectation of payment derived from his intuitive understanding that expert witnesses are entitled to payment for their services. That intuition led him to inquire about payment with the plaintiffs, the parties that solicited and directly benefited from his services.
As for "mind reading," plaintiffs' counsel has it backward: This is a free-market
Finally, the deceptions obviously prevented defendants from "fully and fairly" defending themselves. See Rozier, 573 F.2d at 1339. Lanier emphasized to the court the "importan[ce]" of Drs. Morreys' pro bono testimony, and Lanier repeatedly leveraged the false contrast between defendants' paid mercenaries and plaintiffs' unpaid altruists to his clients' advantage. At the least, disclosure would have enabled defendants to try to impeach the Morreys with evidence of compensation.
DePuy is entitled to JMOL on Greer's and Peterson's defective marketing claims, and J & J is entitled to JMOL on all plaintiffs' aiding-and-abetting claims. The remaining claims avoid JMOL, though a new trial is required for the district court's serious evidentiary errors and counsel's misrepresentations. The judgments are REVERSED in part, and the judgment and the order denying Rule 60(b)(3) relief are VACATED, and the remaining claims are REMANDED for a new trial consistent with this opinion.
Jackson v. Johns-Manville Sales Corp., 781 F.2d 394, 397 (5th Cir. 1986) (en banc) (quotation and alterations omitted). As a practical matter, our inquiry turns on the following predictive indicia:
Centennial Ins. Co. v. Ryder Truck Rental, Inc., 149 F.3d 378, 382 (5th Cir. 1998) (citations omitted).
Put differently, plastic elimination was only the means, never the functional endgame. And though plaintiffs must do more than show that MoP has "the same general purpose as the allegedly defective product," Brockert, 287 S.W.3d at 770, the facts of Brockert show that performing the defective product's basic function, while simultaneously reducing the probability of a specific side effect, is sufficiently particularized for the purposes of alternative-design analysis, see id. at 769-70; see also RESTATEMENT (THIRD) OF TORTS: Products Liability § 2, cmt. f, illustration 8 (explaining that when a defendant markets a new television antenna that utilizes the electrical system in the buyer's home, and "improves reception compared with traditional television antennas, but also introduces significant risks of electrical shock and electrocution," the plaintiff may point to "traditional television antennas" as a reasonable alternative design and is "not confined to offering variations of television antennas that rely on electrical wiring systems" because the novel wiring method is "merely a means of achieving the objective of improved television reception" (emphasis added)).
Question 2 asked, "Was there a defect in the warnings at the time the Pinnacle Ultamet Hip Implant left the possession of DePuy Orthopaedics, Inc....?"
As a general matter, unit-of-time arguments like this one are impermissible because they can lead the jury to "believ[e] that the determination of a proper award for ... pain and suffering is a matter of precise and accurate determination and not, as it really is, a matter to be left to the jury's determination, uninfluenced by arguments and charts." Foradori v. Harris, 523 F.3d 477, 512 (5th Cir. 2008) (quotation omitted). Lanier's reference to expert fees was meant simultaneously to activate the jury's passions and to anchor their minds to a salient, inflated, and irrelevant dollar figure. The inflammatory benchmark, bearing no rational relation to plaintiffs' injuries, easily amplified the risk of "an excessive verdict." Westbrook v. Gen. Tire & Rubber Co., 754 F.2d 1233, 1240 (5th Cir. 1985). The argument was "design[ed] to mislead," Foradori, 523 F.3d at 512, and tainted the verdict that followed.
Plaintiffs urge that the district court could cure the problem by offering a "specific cautionary instruction" that the unit-of-time claim reflects the lawyer's private opinion, "which the jury is free to disregard." Colburn v. Bunge Towing, Inc., 883 F.2d 372, 377 (5th Cir. 1989). In Colburn, we vacated damages because counsel had presented "a `unit of time' argument without a specific cautionary instruction," raising a "substantial and ineradicable doubt as to whether or not the jury has been properly guided in its deliberations." Id. at 377-78 (quotation omitted). Here, the record reveals only a general instruction that "any statement or arguments made by the lawyers are not evidence and are not instructions on the law." Colburn explicitly deemed this inadequate. Id.
We decline to address defendants' remaining evidentiary challenges regarding DePuy's 2007 DPA, the Doubt is Their Product book, cancer and suicide, the "thousands" of pending Ultamet suits, and unrelated transvaginal mesh suits. The district court should weigh carefully the applicability of Rules 403 and 404(b) and, where necessary, should issue specific instructions to avoid undue prejudice. See, e.g., Croce, 623 F.2d at 1092.
To the first, Texas courts have uniformly held that Section 41.008 does not violate the "open courts" provision. See Waste Disposal Ctr., Inc. v. Larson, 74 S.W.3d 578, 588 (Tex. App.-Corpus Christi 2002, pet. denied) ("[T]he open courts provision of the Texas Constitution serves to protect only private rights and interests, [whereas] the statutory cap on exemplary damages affects only public punishment interests[.]" (citation omitted)); Hall v. Diamond Shamrock Ref. Co., L.P., 82 S.W.3d 5, 22 (Tex. App.-San Antonio 2001) (same), rev'd on other grounds, 168 S.W.3d 164 (Tex. 2005); cf. Seminole Pipeline Co. v. Broad Leaf Partners, Inc., 979 S.W.2d 730, 758 (Tex. App.-Houston [14th Dist.] 1998, no pet.). To the second, plaintiffs suggest the cap's differentiation between economic and non-economic injury effectively discriminates based on wealth. But even if that were so, the law need only survive rational-basis review, Smith v. Botsford Gen. Hosp., 419 F.3d 513, 519-20 (6th Cir. 2005), and Section 41.008 does so by injecting predictability into exemplary damages awards and preempting potentially unconstitutional awards. Cf. State Farm Mut. Auto. Ins. Co. v. Campbell, 538 U.S. 408, 426, 123 S.Ct. 1513, 155 L.Ed.2d 585 (2003); BMW of N. Am., Inc. v. Gore, 517 U.S. 559, 574-75, 116 S.Ct. 1589, 134 L.Ed.2d 809 (1996) (recognizing constitutional limits on a punitive-damages award). The cross-appeal fails.
