Why Courts Should Exclude Warning - DRI Today

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On The Record 

Recognizing What Is Important 

A Few Things on My Mind 

By R. Matthew Cairns, DRI Immediate Past President 

This column is most often filled with a discussion of the 

great benefits and accomplishments of DRI, and rightly 

so. We are the largest and most visible organization of 

defense attorneys in the world for good reason. Similarly, 

competitors for our membership seek to emulate our 

educational offerings and other benefits because there 

are none better. So rather than bore you with another 

essay on what you already know because you have made 

the informed decision to be part of this great organization, 

I want to write my final column as a DRI Officer 

about a few things that have been on my mind of late. 

Civil Discourse 

Depending on the time of day, 75 percent of television 

commercials in New Hampshire involve the race for 

president, and 95 percent of those ads are negative (an 

unscientific analysis determined by me and my dog Marcus 

while lying on the couch). Local and national politicians 

spend more time pointing fingers at each other 

than trying to reach consensus on the important issues 

to move our nation forward. Judges who rule against 

someone or some strongly held position in a case are 

suddenly activist judges who deserve to be vilified and 

removed from the bench. Clients increasingly expect 

lawyers to be attack dog litigators because that is what 

they see work on TV. This all needs to change. We need 

to model good behavior for our children, our clients, 

our opponents, and the rest of the world. Civility does 

not mean weakness. I submit that it means doing your 

job or behaving in a way that respects the person you are 

dealing with and the forum in which you are acting. You 

do not need to agree with everyone or everything, and 

you should stand up for your beliefs and your client. But 

I would hope that we could all do that in a civil way. The 

person who behaves civilly may not win every fight, but 

will be respected for his or her behavior. And that is a 

brand all of us should want to wear. 

Mentoring 

Recently, I tried three cases in six weeks, against three 

very different sets of lawyers. In each, I had the opportunity 

to work with different lawyers from my office on our 

side of the case and on one with a lawyer from a different 

state. It became clear by the third case that young lawyers 

who had the good fortune of being associated with 

more experienced lawyers were better prepared for the 

courtroom and more civil in their dealings with opposing 

counsel. Senior lawyers are often very busy with case 

strategy, depositions of clients and experts, and business 

development. However, from personal experience, we 

need to make time for mentoring. First, it is vital to the 

future of our law firms. Second, it is vital to creating a 

culture of excellent advocacy and civility at the bar. And 

third, it is so welcomed and appreciated by the mentees 

that you can’t help but feel good afterwards. Justice Paul 

De Muniz of Oregon instituted mandatory mentoring for 

all new lawyers in Oregon, with training for the mentors. 

It has been a resounding success by all reports. Shouldn’t 

DRI and all of us be doing more mentoring 

Fitness 

As painful as this might be for many of us, we need to 

try to remain (or get) fit. I am not talking about six minute 

mile or 200 push-ups or downward facing dog for one 

hour fit. I am talking about physically and emotionally 

fit. My recent run of trials came right on the heels of a 

slight hamstring tear. The tear knocked me out of a halfmarathon 

and out of running for almost two months, 

and gave me a (bad) excuse for not exercising during 

trial. In addition to some added pounds, I found that I 

was tired earlier in the day and had less energy for the 

late nights that trial requires. I also found that the lack 

of energy carried over to not being able to do pleasure 

reading (because I would instantly fall asleep) or not 

being motivated to do necessary yard work. It became a 

downward spiral of fatigue, beating myself up for being 

tired and out of shape, and fear of how long it would 

take to get back in shape. I have turned that around and 

am working on increasing my fitness both physically 

and mentally. Fitness of body and mind is like gas in 

the tank—when it gets to empty, there is nowhere to go, 

but if you keep filling it up, even though it will go down 

from time to time, you will be able to get where you want 

to go, and then go beyond. Don’t get so focused on the 

end point that you forget what you need to do for yourself 

to get there. 

Love 

Narcissism may work for some people, but not for me. 

The love of my friends and my family is what keeps me 

going throughout the day. And for that, I love them. 

Thank you for the opportunity to have served. 

For The Defense ■ October 2012 ■ 1

DRI—The Voice 

of the Defense Bar 

Vol. 54, No. 10 October 2012 

President 

Henry M. Sneath 

Pittsburgh, Pennsylvania 

Immediate Past President R. Matthew Cairns 

Concord, New Hampshire 

President-Elect 

Mary Massaron Ross 

Detroit, Michigan 

In This Issue 

1 On The Record 

Recognizing What Is Important: A Few Things on My Mind 

By R. Matthew Cairns, DRI Immediate Past President 

4 DRI News 

The DRI Center for Law and Public Policy: Defining the Voice of Civil Justice • DRI 

Calendar • Members on the Move • DRI’s Southwest Leaders Convene in NOLA 

10 Affiliates in Action 

Sister Organizations Elect New Leadership for 2012–2013 

SLDOs: Checking in with IL, MN and MS 

1st Vice President 

2nd Vice President 

Secretary-Treasurer 

Executive Director 

J. Michael Weston 

Cedar Rapids, Iowa 

John Parker Sweeney 

Baltimore, Maryland 

Laura E. Proctor 

Nashville, Tennessee 

John R. Kouris 

Drug and Medical Device 

14 From the Chair 

More than Ever We 

Need You Involved 

By Scott W. Sayler 

16 Prescription Medication Cases 

The Case Against Negligent 

Design Claims 

By Geoffrey M. Drake and Victoria C. Smith 

34 Anomalies and Implications 

The First Amendment and 

“Off-Label” Promotion 

By Ralph S. Tyler, Thomasina E. Poirot, 

Andrea S. Andrews and Bruce R. Parker 

39 Some Unsettled Issues Linger 

Mensing: Effects and Opportunities 

By Edward W. Gerecke and David J. Walz 

Deputy Executive Director Tyler Howes 

Director of Publications Jay Ludlam 

Editor 

Michelle Parrini 

Production Manager Julia Bergerud 

22 Biosimilars 

The Next Big Thing 

By Henninger S. Bullock and Andrew J. Calica 

30 FDA Opinion Letters 

Why Courts Should Exclude Warning, 

“Untitled,” and Advisory Letters 

By Nancy M. Erfle and Andrew J. Lee 

44 A Powerful Tool to Wield Early 

How to Argue Medical 

Device Preemption 

By Andrew Tauber, Max Heerman 

and Brian Wong 

Contributing Editor 

Marge Motluck 

Life, Health and Disability 

Advertising 

Representative 

Laurie P. Mokry 

For The Defense, October 2012, Vol. 54, No. 10 (ISSN 

0015-6884). Copyright ©2012, DRI. All rights reserved. 

Published monthly by DRI, 55 West Monroe Street ~ 

Suite 2000, Chicago, Illinois 60603. Telephone: (312) 

795-1101. Fax: (312) 795-0747. 

Periodicals postage paid at Chicago, Illinois, and at 

additional mailing offices. Subscription price is $65.00 

per year, and, for DRI members, is included in the membership 

dues. Individual copies are $7.00 for DRI members 

and $12.00 for non-members, plus postage and 

handling. 

POSTMASTER: Send address changes to For The 

Defense, DRI, 55 West Monroe Street ~ Suite 2000, Chicago, 

Illinois 60603. 

Correspondence and manuscripts should be sent to 

the Editor. 

All views, opinions and conclusions expressed in this 

magazine are those of the authors, and do not necessarily 

reflect the opinion and/or policy of DRI and its 

leadership. 

52 From the Chair 

Many Accomplishments, 

but Continued Growth 

By Gary Schuman 

54 Who Pressed “Enter,” Anyway 

Enforcing Contracts in 

an Electronic World 

By Michelle Thurber Czapski 

and Matthew R. Rechtien 

60 The Vexation of Conflicting Claims 

Rule and Statutory Interpleaders 

in Federal Court 

By E. Ford Stephens 

65 Social Security Disability Decisions 

Should Disability Insurers 

Be Concerned 

By Eric P. Mathisen 

and Kimberly A. Jones 

70 Discovery in ERISA Cases 

Did Amara Change the Landscape 

By Kathleen S. Massing and Russell S. Buhite 

74 ERISA Section 502(a)(3) 

Equitable Defenses and 

“Appropriate Equitable Relief” 

By Aaron E. Pohlmann 

79 How to Apply the Commonality 

Requirement 

Wal-Mart Stores v. Dukes— 

After the Hype 

By Michael Kentoff, Robin 

Sanders and Dawn Williams 

85 Who Is to Blame for 

Enrollment Deficiencies 

Evidence of Insurability and 

Conversion Claims 

By Joshua Bachrach, Edna S. Kersting 

and Russell Birner 

92 Advocates and New Members 

2 ■ For The Defense ■ October 2012

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© 2012 Thomson Reuters L-375076/5-12

DRI News 

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The DRI Center for Law and Public Policy 

Defining the Voice of Civil Justice 

By Marc E. Williams 

In its more than 50 years of existence, DRI has 

repeatedly faced issues regarding civil justice that 

were the subject of national debate. And for the largest 

organization of lawyers engaged in defending the 

interests of businesses and individuals in civil litigation, 

the question has consistently 

been, “What is our role” When I 

joined the DRI board in 2003, one 

of my first assignments was to lead 

a discussion at a meeting of the DRI 

state representatives on our position 

regarding the tort reform wave that was raging 

in Congress and in state legislatures across our country. 

The conclusion reached in that discussion, as well 

as similar discussions by the DRI board, was that it 

is difficult to find a consensus among our members 

as to the propriety of specific civil justice reform proposals. 

But one point was clear: to the extent that DRI 

had a voice in any of these debates, it had to be as an 

advocate for the preservation of the civil justice system 

and that our focus had to be on reforms that 

made the system fairer to all parties. Our guiding 

star had to be change that resulted in a better functioning 

system of civil justice. 

Over the years DRI worked on these issues and 

put in place programs to identify the issues in the 

national debate on civil justice on which we should 

be engaged. Ultimately, that effort at outreach led us 

to consider whether we should expand our efforts to 

become a true “thought leader” on these issues. To 

do so, however, would require a significant commitment 

from the organization in terms of staff, volunteer, 

and financial resources. Under the leadership 

of the DRI Executive Committee, led by President 

Henry Sneath, the decision was made this year to 

launch the DRI Center for Law and 

Public Policy. As Henry described 

on these pages last month, the Center 

is a consolidation of DRI’s public 

advocacy efforts, and is intended to 

provide a framework for the public 

policy discussions that we undertake. I was honored 

to be asked to be the first chair of the Center. By combining 

the resources of the Public Policy Committee 

(chaired by DRI Director Bruce Barze), the Amicus 

Committee (chaired by Scott Smith, Immediate Past 

Chair of DRI’s Appellate Advocacy Committee), 

and the newly formed Public Education Committee 

(chaired by former DRI Director Russ Myles), we 

have built an organizational structure that will allow 

us to review, vet, and consider the propriety of DRI 

speaking out on the myriad of civil justice issues that 

percolate up from our members. And once a decision 

is made to address an issue, we can utilize resources 

from the DRI staff and the Public Education Committee 

to craft a strategy to optimize the impact on 

our members and the public regarding our position. 

Additionally, the Center will allow us to maximize 

■■ 

Marc E. Williams is the managing partner in Nelson Mullins Riley & Scarborough’s Huntington, 

West Virginia, office. His practice includes experience in the trial and appellate levels of class 

actions and other mass torts, as well as complex commercial litigation, employment disputes, 

toxic torts, consumer fraud, drug and medical device litigation, intellectual property and trade 

secrets, and environmental claims. Mr. Williams is a past president of DRI (2008–2009) and chair 

of the DRI Center for Law and Public Policy. 

Diversity and Inclusion in DRI: A Statement of Principle 

DRI is the largest international membership organization of attorneys defending the 

interests of business and individuals in civil litigation. 

Diversity is a core value at DRI. Indeed, diversity is fundamental to the success of the 

organization, and we seek out and embrace the innumerable benefits and contributions 

that the perspectives, backgrounds, cultures, and life experiences a diverse membership provides. 

Inclusiveness is the chief means to increase the diversity of DRI’s membership and leadership positions. DRI’s 

members and potential leaders are often also members and leaders of other defense organizations. Accordingly, 

DRI encourages all national, state, and local defense organizations to promote diversity and inclusion in their 

membership and leadership. 


Calendar 

Upcoming events 

of interest to 

DRI members and 

other defense lawyers 

For more information 

about any of these events, 

call DRI Customer Service 

at (312) 795-1101, 

or visit our website at 

www.dri.org. 

October 24–28 DRI Annual Meeting New Orleans 

November 7 Professional Liability 101: FINRA Arbitrations Webcast 

Strike First, Strike Fast: Making Injunctions a 

Webcast 

Part of Your Early Litigation Strategy 

November 8–9 Asbestos Medicine Seminar Miami Beach 

November 13 Ethics Matters Webcast 

November 29 Effectively Defending Rule 30(b)(6) Deponents in Bad Faith Cases Webcast 

December 6–7 Insurance Coverage and Practice Symposium New York City 

December 6–7 Professional Liability Seminar New York City 

2013 

November 8 

DRI Calendar 

January 8 Professional Liability 101: Insurance Producer Liability 

January 24–25 Fire Science and Litigation Seminar Scottsdale, AZ 

January 31– Civil Rights and Governmental Tort Liability Seminar 

Phoenix 

February 1 

February 5 Professional Liability 101: Insurance Coverage 

February 28– Toxic Torts and Environmental Law Seminar 

New Orleans 

March 1 

March 14–15 Women in the Law Seminar Miami Beach 

March 20–22 Trial Tactics Seminar Las Vegas 

March 21–22 Medical Liability and Health Care Law Seminar Miami Beach 

April 3–5 Product Liability Conference National Harbor, MD 

April 10–12 Insurance Coverage and Claims Institute Chicago 

April 24–26 Life, Health, Disability and ERISA Claims Seminar Boston 

the impact of our ongoing amicus efforts. 

The most frequent way in which DRI takes 

public positions regarding important civil 

justice issues is through our Amicus Committee 

filings. Over the last five years, DRI 

has made a significant commitment to 

expand our amicus efforts. By bringing 

the best appellate advocates in the organization 

to the committee, by committing 

additional financial resources to the 

effort, and by focusing on being a voice in 

the cases being argued before the United 

States Supreme Court, we have now become 

the most frequent amici in SCOTUS cases 

among all of the business- and defensefocused 

organizations in the country. This 

effort has also allowed us to strengthen our 

relationships with some of the largest firms 

in the country by hiring their Supreme 

Court practice groups to prepare our briefs. 

As the Center’s first project, we commissioned 

the first annual DRI National Poll 

on the Civil Justice System. This is an independent, 

nonpartisan, national telephone 

survey conducted in August 2012 among 

a scientific random sample of adults. The 

poll was conducted by Gary Langer, former 

head of polling for ABC News. The 

poll was the first effort by DRI to identify 

juror’s attitudes towards our clients and 

our cases. We hoped that the results would 

provide a jumping- off point for our educational 

efforts in the coming year. Some of 

the findings from the survey include: 

• 41 percent of Americans are not confident 

that the civil law system is fair 

and just. Only nine percent are very 

confident. 

• In a suit pitting a corporation against an 

individual, 54 percent would be inclined 

to favor individuals. Eleven percent 

would favor corporations. And only 23 

percent volunteer that they would be 

neutral! 

• 38 percent of American adults, equivalent 

to 90 million people, have been 

invited to participate in class action 

lawsuits. 

• 81 percent of former jurors say the experience 

was a positive one. 

The full poll results and data analysis 

can be found at dri.org. The data revealed 

in the poll adds to the pool of knowledge 

regarding the civil justice system and may 

suggest where reforms or public education 

are needed. In order to track the progress 

that we make on public education efforts, 

and to see how public perceptions change 

over time, we intend to continue the poll on 

an annual basis. 

As we go forward with the Center, we 

will be looking for opportunities for DRI 

Stay connected… 



Members on the Move 

The law firm of Gallivan, White & Boyd, 

P.A., is pleased to announce that H. Mills 

Gallivan has been elected as a senior director 

to the board of the Federation of Defense 

and Corporate Counsel (FDCC). Mr. 

Gallivan will serve a one year term as a senior 

director of FDCC, beginning this year. 

This election continues Mr. Gallivan’s role 

as a leader in the community and the legal 

profession. His long list of service includes 

president of the South Carolina Defense 

Trial Attorneys’ Association; president of 

the Upstate S.C. American Inn of Court; 

commissioner for City of Greenville Planning 

Commission; and president of Rotary 

Club of Greenville Foundation. He was also 

recently elected president of National Foundation 

for Judicial Excellence. Mr. Gallivan 

has previously received the DRI Exceptional 

Performance Citation and was the 2010 recipient 

of the South Carolina Defense Trial 

Attorneys’ Association’s prestigious Robert 

Hemphill Award. He is perennially featured 

as one of the Best Lawyers in America and a 

South Carolina Super Lawyer. Mr. Gallivan 

focuses his practice on alternative dispute 

resolution, workplace practices, administrative 

law, and negotiation strategies. 

Los Angeles lawyer J. Michael Webster, a 

member of FDCC and LCA, formerly a partner 

with Silver & Freedman APLC, which 

closed its doors after 37 years, formed Webster 

Kaplan Sprunger LLP in March of 2012 

and will serve as the firm’s managing partner, 

with offices in Century City and El Segundo, 

California. Mr. Webster will head 

up the firm’s product liability/risk management 

and family law practice groups. The 

firm’s other practice areas will be business 

and transactions; mergers and acquisitions; 

real estate; labor and employment; commercial 

litigation; and dispute resolution. 

David B. Thomas, Philip J. Combs, 

Robert H. Akers and Christopher S. 

Dodrill are among 11 attorneys pleased to 

announce the formation of Thomas Combs 

& Spann, a litigation boutique located in 

Charleston, West Virginia, that defends 

Goldberg Segalla Receives National Recognition from MCCA for Diversity Initiative 

Goldberg Segalla LLP is proud to announce 

that it received the George B. Vashon Innovator 

Award from the Minority Corporate Counsel 

Association (MCCA) in the category of 

Pipeline Initiatives. Joseph M. Hanna, a partner 

at the law firm and Chair of its Diversity 

Task Force, accepted the award at the MCCA 

Pathways to Diversity Conference Innovators 

Reception, held September 10 at the New 

York Marriott Marquis. The Innovator Award 

recognized Goldberg Segalla and Mr. Hanna 

for spearheading the creation of a diversityfocused 

internship program in collaboration 

with the Minority Bar Association of Western 

New York (MBAWNY) and the University 

6 ■ For The Defense ■ October 2012 

Joseph M. 

Hanna of Goldberg 

Segalla 

(right) accepts the 

George B. Vashon 

Innovator Award 

from Joseph West, 

President and CEO 

of the Minority 

Corporate Counsel 

Association. 

(Photo courtesy of 

the Minority Corporate 

Counsel 

Association.) 

at Buffalo Law School. The program, begun 

in 2011 while Mr. Hanna was president of the 

MBAWNY, provides opportunities for minority 

UB law students to gain firsthand experience 

in the legal system and to develop greater 

knowledge, business savvy, and networking 

connections that are critical for success. 

So far, the program has placed more than 50 

students in clerkships in Western New York 

courts as well as in several area law firms. 

“Our firm was proud to be the first law 

firm to welcome minority law clerks through 

this program in the summer of 2011, and we 

are happy to see how it has grown to benefit 

so many in our community,” said Richard 

J. Cohen, Goldberg Segalla’s managing 

partner. “We are honored by this recognition 

and look forward to continuing our efforts to 

strengthen diversity in the legal profession.” 

Mr. Hanna said, “We are humbled and proud 

to receive such an honor from the MCCA for 

this program, which would not have been 

possible without the critical partnership and 

sincere dedication of the Minority Bar Association 

of Western New York and the University 

at Buffalo Law School. Research shows,” 

Mr. Hanna continued, “that minorities are 

less likely to receive the often coveted judicial 

clerkships or associate positions in law 

firms following law school, and they are significantly 

less likely to advance to high-level 

jobs such as partner or corporate general 

counsel. Our hope was to eliminate those 

barriers by creating a program that would 

arm participants with resources that will help 

make their qualifications undeniable and prepare 

them for success in the highly competitive 

legal job market.” 

The mission of the Minority Corporate 

Counsel Association is to advance the hiring, 

retention, and promotion of diverse attorneys 

in legal departments and the law firms 

that serve them. MCCA furthers its mission 

by publishing research on achieving diversity 

and best practices in the legal profession, 

honoring innovative diversity programs, and 

assisting diverse law students through the 

Lloyd M. Johnson, Jr. Scholarship Program.


product liability, toxic tort, and commercial 

litigation. The firm is currently serving 

as counsel in the Pelvic Mesh MDL sited in 

Charleston, West Virginia. 

Keller and Heckman LLP is pleased to 

announce that Robert S. Niemann has 

joined the law firm as partner in its San 

Francisco office. Mr. Niemann practices 

civil trial litigation with emphasis in the 

areas of commercial and business litigation, 

product liability, professional liability, 

unfair business practices, intellectual property 

and trade secrets, environmental/toxic 

torts, premises liability, personal injury, 

wrongful death cases, and alternative dispute 

resolution. 

Jeanne Vos has joined Maraziti, Falcon 

& Healey LLP in Short Hills, New Jersey, 

as of counsel, specializing in environmental 

law and litigation. Ms. Vos is a member 

of the DRI Toxic Torts and Environmental 

Law Committee and a past president of the 

New Jersey Defense Association. 

Hawkins Parnell Thackston & Young 

LLP is pleased to announce the election 

of five new partners: Willie C. Ellis, Jr. 

(Atlanta); Julia Gowin (Los Angeles); Martin 

A. Levinson (Atlanta); Karen M. Volkman 

(St. Louis); and Claire C. Weglarz 

(Los Angeles). Over the last half century, 

Hawkins Parnell Thackson & Young has 

grown to include more than 125 lawyers in 

seven offices located in California, Georgia, 

Missouri, Texas, and West Virginia. HPTY 

attorneys represent some of America’s largest 

corporations, small local businesses, 

and individual clients in high risk litigation 

and business disputes across the country. 

John C. Trimble, managing partner of 

Lewis Wagner LLP in Indianapolis, has 

been named Best Lawyers 2013 Indianapolis 

Insurance Law Lawyer of the Year. 

After more than a quarter of a century in 

publication, Best Lawyers is designating 

“Lawyers of the Year” in high- profile legal 

specialties in large legal communities. Only 

a single lawyer in each specialty in each 

community is being honored as the “Lawyer 

of the Year.” Mr. Trimble maintains a 

practice that is dominated by catastrophic, 

complex, and class action litigation in the 

state and federal courts. He focuses much 

of his time on insurance coverage disputes, 

bad faith defense, lawyers and insurance 

agent malpractice, business litigation, and 

catastrophic damages caused by all types 

of casualty risks, including transportation, 

construction, product liability, and 

fires. He has also argued numerous appeals 

in the state and federal appellate courts as 

counsel for a party and as amicus counsel 

for lawyer and trade associations. Through 

the years, he has been admitted pro hac 

vice in more than 25 jurisdictions, and is 

frequently hired by out of state firms to 

serve as local counsel in Indiana. 

Alabama Governor Robert Bentley has 

re-appointed Mark Waggoner, an attorney 

in Hand Arendall’s Birmingham office, to 

serve on the Red Mountain Greenway and 

Recreational Area Commission for a six-year 

term. The commission is responsible for providing 

oversight for planning and operations 

for Red Mountain Park, located in Birmingham, 

Alabama. Mr. Waggoner focuses much 

of his practice on environmental protection 

and employment issues. He chaired the Alabama 

State Bar Environmental and Natural 

Resources Law Section from 2007–2008, 

and was a member of the Birmingham Bar 

Association’s Grievance Committee from 

2001–2004. He is a member of the DRI Employment 

and Labor Law Committee. Mr. 

Waggoner’s civic involvements have included 

serving on the Environmental Committee of 

the Birmingham Regional Chamber of Commerce, 

on the board of the Alabama Chapter 

of the National Multiple Sclerosis Society, 

and on the Board of Preschool Partners. 

Butler, Snow, O’Mara, Stevens & Cannada 

PLLC (Butler Snow) attorney Christy 

D. Jones has been inducted into the International 

Academy of Trial Lawyers (IATL). 

“This is a well- deserved honor for Christy, 

Pennsylvania Defense Institute (PDI) President Patrick Sweeney, DRI President Henry 

Sneath, and PDI Executive Director David Cole. 

DRI President Henry M. Sneath, a principal 

shareholder at the Pittsburgh business litigation, 

insurance coverage, and intellectual 

property boutique law firm Picadio Sneath 

Miller & Norton, P. C., was recently awarded 

the 2012 Pennsylvania Defense Counsel of 

the Year Award by the Pennsylvania Defense 

Institute (PDI at http://www.padefense. 

org/) at the organization’s annual meeting. 

The award is given annually to a PDI member 

who “best exemplifies the qualities of 

professionalism, dedication to the practice 

of law and promotion of the highest ideals of 

justice in the community.” Mr. Sneath’s law 

practice specializes in business, intellectual 

property, pharmaceutical, toxic tort and 

product liability, and insurance coverage litigation. 

He has been voted a Super Lawyer in 

Business and Intellectual Property Litigation 

and is recognized in Best Lawyers in America 

in several categories including business, 

patent, personal injury defense and legal 

malpractice litigation. He is also the editor of 

an intellectual property and technology blog 

at http://pitiptechblog.com/. 



and we are very proud of her many accomplishments,” 

said Butler Snow chairman 

Donald Clark, Jr. “She is a highly respected 

and successful trial lawyer who is valued 

both by our firm and our clients around 

the globe.” Practicing from the Ridgeland, 

Mississippi, office, Ms. Jones is chair of the 

firm’s Litigation Department and co-chair 

of the Pharmaceutical, Medical Device and 

Healthcare Industry Team. She focuses her 

practice on drug and medical device, product 

liability law, and mass torts. Ms. Jones has 

served as national trial counsel representing 

various multi- national corporations and has 

tried numerous bellwether cases throughout 

her career. She is a fellow of the American 

College of Trial Lawyers and is a past Regent 

of Region 6. She is also a Fellow of both 

the American Bar Foundation and the Mississippi 

Bar Foundation. The International 

Academy of Trial Lawyers limits membership 

to 500 fellows from the United States. 

The academy seeks out, identifies, acknowledges, 

and honors those who have achieved 

a career of excellence through demonstrated 

skill and ability in jury trials, trials before 

the court and appellate practice, and invites 

only lawyers who have attained the highest 

level of advocacy. 

J. Carter Thompson, of the law firm 

Baker, Donelson, Bearman, Caldwell & 

Berkowitz, PC, has been named to the International 

Who’s Who of Product Liability 

Defence Lawyers 2012. He is among only 

five Mississippi attorneys to be selected for 

inclusion in this list, which recognizes the 

world’s leading product liability defense 

lawyers based on feedback from clients 

and peer attorneys. A shareholder in his 

firm’s Jackson office, Mr. Thompson is 

the leader of the Product Liability and 

Mass Tort Group and former co-chair of 

the Drug, Device and Life Sciences Industry 

Group. He concentrates his practice in 

the national, regional and local defense of 

products liability matters, as well as drug 

and medical device, commercial and professional 

liability cases. Mr. Thompson is a 

fellow of the Litigation Counsel of America, 

a member of the Product Liability Advisory 

Council, and the program chair of the DRI 

Drug and Medical Device Committee. 

Wilkins Tipton, P.A., based in Jackson, 

Mississippi, with offices also in Tennessee, 

North Carolina, and Alabama, and Adelman 

Law Firm PLLC of Memphis, Tennessee, are 


pleased to announce the merger of their 

firms as part of a greater regional and national 

expansion. The merger and formation 

of the new firm will be effective January 1, 

2013. Wilkins Tipton P.A., through one of its 

co-founders, Senith Tipton, traces its roots 

back to 1978 and has developed into one of 

the premier litigation firms in the Southeast 

and beyond in the areas of insurance 

defense, workers’ compensation, premises 

liability, general negligence defense, product 

liability, automobile and trucking accidents, 

construction, and insurance coverage 

disputes. There has been intense growth in 

the past ten years in its medical malpractice 

and nursing home/long-term care practice 

groups, led by attorneys Carl Hagwood 

and Michael Phillips, who have successfully 

defended complex litigation throughout the 

country. Adelman Law Firm PLLC, founded 

by Rebecca Adelman in 2001, represents 

regional and national clients in the areas of 

insurance defense and business litigation 

and offers comprehensive professional liability 

services to the health care industry 

including nursing homes, assisted living 

facilities, hospitals, home health agencies, 

physicians, staffing organizations, medical 

directors, administrators, nurses and other 

providers and their insurers. The merger will 

allow the firm to extend its offices in Memphis 

and Nashville, Tennessee; Jackson and 

Greenville, Mississippi; Birmingham, Alabama; 

and Charlotte, North Carolina. Plans 

are to expand to Arkansas and to continue 

with measured growth to meet the needs of 

our diverse client base. 

Wilson Elser partner Thomas Tobin 

was recently elected northeast regional 

vice president of the Nation Association 

of Railroad Trial Counsel (NARTC). Mr. 

Tobin is co-chair of the firm’s product 

piability practice, chair of its railroad and 

e- discovery practices, and works in the 

firm’s New York metro region. He also 

serves on Wilson Elser’s executive committee. 

A member of the NARTC nearly 10 

years, Mr. Tobin has served on the organization’s 

executive committee for the past 

two years. In addition to DRI, he is a member 

of the ABA, the Society of Automobile 

Engineers, and the American Short Line 

and Regional Railroad Association. He 

presents and publishes frequently on a variety 

of topics including implied preemption, 

positive train control, National Transportation 

Safety Board, and Federal Railroad 

Administration investigations of rail accidents 

and e- discovery. 

James P. Hadden, director in the Philadelphia 

office of Maron Marvel Bradley 

& Anderson LLC was recently appointed 

to the board of the North Light Community 

Center. North Light Community Center 

is a multi- service, community based 

nonprofit organization founded in 1936. 

Its mission is to enable people of all ages in 

the community, especially those most in 

need, to reach their full potential as productive 

and responsible citizens through 

initiatives that support and enrich children, 

teens and families. 

Swanson Martin & Bell LLP partner 

Michael W. Drumke has been elected vice 

chair of the Tort Trial and Insurance Practice 

Section (TIPS) of the ABA for 2012– 

2013. His term commences a three-year 

leadership track as an ABA section officer. 

Mr. Drumke will become TIPS chair-elect 

in August 2013 and will serve as TIPS chair 

for a one-year term beginning in August 

2014. At SM&B LLP, Mr. Drumke focuses 

his practice on toxic torts litigation, product 

liability, class action defense, and commercial 

litigation and business disputes. He 

has represented clients in 18 states and the 

U.S. Virgin Islands. 

Reminger Co. LPA is proud to announce 

that William A. Meadows, a partner in the 

firm’s Cleveland office, has been honored as 

Best Lawyers “2013 Lawyer of the Year” in 

Medical Malpractice Law. Lawyers honored 

as “Lawyers of the Year” have received particularly 

high ratings in these surveys by 

earning a high level of respect among their 

peers for their professionalism, ability and 

integrity. Only a single lawyer in each specialty 

in each community is honored as 

the “Lawyer of the Year. For more than 25 

years, Mr. Meadows has been dedicated to 

the defense of hospitals, physicians, nurses, 

and virtually every other category of health 

care provider. Throughout his career he has 

successfully defended hundreds of lawsuits, 

mostly involving claims of medical 

malpractice and hospital liability. Mr. 

Meadows is a frequent speaker on issues 

of medical malpractice and risk management. 

He also serves as chair of the Reminger 

Medical Malpractice Group and is a 

member of the firm’s Executive Group. 

Marge Motluck


DRI’s Southwest Leaders Convene in NOLA 

Attendees of DRI’s 2012 Southwest Regional Meeting on the steps of the Windsor Court Hotel in New Orleans. 

The Southwest Regional Meeting was held 

on August 24–25, 2012, at the Windsor 

Court Hotel in New Orleans. The attendees 

gathered Friday evening for a networking 

reception and dinner at Commanders 

Palace. Kevin Driskill, DRI’s Southwest 

Regional Director, led the meeting. DRI 

President- Elect Mary Massaron Ross was 

the officer in attendance. The meeting was 

attended by representatives from state and 

local defense organizations (SLDOs) in 

Arkansas, Louisiana, New Mexico, Oklahoma, 

and Texas. 

Mr. Driskill began the meeting Saturday 

by welcoming everyone to New Orleans 

and the meeting. Ms. Massaron Ross provided 

the DRI Officer’s report on “What’s 

New at DRI” and she also discussed current 

DRI initiatives and resources for the 

SLDOs. In addition, Ms. Massaron Ross 

provided an overview of the National Foundation 

for Judicial Excellence and the 2012 

DRI Annual Meeting. John R. Kouris, DRI 

Executive Director, reported on DRI’s new 

branding initiative. David E. Chamberlain, 

DRI National Director, provided an 

update on the Center for Law and Public 

Policy. Paul M. Lavelle, DRI Law Institute 

Chair, reported on DRI seminars and 

webcasts. Bruce A. Cranner, DRI Medicare 

Secondary Payer Task Force Chair, gave an 

update on MSP issues and Carlos Rincon, 

DRI National Director, talked about DRI’s 

substantive law committees and how to get 

involved in committee activities. Quentin 

F. Urquhart, Jr., President of the International 

Association of Defense Counsel, 

discussed various IADC activities and how 

DRI and the IADC work together to further 

the mission of the defense bar. As is the tradition 

at the Southwest Regional Meeting, 

DRI past president Cary E. Hiltgen provided 

“Words of Wisdom.” Mr. Hiltgen 

talked about how it is the senior partners’ 

responsibility to teach their young lawyers 

the importance of building relationships 

with other lawyers and their clients. 

The individual state representatives 

reported on the activities of their organizations. 

Paul D. Morris, DRI Arkansas State 

Representative, reported for the Arkansas 

Association of Defense Counsel. The 

Louisiana Association of Defense Counsel 

was the host SLDO for the meeting, and 

DRI Louisiana State Representative Mark 

J. Neal provided the report for the organization. 

Brian C. Garcia, DRI New Mexico 

State Representative, gave the New Mexico 

Defense Lawyers Association report. The 

Oklahoma Association of Defense Counsel 

report was given by OADC President 

Nathan E. Clark. Finally, DRI Texas State 

Representative Greg W. Currey reported 

on the activities of the Texas Association 

of Defense Counsel. 


Sister Organizations Elect New 

Leadership for 2012–2013 

Stephen J. 

Heine 

In April the Association 

of Defense Trial Attorneys 

(ADTA) held its 

annual meeting at the 

Royal Sonesta in New 

Orleans’ French Quarter. 

During the meeting, the organization’s new 

leaders for 2012–2013 were introduced. 

Stephen J. Heine is now 

the president of the ADTA. 

Mr. Heine is a partner of 

Heyl Royster in Peoria, Illinois, 

and has tried cases 

throughout the state of Illinois 

in the areas of trucking, 

railroad, automobile, 

professional liability, product 

liability, construction, 

and first-party property insurance claims. 

He served as the president of the Illinois 

Association of Defense Trial 

Counsel (2004–2005) and as 

DRI State Representative for 

Illinois for several years. 

George M. Walker is now 

the ADTA’s immediate past 

president. Mr. Walker is a 

member of Hand Arendall, 

LLC, in Mobile, Alabama, 

where he has a general civil 

litigation practice with emphasis on defense 

of product liability and toxic tort cases. 

David W. Zizik has risen 

from ADTA vice president to 

president- elect. Mr Zizik is a 

founding member and managing 

attorney of Zizik, Powers, 

O’Connell, Spaulding & 

David W. 

Zizik 

Lamontagne, P.C., in Westwood, 

Massachusetts. 

The new ADTA vice president 

is F. Daniel Balmert, 

managing partner of Vorys, 

Sater, Seymour, & Pease LLP 

in Akron, Ohio. Mr. Balmert 

practices in the areas of 

general litigation, product 

litigation, employment law, 

and workers’ compensation. 

Matthew W. Bailey continues 

to serve the ADTA as 

Affiliates in Action 

George M. 

Walker 

F. Daniel 

Balmert 

treasurer. Mr. Bailey is the 

owner/managing partner of 

Walsh and Bailey in Baton 

Rouge, Louisiana, where 

his areas of practice include 

auto/trucking defense, coverage 

and bad faith defense, 

product liability and premises 

liability. 

Thomas J. Hurney, Jr., 

Matthew W. 

Bailey 

of Jackson Kelly PLLC in 

Charleston, West Virginia, is 

now the organization’s secretary. 

Mr. Hurney is the leader 

of the firm’s Industrial, Environmental 

and Complex Litigation 

Practice Group and 

his practice involves the litigation 

and trial of cases involving serious 

personal injury and wrongful death. He is 

a past president of the Defense Trial Counsel 

of West Virginia. 

At their July 2012 

annual meeting 

in W hist ler, 

British Columbia, 

Canada, the 

Federation of Defense and Corporate 

Counsel (FDCC) elected its officers for the 

coming year. These officers will serve until 

the end of the annual meeting at the Broadmoor, 

in Colorado Springs, 

Colorado, in 2013. 

Edward M. Kaplan of 

Sulloway & Hollis PLLC in 

Concord, New Hampshire, 

is now the FDCC president. 

Edward M. 

Kaplan 

In his practice, Mr. Kaplan 

represents corporations, 

businesses, school districts, 

universities, 

and hospitals in all areas of 

labor and employment law, 

product liability, professional 

liability, and related 

litigation. 

Timothy A. Pratt is 

the newly elected FDCC 

president- elect. Mr. Pratt 

Thomas J. 

Hurney, Jr. 

Timothy A. 

Pratt 

is executive vice president and general 

counsel of Boston Scientific in Natick, 

Massachusetts. 

Victoria H. Roberts of 

Meadowbrook Insurance 

Group in Scottsdale, Arizona 

is the FDCC’s new 

secretary-treasurer. 

Victoria H. 

Roberts 

The 2011–2012 FDCC president, 

Michael I. Neil, senior 

trial partner and trial lawyer 

with Neil, Dymott, Frank, 

McFall & Trexler APLC in 

San Diego, now assumes the 

position of board chair. Mr. 

Neil is a past president of the 

Association of Southern California 

Defense Counsel and 

holds the rank of diplomate 

in the American Board of 

Trial Advocates. 

At its annual 

meeting in July, 

held at the Grove 

Park Inn in 

Asheville, North Carolina, the International 

Association of Defense Counsel 

(IADC) elected Quentin F. 

Urquhart, Jr., as president 

for the 2012–2013 term. Mr. 

Urquhart is a founding partner 

of Irwin Fritchie Urquhart 

& Moore in New 

Quentin F. 

Urquhart, Jr. 

Michael I. 

Neil 

Orleans, where his practice 

is focused in the areas of 

product liability, drug and 

medical device, and toxic 

tort and environmental litigation, with specific 

emphasis on complex 

and mass tort litigation. 

Molly H. Craig, a partner 

of the Hood Law Firm LLC in 

Charleston, South Carolina, 

is the new IADC president- 

elect. Ms. Craig focuses her 

trial practice in civil litigation 

and the defense of cat- 

Craig 

Molly H. 

astrophic product liability, 

professional liability, pharmaceutical 



and medical device, nursing home litigation, 

and employment litigation matters 

throughout the United States. 

William J. Perry, senior 

partner of Carter Perry Bailey 

LLP in London, England, 

is now the IADC immediate 

past president. Mr. Perry 

was the first non-United 

William J. 

Perry 

States lawyer in history to 

hold this prestigious position. 

His practice centers on 

insurance and reinsurance 

coverage issues, litigation, and arbitration, 

as well as advice on policy wordings. 

Pamela 

McGovern 

Pamela McGovern, general 

counsel for Hydro- 

Québec in Montreal, 

Québec, Canada, and Joseph 

E. O’Neil, shareholder of 

Lavin, O’Neil, Ricci, Cedrone 

& DiSipio in 

Philadelphia, 

remain IADC 

vice president of international 

and IADC secretarytreasurer, 

respectively. 

Connie Lewis Lensing of 

Federal Express in Memphis, 

Tennessee, is the IADC 

Joseph E. 

O’Neil 

Connie 

Lewis 

Lensing 

vice president of corporate 

and Daniel M. Zureich of 

Lawyers Mutual Liability 

Insurance in Cary, North 

Carolina, is vice president of 

insurance. 

For more 

information 

about ADTA, 

visit http://www.adtalaw.com/; 

for FDCC, visit http://www. 

thefederation.org; or for IADC, 

visit http://www.iadclaw.org/. 

Daniel M. 

Zureich 

SLDOs: Checking in with IL, MN and MS 

Illinois 

This past year has been a banner year for 

the Illinois Association of Defense Trial 

Counsel (IDC). With the publication of a 

Survey of Law and the White Paper on Cook 

County’s “Pilot Project” for Simultaneous 

Disclosure of Expert Witness Disclosure, 

reorganization of committees, submission 

of numerous amicus curiae briefs, the presentation 

of outstanding CLE programs, 

and so much more, the IDC worked diligently 

toward their mission of “ensur[ing] 

civil justice with integrity, civility and professional 

competence.” 

All of this success could not have been 

achieved without the countless hours and 

dedicated work of IDC’s volunteers. These 

busy attorneys work diligently behind 

the scenes contributing time and talent 

to improve the defense bar and the practice 

of law. 

In June, members of the IDC gathered 

together to recognize the next generation 

of leaders and to celebrate the hard work 

and accomplishments of the past year. At 

the annual meeting, held June 8, 2012, R. 

Mark Mifflin of Giffin, Winning, Cohen & 

Bodewes, P.C., in Springfield, was elected 

2012–2013 IDC Secretary/Treasurer and 

to a position on the executive committee. 

Mr. Mifflin will move up the Executive 

Committee ladder to become president in 

June 2016. 

Other officers on the executive committee 

include President R. Howard Jump 

of Jump & Associates, P.C., Chicago; 

President- Elect Aleen R. Tiffany of Aleen 

R. Tiffany, P.C., Crystal Lake; First Vice 

Illinois Association of Defense Trial Counsel (IDC) recognizes the following members: (above left) R. Howard Jump, 2012–2013 President; Charles 

H. Cole of Schuyler, Roche & Crisham, P.C., Chicago (with Past President Anne M. Oldenburg); Jennifer B. Groszek of Resolute Management Inc., 

Midwest Division, Chicago; and Eliina Viele Pritzker, Chicago. 



Mississippi Defense Lawyers Association University of Mississippi Scholarship Recipients Justin 

Kopf (left) and Whitney Holliday, with Lucius B. Dabney, Jr. (center). 

President David H. Levitt of Hinshaw & 

Culbertson LLP, Chicago; and Second Vice 

President Troy A. Bozarth of HeplerBroom 

LLC, Edwardsville. 

The following members were elected to 

new three-year terms on the IDC Board 

of Directors: Joseph A. Bleyer of Bleyer & 

Bleyer, Marion; Terry A. Fox of SmithAmundsen 

LLC, Chicago; Jennifer B. Groszek 

of Resolute Management, Inc., Midwest Division, 

Chicago; Al Pranaitis of Hoagland, 

Fitzgerald & Pranaitis, Alton; and Tracy E. 

Stevenson of Robbins Salomon & Patt, Ltd., 

Chicago. R. Mark Cosimini of Rusin Maciorowski 

& Friedman, Ltd., Champaign, 

was appointed to fill the director vacancy 

when R. Mark Mifflin was appointed to 

serve as secretary/treasurer. Bruce Dorn of 

Bruce Farrel Dorn & Associates, Chicago; 

M. Gerard Gregoire of the Law Office of M. 

Gerard Gregoire, Chicago; and Terrence F. 

Guolee of Querrey & Harrow, Ltd., Chicago, 

were appointed to serve as directors at large. 

At the annual meeting awards luncheon, 

several members were recognized for their 

service. Charles H. Cole of Schuyler, Roche 

& Crisham, P.C., Chicago, was recognized 

with the Distinguished Member Award and 

Eliina Viele Pritzker, Chicago, was recognized 

with the Rising Star Award. Jennifer 

B. Groszek of Resolute Management Inc., 

Midwest Division, Chicago, was recognized 

with the President’s Award and Nicole D. 

Milos of Cremer, Spina, Shaughnessy, Jansen 

& Siegert LLC, Chicago, was recognized 

with the Volunteer of the Year Award. 

The Meritorious Service Award was presented 

to Linda J. Hay of Alholm, Monahan, 

Klauke, Hay & Oldenburg LLC and John P. 

Lynch, Jr., of Cremer, Spina, Shaughnessy, 

Jansen & Siegert LLC for their service on 

the board of directors; Adnan A. Arain of 

Aon for his service as editor in chief of the 

IDC Survey of Law; and Sarah Condon of 

CNA for her service as IDC Quarterly editor 

in chief. 

The Meritorious Service Award was also 

presented to James K. Borcia of Tressler 

LLP for his service as chair of the Commercial 

Law Committee; Terry A. Fox of 

SmithAmundsen, LLC for service as chair 

of the Insurance Law Committee; Edward 

K. Grassé of Busse, Busse & Grassé, P.C., for 

service as chair of the Civil Practice Committee; 

Nicole D. Milos of Cremer, Spina, 

Shaughnessy, Jansen & Siegert LLC for 

service as chair of the Tort Law Committee; 

Paul Rettberg of Querrey & Harrow for 

his service as chair of the Municipal Law 

Committee; Scott D. Stephenson of Litchfield 

Cavo, LLP for service as chair of the 

Events Committee; Eliina Viele Pritzker for 

service as chair of the Young Lawyers Division; 

and Aleen Tiffany of Aleen R. Tiffany, 

P.C., for service as chair of the Legislative 

Committee. 

From left: Minnesota Defense Lawyers Association (MDLA) President Lisa Griebel, MDLA past 

president Patricia Beety, DRI President Henry Sneath, DRI Minnesota State Representative Paul 

Rajkowski, DRI North Central Regional Director Steve Schwegman, and DRI past president Marc 

Williams at the MDLA 50th Anniversary Celebration. 

Minnesota 

The Minnesota Defense Lawyers Association 

(MDLA) New Defense Lawyers 

Committee recently joined forces with the 

Minnesota Association for Justice to host 

a Young Lawyers Networking Reception. 

The group has focused substantial efforts 

toward engaging new attorneys and developing 

an online presence that communicates 

the culture of the MDLA, as well as 

useful information for those entering the 

field of defense work. 



The MDLA also announces a new staff 

member on their team. Monte Abeler joins 

the organization as assistant account executive 

and will work with MDLA Executive 

Director Paul J. Hanscom on a number of 

projects, namely coordinating the work of 

the board of directors and the substantive 

law committees. 

The MDLA also played host to 135 

attendees at its annual Trial Techniques 

Seminar and 50th Anniversary Celebration 

on August 16–18. The event included a funfilled 

reception involving MDLA- related 

Jeopardy, led by MDLA member and Alex 

Trebek lookalike contestant Michael Will 

of Meagher & Geer PLLP, as well as a trial 

re- enactment of Frey v. Snelgrove, a key 

trial in Minnesota and MDLA history. 

Mississippi 

The Mississippi Defense Lawyers Association 

(MDLA) has selected four secondyear 

students for the prestigious Reginald 

A. Gray Scholarships. The awards were personally 

presented by the MDLA’s Scholarship 

Committee chair and distinguished 

member, Lucius B. Dabney, Jr., to Mississippi 

College School of Law students Samuel 

D. Gregory and Anna H. Watson in 

Jackson on April 12, 2012, and to University 

of Mississippi School of Law students 

Justin D. Kopf and Whitney E. Holliday in 

Oxford on April 20, 2012. 

MDLA also congratulates Mississippi 

College School of Law Professor Judith J. 

Johnson as recipient of the 2012 MC School 

of Law Faculty Award. Professor Johnson 

earned her undergraduate degree from the 

University of Texas at Austin and attended 

law school at the University of Mississippi. 

The MDLA is proud to honor these award 

recipients and thanks Mr. Dabney for his 

service to the MDLA Scholarship Committee 

for so many years. 

Mississippi Defense Lawyers Association 

award and scholarship recipients (at right, 

from top): 2012 Mississippi College School 

of Law (MC) Faculty Winner Judith Johnson, 

flanked by Jim Rosenblatt (left) and Lucius B. 

Dabney, Jr.; 2012 MC Scholarship Recipient 

Anna Watson; and 2012 MC Scholarship 

Recipient Samuel Gregory. 



From the Chair 

More than Ever We 

Need You Involved 

By Scott W. Sayler 

One of our central 

purposes is to promote 

networking and 

communication among 

those on the defense side 

to counter our opponent’s 

increasingly coordinated 

tactics and theories. 

As we look back on this committee’s accomplishments 

over the past 12 months, we realize that the excellent work 

product of this committee is the result of hundreds of 

hours of effort by numerous committee members and DRI 


■ Scott W. Sayler is a partner of Shook, Hardy & Bacon LLP in Kansas City, Missouri, with over 24 years of litigation experience. 

Mr. Sayler’s practice is devoted exclusively to litigation, and he has focused primarily on the representation of product manufacturers 

and other defendants involved in product liability and commercial litigation.

staff. As we look forward to our challenges 

and opportunities over the coming 

year, I hope that you will consider 

getting involved in this committee’s ongoing 

effort to increase communication 

and to share knowledge and ideas among 

the drug and medical device defense bar. 

In May 2012, the Drug and Medical 

Device Committee held its showcase 

event, the annual Drug and Medical 

Device Litigation Seminar, in New 

Orleans. The planning for this event 

began almost a year earlier in the summer 

of 2011 with weekly planning calls 

involving a committee of approximately 

15 individuals. The leaders of this planning 

committee included Carter Thompson 

of Baker, Donelson (program chair), 

Sara Gourley of Sidley Austin (program 

vice chair), Gail Rodgers of DLA Piper 

(marketing chair), and Sheila Boston 

(marketing vice chair). Jim Rogers of 

Nelson Mullins (committee vice chair), 

and Mark Solheim of Larson & King 

(Law Institute liaison). Ray Williams 

of DLA Piper and Rick Richardson of 

GlaxoSmithKline also played important 

roles. This group, along with numerous 

others too lengthy to mention, were 

responsible for putting on an excellent 

two-day seminar in New Orleans. 

The 2012 seminar included for the 

first time a breakout session restricted 

to and tailored for in-house counsel. 

This session was led by Jeff Kruse of Boston 

Scientific, Catherine Levitt of Astellas, 

Sarah Padgitt of Baxter Healthcare, 

and Rick Richardson of GlaxoSmith- 

Kline. This session was well- received, 

and we hope that it will serve as another 

reason for in-house counsel to attend 

future seminars. 

The planning committee currently is 

very busy preparing for next year’s seminar, 

scheduled to be held May 16–17, 

2013, in New York City. In addition to an 

unparalleled substantive program, this 

seminar will include company counsel 

meetings, a diversity luncheon, an inhouse 

counsel only breakout session, a 

young lawyers blockbuster session, and 

numerous networking and social opportunities. 

If you haven’t already, I hope 

you will put this event on your calendar. 

This committee’s efforts include making 

various publication contributions on 

topics of interest to in-house counsel, 

outside counsel, and others involved in 

the representation of companies responsible 

for valuable and lifesaving drugs 

and medical devices. A sincere thank 

you to Ed Gerecke of Carlton Fields in 

Tampa for organizing and chairing this 

collection of For The Defense articles. 

After the publication of this issue, Ed 

will pass the baton after having led this 

effort for many years. 

This issue of FTD contains the usual 

range of excellent and topical articles 

on subjects of interest to the defense of 

drug and device litigation, including offlabel 

promotion, FDA opinion letters, 

biosimilars, negligent design claims, 

and preemption. We thank all of the 

authors for the excellent articles contained 

in this issue of FTD. 

The Drug and Medical Device Committee’s 

publication efforts are further 

reflected in our electronically disseminated 

committee newsletter, Rx For 

the Defense. Anne Talcott of Schwabe 

Williamson in Portland, Oregon, has 

for several years chaired the publication 

of Rx For the Defense. Anne will 

soon be passing on the responsibility 

for this newsletter to Melissa Tannery 

of Troutman Sanders in Richmond, 

Virginia. This newsletter is published 

two to four times a year and typically 

includes approximately eight short and 

practical substantive articles, along with 

other information of interest. I encourage 

you to take the time to check out 

the articles in this newsletter. You will 

learn something every time. If you are a 

committee member, you will receive the 

newsletter electronically. If you aren’t a 

committee member, please go to DRI. 

org and join our committee immediately! 

Back issues of Rx For the Defense 

are available at our committee’s page on 

the DRI.org website. 

The committee is also actively 

involved in the preparation and presentation 

of webcasts. These webcasts are 

an excellent and cost- effective way for 

an attorney (or group of attorneys at a 

single screen) to see and hear presentations 

on hot topics in the area of drugs 

and medical devices. Vivian Quinn of 

Nixon Peabody in Buffalo, New York, 

has done a great job as our webcast 

chair, and she has been assisted by and 

will soon be succeeded by Mike Miller 

of Strong & Hanni in Salt Lake City. Our 

most recent webcast, held in July 2012, 

included several excellent presentations 

under the heading of “FDA & Medical 

Products: Practices/Proposals for 

Internet & Social Media.” The webcast 

committee currently is preparing webcasts 

for the latter part of 2012 that will 

address topics ranging from the Foreign 

Corrupt Practices Act to an update on 

decisions handed down in the wake of 

Mensing. Please contact Vivian or Mike 

or consult the DMD page on the DRI 

website for the latest on webcasts. 

Our committee also recently completed 

another Drug and Medical Device 

Young Lawyers Primer, held September 

12, 2012, at Sidley Austin in Chicago. 

Led by Dave Geiger of Foley Hoag 

in Boston, this annual one-day seminar 

is aimed at young lawyers. Attendees 

receive an excellent nuts and bolts overview 

of drug and device defense from a 

faculty comprised of top-flight in-house 

and outside defense counsel. This seminar 

also provides young lawyers with a 

great opportunity to meet other young 

lawyers involved in the defense of drug 

and medical device litigation. 

Perhaps now more than ever, it is 

critical that defense counsel—both inhouse 

and outside attorneys—increase 

their communication and their sharing 

of knowledge and ideas with one 

another. Our skilled opponents continue 

to raise the bar with new procedural tactics 

and substantive theories, and they 

are increasingly coordinated. One of the 

DRI Drug and Medical Device Committee’s 

central purposes is to increase networking 

and communication among 

those on the defense side. Please take 

advantage of the many opportunities 

to get involved in committee activities. 

If you want to get involved, I encourage 

you to visit our committee’s page on 

the DRI website, where you will find the 

contact information for all those chairing 

and leading the committee’s various 

activities. Please feel free to contact 

me or one or more of those individuals 

about getting involved. I wish everyone 

all the best and hope you enjoy reading 

this edition of For The Defense. 



Prescription 

Medication Cases 

By Geoffrey M. Drake 

and Victoria C. Smith 

The Case Against 

Negligent Design 

Claims 

A multijurisdictional 

overview of strict 

liability and negligence, 

as well as the legal and 

public policy arguments 

against recognizing 

negligent design claims 

in the prescription 

medication arena. 

Prescription medications are different from ordinary consumer 

products in many ways. Unlike most consumer 

products, for example, medications are developed with the 

specific purpose of curing or preventing serious diseases 

and alleviating suffering. They, therefore, 

play an essential role in protecting the public 

health. But medications also inherently 

have the capacity to harm people. Perhaps 

because of these unique characteristics, 

prescription medications are not available 

to consumers on demand. Instead, a 

licensed health-care provider must prescribe 

a medication. That professional has 

a legal obligation to ensure that the medication’s 

expected benefits outweigh its 

potential risks for a patient and to obtain 

informed consent. 

Additionally, in contrast to an average 

consumer product, prescription medications 

cost an enormous amount of money 

to develop, test, and bring to the market. 

Prescription medications are also specific 

chemical compounds defined by their 

molecular structures. Medications, unlike 

other products, do not have “alternative 

designs.” If a medication’s chemical composition 

is altered, the alteration creates a 

different medication entirely, even if it is 

intended to treat the same illness. 

Because of these unique properties, the 

federal government traditionally has regulated 

prescription medications differently 

than other consumer products. A 

comprehensive federal regulatory framework 

established by Congress and implemented 

by the United States Food and Drug 

Administration (FDA) controls the process 

for bringing new prescription medications 

to the marketplace. Through a series 

of complex federal statutes and regulations, 

the FDA acts as a “gatekeeper” to the 

United States marketplace. The FDA alone 

is responsible for reviewing considerable 

documents and data concerning the chemical 

composition, formulation, manufacturing 

process, labeling, safety, and efficacy of 

a particular compound. It is the FDA that 

is charged with ultimately determining 

whether a medication is “safe and effective” 

for marketing. The FDA, therefore, main- 


■ Geoffrey M. Drake is a senior associate and Victoria Smith is an associate in King & Spalding LLP’s 

Atlanta office. Mr. Drake specializes in defending product manufacturers, with an emphasis in representing 

pharmaceutical companies in high-stakes personal injury, mass tort, consumer fraud, and class action litigation. 

Ms. Smith’s practice focuses on defending product manufacturers in the pharmaceutical, automotive, 

and asbestos industries in nationwide product liability and personal injury litigation. Both authors are 

members of the DRI Drug and Medical Device and Young Lawyers Committees.

tains exclusive regulatory control over a 

prescription medication’s formulation and 

composition—its “design.” Indeed, federal 

law prohibits a manufacturer from changing 

a medication’s formulation or composition 

without first obtaining FDA approval. 

Recognizing the FDA’s exclusive role in 

weighing a prescription medication’s risks 

and benefits, many states have carefully 

defined which tort claims state laws will 

permit against pharmaceutical manufacturers. 

For instance, many jurisdictions 

have adopted comment k to section 402A 

of the Restatement (Second) Torts, which 

bars strict liability claims for design defects 

against prescription medication manufacturers 

but recognizes claims for failing to 

warn and for manufacturing defects. At the 

same time, some jurisdictions have recognized 

claims against manufacturers for the 

“negligent design” of prescription medications. 

In fact, whether Pennsylvania law 

recognizes negligent design claims against 

medication manufacturers—even when 

that law bars strict liability design defect 

claims—is presently before the Supreme 

Court of Pennsylvania. 

A claim for negligent design against a 

prescription medication manufacturer is 

no more appropriate than a strict liability 

claim for a design defect. In addition to 

providing an overview of the state of strict 

liability and negligent design defect claims 

in jurisdictions around the country, this 

article will present legal and public policy 

arguments against recognizing negligent 

design claims in the prescription medication 

arena. 

Claims for Strict Liability 

Design Defect 

Section 402A of the Restatement (Second) of 

Torts explains that a product manufacturer 

is subject to strict liability if the product is 

sold “in a defective condition unreasonably 

dangerous to the user or consumer.” Comment 

k to section 402A, however, recognizes 

that some consumer products, specifically 

including prescription medications, are 

“unavoidably unsafe,” and thus, should be 

exempt from this strict liability rule for a 

design defect. Under comment k, a manufacturer 

of an FDA- approved prescription 

medication cannot be held strictly liable 

for an injury caused by its medication as 

long as adequate warnings accompanied the 

medication and the manufacturer prepared 

it properly. Recognizing that all prescription 

medications have inherent risks— 

risks that the FDA decided the medication’s 

benefits outweighed when approving the 

medication for marketing—plaintiffs, under 

comment k, cannot sustain strict liability 

claims based on an allegation that a 

manufacturer defectively designed a prescription 

medication. As explained by the 

Supreme Court of Arkansas in West v. Searle 

& Co., 305 Ark. 33, 39, 806 S.W.2d 608, 612 

(1991), “[c]om ment k reflects the concern… 

that large monetary judgments would deter 

drug manufacturers from undertaking 

research programs to develop socially 

beneficial pharmaceuticals.” Comment k 

helps ensure that manufacturers do not 

experience “large judgments [that] would 

increase the costs of beneficial and necessary 

drugs beyond the reach of the people 

who need them.” West, 305 Ark. at 39, 806 

S.W.2d at 612. 

Although the courts of many jurisdictions 

have adopted comment k, not all courts 

have applied the comment in the same manner. 

A considerable number of states have 

applied comment k to manufacturers of all 

types of prescription medications as a rule, 

effectively barring claims for strict liability 

design defect against the manufacturer of 

FDA-approved medications. See, e.g., N.C. 

Gen. Stat. §99B-6(d) (“No manufacturer of 

a prescription drug shall be liable in a product 

liability action on account of some aspect 

of the prescription drug that is unavoidably 

unsafe, if an adequate warning and instruction 

has been provided.”); Ohio Rev. Code 

Ann. §2307.75(D) (“An ethical drug… is not 

defective in design or formulation because 

some aspect of it is unavoidably unsafe, if the 

manufacturer… provides adequate warning 

and instruction”); Petty v. United States, 

740 F.2d 1428, 1439 (8th Cir. 1984) (applying 

Iowa law); Brooks v. Medtronic, Inc., 

750 F.2d 1227, 1230–31 (4th Cir. 1984) (applying 

South Carolina law); Davis v. Wyeth 

Labs., 399 F.2d 121, 129 (9th Cir. 1968) (applying 

Montana law); Reyes v. Wyeth Labs., 

498 F.2d 1264, 1273–74 (5th Cir. 1974) (applying 

Texas law); Lareau v. Page, 840 F. 

Supp. 920, 923 (D. Mass. 1993), aff’d 39 F.3d 

384 (1st Cir. 1994); Hurley v. The Heart Physicians, 

P.C., 278 Conn. 305, 315–316, 898 

A.2d 777, 783 (2006); Larkin v. Pfizer Co., 153 

S.W.3d 758, 762 (Ky. 2004); Carlin v. Superior 

Court, 13 Cal. 4th 1104, 1122–23, 920 P.2d 

1347, 1358 (Cal. 1996); Hahn v. Richter, 543 

Pa. 558, 562, 673 A.2d 888, 891 (Pa. 1996); 

Young v. Key Pharmaceuticals, 130 Wash. 2d 

160, 166–67, 922 P.2d 59, 63 (Wash. 1996); 

Pittman v. Upjohn Co., 890 S.W.2d 425, 428 

(Tenn. 1994); Martin v. Hacker, 83 N.Y.2d 1, 

8, 628 N.E.2d 1308, 1311 (N.Y. 1993); Grundberg 

v. Upjohn Co., 813 P.2d 89, 95 (Utah 

1991); Stone v. Smith, Kline, & French Labs., 

447 So. 2d 1301, 1303–04 (Ala. 1984). 

On the other hand, some courts have 

adopted a “case-by-case” approach to 

comment k, treating the standard as an 

affirmative defense available to a manufacturer. 

A manufacturer in such jurisdictions, 

therefore, must demonstrate that 

the strict liability rule would not apply 

to the prescription medication at issue. 

Courts in these jurisdictions have certain 

factors that they consider when deciding 

whether a drug is “unavoidably unsafe.” In 

Kociemba v. G.D. Searle & Co., 680 F. Supp. 

1293, 1301 (D. Minn. 1988), for instance, 

the court rejected the idea that “comment 

k was intended to provide all prescription 

drugs with blanket immunity from 

strict liability claims” and stated that the 

elements to examine in determining if 

comment k applied were “(i) whether the 

product could have been designed in a safer 

manner; (ii) whether a safer alternative 

product could have been available at that 

time to accomplish the same intended purpose… 

and (iii) whether the benefits of the 

product outweigh the interest in promoting 

enhanced accountability.” Similarly, 

the Oklahoma Supreme Court explained: 

Comment k serves as an affirmative defense 

when the product is incapable of 

being made safe under present technology, 

but the social need for the product 

warrants its production. The design must 

be as safe as the best available testing and 

research permits. There must be… no 

feasible alternative design [for the drug].” 

Tansy v. Dacomed Corp., 890 P.2d 881, 885 

(Okla. 1994). See also Violette v. Smith & 

Nephew Dyonics, Inc., 62 F.3d 8, 13 n.3 

(1st Cir. 1995) (applying Maine law); Hill v. 

Searle Labs., 884 F.2d 1064, 1067–68 (8th 

Cir. 1989) (applying Arkansas law); Ehlis v. 

Shire Richwood, Inc., 233 F. Supp. 2d 1189, 

1191 (D.N.D. 2002), aff’d 367 F.3d 1013 

(8th Cir. 2004); Bennett v. Madakasira, 821 

So. 2d 794, 809 (Miss. 2002); Freeman v. 



Hoffman- La Roche, 260 Neb. 552, 552, 618 

N.W.2d 827, 831 (2000); Larsen v. Pacesetter 

Systems, Inc., 74 Haw. 1, 24–25, 837 P.2d 

1273, 1286 (Haw. 1992); Savina v. Sterling 

Drug, Inc., 247 Kan. 105, 115–16, 795 P.2d 

915, 924 (Kan. 1990); Senn v. Merrell- Dow 

Pharma., Inc., 305 Or. 256, 263 n. 4, 751 

P.2d 215, 218 n.4 (Or. 1988); Castrignano v. 

E.R. Squibb & Sons, Inc., 546 A.2d 775, 781 

A claim for negligent 

design against a prescription 

medication manufacturer 

is no more appropriate 

than a strict liability claim 

for a design defect. 

(R.I. 1988); Toner v. Lederle Lab., 112 Idaho 

328, 339, 732 P.2d 297, 308 (Idaho 1987). 

Finally, it is worth noting that a small 

number of courts do not rely on comment 

k at all in considering whether a prescription 

medication manufacturer can be 

held strictly liable for a design defect. See, 

e.g., Fisher v. Professional Compounding 

Centers of America, Inc., 311 F. Supp. 2d 

1008, 1018 (D. Nev. 2004) (applying Nevada 

law and rejecting comment k altogether); 

Shanks v. Upjohn Co., 835 P.2d 1189, 1197– 

98 (Alaska 1992) (rejecting comment k); 

Collins v. Eli Lilly & Co., 116 Wis. 2d 166, 

197, 342 N.W.2d 37, 52 (Wis. 1984) (“the 

rule embodied in comment k is too restrictive 

and, therefore, not commensurate with 

strict products liability law in Wisconsin”). 

Claims for Negligent Design Defect 

Some courts have found that strict liability 

design claims are the same as those 

grounded in negligence, extending comment 

k’s rationale as barring negligent design 

claims. For example, the Georgia Court 

of Appeals noted that a negligent design defect 

claim “cannot be treated as a distinct 

theory of recovery from the strict liability 

claims, as the same risk- utility analysis 

applies.” Bryant v. Hoffmann- La Roche, 

262 Ga. App. 401, 410 n.5, 585 S.E.2d 723, 


730 n.5 (Ga. Ct. App. 2003) (internal citations 

omitted). See also Lewis v. White, No. 

08 Civ. 7480 (SCR) (GAY), 2010 U.S. Dist. 

LEXIS 142567, at *9–*10 (S.D.N.Y. July 1, 

2010) (“[F]or the purposes of analyzing a 

design defect claim, the theories of strict 

liability and negligence are virtually identical.”); 

Doe v. Solvay Pharmaceuticals, 350 

F. Supp. 2d 257, 266 (D. Maine 2004) (“in 

actions based on product design defects, 

negligence and strict liability theories overlap 

in that under both theories the plaintiff 

must prove that the product was defectively 

designed thereby exposing the user to an 

unreasonable risk of harm”) (internal citations 

omitted); Ackley v. Wyeth, No. C-2-86- 

107, 1989 U.S. Dist. Lexis 19166, at *10 (S.D. 

Ohio Aug. 3, 1989), aff’d 919 F.2d 397 (6th 

Cir. 1990) (stating that in the case of a design 

defect product liability case, the theories 

of strict liability and negligence merge). 

Some courts, however, have held that 

plaintiffs can pursue claims for negligent 

design defects even when a jurisdiction has 

adopted comment k to exempt prescription 

medications from strict liability design 

defect claims. For example, a Utah federal 

court decided that comment k is limited 

to strict liability, and thus, refused to dismiss 

a claim for negligent design defect. 

Lake- Allen v. Johnson & Johnson L.P., No. 

2:08CV00930DAK, 2009 WL 2252198, at 

*2–3 (D. Utah July 27, 2009). The court 

explained that when the Utah Supreme 

Court adopted comment k, “it clearly noted 

that the purpose ‘is to protect from strict 

liability products that cannot be designed 

more safely.’” Lake-Allen, 2009 WL 2252198 

at *3 (internal citations omitted). See also, 

e.g., Graham v. Wyeth, 906 F.2d 1399, 1406 

(10th Cir. 1990) (applying Kansas law) (“a 

plaintiff may proceed on a theory of negligent 

design defect where she is prohibited 

by comment (k) from proceeding on a strict 

liability design defect theory”); Torkie- Tork 

v. Wyeth, 739 F. Supp. 2d 895 (E.D. Va. 

2010) (generally recognizing a claim for 

negligent design defect against a prescription 

medication manufacturer); Wright v. 

Brooke Group Ltd., 114 F. Supp. 2d 797, 805 

(N.D. Iowa 2000) (stating that a strict liability 

theory does not replace claims based 

on negligence). 

This tension between strict liability and 

negligent design defect claims involving 

prescription medications recently came 

to the attention of Pennsylvania’s highest 

court. Traditionally, Pennsylvania has 

rejected strict liability design defect claims 

against manufacturers of all types of prescription 

medications. See Hahn, 543 Pa. 

558, 673 A.2d 888 (Pa. 1996). In Lance v. 

Wyeth, 4 A.3d 160 (Pa. Super. Ct. 2010), 

however, a Pennsylvania appellate court 

held that the plaintiff could pursue her 

claim for negligent design defect against 

the manufacturer of a prescription medication. 

In Lance, the plaintiff alleged that the 

decedent’s use of a diet drug manufactured 

by the defendant caused her to develop primary 

pulmonary hypertension. The plaintiff 

alleged negligence claims sounding in 

unreasonable marketing, failure to recall, 

and design defect. On the appeal of the trial 

court’s grant of a summary judgment for 

the defendant on all three causes of action, 

the superior court found that Pennsylvania 

law did not recognize the marketing 

claim or the failure- to- recall claim. Lance, 

4 A.3d at 167–69. The court determined 

that it could not properly create a common 

law claim for failure to recall a drug from 

the market because that decision belonged 

to the FDA. Id. at 167. As to the unreasonable 

marketing claim, the court decided 

that it was essentially a cause of action for 

negligent failure- to- test, which Pennsylvania 

did not recognize. Id. at 168–69. 

But regarding the plaintiff’s negligent 

design claim, the superior court reversed 

the summary judgment. While recognizing 

Pennsylvania’s longstanding adoption 

of comment k limiting strict liability claims 

to claims of manufacturing defect and failure 

to warn, the court found that “a negligent 

design defect claim is considered to be 

distinct from, and not subsumed within, a 

strict liability design defect claim.” Id. at 

166.The court explained that this difference 

is based on the fact that “[s]trict liability 

examines the product itself, and sternly 

eschews considerations of the reasonableness 

of the conduct of the manufacturer” 

while “[i]n contrast, a negligence cause of 

action revolves around an examination of 

the conduct of the defendant.” Id. (internal 

citations omitted). The superior court 

also cited with approval the reasoning of 

the Idaho Supreme Court in Toner, which 

rationalized that 

[b]y denying plaintiffs recovery based 

on the dangerousness of the product

and requiring plaintiffs to prove negligent 

conduct on the part of the defendants, 

comment k furthers the policy of 

encouraging the production and marketing 

of useful products. However, to 

immunize sellers of products deemed 

unavoidably unsafe pursuant to comment 

k from negligence claims would 

remove needed incentive for safe design. 

Id. (internal citations omitted). 

The Supreme Court of Pennsylvania 

agreed to review this case, and while it 

has yet to issue a final pronouncement, 

the decision will likely define the scope of 

future lawsuits against prescription drug 

manufacturers in Pennsylvania, and potentially 

beyond. 

Courts Should Reject 

Negligent Design Claims 

Those jurisdictions that have not expressly 

barred claims for negligent design against 

prescription medication manufacturers 

should do so. The same legal and public 

policy reasons that have led numerous 

jurisdictions across the country to adopt 

comment k and bar strict liability design 

defect claims against prescription medication 

manufacturers also caution against 

recognizing negligent prescription drug 

design claims. 

The FDA Must Assess Product Design 

Allowing negligent design claims to proceed 

against prescription medication manufacturers 

conflicts with the tradition of 

deferring to the FDA’s expert determination 

of whether a prescription medication’s benefits 

outweigh its risks—that is, whether 

the medication is safe and effective for the 

public. The FDA, not a lay jury, is in the 

best position to make such an important 

and complicated determination. A complex 

and detailed regulatory framework 

under which the FDA has the sole responsibility 

for reviewing all of the available data 

and exclusively determining whether a prescription 

medication is “safe and effective” 

for marketing to the public dictates the 

process for approving prescription medications. 

In approving a medication, the 

FDA has determined that the medication 

will help some segment of society and that 

its benefits outweigh its risks. Indeed, in 

adopting comment k and rejecting strict 

liability for prescription medication design 

defects, courts have acknowledged that 

juries are not in the best position to decide 

which medications provide valuable health 

benefits to patients that outweigh potential 

risks. Rather, the FDA must make uniform, 

national decisions based on stringent regulatory 

procedure. 

Recognizing negligent design claims 

would only undermine the FDA’s approval 

and regulation of prescription medications. 

A court or jury does not have the tools to 

assess properly whether a drug suffers a 

defect due to its composition and formula. 

As one court explained, to 

determine whether a drug’s benefit outweighs 

its risk is inherently complex 

because of the manufacturer’s conscious 

design choices regarding the numerous 

chemical properties of the product 

and their relationship to the vast 

physiologic idiosyncrasies of each consumer 

for whom the drug is designed. 

Society has recognized this complexity 

and in response has reposed regulatory 

authority in the FDA. Grundberg, 

813 P.2d at 99. 

The experts employed by the FDA have special 

skills and qualifications that enable 

them to assess a medication’s overall adequacy 

and effectiveness. Their technical 

expertise provides the agency with the 

ability to analyze and judge the safety 

and effectiveness of a prescription medication: 

“[T]he individuals making the ultimate 

judgment [at the FDA] will have the 

benefit of years of experience in reviewing 

such products, scientific expertise in 

the area, and access to the volumes of data 

they can compel manufacturers to produce.” 

Id. at 98. 

Conversely, the average lay juror does not 

have the expertise or perspective to question 

the correctness of the FDA’s decision 

about whether a medication’s benefits outweigh 

its risks. A court would instruct jurors 

to focus on the discrete issues at hand, 

such as whether a drug’s design should 

have been altered in a particular way to 

LMI 

Litigation Management,Inc. 



prevent the particular injury suffered by a 

particular plaintiff. Jurors, therefore, generally 

would decide the appropriateness 

of a medication’s design without having 

the benefit of understanding the greater 

context in which it was developed and 

approved. Courts simply do not ask jurors 

to consider “big picture” questions pertaining 

to topics such as public health. As one 

Recognizingnegligent 

design claims would only 

undermine the FDA’s 

approval and regulation of 

prescription medications. 

court explained, “[i]t would be difficult for 

a jury focused on a single case to take into 

account ‘the cumulative systemic effects’ 

of a series of verdicts.” Brooks v. Howmedica, 

Inc., 273 F.3d 785, 797 (8th Cir. 2001), 

cert. denied, 535 U.S. 1056 (2002). Moreover, 

a jury, unlike the FDA, is “subject to 

the inherent limitations of the trial process, 

such as the rules of evidence, restrictions 

on expert testimony, and scheduling 

demands.” Grundberg, 813 P.2d at 98. 

Finding a manufacturer liable for negligent 

prescription medication design would 

mean that the jury has decided that the 

manufacturer knew or should have known 

to adopt a different, better design. An FDA 

approval signifies that experts have already 

evaluated the drug’s safety and effectiveness. 

It defies logic to require a manufacturer 

to use a “better” design than that 

approved by the FDA, especially when 

experts hired for litigation merely explain 

hypothetical ideas when proposing those 

designs. Additionally, compliance with 

regulatory standards constitutes evidence 

of due care in negligence cases. If a drug 

has met the FDA’s safety and efficacy standards, 

it also logically satisfies the common 

law standard for reasonable design. 

Recognizing negligent design claims 

would increase the role of the courts, allowing 

them to regulate prescription medications 

through tort liability. This expansion 


of power would weaken the FDA’s role in 

providing expert regulation of those products. 

Rejecting a negligent prescription 

medication design defect claim while still 

allowing other product liability claims 

such as failure to warn and manufacturing 

defect claims carefully balances a 

state’s interest in providing compensation 

to those citizens injured by prescription 

drugs and the federal government’s interest 

in standardizing decisions about which 

drugs should enter the marketplace. 

Negligent Design Claims Undermine 

the FDA Regulatory Framework 

If a jury determined that a prescription 

medication had a negligent design, the 

manufacturer would face a complicated dilemma. 

It would need to consider recalling 

and redesigning the drug, or it would risk 

having others sue it, alleging similar claims 

and also asserting that the manufacturer 

owed punitive damages. The manufacturer 

could not alter the medication’s composition 

or formula without first obtaining 

FDA approval through a painstaking and 

extensive approval process. See 21 C.F.R. 

§314.70 (outlining the procedures for supplementing 

or changing an approved drug 

application). Suspending manufacturing 

and recalling a medication would undermine 

the FDA’s established framework for 

the approval and change of a medication’s 

design. Further, it would call into question 

the FDA’s previous determination that a 

medication was safe, effective, and thus 

marketable. Suspending manufacturing 

and recalling an FDA- approved prescription 

medication could also adversely affect 

the public health. See Wolfe v. McNeil- PPC, 

Inc., No. 07-348, 2011 U.S. Dist. Lexis 34714, 

at *18–*20 (E.D. Pa. Mar. 30, 2011) (granting 

summary judgment on the plaintiff’s 

design defect claim, in part, because finding 

the defendant liable would require removal 

of the drug from the market, which 

would be contrary to the public’s interest). 

“Safer” Designs Do Not Exist 

To prevail on a claim for a design defect, 

whether based on a theory of negligence or 

strict liability, a plaintiff often must plead 

and prove the existence of a safer and feasible 

alternative design. See, e.g., Berrier 

v. Simplicity Mfg., 563 F.3d 38, 64 (3d Cir. 

2009); Woodcock v. Mylan, Inc., 661 F. 

Supp. 2d 602, 611–12 (S.D. W. Va. 2009); 

Tansy, 890 P.2d at 885–86. A feasible alternative 

design is one that reduces the dangers 

associated with the product but does 

not unduly effect its performance or effectiveness. 

Tansy, 890 P.2d at 885–86 (noting 

that a safer feasible alternative design is one 

that “on balance accomplishe[s] the subject 

product’s purpose with a lesser risk”). 

Thus, a “negligent design” claim assumes 

that the product at issue not only should 

but could have been designed differently. 

But unlike other consumer products with 

designs that manufacturers can alter to reduce 

the possibility of injury, simply adding 

a feature such as a “safety valve” or making 

a minor revision to the composition would 

not necessarily render prescription medications 

safer. Practically speaking, alternative 

designs do not exist to make prescriptions 

medications entirely safe. Logically, if a 

safer design exists for a particular drug, 

the original design would not have rendered 

the drug as originally designed “unavoidably 

dangerous.” See L. Frumer & M. Friedman, 

Products Liability §§8.07[1]–[2], pp. 

8-277 to 8-278 (2010) (comment k applies 

“only to defects in design,” and there “must 

be no feasible alternative design which on 

balance accomplishes the subject product’s 

purpose with a lesser risk”) (internal quotations 

omitted). Since prescription drugs are 

by nature unavoidably unsafe, a proposed 

alternative design also would have its own 

unique safety risks. Thus, someone could 

attack even a medication produced according 

to an alternate design as negligently designed. 

In other words, because prescription 

drugs are inherently “unavoidably dangerous,” 

a manufacturer could never create an 

entirely safe product completely insulated 

against negligent design liability. This reality 

makes negligent design claims illogical 

and impractical. 

Moreover, negligent design claims fail 

to recognize that to change a drug’s design, 

the composition, the formula, or the 

ingredients must be changed, which essentially 

transforms the medication into an entirely 

new and different compound or drug 

rather than producing an alternate version 

of the present medication. See Cody Labs., 

Inc. v. Sebelius, No. 10-CV-00147-ABJ, 2010 

U.S. Dist. Lexis 80118, at *16 (D. Wyo. July 

26, 2010) (noting that “[e]ven a change in 

an inactive ingredient will render a drug

a ‘new drug’” within the meaning of FDA’s 

framework) (internal citations omitted); In 

re OxyContin Antitrust Litig., 530 F. Supp. 

2d 554, 568 (S.D.N.Y. 2008) (quoting approvingly 

the testimony of Dr. Joseph Robinson, 

a University of Wisconsin professor 

of pharmacy and ophthalmology, that “[t]he 

minute you change the drug, the chemical, 

the formula, you have changed everything 

about that product.”). As one court 

explained, “[t]o alter the chemistry of the 

[drug] molecule, would be to create a new 

compound and a new product. There does 

not exist a mixture of ingredients capable of 

alternative design.” Sprague v. Upjohn Co., 

No. 91-40035-NMG, 1995 WL 376934, at 

*10 (D. Mass. May 10, 1994). Negligent design 

claims, therefore, are impractical because, 

by definition, “an alternative design 

is not reasonable if it alters a fundamental 

and necessary characteristic of the product.” 

Torkie- Tork, 739 F. Supp. 2d at 900. 

The impracticality of a design defect 

claim against a prescription medication 

manufacturer was demonstrated in a New 

York federal court in a recent trial concerning 

a jawbone injury allegedly caused 

by an osteoporosis medication. In Secrest 

v. Merck & Co., No. 1:06-cv-06292-JFK 

(S.D.N.Y. 2011), the plaintiff proceeded 

to take the case to the jury exclusively 

on claims of strict liability and negligent 

design defect after the court granted a summary 

judgment to her for claims for failure 

to warn. Determining that Florida law did 

not bar design defect claims against prescription 

medication manufacturers, the 

court instructed the jury as follows: 

A product is defectively designed if… 

the risks of the drug outweigh its benefits. 

In [making this] determin[ation]… 

you should consider the feasibility of an 

alternative safer design given the scientific 

and technical knowledge that 

existed at the time of manufacture…. 

You should consider not only the benefits 

and risks to plaintiff but also the 

overall risks and benefits to the public 

as a whole. 

Arguing that the FDA had erroneously approved 

the medication as “safe and effective” 

on numerous occasions for a handful 

of different indications, the plaintiff’s counsel 

declared during closing statements that 

“the safer alternative design [to the medication 

at issue] is a placebo pill.” In other 

words, the plaintiff, unable to offer proof of 

a safer alternative design, asked the jury to 

second- guess the FDA’s determination that 

the benefits outweighed the risks, arguing 

that the FDA should never have approved 

the medication at issue, or, at least, the medication 

should have been recalled once information 

arose about its possible risks. 

Plaintiffs Cannot Prove Negligent 

Design Sufficiently 

Even if a plaintiff met his or her burden 

of offering proof that a feasible alternative 

design existed that did not result in an 

entirely new medication, he or she would 

then have to prove that the design would 

have removed, or at least considerably 

diminished, the risk of his or her particular 

injury. To do so, the plaintiff must isolate 

the precise element of the medication’s 

design that harmed him or her. In most 

instances, the state of science is not sufficiently 

developed to allow this. 

After tackling this hurdle, a plaintiff 

would have the nearly impossible task 

of demonstrating that the alternatively 

designed drug has the same level of efficacy 

as the medication originally prescribed. A 

plaintiff would need expert testimony analyzing 

a collection of nonexistent clinical 

safety and efficacy data for the alternative 

product to satisfy this burden. It is unclear 

how a plaintiff and the plaintiff’s expert 

could acquire the data for a new, alternatively 

designed drug that the FDA never 

approved for testing. 

A plaintiff would also have to show that 

the FDA would approve the proposed alternative 

product. Without FDA approval, 

an alternative product is not “feasible.” See 

Wolfe, 2011 U.S. Dist. Lexis 34714, at *18– 

*20 (holding that the defendant did not have 

a duty to develop a safer version of the drug 

at issue, in part, because no other FDAapproved 

forms of that drug existed); Ackley 

v. Wyeth Labs., Inc., 919 F.2d 397, 401–02 

(6th Cir. 1990) (applying Ohio law) (requiring 

FDA approval for a vaccine’s alternative 

design to be considered “feasible”). Fulfilling 

this requirement would require both a 

complete record on the safety and efficacy 

of the alternative medication, as well as testimony 

from FDA employees about the ultimate 

approval determination. Since FDA 

officials can only testify in civil trials in limited 

circumstances, a plaintiff would have 

to overcome obstacles to produce this testimony. 

See 21 C.F.R. §20.1 (“No officer or 

employee of the [FDA]… except as authorized 

by the Commissioner… shall give any 

testimony before any tribunal pertaining to 

any function of the [FDA] or with respect to 

any information acquired in the discharge 

of his official duties.”). 

Other Legal Deterrents Make Negligent 

Design Claims Unnecessary 

In many of the states that excuse medication 

manufacturers from design defect 

claims, injured plaintiffs can still sue medication 

manufacturers for failure to warn 

or for manufacturing defects. A negligent 

design claim would allow a plaintiff to 

recover even though the FDA had already 

decided that the medication at issue was 

safe and effective and the plaintiff’s prescribing 

health-care provider was fully 

cognizant of all relevant risks and still 

determined that the medication’s benefits 

for that particular patient outweighed 

the risks. 

It doesn’t follow that without negligent 

design claims drug manufacturers would 

somehow have the freedom to engage in 

design “misconduct.” Manufacturers must 

follow stringent and demanding federal 

regulations in designing medications. The 

law also establishes civil and criminal punishment 

and a variety of lesser sanctions if 

they obtain FDA approval of a medication 

design through improper means. Hence, the 

states do not need to create additional layers 

of regulation. Cf., Buckman Co. v. Plaintiffs’ 

Legal Comm., 531 U.S. 341, 350 (2001) 

(holding that the Food Drug and Cosmetic 

Act preempts state law fraud-on-the-FDA 

claims because those claims “inevitably 

conflict with the FDA’s responsibility to police 

fraud consistently with the Administration’s 

judgment and objectives.”). 

Conclusion 

Recognizing a claim of negligent prescription 

medication design makes no more 

sense than recognizing a strict liability 

claim for defective design. Given the unique 

characteristics of prescription medications 

and the vast regulatory framework governing 

their market entry, negligent prescription 

medication design claims are illogical, 

impractical, and unnecessary, and courts 

should reject them wholesale. 



Biosimilars 

By Henninger S. Bullock 

and Andrew J. Calica 

The Next 

Big 

Thing 

Despite the opportunities 

presented by this nascent 

marketplace, players 

in this arena still face 

legal, regulatory, and 

economic uncertainty. 

The individual mandate dominated the headlines before 

and after the recent U.S. Supreme Court decision upholding 

the Patient Protection and Affordable Care Act. 

Though less publicized, that decision also preserved an 

equally interesting piece of legislation 

aimed at reducing health-care costs—the 

Biologics Price Competition and Innovation 

Act of 2009 (BPCIA). Biologics Price 

Competition and Innovation Act, Pub. L. 

No. 111-148, 123 Stat. XXX, (codified at 42 

U.S.C. §262). The BPCIA, section 351 of the 

Public Health Service Act, 41 U.S.C. 262(i) 

(1), signed into law on March 23, 2010, provides 

an abbreviated pathway for “biosimilars,” 

a generic form of innovative biologic 

products, to enter what could become the 

next frontier for new drugs and therapies 

for patients. 

Although conceptually similar to the 

Drug Price Competition and Patent Term 

Restoration Act of 1984, Pub. L. 98-417, 

98 Stat. 1585, referred to as the “Hatch- 

Waxman Amendments,” which established 

the abbreviated approval pathway 

for generic drugs in the small molecule 

market, there are important and, in some 

instances, still developing, differences in 

the language and potential implementation 

of the BPCIA that promise to raise critical 

legal, economic, and practical issues for the 

pharmaceutical industry. 

Biologics, defined to include viruses, 

therapeutic serums, toxins and antitoxins, 

blood and blood components, vaccines, 

allergenic products and proteins, 

except for chemically synthesized polypeptide, 

are typically generated through 

the use of the biologic processes of a living 

organism, or through biotechnology 

such as recombinant DNA technologies. 

42 U.S.C. §262(i)(1). Uses for biologics are 

varied, with examples including the treatment 

of rheumatoid arthritis (Humira, 

Enbrel, and Remicade), cancer (Avastin, 

Herceptin), and diabetes (Lantus). The 

molecular structures of biologics are far 

more complex than small molecule drugs; 

their molecules can be between 100 and 

1,000 times larger. As discussed below, this 

scientific and technical complexity presents 

unique challenges for the safety, efficacy, 

and interchangeability of products, 


■ Henninger S. Bullock is a partner and Andrew J. Calica is an associate of Mayer Brown LLP, resident in 

the firm’s New York office. Mr. Bullock and Mr. Calica counsel pharmaceutical clients in nationwide product 

liability litigation, complex commercial disputes, and internal investigations. Mr. Bullock is a co-leader 

of Mayer Brown’s Product Liability and Mass Torts group. James C. duPont, a Mayer Brown LLP associate, 

contributed to this article.

and also provides fertile ground for unique 

and developing legal issues and strategies. 

Biologics are also big business, accounting 

for 10–15 percent of the global pharmaceuticals 

market. The combined sales 

of the top 12 biologics in the United States 

reached an estimated $30 billion in 2010, 

and one calculation put the worldwide total 

for the one year period ending June 2011 

at a staggering $148.2 billion. Andrew F. 

Bourgoin, What You Need to Know About 

the Follow- On Biological Market in the 

U.S.: Implications, Strategies, and Impact 5 

(Thomson Reuters 2011); Thomas M. Burton 

& Jonathan D. Rockoff, FDA Sets Path 

for Biotech Drug Copies, Wall St. J., Feb. 10, 

2012. The opportunity for generic competition 

beckons. Between 2011 and 2015, more 

than 30 branded biologics are expected to 

lose patent protection in the United States. 

Generics and Biosimilars Initiative, Global 

Biosimilar Market to Grow to US $3.7 Billion 

in 2015, Aug. 4, 2011. 

Anticipating the potential for a new frontier, 

and perhaps in response to other factors 

such as the end of patent exclusivity 

for statins and an uncertain drug pipeline, 

biotechnology and pharmaceutical companies, 

both brand and generic, have engaged 

in a flurry of activity including acquisitions, 

mergers, and strategic partnerships. Eli Lilly’s 

2008 acquisition of ImClone elevated 

biologics to nearly half of its drug pipeline. 

Pfizer formed a strategic partnership with 

Biocon to compete in the recombinant human 

insulin market, primarily in emerging 

markets, but eventually in the United States 

as well. Teva and Lonza have undertaken a 

joint venture involving biologics, and Amgen 

recently announced a partnership with 

Watson Pharmaceuticals aimed at developing 

biosimilars to treat cancer. 

Despite the opportunity for a new frontier, 

as discussed further below, players in this 

market still face uncertainty—legal, regulatory, 

and economic—at nearly every turn. 

The Biologics Price Competition 

and Innovation Act 

Spurred by a desire to decrease the cost of 

expensive biologic therapies and, therefore, 

increase patient access to treatment for 

often serious and life- threatening conditions, 

the BPCIA offers a framework for the 

approval of biosimilar products for the first 

time in the United States. Under the act, a 

so-called 351(k) applicant demonstrates 

that its product is biosimilar to a licensed 

biological product, the “reference product,” 

if its product is “highly similar” to the reference 

product and there are “no clinically 

meaningful differences” between the two 

products in the areas of safety, purity, and 

potency. 42 U.S.C. §262(i)(2). Generally, an 

applicant must establish that (1) the biosimilar 

product uses the same mechanism 

of action as the reference product; (2) the 

condition of use in the proposed labeling 

has been previously approved for the reference 

product; (3) the route of administration, 

dosage form, and strength are 

the same; and (4) the facility for manufacturing, 

processing, packing, or holding 

meets standards designed to assure 

that the product remains safe, pure, and 

potent. 42 U.S.C. §262(k)(2)(A)(i). The U.S. 

Food and Drug Administration (FDA), in 

its discretion, may determine that one or 

more of these elements are unnecessary 

for a particular application. Id. An applicant 

must make the required showing with 

data derived from analytical studies, animal 

studies, and, notably, its own clinical 

studies. Id. Here a 351(k) application begins 

to diverge from a traditional Abbreviated 

New Drug Application (ANDA) submitted 

under the Hatch- Waxman Amendments. 

ANDA applicants typically rely exclusively 

on clinical studies conducted by the New 

Drug Application (NDA) holder. 

The FDA anticipates that demonstrating 

biosimilarity will be more cumbersome 

than demonstrating bioequivalence. 

Even slight differences in the structure of 

a biologic can produce significant therapeutic 

differences. In turn, these therapeutic 

differences can affect safety, purity, 

or potency. Manufacturing differences and 

environmental factors such as light and 

temperature can have a similar effect. As a 

result, unless the FDA deems them unnecessary, 

one or more clinical studies will be 

required to demonstrate biosimilarity. 

In determining biosimilarity, the FDA 

proposes to use a risk-based totalityof- theevidence 

approach. The FDA will evaluate 

the different information provided by an 

applicant—clinical studies, animal studies, 

knowledge of human pharmacokinetics—in 

reaching an overall assessment on 

whether or not a product is biosimilar to a 

reference product. The FDA has suggested 

that it will not apply a single one-size-fitsall 

analysis. 

In February 2012, the FDA unveiled 

guidance documents informing the industry 

that the first step in this approach is to 

characterize the structure and function of 

a proposed biosimilar and the reference 

product and then to compare them. Ctr. for 

Drug Evaluation and Research, Ctr. for Biologics 

Evaluation and Research, U.S. Dep’t 

of Health and Human Services, U.S. Food 

and Drug Admin., Guidance for Industry: 

Scientific Considerations in Demonstrating 

Biosimilarity to a Reference Product 7 

(2012). This characterization will be used as 

a guide in developing the scope and extent 

of animal and human clinical studies necessary 

to determine biosimilarity. Id. (“For 

example, if rigorous structural and functional 

comparisons show minimal or no 

difference between the proposed product 

and the reference product, the stronger the 

scientific justification for a selective and 

targeted approach to animal and/or clinical 

testing to support a demonstration of 

biosimilarity.”). The FDA has noted that an 

applicant may be able to demonstrate biosimilarity 

even if the biosimilar and the 

reference product exhibit “formulation or 

minor structural differences,” as long as the 

applicant demonstrates that they are not 

clinically meaningful. Id. at 8. The agency 

further advised that a clinically meaningful 

difference could include a difference 

in the “expected range of safety, purity, 

and potency” of the two products, but that 

“slight differences in rates of occurrence of 

adverse events between the two products 

ordinarily would not be considered clinically 

meaningful differences.” Id. 

Next, an applicant should consider the 

role of animal studies in addressing toxicity 

and in developing additional support 

for biosimilarity. Id. at 7. In the third step, 

the applicant conducts human pharmacokinetics 

studies and, when appropriate, 

pharmacodynamic studies. Id. Fourth, an 

applicant compares the clinical immunogenicity 

of the two products. Id. If after these 

steps residual uncertainties remain regarding 

biosimilarity, an applicant “should then 

consider what comparative clinical safety 

and efficacy data” may be necessary. Id.; 

Rachel E. Sherman, Assoc. Dir. for Medical 

Policy, Ctr. for Drug Evaluation and 

Research, U.S. Food and Drug Admin., 



Biosimilar Biological Products: Biosimilar 

Guidance Webinar 13 (2012). As one might 

expect, the FDA has encouraged applicants 

to consult with the agency in developing a 

clinical program after completing the comparative 

structural and functional analysis. 

Guidance for Industry: Scientific Considerations 

in Demonstrating Biosimilarity to a 

Reference Product, supra, at 7–8. 

Biologics arealso big 

business, accounting for 

10–15 percent of the global 

pharmaceuticals market. 

Biosimilarity and Interchangeability 

At the end of this process, a product deemed 

biosimilar will become eligible for marketing 

approval by the FDA. But approval does 

not ensure instant market penetration at the 

expense of the reference product. Unlike a 

classic generic product, a biosimilar product 

may not be substituted for a reference product 

without the intervention of the prescribing 

health-care provider. In other words, 

generic substitution laws, enacted in most 

states, will not permit pharmacists to substitute 

biosimilars for a reference product as 

they do in the small molecule market. Once 

again, it is the complexity of biologics that 

drives this different dynamic. 

However, the BPCIA contains a second 

designation. Once biosimilarity is established, 

the FDA may determine that a product 

is “interchangeable” with the reference 

product. Interchangeability requires a 

determination that (1) the biosimilar can 

be expected to produce the same clinical 

result as the reference product in any given 

patient, and (2) for a biological product 

that is administered more than once, that 

the risk to the patient in terms of safety or 

diminished efficacy of altering or switching 

between use of the biosimilar product and 

the reference product is not greater than 

the risk of not switching. 42 U.S.C. §262(k) 

(4). An interchangeable product may be 

substituted for the reference product automatically 

and without the intervention of a 

health-care provider. 


Progress Toward Implementation 

of the BPCIA 

Implementation of the act has been measured. 

In February 2012, the FDA issued 

three draft guidance documents on biosimilar 

product development. First, Scientific 

Considerations in Demonstrating Biosimilarity 

to a Reference Product, is intended to 

assist companies drawing up a 351(k) application 

in demonstrating that a proposed 

therapeutic product is a biosimilar. This 

draft guidance describes the FDA’s totalityof- 

theevidence approach, discussed above. 

Second, Quality Considerations in Demonstrating 

Biosimilarity to a Reference Protein 

Product, details the analytical factors 

considered when assessing biosimilarity. 

Third, Biosimilars: Questions and Answers 

Regarding Implementation of the Biologics 

Price Competition and Innovation Act 

of 2009, is intended to supply answers to 

common questions from applicants. The Q 

& A document provides the beginnings of 

a roadmap for navigating the application 

process. The FDA is now in the process of 

receiving and reviewing public comment 

on these documents. 

As part of its February 2012 rollout, the 

FDA reported that it had already received 

35 pre- Investigational New Drug (IND) 

meeting requests for proposed biosimilar 

products corresponding to 11 reference 

products, held 21 pre-IND sponsor 

meetings, and received 9 INDs. See Sherman, 

supra. No biosimilar applications 

have yet been received in the United States. 

In Europe, the European Medicines Agency 

approved its first biosimilar in 2006—Sandoz’s 

Omnitrope, used to treat growth hormone 

deficiency. Since then, 13 additional 

biosimilars have received approval. 

The FDA anticipates receiving only two 

biosimilar applications annually and only 

one application requiring a determination 

of interchangeability annually. Agency 

Information Collection Activities; Proposed 

Collection; Comment Request; General 

Licensing Provisions; Section 351(k) 

Biosimilar Applications, 77 Fed. Reg. 88,80, 

88,82 (Feb. 15, 2012). But these estimates 

are based on the FDA’s review of the expiration 

dates for patents related to potential 

reference products and general market 

interest in biological products that could 

be candidates for 351(k) applications. Id. 

The number of meeting requests and INDs 

received in the two years since the act’s 

passage may suggest that the FDA has 

underestimated the market’s interest in 

biosimilar and interchangeable products. 

Then again, the requests might signal a 

rush to market by key players already well 

positioned to enter the fray. Time will tell. 

Of note, the FDA has succeeded in 

implementing a user fee program to fund 

its review of 351(k) applications. Food and 

Drug Administration Safety and Innovation 

Act of 2012, Pub. L. No. 112-144, XXX 

Stat. XXX (codified in scattered sections of 

the U.S.C.); Rachel Slajda, FDA User Fee Bill 

Keeps Rocketing Through Congress, Law360 

(June 20, 2012). The new biosimilar user 

fee program is similar to the prescription 

drug user fee program but permits the collection 

of fees during the pre- application 

development phase to generate revenue 

in the near term and to enable the FDA to 

meet with applicants early in the development 

of potential products. 76 Fed. Reg. at 

76,425. Within five days of FDA acceptance 

of a request for a product development 

meeting, or upon the filing of an IND, the 

sponsor must pay an initial biosimilar biological 

product development fee. Food and 

Drug Administration Safety and Innovation 

Act, §744H(a)(1)(A). The sponsor must 

then pay an annual development fee each 

fiscal year thereafter. Id. at §744H(a)(1)(B). 

The Food and Drug Administration Safety 

and Innovation Act also calls for application 

and supplement fees, an annual biosimilar 

biologic product establishment fee 

to be paid by any facility engaged in the 

manufacture of a biosimilar product for 

which an application has been approved, 

and an annual biosimilar biologic product 

fee. Id. at §§744H(a)(2), 744H(a)(3), 744H(a) 

(4). Congress has authorized the FDA to 

use these fees for all aspects of the review 

of applications, including the development 

phase and postmarketing surveillance. 

The FDA estimates that the burden, in 

terms of hours, associated with the review 

of a biosimilar application will not differ 

from the review of first- generation biologic 

products. 77 Fed. Reg. at 88,81. As one 

might then expect, biosimilar application, 

establishment, and product fees will be 

equal to the fees established under the prescription 

drug user fee program for human 

drug applications, which includes new biological 

product applications, for any fiscal

year. Food and Drug Administration Safety 

and Innovation Act, §744H(b)(1); 76 Fed. 

Reg. at 76,425–26. Fees collected during 

the development phase are set at ten percent 

of those set for a human drug application. 

Id. Finally, the bill commands the 

FDA to produce written reports each fiscal 

year detailing the FDA’s progress in achieving 

established review goals, its implementation 

of the user fee program, and how it 

used the fees collected during that fiscal 

year. Food and Drug Administration Safety 

and Innovation Act, §744I(a), §744I(b). 

Notwithstanding the above, issues 

remain that could interrupt the implementation 

of this new regulatory scheme. For 

example, in April 2012 Abbott Laboratories 

filed a petition with the FDA requesting 

that the agency decline approval of any biosimilar 

application referencing Humira®, or 

any other product whose BLA was submitted 

prior to the BPCIA. The petition contends 

that approval would work a taking 

of the reference product sponsor’s trade 

secrets without just compensation. Further, 

having reasonably relied upon the 

FDA’s specific lack of authority to approve 

a biosimilar application, Abbott argued 

that the use of information provided to the 

FDA as a part of a pre-BPCIA BLA would 

frustrate the discreet investment- backed 

expectations of reference product sponsors. 

This issue, among others, could eventually 

result in litigation. 

Barriers to Entry 

Despite the market opportunities and a 

developing framework for seeking approval, 

the barriers for biosimilar products remain 

high. Some estimates for developing a biosimilar 

product are as high as $10 to $40 

million, compared to $1 to $2 million for a 

traditional generic. Estimates have anticipated 

that biosimilar products will involve 

higher manufacturing costs than traditional 

generics generate. Biologics probably 

will also generate higher distribution costs 

than small molecule drugs because biologics 

are less stable and have shorter shelf 

lives. These heightened costs will translate 

into a smaller price difference between biosimilars 

and reference products than in the 

typical brand- generic market. For example, 

Sandoz launched Omnitrope in Europe at 

only a 20–30 percent discount to its reference 

product, Eli Lilly’s Humatrope. Drug 

Appraisal: Assessing the Efficacy and Safety 

of Omnitrope, 2 Brit. J. Clin. Pharmacology 

298, 300 (2010). 

Manufacturers of reference products can 

also be expected to defend their turf. They 

may decide to produce increasingly complex 

products to discourage biosimilars or take 

aggressive approaches to pricing. Reference 

product manufacturers may also seek to develop 

second generation products of their 

own and encourage physicians to switch to 

those products rather than to biosimilars. 

Some generic manufacturers will no 

doubt seek to leverage their experience 

in Europe and other developing markets. 

Some generic manufacturers that have 

achieved approval for biosimilar products 

in other regulated markets have already 

started to work toward launch of a U.S. 

product, including Teva, Sandoz, Hospira, 

and Actavis. For example, Hospira’s biosimilar 

for Epogen to treat anemia is in the 

clinical trial phase in the United States. 

Others now seek strategic partnerships to 

shore up product development, technological 

innovation, and marketing and distribution 

needs. 

Still, regulatory and commercial uncertainty 

looms large. Combine those pressures 

with the reality that it appears that 

companies do not have enough potential 

biosimilar opportunities to launch new 

products continually and some companies 

may decide not to pursue biosimilar 

development. 

Some manufacturers may instead opt to 

file a Biologics License Application (BLA), 

positioning a drug as a reference product 

rather than using the abbreviated pathway 

for a biosimilar. The advantages of marketing 

a second- generation product, or “biobetter,” 

including market exclusivity and 

the ability to file at any time, may outweigh 

the burdens discussed above. Generics and 

Biosimilars Initiative, US Biosimilars Pathway 

Unlikely to Be Used, March 18, 2011; 

Michael McCaughan, Follow- On Biologics: 

Is there a Pathway, In Vivo Blog, May 20, 

2010. One report has noted that Sandoz, 

which has more biosimilar launches in regulated 

markets outside of the United States 

than any other company, has opted to file 

BLAs in the United States. Bourgoin, supra, 

at 5. Teva, the largest generic manufacturer 

in the world, also elected to file a BLA for 

a granulocyte colony- stimulating factor 

called Neutroval shortly before the passage 

of the BPCIA, rather than wait for the availability 

of the abbreviated pathway. Id. at 5. 

Legal Landscape 

The BPCIA raises some familiar legal issues 

but differs in structure and application from 

the Hatch- Waxman Amendments. We endeavor 

below to provide a primer on some 

of the most pressing issues, although we 

acknowledge that there is ample room for 

commentary in this still developing field. 

Patent Protection and Market Exclusivity 

Similar to the Hatch- Waxman Amendments, 

the BPCIA uses market exclusivity 

and the patent laws together to achieve the 

twin aims of fostering new drug innovation 

and patient access to lower cost products. 

However, once again, the complexity 

and variability of biologics has, in part, led 

Congress to take a different approach to 

exclusivity and patent dispute resolution 

regarding biologics. 

Reference Product Exclusivity 

The BPCIA authorizes a 12-year period of 

exclusivity for reference products. Biosimilar 

applications may not be submitted until 

four years after the date of first licensure of 

the reference product. 42 U.S.C. §262(k)(7) 

(B). Afterward, the FDA may not approve a 

biosimilar application until 12 years after 

the date of first licensure of the reference 

product. 42 U.S.C. §262(k)(7)(A). The reference 

product will enjoy an additional six 

months of exclusivity over and above these 

four- and 12-year time periods if the FDA 

determines that information related to 

the use of a biologic product will produce 

health benefits in the pediatric population 

and the sponsor completes the additional 

requested studies for that group. 42 U.S.C. 

§262(m)(2), §262(m)(3). 

The 12-year exclusivity term received 

bipartisan support in Congress, but unsurprisingly, 

industry viewpoints varied considerably. 

Andrew Pollack, Biologic Drugs 

May Get Less Protection, N.Y. Times, Jan. 

14, 2010. In 2008, the Biotechnology Industry 

Organization proposed a 14-year period 

of exclusivity. Bourgoin, supra, at 2 (citing 

H. Grabowski, Data Exclusivity for 

New Biological Entities, Duke Univ. Dep’t 

of Economics Working Paper, June 2007). 

Advocates argued that biosimilar produc- 



ers would market products that would have 

similarities to but that would not duplicate 

reference products, which would limit the 

patent protection of a reference product. 

Fed. Trade Comm’n, Emerging Health Care 

Issues: Follow- on Biologic Drug Competition 

32–33 (2009). Some proponents also 

argued that incentivizing innovator firms 

to invest in research and development for 

The FDA anticipatesthat 

demonstrating biosimilarity 

will be more cumbersome 

than demonstrating 

bioequivalence. 

new therapies and post- approval research 

to develop new uses for existing therapies 

required a longer period of market exclusivity. 

Id. at 39–41. 

In contrast, the Generic Pharmaceutical 

Association (GPhA) argued that a 

period similar to Hatch- Waxman’s five 

years of market exclusivity provided the 

incentives necessary to promote innovation 

while ensuring timely patient access to less 

costly biosimilars. The GPhA was wary of 

an absolute shield that would bolster what 

it characterized as reference product sponsors’ 

weaker patents. Press Release, Generic 

Pharmaceutical Association, GPhA Statement 

on BIO’s Flawed Data Exclusivity 

White Paper (Jan. 30, 2009). Other advocates 

for a shorter exclusivity period, such 

as the Federal Trade Commission (FTC), 

argued that because competition in the biosimilar 

market was more likely to resemble 

brand-to-brand competition than traditional 

brand- to- generic competition, the 

patent regime would protect developers 

sufficiently to spur innovation without 

an extended period of exclusivity. Emerging 

Health Care Issues: Follow- on Biologic 

Drug Competition, at 35–37. 

The Obama administration took a position 

somewhere in the middle. In a letter 

to Representative Henry Waxman, 

the White House endorsed an exclusivity 

period of seven years. Lisa Richwine, White 


House: 7 Years Enough to Shield Biotech 

Drugs, Reuters (June 25, 2009). Given the 

nascent state of the biosimilar industry in 

the United States, exactly how the 12-year 

period of exclusivity granted by Congress 

will affect the development of the market 

remains to be seen. 

First Interchangeable Exclusivity 

The first biosimilar determined to be interchangeable 

with a particular reference 

product will enjoy a period of exclusivity 

during which time the FDA cannot license 

other biosimilar products as interchangeable. 

The exclusivity calculus is based on 

the date of approval, the date of first commercial 

marketing, and certain patent litigation 

milestones. The period of exclusivity 

ranges in length from a minimum of one 

year after the date of the first commercial 

marketing of the biosimilar product as interchangeable 

with the reference product, 

to a maximum of 42 months after the approval 

of the first interchangeable biosimilar 

product if patent litigation is instituted 

and remains ongoing. 42 U.S.C. §262(k)(6). 

Opponents of this type of exclusivity 

pointed out perceived abuses and anticompetitive 

behavior attributed to the corollary 

180-day period of exclusivity under Hatch- 

Waxman. After the U.S. Court of Appeals 

for the District of Columbia Circuit ruling 

in Mova Pharmaceutical Corp. v. Shalala, an 

ANDA applicant only needed to be the first 

to file a Paragraph IV certification with respect 

to a particular drug to receive 180- 

day exclusivity. Mova Pharmaceutical Corp. 

v. Shalala, 140 F.3d 1060, 1076 (D.C. Cir. 

1998). Critics argue that this has promoted 

a litigation cottage industry in the small 

molecule market. They contend that some 

generic companies have taken opportunities 

to attack brand patents and settle disputes 

in exchange for agreements to delay entry 

of the generic form to the market, which 

they view as a business strategy as lucrative 

as the business of manufacturing generic 

drugs. Wendy H. Schacht & John R. Thomas, 

Cong. Research Serv., RL31379, The “Hatch- 

Waxman” Act: Selected Patent- Related Issues 

12–13 (2002); Bethany McLean, A Bitter 

Pill, Fortune, Aug. 13, 2001. Some were concerned 

that this same dynamic could play 

out with biosimilars. 

Proponents argued that market participants 

would be reluctant to invest the substantial 

resources necessary to establish 

interchangeability without the added certainty 

of recouping the costs associated 

with development and patent challenges. 

Emerging Health Care Issues: Follow- on 

Biologic Drug Competition, at 66–67. The 

decision to provide a period of exclusivity 

for the first product actually approved 

as interchangeable, rather than the first 

to challenge a reference product’s patents, 

applying only to interchangeable products, 

as opposed to interchangeable and biosimilar 

products, arguably promotes the desire 

to incentivize development without engendering 

anticompetitive behavior. 

The cost and complexity of establishing 

interchangeability and the anticipated 

narrow price differential between reference 

and biosimilar products suggests that this 

exclusivity period may not have a substantial 

impact on the market. Indeed, the first 

interchangeable product may experience 

de facto exclusivity as some have projected 

that only a few interchangeable products 

likely will enter the market. Id. at 67–68. 

Disclosure of Competitively Sensitive 

Information and Multiple Litigations 

The most significant difference between 

the small molecule patent dispute resolution 

approach and the BPCIA approach 

to patent dispute resolution is that the latter 

makes information- sharing compulsory 

and could lead to multiple litigations. 

Within 20 days of receiving a notice from 

the FDA that a biosimilar sponsor’s application 

has been accepted for review, the 

applicant must provide the reference product 

sponsor a copy of the application and 

additional information describing the process 

used to manufacture the proposed biosimilar. 

42 U.S.C. §262(l)(2). Although not 

explicitly stated, this manufacturing information 

will likely consist of what is known 

in the small molecule market as chemistry, 

manufacturing, and controls, or “CMC” 

information. 

This information is to be turned over to 

the reference sponsor’s in-house and outside 

counsel, as long as the attorneys do not 

engage in patent prosecution related to the 

reference product, for the exclusive purpose 

of determining whether a claim of patent 

infringement could reasonably be asserted. 

42 U.S.C. §262(l)(B)(ii), §262(l)(C), §262(l) 

(D). If the reference product sponsor is the

licensee of a particular patent, the information 

may be turned over to the licensor 

provided that the licensor has retained the 

right to assert the patent or participate in 

litigation and provided that the licensor has 

agreed to be subject to the act’s confidentiality 

provisions. 42 U.S.C. §262(l)(B)(iii). 

Following this initial disclosure, the biosimilar 

applicant and the reference sponsor 

are to exchange information and patent 

lists in an effort to determine which patents, 

if any, should lead to an immediate 

infringement action. Sixty days after 

the initial disclosure, the reference sponsor 

must provide the applicant with a list 

of patents for which the reference sponsor 

believes it could reasonably assert patent 

infringement claims and must identify 

which patents the reference sponsor is willing 

to license to the applicant. 42 U.S.C. 

§262(l)(3)(A). In response, the applicant 

must provide the reference sponsor with a 

detailed statement that describes the factual 

and legal basis of the applicant’s opinion, 

on a claim-by-claim basis, that one or 

more patents is invalid, unenforceable, or 

will not be infringed, or a statement that 

the applicant does not intend to market 

the product until the patent’s expiration. 

42 U.S.C. §262(l)(3)(B)(ii). The applicant 

must also list which patents it is willing to 

license from the reference sponsor, if any. 

42 U.S.C. §262(l)(3)(B)(iii). Finally, the reference 

product sponsor must then respond 

with a detailed statement specifying the 

factual and legal basis of the opinion, on a 

claim-by-claim basis, of the reference product 

sponsor that one or more patents will be 

infringed by the marketing of the biosimilar 

product. 42 U.S.C. §262(l)(3)(C). 

After this exchange, the parties must 

negotiate in good faith to determine which 

patents, if any, will be the subject of an 

immediate action for infringement. If a 

resolution is not forthcoming, provisions 

narrowing the number of patents at issue 

become applicable. 42 U.S.C. §262(l)(5), 

§262(l)(6). First, the biosimilar applicant 

decides how many patents it should litigate 

in an immediate infringement action; not 

which patents it should litigate, but only 

how many. 42 U.S.C. §262(l)(5)(A). Within 

five days, the reference sponsor and applicant 

must simultaneously exchange lists 

of patents, containing only the number of 

patents previously chosen by the biosimilar 

applicant, which each party believes should 

become the subject of an immediate action 

for infringement. 42 U.S.C. §262(l)(5)(B). If 

the biosimilar applicant decides that no patents 

should be litigated, the reference product 

sponsor may choose one patent to list. 42 

U.S.C. §262(l)(5)(B)(ii). The reference product 

sponsor must then bring an action for 

each patent contained on bothlists within 

30 days. 42 U.S.C. §262(l)(6)(B). All told, 

this exchange of patent lists and confidential 

information can last up to eight months. 

All other patents for which the reference 

sponsor intends to assert claims would 

then be litigated in a second proceeding 

after the biosimilar applicant supplies the 

reference sponsor with a mandatory 180- 

day notice that it intends to market the 

product. 42 U.S.C. §262(l)(8)(A). Presumably, 

this would not occur until at least 180 

days before the expiration of the reference 

sponsor’s 12 years of exclusivity. Unless the 

biosimilar applicant decides to launch “atrisk,” 

immediately on the expiration of the 

reference sponsor’s exclusivity, the reference 

sponsor’s exclusivity effectively would 

lengthen by the period of time that it takes 

to resolve the ensuing litigation. 

In contrast, an ANDA applicant in the 

small molecule context does not have to 

make similar disclosures other than in a 

particular set of circumstances. ANDA 

sponsors must certify, with respect to each 

patent listed under the referenced drug in 

the “Orange Book,” either that (1) the patent 

information has not been filed and listed, 

(2) the patent is expired, (3) the applicant 

does not intend to market the generic drug 

until after the patent’s expiration, or (4) the 

patent is invalid or will not be infringed by 

the manufacture, use, or sale of the new 

drug for which the application is submitted. 

21 U.S.C. §355(j)(2)(A)(vii). 

If an ANDA applicant elects to challenge 

a patent and makes a Paragraph IV 

certification, the sponsor must provide 

notice to the patent owner, and the holder 

of an approved application for the reference 

listed drug (RLD) if someone other than the 

patent owner, within 20 days of the FDA’s 

acceptance of the ANDA. 21 U.S.C. §355(j) 

(2)(B). This notice must include a detailed 

statement of the factual and legal basis for 

the opinion that the patent is invalid or 

will not be infringed.” 21 U.S.C. §355(j)(2) 

(B)(iv). The owner of the patent or the RLD 

holder then will have 45 days to commence 

an infringement action or the approval of 

the ANDA will take effect immediately. 21 

U.S.C. §355(j)(5)(B)(iii). The ANDA applicant 

may not bring a declaratory judgment 

action for non- infringement unless the 

45-day period has expired without either 

the patent owner or the RLD holder bringing 

an action for infringement. In addition, 

the ANDA sponsor’s notice to the 

patent owner or the RLD holder must have 

included an offer of confidential access to 

the ANDA application so that the owner of 

the patent or the RLD holder may determine 

whether an action for infringement 

should be brought. 21 U.S.C. §355(j)(5)(C) 

(i)(I). If an infringement action is brought 

within 45 days the approval shall be made 

effective 30 months after the date of receipt 

of the notice, or a shorter or a longer period 

as a court may order because either party to 

the action failed to cooperate reasonably in 

expediting the action, or because the court 

makes a final determination regarding 

infringement. 21 U.S.C. §355(j)(5)(B)(iii). 

One notable distinction between these 

two methods of resolution is that the BP- 

CIA does not establish a 30-month stay of 

approval of a biosimilar application pending 

a judgment on the issue of infringement 

as in a small molecule patent infringement 

dispute. Michael P. Dougherty, The New 

Follow- On- Biologics Law: A Section by Section 

Analysis of the Patent Litigation Provisions 

in the Biologics Price Competition and 

Innovation Act of 2009, 65 Food & Drug L.J. 

231, 234 (2010). Another is that the biosimilar 

applicant is required to turn over competitively 

sensitive information while the 

reference product sponsor doesn’t have an 

equivalent pre- litigation disclosure obligation. 

However, this is balanced by the biosimilar 

applicant’s ability to control the 

number of patents litigated in an immediate 

action and the timing of that litigation 

in relation to the expiration of the reference 

product sponsor’s market exclusivity. 

Though no 351(k) applications have yet 

been filed, the patent protection and exclusivity 

scheme may make applicants reluctant 

to use the abbreviated pathway and 

risk dissemination of sensitive information. 

Lack of an Orange Book Equivalent 

A final, significant difference between the 

small molecule scheme and the biosimilar 



scheme is that the BPCIA does not require 

a listing of biosimilar or interchangeable 

products and their reference products and 

associated patents. Bourgoin, supra, at 3. In 

the small molecule market, an NDA must 

include information regarding any patent 

which claims the drug for which the application 

is submitted. 21 U.S.C. §355(b)(1). 

This information is published by the FDA 

The FDA may establish 

more stringent postmarketing 

surveillance 

requirements for 

biosimilars than for classic 

generic products. 

in the Orange Book. When filing an ANDA, 

generic manufacturers can reference patents 

covering brand products in the Orange 

Book and, as previously noted, must make 

a certification regarding each patent listed 

in the Orange Book under a particular 

drug. Instead of publishing an Orange 

Book equivalent, the BPCIA relies on the 

exchange of patent information described 

above to identify relevant patents. Dougherty, 

supra, at 234. 

In a letter to the FDA, three pharmacist 

trade organizations expressed support 

for the development of an FDA- compiled 

interchangeability reference list, something 

similar to the current Orange Book, 

to assist health-care providers. Letter 

from Am. Pharmacists Ass’n, Nat’l Ass’n 

of Chain Drug Stores, and Nat’l Cmty. 

Pharmacists Ass’n to U.S. Food and Drug 

Admin. 3 (May 25, 2012). This type of listing 

would also aid prospective applicants 

to identify patents that might become the 

subject of a dispute before filing an application. 

Others have expressed concern that 

establishing a similar patent listing system 

may result in the same kind of anticompetitive 

behavior experienced in the 

small molecule market, such as the phenomenon 

of brand manufacturers delaying 

generic entry by “later listing” patents after 


an ANDA has been filed. Emerging Health 

Care Issues: Follow- on Biologic Drug Competition, 

at 57. On the other hand, if the 

intent is to encourage follow- on manufacturers 

to design around branded manufacturers’ 

patents, an Orange Book equivalent 

could aid in that process. 

Potential Litigation Exposure 

and Regulatory Scrutiny 

Because substitution of a biosimilar for a 

reference product requires specific intervention 

of a physician—the inverse in 

some respects of the “dispense as written” 

construct for traditional drugs—some 

commentators, and the European experience, 

have suggested that biosimilar manufacturers 

will be required to engage in 

promotional activities to achieve market 

penetration. Typically, generic manufacturers 

do not employ a sales force to promote 

their products, relying instead on 

price, timing of market entry, generic substitution 

laws, and placement on formularies 

to garner market share. Biosimilars 

may not enjoy those advantages, and price 

alone may not sufficiently motivate physicians 

to switch to biosimilars. Deploying 

so-called “detail men” may become necessary 

to ensure that physicians become 

comfortable with prescribing biosimilar 

products. Notwithstanding the advances 

in corporate compliance measures, operating 

a sales force carries inherent risks 

that could expose a company to the type 

of tort claims and regulatory scrutiny, for 

instance, for misbranding or offlabel promotion, 

traditionally reserved for innovator 

companies. 

The FDA may establish more stringent 

postmarketing surveillance requirements 

for biosimilars than for classic generic 

products. The FDA draft guidance suggests 

that in their post- market monitoring 

biosimilar applicants should take into consideration 

particular safety concerns associated 

with the use of the reference product 

and its class. Guidance for Industry: Scientific 

Considerations in Demonstrating Biosimilarity 

to a Reference Product, at 20. 

Biosimilar applicants are further advised 

to implement mechanisms to differentiate 

between adverse events associated with 

their products and those associated with 

the reference products, including events 

not seen with the reference products. Additional 

emphasis is placed on the detection 

of rare but potentially serious safety 

risks not identified during pre- approval 

testing. Biosimilars thus carry the potential 

for differing rates of particular adverse 

events from the reference products or for 

altogether different adverse events. Knowledge 

of these events, sometimes thought 

to reside only, or to a greater degree, with 

brand manufacturers, may instead reside 

with generic manufacturers. Biosimilars 

could, therefore, become targets for litigation 

in a way that small molecule generic 

manufactures are not accustomed. Similarly, 

Biosimilar manufacturers will have 

their own clinical trial experiences and 

may find themselves having to in some 

instances defend those trials in litigation. 

Will Mensing Preempt Failure-to- 

Warn Claims Involving Biosimilars 

Another outstanding question is whether 

plaintiffs will be able to maintain state law 

failure- to- warn claims involving biosimilars, 

or whether the courts will deem those 

claims preempted by federal law. Assuming 

for present purposes that the act does 

not contain any express preemption provision, 

and we haven’t found an obvious preemption 

clause, attorneys will fight on the 

battleground of implied or conflict preemption. 

To be sure, depending on the product 

at issue, other regulatory schemes may 

affect the biosimilar preemption analysis— 

the National Childhood Vaccine Injury Act, 

for instance—but we limit the discussion 

here to comparing biosimilars to products 

approved under Hatch- Waxman. 

In Pliva, Inc. v. Mensing, 131 S. Ct. 2567 

(2011), the U.S. Supreme Court held that 

the federal regulatory scheme governing 

prescription drugs preempted state law 

failure- to- warn claims. The touchstone 

of Mensing- style preemption is an ANDA 

holder’s federal duty of “sameness.” To 

obtain FDA approval, a generic manufacturer 

ordinarily must show that its 

drug is bioequivalent to the brand-name 

product. As the Court observed, by eliminating 

the requirement that generic manufacturers 

independently prove the safety 

and efficacy of their products, the Hatch- 

Waxman Amendments allow manufacturers 

to bring generic drugs to the market less 

expensively than they could if they had to 

undertake independent safety studies. This

analysis is fairly straightforward in the traditional, 

small molecule context. 

But, as discussed, the BPCIA establishes 

two tiers of similarity: biosimilarity 

and interchangeability. The first category, 

biosimilarity, may seem similar to 

bioequivalence, but it has important distinctions. 

The FDA draft guidance suggests 

that differences may exist in formulation 

between a reference product and a biosimilar. 

For example, a proposed biosimilar 

product may demonstrate biosimilarity 

even though it does not contain human 

serum albumin, which is part of the reference 

product’s formulation. The second 

category, interchangeable products would 

seem to present the strongest argument 

for sameness, or at least most similarity, in 

comparison to reference products. Interchangeable 

biosimilars may be substituted 

for reference products without the intervention 

of a prescriber and are expected 

to produce the same clinical result in any 

particular patient. It remains to be seen 

whether courts will treat these tiers differently 

in a preemption analysis. 

Mensing’s duty of sameness extends to 

the product labeling as well. An ANDA 

holder cannot initiate labeling changes that 

would render its product information different 

from that of the NDA holder, or in 

some cases, a reference listed drug holder. 

Thus, except for small differences, such as 

a National Drug Code identifier, a generic 

manufacture must use the same label as 

the NDA at all times. The FDA has not yet 

made clear whether or to what degree this 

construct will apply to biosimilars. 

All that the act requires is that an application 

include information demonstrating 

that “the condition or conditions of use 

prescribed, recommended, or suggested in 

the labeling proposed for a biological product 

have been previously approved for the 

reference product.” 42 U.S.C. §262(k)(2)(A) 

(i)(III). The FDA draft guidance does not fill 

in the gaps for industry: “Labeling of a proposed 

product should include all the information 

necessary for a health professional 

to make prescribing decisions…” Guidance 

for Industry: Scientific Considerations in 

Demonstrating Biosimilarity to a Reference 

Product, at 21. Although it would result in 

practical difficulties, a case-by-case determination 

on labeling is not entirely out of 

the question, given the complexity of and 

uncertainty involved in biologics. Some 

industry groups have raised with the FDA 

the possibility that differing effects of biosimilars 

on patients could warrant labeling 

distinctions. As it currently stands, 

biosimilars will have a different naming 

convention than small molecule generics, 

suggesting another area of potential divergence 

from classic ANDA drugs. 

Interestingly, the act does include an 

exception to the approval process permitting 

applicants in certain product classes to 

submit their applications under 505 of the 

FDCA. 21 U.S.C. §355. Because this application 

would fall within the same regulatory 

scheme addressed by the Mensing 

court, we have good reasons to think that 

preemption would apply to the labeling on 

these products. The exception is, however, 

time limited. Only applications submitted 

before approval of the act and those submitted 

no later than 10 years after enactment 

may be eligible. 

Absent labeling sameness, the reasoning 

underpinning Mensing arguably will 

not translate to the biosimilar context. If 

a biosimilar contains its own precautions, 

warnings or adverse events, presumably 

only the biosimilar manufacturer, can initiate 

labeling changes, at least to those 

unique sections, setting aside the FDA’s 

authority to do so on its own initiative for 

a moment. 

How, if at all, the courts will apply the 

preemption doctrine to biosimilars may 

well have implications for manufacturers of 

reference products. NDA holders currently 

face claims by consumers of ANDA products 

that are premised on their ability or an 

ANDA’s inability to alter drug labeling and 

the medical community’s perceived reliance 

on information originating with an 

NDA holder. So-called brand or “innovator” 

liability is truly a minority position in 

the case law, but California courts have recognized 

it, for example. If labeling claims 

can proceed against biosimilars, litigants 

who ingested biosimilar products may not 

target reference product manufacturers, or 

reference product manufacturers may have 

defenses that differ from those available to 

innovator companies in the small molecule 

litigation. 

Even setting preemption aside, reference 

product manufacturers may have powerful 

arguments in cases involving noninterchangeable 

biosimilars. Brand liability 

is premised on the notion that (1) an NDA 

holder’s warning is addressed to the compound, 

not merely its own branded product; 

and (2) the substitution of a generic 

product by a pharmacy is a foreseeable 

event, happenstance, or both, and, therefore, 

does not break the causal chain. Neither 

premise may operate in the biosimilar 

context because each product may contain 

unique warnings, and pharmacies may not 

substitute biosimilars for reference products 

without physician intervention. 

Conclusion 

The United States is marching toward a biosimilar 

world. The opportunities for industry 

and the potential benefits for patients 

can hardly be ignored. Nonetheless, economic, 

regulatory, and legal uncertainty 

abounds and promise to shape the contours 

of this nascent marketplace. Will biosimilars 

indeed become the next big thing Stay 

tuned. 



FDA Opinion Letters 

By Nancy M. Erfle 

and Andrew J. Lee 

Why Courts Should 

Exclude Warning, 

“Untitled,” and 

Advisory Letters 

Tips to arm defense 

practitioners with 

challenges to the 

admissibility of these 

letters, which judges and 

juries should understand 

do not determine any 

rights or legal obligations. 

We’ve recently spent some time with U.S. Food and Drug 

Administration (FDA) letters admonishing drug manufacturers 

for various alleged regulatory infractions. As 

litigators, we’ve seen plaintiffs’ attorneys wave these letters 

before judges or jurors to fan the flames of 

contempt for our clients. Unfortunately, to 

those not steeped in the FDA’s practices— 

namely, many judges and most jurors—the 

FDA’s name places the letters’ contents beyond 

reproach. That is a problem. Certainly, 

manufacturers treat these FDA letters seriously 

and generally work to meet the FDA’s 

demands. But for a variety of business and 

political reasons, manufacturers often do so 

regardless of the accuracy and substance of 

the accusations in the letters. In short, the 

letters invite a level of deference that FDA 

practice may contradict. 

Regrettably, few appellate opinions have 

dealt with the admissibility of FDA opinion 

letters, and even the opinions that do 

exist treat the issue in cursory ways. We 

wish to help change that by arming defense 

practitioners with challenges to the letters’ 

admissibility. 

A Letter and Its Title or Lack of One 

Not surprisingly since appellate courts 

haven’t closely examined FDA letter admissibility, 

we have found little case law describing 

the letters and their limitations. In 

fact, the best authority that we’ve found is 

a blog posting by James M. Beck and Mark 

Herrmann, writing under the pen name 

“Bexis,” on Drug and Device Law. See James 

M. Beck & Mark Herrmann, You Have Been 

Warned—Now Do Something About It, 

Drug and Device Law Blog, http://drugand 

devicelaw.blogspot.com/2010/04/you-have-beenwarned-now-do-something.html 

(posted April 

21, 2010 3:03 PM) (discussing Bailey v. Wyeth, 

Inc., 424 N.J. Super. 278, 301–02, 37 

A.3d 549 (2008)). To summarize—and update 

a bit—there are three types of letters 

that the FDA may send when confronted 

with activities that potentially violate drug 

marketing law and regulations: 

• Warning letters are titled as such and are 

intended to be “informal and advisory.” 

Various FDA centers or district offices 

issue warning letters when, in their 

opinion, a manufacturer has engaged 


■ Nancy M. Erfle is a shareholder and Andrew J. Lee is a senior counsel in the Portland, Oregon, office of 

Schwabe Williamson & Wyatt. Ms. Erfle is chair of the firm’s Product Liability and Business Litigation Practice 

Group. She focuses her practice primarily on the defense of major manufacturers and clients involved in 

complex business disputes. Mr. Lee’s practice has focused on defending companies in high-stakes personal 

injury actions. Both authors are members of DRI and the DRI Drug and Medical Device Committee.

in activities that “may lead to enforcement 

action if not promptly and adequately 

corrected.” U.S. Food and Drug 

Admin., Regulatory Procedures Manual, 

4-1-1, 4-1-10 (2011), available at 

http://www.fda.gov/ICECI/ComplianceManuals/ 

RegulatoryProceduresManual/default.htm (last 

visited Sept. 7, 2012) (emphasis added). 

• Untitled Letters, as suggested by the 

word “untitled,” do not bear a title, do 

not relate to a “significant violation,” 

and in contrast to warning letters, their 

contents do not threaten an enforcement 

action. Regulatory Procedures Manual, 

supra, at 4-2-1. 

• Advisory letters are issued by the new 

FDA Office of Prescription Drug Promotion, 

referred to as the “OPDP,” in response 

to a manufacturer’s submission 

of advertising and marketing materials 

under the caption “Request for Advisory 

Comment” prior to publication; in the 

past the FDA Division of Drug Marketing, 

Advertising and Communications 

issued them. See OPDP Submission of 

Proposed DTC TV Ads for Advisory Review, 

http://www.fda.gov/AboutFDA/Centers 

Offices/OfficeofMedicalProductsandTobacco/ 

CDER/ucm090159.htm (last visited Sept. 7, 

2012) (manufacturer should caption their 

pre- publication submissions “Request for 

Advisory Comments”); OPDP Frequently 

Asked Questions (FAQs), Predistribution 

submissions, http://www.fda.gov/AboutFDA/ 

CentersOffices/ OfficeofMedicalProductsand 

Tobacco/CDER/ucm090308.htm (last visited 

Sept. 7, 2012, 2012) (“DDMAC provides 

opinions on proposed advertisements 

and labeling pieces before use upon request 

by an applicant.”). 

Importantly, none of these letters 

embody “FDA findings.” As the Bexis post 

notes, the FDA considers even the most 

pressing letter type, the warning letter, 

“informal and advisory” and an “opportunity 

[for the manufacturer] to take voluntary 

and prompt corrective action…” 

Beck & Hermann, supra; Regulatory Procedures 

Manual §4-1-1 (stating same). In 

other words, the “FDA does not consider 

Warning Letters to be final agency action 

on which it can be sued.” Id. See also Biotics 

Research Corp. v. Heckler, 710 F.2d 1375, 

1378 (9th Cir. 1983) (noting that letters 

do not “constitute a final decision by the 

FDA”); Estee Lauder, Inc. v. FDA, 727 F. 

Supp. 1, 6–7 (D.D.C. 1989) (noting that the 

FDA letter was not the agency’s “final position.”); 

Profls. & Patients for Customized 

Care v. Shalala, 847 F. Supp. 1359, 1365 

(S.D. Tex. 1994) (noting that letters “merely 

establish a dialogue”). 

The Bexis post further offers several 

reasons why plaintiffs’ attorneys shouldn’t 

“drool” over these letters and punitive 

damages. Beck & Hermann, supra. In particular, 

they note that the FDA’s statutory 

authority for addressing alleged regulatory 

infraction is limited to situations involving 

“minor violations.” Id. (citing 21 U.S.C. 

§336). Further, Bexis writes: 

FDA’s Regulatory Procedures Manual 

makes pretty clear… that warning letters 

are “not appropriate” if alleged violations 

are “repeated,” “continual,” 

“intentional,” “flagrant,” or “willful”; or 

if “[t]he violation presents a reasonable 

possibility of injury or death.” Id. §4.1.1. 

What does that do for us Well, it means 

essentially that FDA warning letters 

shouldn’t have any significance in a punitive 

damages case. That’s because punitive 

damages generally are only available 

where the defendant’s conduct is all of 

the things that the FDA says aren’t properly 

addressed in warning letters. 

Beck & Hermann, supra (emphasis in 

original post) (citing and quoting Regulatory 

Procedures Manual §4.1.1, “Warning 

Letters”). 

The Bexis post did offer some thoughts 

on the letters’ admissibility, noting character 

evidence and impeachment issues 

in particular. It then concluded by citing 

a few cases in which courts had excluded 

the letters and a few additional cases about 

the prejudicial potential of government 

reports generally. Beck & Hermann, supra; 

In re Viagra Prods. Liab. Litig., 658 F. Supp. 

2d 950, 966 (D. Minn. 2009) (excluding 

letter because there was no evidence that 

the plaintiffs or the physicians ever saw 

the advertising that was the subject of 

FDA letters); In re Seroquel Prods. Liab. 

Litig., No. 6:06-md-1769-Orl-22DAB, 2009 

U.S. Dist. Lexis 124798, at *286 (M.D. Fla. 

Jan. 30, 2009) (excluding letters because 

the “[p]lain tiffs have not shown that their 

prescribing physicians were exposed to 

the promotional materials”). In sum, the 

Bexis blog post was great piece, but to our 

eyes anyway, it did not cover the “nuts and 

bolts” of admissibility. That leaves us some 

room to construct our own arguments. 

A Cautionary Tale 

Before turning to the admissibility issues, 

it’s worth taking a quick detour to illustrate 

the peril posed by the FDA’s position on letters. 

According to the FDA Regulatory Procedures 

Manual, warning letters set forth 

These FDA letterscarry 

an aura of authority, 

finality, and reliability 

that has the potential to 

deceive even those trained 

to interpret the law. 

“the agency’s position on a matter.” Regulatory 

Procedures Manual, supra, at §4- 

1-1. But a manufacturer is without legal 

recourse to challenge those positions. Id.; 

Biotics Research Corp., 710 F.2d at 1378; Estee 

Lauder, Inc., 727 F. Supp. at 6–7. The FDA 

expects “voluntary and prompt corrective 

action.” But the FDA refuses to commit itself 

to any enforcement action, id., relying 

instead on its superior negotiating position. 

See, e.g., Regulatory Procedures Manual, supra, 

at §4-1-10 (drug and device warning letters 

should include statement advising the 

manufacturer that other federal agencies 

may take the warning letter into account 

when considering the award of contracts). 

If you sense that the FDA has tried to 

have its cake and eat it, too, you’re not alone. 

At least one commentator has remarked 

that the FDA uses these letters to impose its 

will on manufacturers without risking judicial 

review: “Most of the FDA’s decisions… 

escape… scrutiny, which means that nothing 

other than humility and self- restraint 

stand in the way of regulatory overreaching.” 

Lars Noah, Symposium: U.S. Food and 

Drug Regulation in Its First Century and Beyond: 

Article: The Little Agency That Could 

(Act with Indifference to Constitutional and 

Statutory Strictures), 93 Cornell L. Rev. 901, 

925 (2008). See also Lars Noah, Administra- 



tive Arm- Twisting in the Shadow of Congressional 

Delegations of Authority, 1997 Wis. 

L. Rev. 873. 886–87, 941 (1997) (identifying 

the coupling of warning letters with threats 

to contracts with the federal government, 

“the single largest purchaser of prescription 

drugs in this country,” as a practice 

that “poses serious concerns about sacrificing 

fairness and accountability”) (citations 

To a plaintiff’s attorney 

an FDA letter is conclusive 

proof of a manufacturer’s 

wrongful conduct. 


omitted). And because the FDA’s positions 

escape judicial scrutiny, the letters pose 

unique dangers to manufacturers—especially 

when the judiciary fails to scrutinize 

the scant judicial scrutiny. 

In State ex rel. McGraw v. Johnson & 

Johnson, 226 W. Va. 677, 704 S.E.2d 677 

(2010), the state of West Virginia sued 

Johnson & Johnson and Janssen Pharmaceutica 

Products, L.P., for alleged violations 

of that state’s consumer protection 

act based on those companies’ promotional 

activities aimed toward health-care 

providers. The FDA had issued Janssen two 

warning letters regarding its communications 

with prescribers about two separate 

medications. Id. at 682, 683. In response to 

each warning letter, Janssen had provided 

to the FDA detailed, scientifically supported 

rebuttals to the FDA’s position, but 

it also voluntarily complied with the FDA’s 

request for corrective actions. Id. at 682, 

683. After Janssen completed its corrective 

actions, the FDA closed the two matters 

without undertaking any enforcement 

action. Id. at 682, 683. Fast- forward to West 

Virginia’s consumer protection lawsuit. On 

the state’s motion, the trial court concluded 

that (1) the warning letters evidenced the 

FDA’s determination that Janssen’s communications 

were false and misleading; 

(2) Janssen waived judicial review by failing 

to formally contest the FDA’s determination; 

and (3) Janssen was collaterally 

estopped from disputing that its communications 

were false and misleading in the 

state’s action against it. Id. at 687. 

Fortunately, our cautionary tale has a 

happy ending: the Supreme Court of West 

Virginia reversed. See id. at 689 (holding that 

FDA warning letters do not represent final 

agency action and are not adjudicative in that 

they do not provide manufacturers with due 

process). But the case still teaches that these 

FDA letters carry an aura of authority, finality, 

and reliability that has the potential to deceive 

even those trained to interpret the law. 

Shouldn’t Evidence 

Evince Something 

As we alluded to in our introduction, few 

things swell a plaintiff’s attorney’s heart as 

does an FDA letter admonishing a manufacturer. 

Similar to the West Virginia 

trial court judge in McGraw, to a plaintiff’s 

attorney an FDA letter is conclusive proof 

of a manufacturer’s wrongful conduct. But, 

to be blunt, that position is wrong. Courts 

not only should know that the letters are 

not conclusive evidence, but they should 

not even admit them as evidence. 

This discussion by necessity is abstract 

because courts assess relevance in light of a 

case’s facts and claims, and our article has 

neither facts nor a particular jurisdiction’s 

law. However, even without delving into the 

reasons that an alleged regulatory transgression 

may be irrelevant—and there are 

many—the jury simply should not consider 

an FDA letter. FDA letters engender undue 

prejudice and confusion, present inadmissible 

hearsay, and offer only the inadmissible 

opinions of their authors. 

Central to those arguments is the fact that 

the FDA itself accords the letters very little 

procedural substance. As mentioned earlier, 

the FDA treats even warning letters as intermediate 

proclamations. This means, that 

when a manufacturer that disagrees with 

FDA opinions sues the FDA, the FDA contests 

the manufacturer’s standing because 

“Warning Letters fall far short of establishing 

a real and immediate threat that FDA 

will institute an enforcement action against 

them,” and impose no “hardship” on a manufacturer 

greater than being “confronted by 

an interpretation of a law it dislikes.” FDA 

Motion to Dismiss, Holistic Candlers and 

Consumer Association v. FDA, No. 10-cv-582 

(RJL), 2010 U.S. Dist. Ct. Motions 467839, at 

*28–*29 (D.D.C. June 10, 2010) (internal quotation 

marks and citations omitted). Indeed, 

the FDA admits that even warning letters do 

not “represent the consummation of FDA’s 

process,” nor “determine any legal rights or 

obligations.” FDA Motion to Dismiss, Cody 

Labs. v. Sebelius, No. 10-CV-00147-ABJ, 2010 

U.S. Dist. Ct. Motions 329611, at *28–*29 (D. 

Wyo. July 22, 2010). 

The FDA necessarily takes those positions 

regarding the letters because they are 

not formal advisory opinions. No doubt in 

part because the FDA employs more than 

11,000 people, many of whom are in constant 

communication with public and private 

institutions and individuals, the FDA 

protects itself from being bound to its 

employees’ judgments on specific positions 

or actions by regulation: 

A statement or advice given by an FDA 

employee orally, or given in writing … is 

an informal communication that represents 

the best judgment of that employee 

at that time but does not constitute an 

advisory opinion [a term of art under 

the code], does not necessarily represent 

the formal position of FDA, and does not 

bind or otherwise obligate or commit the 

agency to the views expressed. 

21 C.F.R. §10.85(k) (emphasis added). 

While the FDA may undertake enforcement 

actions during or after sending a 

warning letter, as outlined in the Regulatory 

Procedures Manual §4-1-1, it rarely 

undertakes enforcement actions to force 

corrective actions. See U.S. Food and Drug 

Admin., FDA Enforcement Story, Ch. 10 

(2009), available at http://www.fda.gov/ICECI/ 

EnforcementActions/EnforcementStory/default.htm 

(last visited Sept. 7, 2012). In 2008, the most 

recent year for which the FDA has published 

statistics, the FDA issued 445 warning 

letters but filed only eight seizures and 

five injunctions. Id. But even in the rare 

instances that the FDA actually institutes 

enforcement actions regarding labeling— 

and thus undertakes to prove the positions 

in its letters, the “FDA’s belief that a 

drug is misbranded is not conclusive,” and 

the issue of misbranding is one for a jury. 

Wyeth v. Levine, 555 U.S. 555 (2009). 

Even if a jury is entitled to hear the 

collateral issue of regulatory infractions, 

the letters themselves are unduly prejudicial, 

misleading, confusing, and timeconsuming 

on that issue. As we suggested 

at the beginning of this article—and as

alluded in the Bexis post—“there is a real 

possibility that the jury [will] give undue 

deference to such evidence.” Denny v. 

Hutchinson Sales Corp., 649 F.2d 816, 822 

(10th Cir. 1981) (excluding a government 

report). See also Fowler v. Firestone Tire 

& Rubber Co., 92 F.R.D. 1, 2 (N.D. Miss. 

1980) (excluding a National Highway Traffic 

Safety Administration report under Fed. 

R. Evid. 403 because of danger that the 

jury would “give the evidence inordinate 

weight”). Educating jurors to assign proper 

weight to the letters can only “protract an 

already prolonged trial with an inquiry 

into collateral issues regarding the accuracy 

of the [letter] and the methods used 

in its compilation.” City of New York v. Pullman, 

Inc., 662 F.2d 910, 915 (2d Cir. 1981). 

That danger of confusion, the waste of 

time, and the prejudice is not speculative. 

Returning for the moment to McGraw, the 

case in which the trial court collaterally 

estopped the manufacturer from contesting 

that its communications were false and 

misleading, the trial court judge and state’s 

attorneys gave the FDA letter undue weight 

even after examining the law. Lay jurors 

confronting FDA regulations surely will 

have even more difficulty according such 

a letter proper weight. And even if a manufacturer 

could educate jurors to pierce 

their unquestioning reliance on the letter’s 

author’s opinions, the time is unwarranted 

when a jury would still need to decide, in 

the first instance, whether the manufacturer 

committed a regulatory infraction. 

Arguments on behalf of manufacturers 

for excluding FDA letters under Federal Rule 

of Evidence 403 and state equivalents are 

strengthened by voluntary “corrective” actions 

in response to receipt of letters. Some 

jurisdictions may allow a manufacturer to 

exclude the episode as a subsequent remedial 

measure under Federal Rule of Evidence 407. 

But even when that rule does not apply, you 

may still vindicate one of its purpose by relying 

on Federal Rule of Evidence 403. As one 

court has concluded, “the best rationale for 

the application of the [subsequent remedial 

measure] rule is that… juries… may overreact” 

when faced with evidence of corrective 

actions. Krause v. American Aerolights, Inc., 

307 Or. 52, 59, 762 P.2d 1011 (1988) (inference 

of fault from corrective action is a “fallacy”). 

Additionally, the letters amount to inadmissible 

hearsay. Even the sweep of the public 

records exception is not broad enough to 

encompass FDA letters. Although the public 

records exception allows admission of “conclusion 

or opinion” under its “factual findings” 

prong, articulated in Beech Aircraft 

Corp. v. Rainey, 488 U.S. 153, 164 (1988), 

the exception does not reach “tentative or 

interim reports subject to revision and review.” 

Tool v. McClintock, 999 F.2d 1430, 

1434–35 (11th Cir. 1993) (holding that proposed 

rule published in Federal Register 

regarding premarket approval for siliconegel 

filled breast prostheses was not admissible). 

And FDA letters are subject to review 

by the issuing employee’s superiors merely 

upon request. See U.S. Food and Drug Admin., 

Guidance for Industry—Formal Dispute 

Resolution: Appeals above the Division 

Level, at 1 (Feb. 2000), available at http:// 

www.fda.gov/downloads/Drugs/GuidanceComplianc 

eRegulatoryInformation/ Guidances/ucm079743.pdf 

(last visited Sept. 7, 2012) (describing same). 

Further, pure legal conclusions—that is, one 

of the objects of plaintiffs’ attorneys’ desire 

that they seek from FDA letters—do not fall 

within the scope of the exception. Sullivan 

v. Dollar Tree Stores, Inc., 623 F.3d 770, 777 

(9th Cir. 2010) (“Pure legal conclusions are 

not admissible as factual findings.”); Hines 

v. Brandon Steel Decks, Inc., 886 F.2d 299, 

302 (11th Cir. 1989) (“Rule 803(8)(C) does 

not provide for the admissibility of the legal 

conclusions contained within an otherwise 

admissible public report.”). 

Finally, even assuming that an FDA letter 

could clear the other evidentiary hurdles, 

the letter is still, at most, the expression of 

the “opinions of the FDA officials who wrote 

the letters,” which are not “official position[s] 

concerning the labeling of [a manufacturer’s] 

products to which [a] court can defer.” 

Schering- Plough Healthcare Prod., Inc. v. 

Schwarz Pharma, Inc., 547 F. Supp. 2d 939, 

946 (E.D. Wis. 2008) (emphasis added). See 

also Biotics Research Corp., 710 F.2d at 1378 

(“The letters… contain conclusions by subordinate 

officials of the FDA… [but] do not 

commit the FDA to enforcement action.”). 

Those opinions do not belong before a jury 

unless you can subject the author to crossexamination. 

See Bryan v. John Bean Div. 

of FMC Corp., 566 F.2d 541, 546 (5th Cir. 

1978) (“[T]o admit the hearsay opinion of 

an expert not subject to crossexamination 

goes against the natural reticence of courts 

to permit expert opinion unless the expert 

has been qualified before the jury to render 

an opinion.”). In fact, even if you could test 

those opinions through crossexamination, 

they would still improperly “invade the 

province of the court to determine the applicable 

law and to instruct the jury as to 

that law” and, therefore, “could not have 

been helpful to the jury in carrying out its 

legitimate functions.” United States v. Scop, 

FDA lettersengender 

undue prejudice and 

confusion, present 

inadmissible hearsay, and 

offer only the inadmissible 

opinions of their authors. 

846 F.2d 135, 139, modified, 856 F.2d 5 (2d 

Cir. 1988) (issuing the holding, in part, because 

witness repeatedly tracked the exact 

language of the statutes and regulations 

which the defendant had allegedly violated 

and used judicially defined terms such as 

“manipulation,” “scheme to defraud,” and 

“fraud’) (internal quotation marks and citations 

omitted). 

A Final Thought on Titles 

FDA letters are not the consummation of the 

FDA process. They do not determine any legal 

rights or obligations. Upon receipt of a letter, 

a manufacturer is without formal legal 

recourse to challenge its author’s opinions. 

But these letters do not have titles that make 

their limitations apparent to the uninformed 

eyes of jurors and judges. We’d like the FDA 

to use more descriptive titles for its letters. To 

invoke former presidential candidate George 

McGovern’s comment, “[t]he longer the title, 

the less important the job.” Somehow, it 

seems that plaintiffs’ attorneys would greet 

FDA letters with less relish if they were titled, 

“Letter containing its author’s interim opinion 

about a minor violation and which does 

not commit FDA to any enforcement action, 

even if voluntary corrective actions are not 

undertaken,” assuming that a judge would 

admit such a letter in the first place. 



Anomalies and 

Implications 

By Ralph S. Tyler, Thomasina 

E. Poirot, Andrea S. Andrews 

and Bruce R. Parker 

The federal government 

and the medical products 

industry have been at war 

over off-label promotion 

long enough. It is time 

to find a solution. 

The First 

Amendment 

and “Off-Label” 

Promotion 

The now quite familiar headline almost screams: “Drug 

Company X Pays Government Many Millions [even billions] 

to Settle Off- Label Drug Promotion Case.” Most of 

the media stories that accompany such headlines share 

certain common themes. First, the government’s 

ability to secure a settlement means, 

of course, that the government extracted 

this large sum from Drug Company X 

without the government’s substantiating 

at trial, let alone on appeal, the validity of 

the underlying legal theory or theories of 

the case, and also without the government’s 

persuading a trier of fact that its version of 

the facts was more probable than whatever 

the company’s defenses might have been. 

And second, accounts of such settlements 

rarely assert that the settling drug 

company’s troubles arose because the 

company made false or misleading statements 

about one of the company’s drugs. 

Instead, Drug Company X found itself in 

the crosshairs because it made statements 

about its drug that were at odds with the 

drug’s FDA- approved uses (indications) 

and FDA- approved labeling, even if the 

statements were factually true and not misleading. 

Attorneys involved in representing 

companies in the pharmaceutical or 

medical device industries, whether as inhouse 

counsel or as outside counsel, know 

that truthful, nonmisleading statements 

about uses beyond those that the FDA has 

approved and as stated on the label can 

place a company in the unenviable position 

of being, like Drug Company X, the target 

of a False Claims Act case. 

The focus of this article is the First 

Amendment principles involved in offlabel 

promotion cases and some of the 

anomalies and implications of those cases. 

The anomalies are striking. It is, for example, 

not intuitive that it is permissible, if 

not required as a matter of the standard 

of medical care, for doctors to prescribe 

a medication “offlabel” (that is, for uses 

beyond those that the FDA has approved 

■ Ralph S. Tyler and Bruce R. Parker are partners, and Andrea S. Andrews and Thomasina E. 

Poirot are associates, of Venable LLP in Baltimore. Mr. Tyler’s practice 

concentrates on state and federal regulatory issues. He was 

formerly chief counsel for the FDA and held this position while the 

Allergan case was pending. Mr. Parker’s practice emphasizes pharmaceutical 

and medical devices litigation. He is a past member of 

the DRI Board of Directors. Ms. Andrews’ and Ms. Poirot’s practices 

focus on medical products liability and toxic tort litigation. 


as stated on the drug’s label) while, at 

the same time, it is impermissible for the 

drug’s manufacturer to promote truthfully 

the fact that doctors are using the drug offlabel. 

Equally peculiar is the fact that it is 

entirely permissible for the doctor to promote 

his or her offlabel use of the drug 

(assuming that the doctor is not connected 

to or compensated in any way by the drug 

company), but, again, the drug company is 

precluded from making the same promotional 

statements. 

The Tension Between the First 

Amendment and the Regulation 

of Medical Products 

An open marketplace of free expression, 

with a high tolerance for controversial 

ideas, is the core of the First Amendment. 

That open market First Amendment framework 

is at odds, however, with the tightly 

regulated medical product marketplace 

(when the term “medical products” is used 

in this article, it includes pharmaceuticals 

and medical devices). The regulated medical 

product marketplace has little tolerance 

for commercial speech promoting nongovernmentally 

approved uses of a medical 

product. 

The strictly enforced premise underlying 

the First Amendment open marketplace is 

that government is precluded from picking 

and choosing between the ideas it likes 

and the ones it does not. The rationale for 

the regulated drug product marketplace, 

in sharp contrast to this First Amendment 

model, is that only government is competent 

to determine which uses of a product 

are safe and effective (and thus approved) 

and, therefore, government is entitled to 

limit economically motivated speech to promote 

nongovernmentally approved uses. 

This clash between First Amendment 

and regulatory principles gets played out 

in its most graphic (and for industry most 

expensive) form because of the close and 

inevitable interplay between (a) the government’s 

medical product approval/labeling 

scheme, (b) the government’s involvement 

in paying billions of dollars annually for 

health care through Medicare and Medicaid, 

and (c) the False Claims Act (FCA). 

The government’s position in FCA cases is 

that if the sales personnel, for example, of 

a medical products company promote the 

offlabel use of one of the company’s FDA- 

regulated products by touting truthfully 

offlabel uses of the product and if the government 

pays for such offlabel uses, then 

the government has paid a “false claim.” 

The statutory penalties for violating the 

FCA are stiff. See 31 U.S.C. §3729 (a)(1)(g). 

A fair reading of the extraordinarily rich 

body of First Amendment case law casts a 

long shadow over the government’s theory 

in offlabel promotion cases in which 

truthful statements trigger massive liability. 

As the large offlabel FCA settlements 

confirm, however, the availability of 

strong defenses has seemingly made little 

difference to either the government or the 

companies it has pursued. 

For the government, the incentives to 

bring these cases include the prospect of 

generating significant revenue all in the 

name of “fighting healthcare fraud.” For 

industry, the incentives to settle and not to 

put the government’s legal and factual theories 

to the test of full judicial scrutiny include 

avoiding the risk of indictment and 

avoiding the risk of exclusion from participation 

in receiving federal healthcare funds. 

A criminal indictment is a very heavy burden 

for any company, particularly a publicly 

traded company, and exclusion from 

the Medicare/Medicaid programs is effectively 

the economic death sentence. 

There are, however, some contrary 

rumblings below the radar of the highly 

publicized settlements. These rumblings 

involve cases in which the relevant First 

Amendment- based arguments have been 

advanced. This article will review two of 

those cases. From there, we will examine 

how these offlabel issues impact product 

liability tort cases. And finally, we will propose 

an approach that seeks to preserve the 

integrity of the government’s drug labeling 

scheme while also respecting and preserving 

the First Amendment right of medical 

product companies to make truthful statements 

about their products. 

The Allergan case 

Allergan, Inc. v. United States, Case No. 

1:09-cv-01879 (D.D.C.) (“Allergan”), was a 

civil declaratory judgment case in which 

the plaintiff, a pharmaceutical company, 

challenged FDA’s prohibition of truthful, 

nonmisleading offlabel promotion 

of drugs. After extensive briefing of crossmotions 

for summary judgment, the parties 

agreed to dismiss the case as part of a 

larger settlement between Allergan and the 

government. The arguments in the case are 

nevertheless instructive. 

Allergan’s Allegations and Claims 

Allergan’s products include Botox (onabotulinumotoxinA), 

a product that the 

FDA has approved for several uses and for 

which FDA has approved labeling consistent 

with those uses. Allergan alleged that 

“[a]l though many health care professionals 

frequently use Botox® to treat on- label 

conditions, health care professionals use 

Botox® even more often to treat offlabel conditions.” 

Complaint at 55, Allergan, Inc. v. 

United States, No. 1:09-cv-01879 (D.D.C. 

Oct. 1, 2009) (emphasis added). A significant 

example of this “more often” offlabel 

use is treatment for “various conditions 

associated with spasticity, such as poststroke 

spasticity in adults and lower-limb 

spasticity in pediatric patients with cerebral 

palsy.” Id. at 56. 

Allergan alleged that it wanted to communicate 

with health care professionals 

(not directly to consumers) medical information, 

including safety and dosage information, 

which the company had about the 

offlabel use of Botox to treat spasticity. Id. at 

76–86. Allergan further alleged that it was 

afraid of the consequences were it to engage 

in its contemplated “wide- ranging communication 

plan.” Id. at 83. Specifically, Allergan 

alleged that “its planned truthful, 

nonmisleading scientific speech to physicians 

about the use of Botox® to treat spasticity 

would lead to criminal prosecution 

and severe criminal penalties.” Id. at 88. 

Allergan’s challenge focused on FDA’s 

labeling and advertising regulations (21 

C.F.R. §202.1). Allergan challenged as over 

broad and thus overly restrictive of a drug 

manufacturer’s speech FDA’s interpretation 

of “labeling” as encompassing all materials 

distributed and supplied by the manufacturer 

containing drug information. 

Allergan also challenged as facially invalid 

the FDA drug advertising regulation that 

provides that a dug is “misbranded” if an 

advertisement for it “suggest[s] any use 

that is not in the labeling accepted in [the 

drug’s] approved new-drug application.” 21 

C.F.R. §202.1(e)(4)(i)(a). 

The Food, Drug, and Cosmetic Act 

(FDCA) makes it unlawful to introduce a 



drug into interstate commerce for an intended 

use absent FDA approval. Allergan 

contended that “[t]he FDCA and the FDA’s 

regulations prohibit Allergan from speaking 

truthfully to health care professionals 

about medical issues associated with the offlabel 

use of Botox®.” Mem. Supp. Mot. Prelim. 

Inj. at 19, Allergan, Inc. v. United States, 

No. 1:09-cv-01879 (D.D.C. Oct. 1, 2009). 

That contention is based on the way in 

which the statute and regulations link a 

drug’s approval for specific “indications” 

(meaning uses for which the drug has been 

proven to be safe and effective) and drug 

“labeling” (which FDA interprets to include 

advertising). In Allergan’s view, it was unconstitutionally 

at risk of prosecution for 

“misbranding” by distributing its drug if its 

“labeling,” construing that term as Allergan 

alleged FDA does, contains a suggestion of 

offlabel use or adequate directions for use. 

Allergan’s First Amendment analysis 

involved three steps: (1) FDA’s rules “trigger 

First Amendment scrutiny because they are 

irretrievably content- based”; (2) “offlabel 

promotion is protected speech because offlabel 

use is lawful”; and (3) “although the 

Government has significant interests that 

could justify some restrictions of offlabel 

promotional practices, there is no need 

for the Government to choose the drastic 

means reflected in FDA’s regulations: the 

blanket suppression of offlabel speech.” 

Mem. Supp. Cross-Mot. Summ. J. and Opp. 

Mot. Dismiss or Summ. J. at 18–19, Allergan, 

Inc. v. United States, No. 1:09-cv-01879 

(D.D.C. Jan. 15, 2010). 


The Government’s Response 

The government’s First Amendment 

defense largely rested on the idea that offlabel 

promotion enjoys no First Amendment 

protection because the sale of a drug 

for an unapproved use is unlawful. See, 

e.g., Cent. Hudson Gas & Elec. Corp. v. Pub. 

Serv. Comm’n, 447 U.S. 557, 563–64 (1980) 

(“[T]here can be no constitutional objection 

to the suppression of commercial messages 

that do not accurately inform the 

public about lawful activity. The government 

may ban forms of communication 

more likely to deceive the public than to 

inform it, or commercial speech related to 

illegal activity.”) (citations omitted). 

The government argued that Allergan’s 

lawsuit was “a frontal assault on the framework 

for new drug approval” and that Allergan 

was seeking a regulatory regime “in 

which FDA’s approval of a drug for one use 

would free the manufacturer to promote 

the drug for other, unapproved uses without 

seeking FDA approval of a drug for such 

other uses and without conducting adequate 

clinical trials to determine whether 

the drug is safe and effective for the unapproved 

uses.” Mem. Supp. Mot. Summ. J. at 

16, Allergan, Inc. v. United States, No. 1:09- 

cv-01879 (D.D.C. Jan. 11, 2010). 

The government did not dispute that 

FDA treats “advertising or promotional 

labeling that expressly or implicitly promotes 

a particular use” of a drug “as evidence 

that the use is intended.” Id. at 19. 

Further, if a drug manufacturer’s “speech 

demonstrates, either by itself or in conjunction 

with the other circumstances 

surrounding the distribution of the drug, 

that an unapproved [offlabel] use is an 

intended use, the manufacturer may not 

distribute the drug for that use” without 

obtaining FDA’s approval. Id. 

In the government’s view, the lawfulness 

of a drug manufacturer’s action turns 

on whether the activity is “promotional.” If 

the manufacturer is “promoting” an unapproved 

offlabel use of the drug, that is prohibited. 

If, however, the manufacturer is 

providing health care professionals with 

“non- promotional” information about the 

drug in an article in a medical journal, 

for example, that is permissible, arguably 

encouraged. 

United States v. Caronia 

United States v. Caronia, 576 F. Supp. 2d 

385 (E.D.N.Y. 2008), appeal pending No. 

09-5006 (2d Cir. 2010), is a criminal case 

in which the defendant pharmaceutical 

sales representative Caronia challenged on 

First Amendment grounds his indictment 

for violating the misbranding provisions 

of the FDCA as a result of allegedly promoting 

the offlabel use of a drug (Xyrem). 

The district court denied Caronia’s motion 

to dismiss the indictment in a thoughtful 

opinion that recognized the importance of 

the issues. See id. at 393 (“Caronia’s constitutional 

attack calls into question America’s 

regulatory regime for the approval and 

marketing of prescription drugs.”). 

The court in Caronia ruled that “promotion 

of offlabel usage does not promote 

unlawful activity [and]… [p]romotion of 

offlabel uses is not inherently misleading 

simply because the use is offlabel.” Id. at 

397 (emphasis in original) (citations and 

quotation omitted). Nevertheless, the court 

denied Caronia’s motion to dismiss, concluding 

that the government’s interest in 

restricting a manufacturer’s promotion of 

offlabel uses is substantial, restricting promotion 

of offlabel uses directly advances 

this interest, and the FDCA’s restrictions 

are no more extensive than necessary to 

advance this interest. Id. at 398–99. 

After the district court’s decision in 

Caronia, but while Caronia’s appeal was 

pending in the Second Circuit, the Supreme 

Court decided Sorrell v. IMS Health Inc., 

131 S. Ct. 2653, 2659 (2011) (“Speech in aid 

of pharmaceutical marketing… is a form 

of expression protected by the Free Speech 

Clause of the First Amendment.”), a case 

that certainly bolsters the defense’s argument 

on appeal. Sorrell is discussed further 

below. 

Off-label Claims in Product 

Liability Cases 

The government is not alone in seeking 

to impose liability on medical products 

companies based upon claims of offlabel 

promotion. Plaintiffs in medical products 

tort liability cases often make claims 

based on offlabel promotion claims. Those 

claims rest on various theories, including 

negligence, negligence per se, breach of 

warranty, strict liability, misrepresentation, 

fraud, and unfair or deceptive trade 

practices. 

The typical complaint alleging offlabel 

promotion and predicating claims on those 

promotional statements will allege that 

the statements were false, untrue, misleading, 

or fraudulent. While a defendant 

may have a First Amendment defense in 

such a case, that defense plainly cannot 

be asserted successfully at the motion to 

dismiss stage when the allegations of the 

complaint are taken as true. See Thompson 

v. W. States Med. Ctr., 535 U.S. 357, 367 

(2002) (no First Amendment protection for 

speech that is misleading). In such a case, 

the defendant would want to raise the First 

Amendment as an affirmative defense in 

its answer, conduct fact discovery to establish 

the truthfulness of the offlabel promotional 

statements, and then in a motion for

summary judgment argue that the claim is 

barred by the First Amendment. 

If a plaintiff were to allege that he or she 

was injured by, for example, the consumption 

of a drug for a prescribed offlabel use 

and that the doctor prescribed the drug in 

response to a pharmaceutical sales representative’s 

truthful, nonmisleading promotional 

statements about the offlabel 

use, then a First Amendment defense could 

be raised at the motion to dismiss stage. 

Whether at the motion to dismiss stage 

or later in the case, the first hurdle that must 

be overcome is the “state action doctrine.” 

As is well understood, the Bill of Rights, 

including the First Amendment, limits the 

powers of the federal government (and, by 

incorporation, the powers of state governments), 

not private parties; therefore, to implicate 

the First Amendment, there must 

be sufficient governmental action. There is 

authority for the proposition that the imposition 

of tort liability and filing in the 

state or federal judicial system is constitutionally 

sufficient “state action.” See In re 

Factor VIII or IX Concentrate Blood Prods. 

Litig., 25 F. Supp. 2d 837, 840–41 (N.D. Ill. 

1998) (“The Supreme Court has established 

that the imposition of tort liability constitutes 

state action which implicates the First 

and Fourteenth Amendments… Nothing 

in plaintiff’s briefs suggests that imposing 

tort liability would not amount to governmental 

action.”) (citing New York Times v. 

Sullivan, 376 U.S. 254 (1964)). Assuming 

that the requisite “state action” nexus can 

be established, the question then is whether 

the plaintiff’s claim is barred by the First 

Amendment. 

The court will first determine if the 

speech is commercial, utilizing a threefactor 

test: (1) whether the expression is an 

advertisement; (2) whether it refers to a specific 

product and (3) whether the speaker 

has an economic motivation for speaking. 

The Caronia court determined that offlabel 

promotional activities were considered to 

be speech. From there, the court will utilize 

the reminder of the Central Hudson 

balancing test to weigh the competing interests 

of the commercial speakers versus 

the government’s interest in regulation. The 

“government interest” (here meaning the 

interest being advanced by the plaintiff’s 

claim) must be substantial, the restriction 

imposed as a result of the plaintiff’s claim 

must directly advance this “governmental 

interest,” and the restriction may not 

be more extensive than necessary to serve 

that interest (i.e., that there is a reasonable 

fit between the means and ends of the commercial 

speech restriction). Thompson v. W. 

States Med. Ctr., 535 U.S. at 367 (citing Cent. 

Hudson Gas & Elec. Corp., 447 U.S. at 566)). 

The significance of the “governmental 

interest” will be weighed in light of the Su- 

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preme Court’s analysis last Term in Sorrell 

v. IMS Health, Inc., 131 S. Ct. 2653 (2011). 

In Sorrell, the Court invalidated a Vermont 

law involving the sale and use of pharmacy 

records. Under the Vermont law, “the information 

may not be sold, disclosed by pharmacies 

for marketing purposes, or used for 

marketing purposes, or used for marketing 

by pharmaceutical manufacturers.” Id. 

at 2659. The state’s conceded significant interest 

in protecting privacy interests and in 

protecting patients from prescription decisions 

not in the patients’ best interest were 

not sufficient to sustain the law. The Sorrell 

Court made clear the heavy burden that 

the Vermont law faced and, by inference, 

the heavy burden of “heightened judicial 

scrutiny” faced by other laws restricting 

the speech of pharmaceutical manufacturers. 

Id. Civil tort claims based on truthful, 

nonmisleading off label promotion claims 

should receive similar scrutiny, despite 

claims about the significance of the interests 

that the plaintiffs are seeking to protect. 

Just as Vermont’s law allowed pharmacies 

to share prescriber information 

with any entity except for marketing purposes, 

offlabel promotion claims restrict 

(prohibit) pharmaceutical marketing with 

regard to offlabel uses. The Supreme Court 

acknowledged that Vermont’s law has the 

effect of preventing company sales representatives 

from communicating with physicians 

and providing them with effective 

information. The Court said, “the State 

may not seek to remove a popular but disfavored 

product from the marketplace by 

prohibiting truthful, nonmisleading advertisements 

that contain impressive endorsements 

or catchy jingles. That the State finds 

expression too persuasive does not permit 

it to quiet the speech or to burden its messengers.” 

Id. at 2671. 

Prohibitions of offlabel promotion are 

defended in part on the ground that the 

government is protecting the health of the 

public by preventing biased information 

from entering the hands of physicians and 

influencing their prescribing practices. 

Certainly a tort plaintiff would follow this 

line of argument, contending that allowing 

offlabel promotion is likely to result in 

bad treatment decisions because, for example, 

doctors will be acting in reliance upon 

incomplete or inaccurate information. Vermont’s 

version of that argument in Sorrell 


did not fare well in the Supreme Court: “if 

pharmaceutical marketing affects treatment 

decisions, it does so because doctors 

find it persuasive. Absent circumstances 

far from those presented here, the fear that 

speech might persuade provides no lawful 

basis for quieting it.” Id. at 2670. 

Arguably the best case for raising a successful 

First Amendment defense is when 

the offlabel use of a drug or device is common 

(if not the standard of care), and when 

the government reimburses offlabel use 

of a drug through federally funded programs 

such as Medicare or Medicaid. The 

Medicare statute permits reimbursement 

for expenses that are “reasonable and necessary 

for the diagnosis or treatment of 

an illness or injury.” 42 U.S.C. 1395y(a)(1) 

(A). The Medicare Benefit Policy Manual 

instructs that the Medicare contractors 

must determine the use to be “medically 

accepted, taking into consideration the 

major drug compendia, authoritative medical 

literature and/or accepted standards of 

medical practice.” Medicare Benefit Manual 

50.4.2. This manual should be consulted 

when defending these tort claims to 

determine if the product or device at issue 

is mandated to be reimbursed under the 

government’s healthcare system. 

Perhaps the greatest challenge in disposing 

of an offlabel promotion claim in 

a tort case on First Amendment grounds 

is the difficulty of getting a “clean case” in 

which there is no factual dispute regarding 

the truthfulness of the allegedly offending 

offlabel statements. That will be a rare case. 

The more common pattern will be that even 

post- discovery there will be factual ambiguity 

surrounding the truthfulness of the 

offlabel statements. Were full disclosures 

made, for example, regarding relevant risk 

information Recollections and testimony 

are almost certain to vary on these types of 

issues. In that case, the jury will be left with 

resolving the factual dispute and the manufacturer 

would seek a First Amendment jury 

instruction to the effect that if the jury finds 

that the offlabel statements were truthful 

and not misleading, then the defendant is 

entitled to judgment on the claim. 

Resolving the Conflicting 

and Shared Interests of the 

Government and Industry 

What emerges from this brief review of 

both governmental and private offlabel 

litigation is that litigation is unlikely to 

resolve these issues any time soon. Litigation 

is a notoriously blunt and highly 

imperfect instrument for resolving important 

policy issues. Moreover, as noted at the 

outset, companies have strong incentives to 

pay the money and settle, rather than to litigate 

to define more clearly the legal boundaries. 

That is not going to change. What 

needs to occur, therefore, is for the government, 

specifically FDA and the Department 

of Justice, and the medical products 

industry to come together with a solution, 

a solution that recognizes the need to protect 

the drug approval process while giving 

appropriate latitude for the exercise of First 

Amendment rights. 

Medical products companies, both pharmaceutical 

companies and medical device 

companies, have several different types 

of interests that need to be reconciled. 

First, marketing is “protected by the Free 

Speech Clause of the First Amendment” 

and companies have an interest in marketing 

their products. At the same time, companies 

have an interest in strengthening, 

not undermining, the federal regulatory 

system. Industry’s stake in a strong, credible 

FDA regulatory system includes being 

able to invoke it as evidence of safety and 

efficacy and as an aid in defending product 

liability tort suits. In addition, the 

FDA regulatory scheme benefits industry 

by promoting consumer confidence in 

FDA- approved products, Joseph A. Levitt, 

Regulation of Dietary Supplements: FDA’s 

Strategic Plan, 57 Food Drug L.J. 1, 3 (2002), 

and FDA approval is very helpful in defending 

product liability lawsuits, sometimes 

based upon preemption and sometimes 

because the fact of FDA approval has a 

positive influence on jurors. See Stephanie 

A. Scharf et al., Juror Perceptions of the 

FDA That Affect Verdicts in Pharmaceutical 

Lawsuits, Products Liability Litigation 

43:4 (2012). 

Industry also has a desire to engage in 

truthful off label communication, free of 

the threat of criminal and civil prosecution 

hanging over their heads. Industry 

has an undeniable economic incentive to 

engage in offlabel promotion and to sell a 

drug for purposes other than or in addition 

to the one(s) for which the drug has been 

“Off-Label”, continued on page 90


Some Unsettled 

Issues Linger 

By Edward W. Gerecke 

and David J. Walz 

Mensing: 

Effects and 

Opportunities 

Aside from its direct 

application to claims 

against generic 

manufacturers, Mensing 

has sparked other less 

expected issues that 

affect distributors and 

dispensers, and alter the 

analysis of procedural 

matters such as removal 

to a federal court. 

The United States Supreme Court opinion in PLIVA, Inc. 

v. Mensing, 131 S. Ct. 2567 (2011), changed the landscape 

for generic manufacturers. The Court ruled that warningrelated 

claims conflict with federal law and are preempted. 

After Mensing, the weight of authority 

holds that federal law preempts claims 

related to warnings or information disseminated 

by generic manufacturers. Enterprising 

plaintiffs’ attorneys have attempted 

to make inroads against that authority or 

otherwise limit Mensing, but most efforts 

have been less than successful. Even when 

plaintiffs have gained some traction, they 

have achieved results only in the pleadings 

stage or in ways specific to particular cases. 

Aside from its direct application to 

warningrelated claims against generic 

manufacturers, Mensing has sparked other 

less expected issues. These issues have bearing 

on claims under theories of liability such 

as design defect, affect different defendants 

including distributors and dispensers, and 

alter the analysis of procedural matters such 

as removal to a federal court. This article 

will focus on Mensing’s immediate effects 

in these particular areas, including the opportunities 

Mensing presents in each area. 

The Mensing Holding and Reasoning 

In Mensing, the Court overruled a string of 

lower court cases that restricted preemption 

for generic products following Wyeth v. 

Levine, 555 U.S. 555 (2009). Mensing’s wellknown 

holding requires little elaboration. 

Simply put, the Court held: 

We find impossibility here. It was not 

lawful under federal law for the [m]anufacturers 

to do what state law required 

of them…. 

If the [m]anufacturers had independently 

changed their labels to satisfy 

their state-law duty, they would 

have violated federal law. Taking [the 

plaintiff’s] allegations as true, state law 

imposed on the [m]anufacturers a duty 

to attach a safer label to their generic 

[drug]. Federal law, however, demanded 

that generic drug labels be the same at 

all times as the corresponding brandname 

drug labels. Thus, it was impossible 

for the [m]anufacturers to comply 

■ Edward W. Gerecke and David J. Walz are shareholders in the Tampa, Florida, office of Carlton Fields. Mr. 

Gerecke’s practice involves product liability and mass tort litigation with a particular focus on pharmaceutical 

and medical device litigation. He is a member of the DRI Drug and Medical Device Committee Steering 

Committee. Mr. Walz focuses on the defense of actions involving prescription and generic drugs, medical 

devices, and over- the- counter medical products. He is a member of the DRI Drug and Medical Device, Product 

Liability, and Trial Tactics Committees, along with various other professional and defense organizations. 



with both their state-law duty to change 

the label and their federal law duty to 

keep the label the same. 

Mensing, 131 S. Ct. at 2577–78 (citing 21 

C.F.R. §314.150(b)(10)). 

In other words, the key “question for 

‘impossibility’ is whether the private party 

could independently do under federal law 

what state law requires of it.” Id. at 2579 

Nothingin Mensing limits its 

impossibility reasoning and 

application of preemption to 

generic manufacturers or to 

manufacturers generally. 

(emphasis added). As the Court elaborated, 

“when a party cannot satisfy its state duties 

without the Federal Government’s special 

permission and assistance, which is 

dependent on the exercise of judgment by 

a federal agency, that party cannot independently 

satisfy those state duties for preemption 

purposes.” Id. at 2581. 

The Mensing reasoning was based on the 

unique regulatory environment for generic 

drugs under the Hatch- Waxman amendments 

to the Food, Drug and Cosmetic Act 

(FDCA), formally titled the “Drug Price 

Competition and Patent Term Restoration 

Act of 1984.” Unlike brand-name products, 

generic drugs “gain FDA approval simply 

by showing equivalence to a [brand-name] 

drug that has already been approved by the 

FDA.” Id. at 2574 (citing 21 U.S.C. §355(j)(2) 

(A)). See also 21 C.F.R. §314.127(a)(7). 

That showing of equivalence includes 

all labeling information. The generic 

manufacturer’s obligation is only the 

“responsib[ility] for ensuring that its warning 

label is the same as the brand name’s.” 

Id. at 2574 (citing 21 U.S.C. §355(j)(2)(A) 

(v), §355(j)(4)(G); 21 C.F.R. §314.94(a)(8), 

§314.127(a)(7)). As a result, “generic drug 

manufacturers have an ongoing federal 

duty of ‘sameness.’” Id. at 2575. 

Because the Court analyzed and 

answered the issue under that regulatory 

framework, little question remains 


about many warningrelated claims against 

generic manufacturers. Mensing and the 

requirement of “sameness” seal their likely 

fate. Questions about other claims and 

other defendants, however, remain for the 

lower courts, and possibly the Supreme 

Court again. The resulting answers will 

affect generic manufacturers, of course, 

but they will also affect brand-name manufacturers 

and distributors and pharmacists 

as well. 

Effects on Generic Manufacturers 

for Design Claims 

While warningrelated or informationbased 

theories of liability proceed on new 

terrain under Mensing, it appears unclear 

how courts will apply Mensing to designbased 

claims. One notable outlier, a federal 

appellate court decision, Bartlett v. 

Mut. Pharm. Co., 678 F.3d 30 (1st Cir. 2012), 

highlights this uncertainty. 

In Bartlett, the First Circuit refused to 

apply Mensing to preempt design- defect 

claims against a generic drug. Instead, 

the court treated Mensing as only a narrowly 

defined “exception” to the “general 

no- preemption rule” established in Wyeth 

v. Levine, 555 U.S. 555 (2009). Bartlett, 678 

F.3d at 37–38. Thus, while the Levine “holding 

was technically limited to failure- towarn 

claims, its logic applies to design 

defect claims as well.” Id. at 37. 

Having decided that Levine controlled 

as the general rule, the court seemed to 

acknowledge the critical point for design 

defect: the generic manufacturer “cannot 

legally make [the product] in another composition.” 

Id. Nonetheless, preemption did 

not apply because another source of liability 

existed. According to Bartlett, the 

manufacturer “certainly can choose not to 

make the drug at all; and the FDCA might 

permit states to tell [the manufacturer] it 

ought not be doing so if risk- benefit analysis 

weights against the drug, despite what 

the Supreme Court made of similar arguments 

in the labeling context.” Id. Using 

that reasoning, the court affirmed the jury 

verdict on design defect and left it “up to 

the Supreme Court to decide whether [the 

Mensing] exception is to be enlarged to 

include design defect claims.” Id. at 38. 

Bartlett is problematic. Widespread 

application will undermine Mensing, especially 

if liability arises from not only a 

design- specific defect but from a product 

simply remaining on the market because 

the manufacturer chose not to withdraw 

it. Bartlett suffers from several weaknesses, 

though, that allow avenues to defend 

against its expansion. 

Opportunities on Design Claims 

As a starting point, the decision to apply 

Levine, 555 U.S. 555 (2009), as the general 

framework for an analysis instead of 

Mensing is flawed. Levine did not establish 

a general preemption principle for 

both brand-name and generic drugs, including 

for design claims. Given that it 

involved neither a generic drug nor a 

design claim, it could not create such a 

principle. Instead, Levine focused on the 

manufacturer’s “responsibility for the content 

of its label.” Levine, 555 U.S. at 570–71. 

Even under Bartlett’s premise that Mensing 

applies only to warning claims, Levine is 

no more directly applicable than Mensing. 

On the contrary, considering that Mensing 

actually analyzed generic products and the 

relevant regulatory scheme, Mensing is if 

anything more on-point than Levine. 

Also, the Supreme Court did not treat 

the Mensing holding as an exception and 

did not recognize Levine as a general rule. 

Rather, in Mensing, the Court recognized 

that Levine “was not to the contrary” and 

depended upon the holding “that the lawsuit 

was not preempted because it was 

possible for… a brand-name drug manufacturer, 

to comply with both state and 

federal law” through the “changes being 

effected” (CBE) regulation. Mensing, 131 

S. Ct. at 2581. That conclusion bears no relationship 

to the impossibility conclusion for 

generic products. 

Aside from questionably applying 

Levine, the reasoning and result in Bartlett 

also fundamentally conflict with the relevant 

FDCA provisions and FDA regulations. 

The FDCA requires “that the active 

ingredients of the [generic] drug are of the 

same pharmacological or therapeutic class 

as those of the [brand-name] drug.” 21 

U.S.C. §355(j)(2)(A)(iv). FDA regulations 

require rejection of an Abbreviated New 

Drug Application (ANDA) if it “is insufficient 

to show that the active ingredient 

is the same as that of the [brand-name] 

drug.” 21 C.F.R. §314.127(a)(3)(i). See 21 

C.F.R. §314.127(a)(3)(ii) (applying the same

standard to products with more than one 

active ingredient). 

Moreover, no FDA regulation allows unilateral 

changes to generic drug design. Cf. 21 

C.F.R. §314.70(c)(6)(iii) (covering changes to 

brand-name drug “labeling to reflect newly 

acquired information”); 21 C.F.R. §601.12(f) 

(2) (biologic products); 21 C.F.R. §814.39(d) 

(2) (medical devices). To the contrary, the 

regulation applicable to brand-name design 

changes “requir[es] supplement submission 

and approval prior to distribution” 

for “changes in the qualitative or quantitative 

formulation of the drug product.” 21 

C.F.R. §314.70(b)(2)(i) (emphasis added). 

Even Mensing defined “generic drugs” as 

“designed to be a copy of a reference listed 

drug… and thus identical in active ingredients, 

safety, and efficacy.” Mensing, 131 

S. Ct. at 2574 n.2 (emphases added). Essentially, 

the impossibility implications of the 

“sameness” requirement are the same for 

design claims as for labeling claims. 

In that light, many other courts unsurprisingly 

reject design- defect claims under 

the Mensing preemption holding, regardless 

of Bartlett. Those courts hold that 

“Mensing’s reasoning warrants dismissal 

of [design] claim[s] as well,” reasoning, for 

instance as follows: 

In Mensing, the Supreme Court noted 

that a generic drug manufacturer has a 

duty of sameness, and federal law specifically 

requires a generic drug to be the 

bioequivalent of its name-brand counterpart. 

Therefore, [d]efendant could 

not alter the design of the drug without 

violating federal law and this duty 

of sameness, making it impossible for 

[d]e fend ant independently to comply 

with both federal and state law. 

Aucoin v. Amneal Pharm., LLC, No. 11- 

1275, 2012 WL 2990697, at *9 (E.D. La. July 

20, 2012). 

The Accutane MDL court summed up 

the reasoning from the favorable design 

preemption cases, before and after Bartlett, 

holding that it “agrees with this reasoning, 

which accords with the great weight 

of authority and Mensing.” In re Accutane 

Prods. Liab., No. 8:04MD-2523-T-30TBM, 

2012 WL 3194952, at *2–*3 (M.D. Fla. Aug. 

7, 2012). The court cited two other MDL 

courts that concluded similarly: “the ‘duty 

of sameness’ also applies in the context of 

generic drug design.” In re Pamidronate 

Prods. Liab. Litig., 842 F. Supp. 2d 479, 484 

(E.D.N.Y. 2012); In re Fosamax Prods. Liab. 

Litig. (No. II), MDL No. 2243, 2011 WL 

5903623, at *6 (D.N.J. Nov. 21, 2011). 

Overall, Bartlett is a stark outlier. As 

an appellate decision, that position alone 

bestows it with greater weight. Nonetheless, 

Bartlett’s solitary position, along with 

its questionable choice to follow Levine over 

Mensing and fundamental inconsistencies 

with the relevant FDA regulations, should 

limit its expansion to design claims. This 

issue will continue to develop, however, 

including perhaps through Bartlett itself 

before the Supreme Court where, as of July 

31, 2012, a petition for writ of certiorari 

remained pending. 

Effects on Parties Other 

than Manufacturers 

Nothing in Mensing limits its impossibility 

reasoning and application of preemption 

to generic manufacturers or to manufacturers 

generally. Instead, the principles 

in Mensing apply just as well, if not better, 

to other types of defendants in many 

circumstances involving failure to warn 

claims. The first courts to consider this 

point wholeheartedly agreed. 

In Stevens v. Community Health Care, 

Inc., No. ESCV20070280, 2011 WL 6379298, 

at *1 (Mass. Super. Ct. Oct. 5, 2011), the 

court applied Mensing to claims against a 

distributor of a generic product and granted 

summary judgment. The court expressly 

equated the distributor’s position with the 

generic manufacturer’s position. First, the 

court noted that “generic manufacturers 

have no power to effectuate a label change.” 

Id. The court wrote that “[r]ather, brand 

name manufacturers are the only entity 

able to initiate a label change with the FDA.” 

Id. The court then held that the protections 

afforded to the generic manufacturer by 

Mensing applied equally to the distributor: 

“As a distributor,… [it] had no ability to 

change labeling or warnings and thus, like a 

generic manufacturer, [it] cannot be subject 

to liability in connection with a state law 

claim premised on a ‘failure to warn.’” Id. 

Shortly thereafter, the Accutane MDL 

court did not draw a distinction between 

warningrelated claims against a generic 

manufacturer and the dispensing pharmacy 

on a motion for judgment on the pleadings. 

The claim against the pharmacy “allege[d] 

that [it] sold a product that was not fit for 

the purposes intended and did not conduct 

a proper investigation.” In re Accutane Prods. 

Liab., No. 8:04MD-2523-T-30TBM, 2011 WL 

6224546, at *1 (M.D. Fla. Nov. 9, 2011). The 

court dismissed both defendants without 

noting any difference in Mensing’s applicability. 

To the contrary, the court took a broad 

position that covered the defendants and 

summarized: “In short, any state-law claim 

involving a generic drug label or warning is 

preempted and must be dismissed with prejudice 

under Mensing.” Id. at *2. 

While the reasoning in Stevens and Accutane 

involved defendants that that had 

some relationship to generic products as 

a distributor or a dispensing pharmacy, a 

subsequent case offers an important expansion. 

In re Fosamax Products Liability Litigation 

(No. II), No. 2243 (JAP-LHG), 2012 

WL 181411 (D.N.J. Jan. 17, 2012), extends the 

Mensing reasoning to a brand-name distributor. 

A plaintiff in Fosamax alleged that one 

of the “Generic Defendants” was “the authorized 

distributor of branded Fosamax” and 

“marketed and sold the drug under branded 

name Fosamax.” Id. at *1. After initially denying 

that defendant’s motion for judgment 

on the pleadings, the court reconsidered. 

The court rejected the plaintiffs’ position 

that preemption under Mensing applied 

only to generic- related parties and products. 

In particular, the court rejected the 

argument that, as a distributor of “branded 

Fosamax,” the defendant “stands in the 

shoes of [the brand-name manufacturer] 

and has the ability to change the Fosamax 

labeling.” Id. at *3. 

Instead, even if the defendant distributed 

the brand-name product, that distributor 

faces the same prohibitions against 

changing the product that a generic manufacturer 

faces under the principles applied 

in Mensing: “As a distributor of Fosamax, 

[the defendant] has no power to change 

Fosamax labeling. That power lies with the 

applicant who filed the New Drug Application 

(NDA) seeking approval to market 

Fosamax.” Id. (discussing, among others, 

the “changes being effected” (CBE) regulations). 

While certain regulations allow 

the applicant to initiate changes, “[n]either 

of these procedures involve[d] a distributor.” 

Id. The distinction between brand and 

generic mattered less than the defendant’s 

role relative to the NDA holder: 



As a result of the scheme set forth by the 

FDCA, [the distributor] has no authority 

to initiate a labeling change of Fosamax. 

That authority lies with the FDA and/or 

with [the brand-name manufacturer]. 

Even taking the allegation [] as true, a 

contractual relationship between [the 

distributor and the brand-name manufacturer] 

cannot change the fact that [the 

distributor] is not the NDA holder. Consequently, 

[the distributor] has no power 

to unilaterally change Fosamax labeling. 

Because [the distributor] could not “independently 

do under federal law what 

state law requires of it,” the state law 

claims brought against it are preempted. 

Id. at *4 (quoting Mensing, 131 S. Ct. at 

2579). 

Opportunities for Distributors, 

Dispensers, Sellers 

Under these applications of Mensing preemption, 

distributors and other parties 

that haven’t actually manufactured brandname 

or generic products have a winning 

defense as long as the basis for the claims 

against them lies in some deficiency that 

they cannot change or control because they 

do not hold the NDA. In other words, a defendant 

that cannot hold an NDA cannot 

possibly “independently” or “unilaterally” 

make changes to a product. 

Although the cases do not examine the 

FDA regulations in-depth, their reasoning 

is entirely consistent with the requirements 

for brand-name and generic applicants, 

both before and after approval of an NDA or 

an ANDA. Before approval, only the applicant 

may amend, supplement, or withdraw 

an NDA or an ANDA. 21 C.F.R. §314.60(a) 

(“the applicant may submit an amendment 

to an application…”); 21 C.F.R. §314.65 (“An 

applicant may at any time withdraw an application….”); 

21 C.F.R. §314.96(a)(1) (“An 

applicant may amend an abbreviated new 

drug application….”). 

The same holds true for supplements 

and other changes after NDA or ANDA 

approval. 21 C.F.R. §314.70(a)(1)(i), 21 

C.F.R. §314.71(a) (“Only the applicant may 

submit a supplement to an application.”); 

21 C.F.R. §314.97 (“The applicant shall 

comply… regarding the submission of supplemental 

applications and other changes 

to an approved abbreviated application.”). 

After approval, the responsibility for 


postmarketing monitoring also falls upon 

the applicant. 21 C.F.R. §314.80 (brandname 

reporting); 21 C.F.R. §314.98 (generics). 

This responsibility includes review 

and reporting of adverse drug experiences, 

information from scientific literature, 

and postmarketing studies. 21 C.F.R. 

§314.80(b)–(e). To the extent that a “nonapplicant” 

bears any reporting responsibility 

under 21 C.F.R. §314.80(c)(1)(iii), it 

is limited to those “whose name appears 

on the label of an approved drug product 

as a manufacturer, packer, or distributor.” 

Even then, however, the nonapplicant 

may meet its obligation by passing along 

“all reports… to the applicant” for submission 

in “compl[iance] with the requirements” 

for applicants. Id. If handled in this 

“pass-along” manner, nothing about nonapplicant 

reporting places a party serving 

in a distributing capacity, for instance, 

in a position that Mensing would not protect 

through preemption because the party 

wouldn’t have the ability to act independently 

under federal law. 

It also bears noting that Mensing dealt 

with and held preempted such pass-along 

claims. The Court analyzed circumstances 

involving “possible actions by the FDA and 

the brand-name manufacturer” based on 

information submitted by generic manufacturers, 

including when the federal 

requirements for other than the brandname 

manufacturer could change “if, and 

only if, the FDA and the brand-name manufacturer 

changed the brand-name label.” 

Mensing, 131 S. Ct. at 2578. The Court 

rejected liability arising from submitting 

information that might “have started a 

Mouse Trap game that eventually led to” 

changes. Id. In other words, federal law 

preempts claims arising from the ability to 

pass-along information when they “depend 

on the actions of the FDA and the brandname 

manufacturer.” Id. 

While Mensing reached this conclusion 

for generic manufacturers, the same reasoning 

applies to nonapplicants. Even a 

nonapplicant subject to reporting under 21 

C.F.R. §314.80(c)(1)(iii) may protect itself by 

submitting reports of adverse drug experiences 

to the applicant. Doing so is only the 

first step in the “Mouse Trap game” and 

does not permit the nonapplicant independently 

to “satisfy its state duties without the 

Federal Government’s special permission 

and assistance, which is dependent on the 

exercise of judgment by a federal agency.” 

Mensing, 131 S. Ct. at 2581. 

Overall, parties other than manufacturers 

have sound footing to contest and defeat 

liability at the motion stage, especially on 

warning- based claims. While the initial 

cases focus on labeling, the same reasoning 

should apply to any other claim, including 

design and manufacturing, as long as the 

alleged basis for liability is not specific to 

the distributor or dispenser. 

Effects on Removal 

The substantive success enjoyed by parties 

other than manufacturers has not translated 

yet to procedural success. Courts 

have rejected early efforts to use Mensing 

as a basis for fraudulent joinder of nondiverse 

defendants. The removal arguments 

track those that have produced dismissals 

and summary judgments for distributors 

or dispensers, but these initial cases have 

remanded claims involving generic manufacturers, 

generic distributors, and brandname 

distributors. The reasoning for the 

remands varies, but includes deference to 

state courts, the common defense rule, 

strict liability arising from the chain of distribution, 

and distinctions between design 

and warning claims. 

For a generic manufacturer, one court refused 

to venture into what it described as “a 

legal issue… that can be addressed by a state 

court.” Hughes v. Mylan Inc., No. 11-5543, 

2011 WL 5075133, at *6 (E.D. Pa. Oct. 25, 

2011). Using a difficult test by even fraudulent 

joinder standards of “practically ‘a clear 

legal impossibility,’” the court held that although 

the generic manufacturer “may ultimately 

win the war,” it was “stuck fighting 

on the turf [p]laintiffs selected.” Id. In addition 

to deferring to the state court, the order 

focused on the negligent design claim that 

the court viewed separately from Mensing. 

Distributors of brand-name and generic 

products have fared no better. Another 

court also emphasized the design issue and 

cited Bartlett to grant remand because “it 

is not obvious that Mensing impossibility 

preemption would apply to a design defect 

claim.” Caouette v. Bristol- Myers Squibb 

Co., No. C-12-1814 EMC, 2012 WL 3283858, 

at *4 (N.D. Cal. Aug. 10, 2012). Yet another 

court granted remand under the common 

defense rule when the Mensing argu-

ment applied equally to the manufacturer 

and nonmanufacturer. Fraudulent joinder 

did not exist because the “claims against 

diverse and nondiverse defendants suffer 

from the same alleged flaw.” In re Darvocet, 

Darvon & Propoxyphene Prods. Liab. Litig., 

No. 2:11-md-2226-DCR, 2012 WL 2562245, 

at *4 (E.D. Ky. July 2, 2012). 

Finally, a different court avoided the 

issue of Mensing’s reach by limiting its 

analysis to the nature of strict liability 

arising from the chain of distribution. The 

court rejected the argument that a namebrand 

distributor was fraudulently joined 

“because, as a distributor, it had no authority 

or duty to alter the allegedly defective 

design.” Halperin v. Merck, Sharpe 

& Dohme Corp., No. 11 C 9076, 2012 WL 

1204728, at *3 (N.D. Ill. Apr. 10, 2012). 

Instead, the court focused on the distributor’s 

role and the general proposition that 

“[s]trict liability attaches to all links in 

the distributive chain, without regard to 

a particular link’s knowledge or culpability.” 

Id. As a result, the distributor’s fault 

or faultlessness was inconsequential to the 

removal analysis. The distributor might “be 

liable to [p]laintiffs based on [the] alleged 

design defect despite the fact that it had no 

role in the actual design process.” Id. 

On their face, these cases appear difficult 

to reconcile with the substantive victories 

for parties other than manufacturers. 

The difficult fraudulent- joinder standard 

might explain some of the difference in 

results. Given the Bartlett- driven conflict 

on design defect, along with procedural 

hurdles such as the common defense 

rule, courts seem less willing to dispose of 

claims at the removal stage than they might 

at the dispositive- motion stage. 

Opportunities for Removal 

Mensing wins on fraudulent joinder may 

happen more often in jurisdictions that 

apply a “no reasonable basis” standard than 

a “no possibility” basis for showing fraudulent 

joinder. Likewise, other jurisdictionspecific 

law or practices such as how a 

circuit applies the common defense rule or 

how state law handles strict liability relative 

to fault may also be crucial. For example, 

even in courts that apply the common 

defense rule, it should prove less troublesome 

in cases involving brand-name products 

because Mensing will not provide a 

defense for the brand-name manufacturer. 

Or, when state law links nonmanufacturer 

liability to a “knew or should have known” 

standard rather than distribution- based 

strict liability, then any “theory of non- 

manufacturing seller liability also depends 

on a failure to warn” and “is preempted as 

well.” Whitener v. PLIVA, Inc., No. 10-1552, 

2011 WL 6056546, at *2, *4 (E.D. La. Dec. 6, 

Mensing, continued on page 90 

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A Powerful Tool 

to Wield Early 

By Andrew Tauber, 

Max Heerman 

and Brian Wong 

How to Argue 

Medical Device 

Preemption 

A roadmap to express 

and implied preemption, 

as well as “best practices” 

found to be effective, 

and pitfalls to avoid. 

Federal preemption can be a powerful weapon in the 

defense practitioners’ arsenal. An early win on preemption 

can dispose of a case at the threshold, thereby avoiding the 

burdens and costs of discovery and trial. And a preemp- 

tion defense, if it is effective, can secure 

dismissal as a matter of law in the face of 

unfavorable facts and sympathetic plaintiffs, 

regardless of whether the underlying 

claims are meritorious as a matter of state 

law. In the medical device context, courts 

have found preempted all sorts of state law 

claims, including design defect, manufacturing 

defect, failure to warn, breach of implied 

warranty, breach of express warranty, 

fraud, and consumer protection act claims. 

Any attorney defending a product liability 

action brought by someone who 

■ Andrew Tauber is a partner and Brian 

Wong is an associate at Mayer Brown LLP in 

Washington, D.C. Mr. Tauber is co-leader of 

the firm’s Supreme Court & Appellate Practice 

and focuses on federal preemption. Mr. 

Wong focuses on representing corporate clients 

in courts nationwide. Max Heerman 

is principal litigation counsel at Medtronic 

in Minneapolis, where he supervises both 

medical device and general business 

litigation. Daniel Ring, a partner 

in Mayer Brown LLP’s Chicago 

office, and Kristina Portner, an associate 

in the firm’s Washington, D.C., 

office, assisted in the preparation of 

this article. 

claims to have been injured by a medical 

device should therefore evaluate the viability 

of express preemption and implied 

preemption arguments early. These preemption 

doctrines can be complex and 

are the subject of an ever- evolving and 

expanding body of decisional precedent. 

This article offers a brief roadmap to these 

doctrines. It also describes both “best practices” 

that we’ve found to be effective, and 

some of the potential pitfalls we’ve learned 

to avoid, when arguing that federal law 

preempts state law claims asserted against 

medical device manufacturers. 

The Basics of Express and Implied 

Preemption for Medical Devices 

Federal preemption is nothing more— 

and nothing less—than the Constitution’s 

Supremacy Clause in action. The Supremacy 

Clause declares that all constitutionally 

valid federal laws “shall be the supreme 

law of the land” and that “the judges in 

every state shall be bound thereby, anything 

in the constitution or laws of any 

state to the contrary notwithstanding.” In 

other words, federal law trumps—or preempts—state 

law. 

There are two types of preemption: 

express preemption and implied preemption. 

Express preemption arises when 


Congress has adopted a statute that explicitly 

displaces state law. Implied preemption 

arises, whether or not Congress has 

explicitly displaced state law, when federal 

law occupies the entire regulatory 

field, leaving no place for state law, or when 

state law would conflict with federal law, 

either because simultaneous compliance 

with federal and state law is impossible or 

because state law thwarts the federal statutory 

scheme. 

Both types of preemption are relevant 

in the medical device context. The Medical 

Device Amendments (MDA) to the Food, 

Drug, and Cosmetic Act (FDCA) contain 

an express preemption provision, 21 U.S.C. 

§360k(a), which was authoritatively construed 

by the Supreme Court in Riegel v. 

Medtronic, Inc., 552 U.S. 316 (2008). The 

FDCA also contains a no- private- rightof- 

action clause, 21 U.S.C. §337(a), which, 

the Supreme Court held in Buckman Co. 

v. Plaintiffs’ Legal Committee, 531 U.S. 

341 (2001), impliedly preempts state law 

actions that attempt to enforce provisions 

of the FDCA. 

Express Preemption: §360k(a) and Riegel 

Let’s begin with §360k(a). The MDA, 

enacted in 1976, granted the FDA authority 

to regulate medical devices, and created a 

comprehensive “regime of detailed federal 

oversight.” Riegel, 552 U.S. at 316. Congress 

sought to ensure that safe and effective 

innovative medical devices would be readily 

available to treat patients in need of 

lifesaving or disability- averting care. Specifically 

recognizing the “undu[e] burden[]” 

imposed by differing state regulation, Congress 

adopted a general “prohibition on 

non- Federal regulation” of medical devices 

by incorporating an express preemption 

clause into the Medical Device Amendments. 

H.R. Rep. No. 94-853, at 45 (1976). 

That provision, §360k(a), expressly preempts 

any claim that imposes a state law 

“requirement” with respect to a medical 

device that is “different from, or in addition 

to” a federal requirement imposed by 

the FDA. 

Because it preempts all claims that 

would impose state law requirements 

“different from, or in addition to” the 

applicable federal requirements, and not 

merely those that would impose state law 

requirements that conflict with the federal 

requirements, §360k(a) has broad preemptive 

force. That said, it is important 

to note that §360k(a) does not apply to all 

medical devices. Rather, as interpreted by 

the Supreme Court in Riegel and an earlier 

case, Medtronic, Inc. v. Lohr, 518 U.S. 

470 (1996), §360k(a) applies only to devices 

designated as “Class III” devices under 21 

U.S.C. §360c—i.e., those that support or 

sustain human life or otherwise present a 

potentially unreasonable risk of illness or 

of injury—and more specifically to only 

those Class-III devices that have received 

Premarket Approval (PMA) pursuant to 

21 U.S.C. §360e. By contrast, §360k(a) does 

not preempt claims made with respect to 

Class-III devices marketed pursuant to the 

so-called §510k process. 

In what follows, then, we’ll deal exclusively 

with Class-III devices that have Premarket 

Approval—what we’ll refer to as 

PMA- approved medical devices. Only a 

small fraction of the Class-III medical 

devices that enter the market each year are 

approved through the PMA process. Riegel, 

552 U.S. at 317. Such medical devices are 

subject to a rigorous “federal safety review” 

by the FDA before being sold. Id. at 323. As 

the U.S. Supreme Court explained in Riegel, 

“[t]he FDA spends an average of 1,200 

hours reviewing each [premarket approval] 

application and grants premarket approval 

only if it finds there is a ‘reasonable assurance’ 

of the device’s ‘safety and effectiveness.’” 

Id. at 318 (internal citation omitted). 

To obtain FDA approval for a device via 

the PMA process, a manufacturer must 

typically submit a multi- volume application 

that includes “full reports of all studies 

and investigations of the device’s safety 

and effectiveness”; a “full statement of 

the device’s components, ingredients, and 

properties and of the principle or principles 

of operation”; “a full description of the 

methods used in, and the facilities and controls 

used for, the manufacture, processing, 

and, when relevant, packing and installation 

of, such device”; and “samples or 

device components required by the FDA[] 

and a specimen of the proposed labeling.” 

Id. at 317–18. The FDA closely scrutinizes 

each premarket approval application, 

“‘weig[hing] any probable benefit to health 

from the use of the device against any probable 

risk of injury or illness from such use.’” 

Id. at 318 (quoting 21 U.S.C. §360c(a)(2)(C)). 

Once a device has received Premarket 

Approval, the manufacturer is forbidden 

“to make, without FDA permission, 

changes in design specifications, manufacturing 

processes, labeling, or any 

other attribute, that would affect safety 

or effectiveness.” Riegel, 531 U.S. at 319. 

This means that a PMA- approved medical 

device is subject to device- specific federal 

requirements and that any claim is therefore 

expressly preempted under §360k(a) if 

it relies upon or seeks to impose a state law 

“requirement” that is “different from, or 

in addition to” those federal requirements. 

As the Supreme Court made clear in Riegel, 

state law tort claims, as well as explicit 

state regulation, can be said to impose 

“requirements.” The Court’s reasoning was 

straightforward: A state’s “requirements” 

include the duties imposed by its tort law, 

because liability in tort is “premised on 

the existence of a legal duty,” and a tort 

judgment against a medical device manufacturer 

necessarily establishes that the 

manufacturer has violated a state law obligation 

with respect to the device. Riegel, 

522 U.S. at 324. Riegel confirmed that, by 

enacting §360k(a), Congress expressly preempted 

any state law claim that challenges 

the design, manufacturing, testing, marketing, 

or labeling of a PMA- approved 

medical device that complies with the 

terms of its PMA approval because success 

on such a claim would require a jury to 

determine that the device at issue should, 

as a matter of state law, have been designed, 

manufactured, tested, marketed, or labeled 

in a manner that either adds to, or differs 

from, the manner required by federal law. 

Id. at 326–27. 

The takeaway point is that express preemption 

under §360k(a), as authoritatively 

construed by the Supreme Court in Riegel, 

is a powerful, broad doctrine. Congress 

determined that PMA- approved medical 

devices should not be subject to either differing 

or additional state law requirements. 

And by virtue of the Supremacy Clause, 

§360k(a)’s command must be obeyed by all 

courts, state and federal. 

Implied Preemption: §337(a) 

and Buckman 

Even when a state law claim against the 

manufacturer of a medical device isn’t 

expressly preempted because it doesn’t seek 



Congress determined 

that PMA- approved 

medical devices should 

not be subject to either 

differing or additional 

state law requirements. 

to impose any different or additional state 

law requirements on the device, it still 

might be impliedly preempted by federal 

law. The Supreme Court has held that an 

express preemption provision does not 

“bar the ordinary working of conflict preemption 

principles.” Geier v. American 

Honda Motor Co., 529 U.S. 861, 869 (2000). 

In the specific context of the federal regulatory 

scheme governing medical devices, 

there’s a statutory provision that provides 

a “hook” for implied preemption, 21 U.S.C. 

§337(a). Section 337(a) specifies that all proceedings 

to enforce the Food, Drug, and 

Cosmetic Act, of which the Medical Device 

Amendments are a part, “shall be by and 

in the name of the United States.” As the 

Supreme Court has stated, §337(a) “leaves 

no doubt that it is the Federal Government 

rather than private litigants who are authorized 

to file suit for noncompliance with the 

medical device provisions” of federal law. 

Buckman, 531 U.S. at 349 n.4. 

Section 337(a)’s prohibition against private 

enforcement actions reflects Congress’s 

intent that the Medical Device 

Amendments (and the Food, Drug, and 

Cosmetic Act more generally) be enforced 

exclusively by the federal government. The 

FDA has the authority to investigate violations 

of the Act and “has at its disposal a 

variety of enforcement options that allow 

it to make a measured response” to any 

wrongdoing that it uncovers. Buckman, 

531 U.S. at 349. Those remedies include 

“injunctive relief, 21 U.S.C. §332, and civil 

penalties, 21 U.S.C. §333(f)(1)(A); seizing 

the device, [21 U.S.C.] §334(a)(2)(D); and 

pursuing criminal prosecutions, [21 U.S.C.] 

§333(a).” Id. Thus, as the Supreme Court 


recognized in Buckman, “the federal statutory 

scheme amply empowers the FDA to 

punish and deter” violations of the FDCA. 

531 U.S. at 348 (emphasis added). 

Not only does the FDA have significant 

enforcement power, but it also has 

“complete discretion” in deciding “how 

and when [its enforcement tools] should 

be exercised.” Heckler v. Chaney, 470 U.S. 

821, 835 (1985). That administrative discretion 

is an important aspect of the federal 

regulatory scheme because the agency 

must use its authority “to achieve a somewhat 

delicate balance of statutory objectives.” 

Buckman, 531 U.S. at 348. Thus, as 

the Supreme Court recognized in Buckman, 

state law claims that seek to enforce 

the FDCA and its implementing regulations 

are impliedly preempted because they 

would usurp the FDA’s exclusive enforcement 

authority under §337(a) and thereby 

conflict with the federal regulatory scheme. 

Taken together, express preemption and 

implied preemption can serve as a one-two 

punch knocking out plaintiffs’ state law 

claims. As the Eighth Circuit put it, “Riegel 

and Buckman create a narrow gap through 

which a plaintiff’s state law claim must fit 

if it is to escape express or implied preemption.” 

Bryant v. Medtronic, Inc., 623 F.3d 

1200, 1204 (8th Cir. 2010). We’ll have more 

to say later about that “narrow gap,” and 

about how preemption arguments are most 

effectively presented to courts. 

Practice Pointers for the Express- 

Preemption Argument 

Preemption makes many courts uncomfortable. 

They see preemption as a way for 

defendants to avoid liability, often in cases 

involving sympathetic plaintiffs. They 

fear a regulatory void, where without the 

threat of jury verdicts, manufacturers will 

run wild, designing unsafe products that 

are manufactured shoddily and marketed 

recklessly. 

Therefore, when asserting a preemption 

defense, defendants should educate the 

court on the nature and challenges of Class 

III medical devices that, by definition, 

come with an inherent risk of failure and 

a potentially “unreasonable risk of injury.” 

In short, defendants must establish that in 

the context of Class III medical devices, 

failure and even serious injury does not 

equate to an actionable product “defect.” 

Further, defendants should reassure the 

court that preemption neither absolves 

device manufacturers of accountability for 

their conduct nor jeopardizes public health 

by allowing unduly dangerous products to 

be sold. This can be done, in part, by explaining 

the federal government’s extensive 

civil and criminal enforcement powers. Defendants 

should also take pains to emphasize 

that PMA- approved medical devices 

aren’t like most products on the marketplace. 

They’re subject to a rigorous approval 

process by the FDA, which creates detailed 

federal requirements as to the design, manufacture, 

and labeling of such devices. 

Accordingly, to say that the plaintiff can’t 

proceed with his or her state commonlaw 

tort claims because they’re preempted 

under §360k(a) isn’t to give the device manufacturer 

a free pass. Rather, it is to say 

that a manufacturer who passes through 

one crucible (PMA approval) need not also 

pass through a second (state tort law). The 

express preemption provision in the Medical 

Device Amendments just reflects Congress’s 

considered judgment that the FDA’s 

federal safety review and the uniform federal 

regulatory regime should be the exclusive 

means of imposing requirements on 

such complex, innovative, and lifesaving 

medical devices. 

Regardless of the court’s policy preferences, 

this reflects Congress’s enacted policy, 

which courts are bound to respect. But 

it is also helpful to point out that this congressional 

policy advances public health. 

Before it grants Premarket Approval to a 

device, the FDA engages in a costbenefit 

analysis in which it weighs the potential 

benefits of a device against its potential 

risks. As the Supreme Court explained 

in Riegel, juries are ill-equipped to perform 

the costbenefit analysis because they 

“see[] only the cost[s]” of a device—that is, 

its potential to cause harm—and are “not 

concerned with its benefits” because “the 

patients who reaped those benefits are not 

represented in court.” 552 U.S. at 325. 

With that preliminary observation out 

of the way, here’s some practical advice for 

presenting the express- preemption argument 

in a streamlined and effective way. 

The Basic Structure 

One simple but effective way to organize 

the express preemption argument in a brief

is to start by setting forth the basic test for 

determining if a given state law claim is 

preempted, and then proceed to demonstrate 

that each specific claim is preempted 

under that test. 

Begin by explaining that §360k(a) establishes 

a two-step procedure for determining 

if a state law claim is preempted. It’s 

often effective to break out the two-part 

test under separate headings, especially 

for a court that is unfamiliar with preemption; 

doing so pins the plaintiff down and 

limits what the plaintiff can dispute without 

seeming foolish. 

• First, the court must determine whether 

“the Federal Government has established 

requirements applicable to” the 

particular medical device. Riegel, 552 

U.S. at 321. The key point here is that 

the Supreme Court has held that claims 

involving a medical device that has 

received Premarket Approval from the 

FDA automatically satisfy the first condition 

of this test for preemption. See 

Riegel, 552 U.S. at 322–23; Walker v. 

Medtronic, Inc., 670 F.3d 569, 577 (4th 

Cir. 2012); Wolicki- Gables v. Arrow Int’l, 

Inc., 634 F.3d 1296, 1300–01 (11th Cir. 

2011). 

• Second, the court must determine 

whether the state law claim would 

impose “requirements with respect to 

the device that are ‘different from, or 

in addition to’” Riegel, 552 U.S. at 322 

(quoting 21 U.S.C. §360k(a)(2)). The key 

point here is that the Supreme Court 

has held that state-law claims—whether 

statutory or common law—do impose 

requirements “with respect to devices” 

for purposes of this express- preemption 

provision. Riegel, 552 U.S. at 327. 

The crucial point to convey is that Riegel 

stands unequivocally for the proposition 

that §360k(a) expressly preempts any state 

law cause of action that would impose a 

requirement on a PMA- approved device 

that is “different from, or in addition to” 

the federal requirements imposed by the 

FDA. 

Having established this fundamental 

point, the brief should go on to reassure 

the court that it would be doing nothing 

remarkable if it were to hold that each 

of the plaintiff’s claims are preempted. 

As one court stated, since Riegel, “courts 

across the country have applied Section 

360k(a) broadly, preempting all manner 

of claims from strict products liability 

and negligence, to breach of warranty, to 

failure to warn and manufacturing- and 

design- defect, to negligence per se.” In re 

Medtronic, Inc. Sprint Fidelis Leads Prods. 

Liab. Litig., 592 F. Supp. 2d 1147, 1152 (D. 

Minn. 2009) (citations omitted), aff’d, Bryant 

v. Medtronic, Inc., 623 F.3d 1200 (8th 

Cir. 2010). We’ve found that a string-cite of 

favorable authority from across the country, 

coupled with a more expanded discussion 

of the one or two best cases from the 

relevant jurisdiction, sets the stage well. 

At this point, we typically march 

through each state law claim advanced by 

the plaintiff and cite to other cases where 

the same type of claim has been dismissed 

as expressly preempted, focusing especially 

on authority from the same jurisdiction. 

There are plenty of good cases. The 

biggest challenge often is making sense of 

the plaintiff’s pleadings and breaking the 

complaint down into discrete pieces that 

can be attacked. 

Incidentally, we’ve found that it generally 

isn’t helpful to accept a plaintiff’s categorization 

of claims as “strict liability” 

or “negligence” claims. The constituent 

aspects of each such claim—e.g., design 

defect, manufacturing defect, failure to 

warn—should be addressed separately, 

even if that requires reframing or recharacterizing 

the plaintiff’s complaint. 

Anyway, let’s move on the commonly 

asserted claims and recent authority finding 

each claim preempted: 

• Design defect. Such claims are squarely 

foreclosed because, in order to prevail, 

the plaintiff necessarily would have 

to establish that the medical device 

should have a design different from that 

approved by the FDA through the PMA 

process. See, e.g., Riegel, 552 U.S. at 320; 

Walker, 670 F.3d at 580–81. 

• Manufacturing defect. Putting aside parallel 

claims (which we discuss below), 

claims that a device was defectively 

manufactured are preempted because 

the plaintiff would have to prove that 

the device should have been manufactured 

in a manner different from that 

approved by the FDA through the PMA 

process. See, e.g., Riegel, 552 U.S. at 328; 

Wolicki-Gables, 643 F.3d at 1302; Bryant, 

623 F.3d at 1207. 

• Failure to warn. Because the labeling for 

a medical device is approved by the FDA 

through the PMA process, claims for 

failure to warn are preempted because 

they would require a finding that the 

medical device manufacturer should 

have provided different or additional 

warnings from those approved by the 

FDA. See, e.g., Riegel, 552 U.S. at 329; 

Taken together, express 

preemption and implied 

preemption can serve as a 

one-two punch knocking out 

plaintiffs’ state law claims. 

Wolicki-Gables, 643 F.3d at 1302; Bryant, 

623 F.3d at 1205. As a practical matter, 

we have found it helpful to lump failureto- 

warn, fraud, and misrepresentation 

claims together in the preemption analysis, 

dropping a footnote (where applicable) 

to note that the claims sounding in 

fraud also fail because they have not been 

pleaded with sufficient particularity. 

• Breach of warranty. Plaintiffs often assert 

express and implied warranty claims, 

alleging that a manufacturer breached 

promises that its device was safe and 

effective to use. Such claims (in contrast 

to express warranty claims based, for 

example, on a manufacturer’s promise 

to pay a patient’s unreimbursed medical 

costs in the event of a device malfunction) 

are preempted because they would 

require a finding that the device was not 

safe and effective—a finding that would 

contradict the FDA’s conclusive determination 

during the PMA process that 

the there is “a ‘reasonable assurance’ of 

the device’s ‘safety and effectiveness.’” 

Riegel, 552 U.S. at 318 (quoting 21 U.S.C. 

§360e(d)). See, e.g., id. at 320; Bass v. 

Stryker Corp., 669 F.3d 501, 515–16 (5th 

Cir. 2012); Williams v. Cyberonics, Inc., 

388 F. App’x 169, 171 (3d Cir. 2010). 

• Derivative claims. Derivative claims, such 

as those for loss of consortium, negligent 

infliction of emotional distress, and 



conspiracy, all of which depend on the 

success of a underlying claim, are also 

preempted. See, e.g., Riegel, 552 U.S. at 

321; Kemp v. Medtronic, Inc., 231 F.3d 

216, 237 (6th Cir. 2000). 

Debunking Plaintiff’s Arguments 

The Supreme Court’s decision in Riegel 

doesn’t give plaintiffs much room to 

Defendants must 

establish that in the context 

of Class III medical devices, 

failure and even serious 

injury does not equate to an 

actionable product “defect.” 

argue that claims asserted against medical 

device manufacturers aren’t preempted. 

But they still try. Here are seven arguments 

that plaintiffs like to make, and effective 

responses to each. 

Plaintiffs Might Invoke Pre-Riegel Caselaw 

Plaintiffs may rely on pre- Riegel caselaw—especially 

cases from state courts— 

to deny that Premarket Approval imposes 

federal requirements. Or they might say 

that state commonlaw causes of action 

do not impose state law “requirements.” 

The effective—and completely dispositive—response 

is that the Supreme Court 

squarely held otherwise in Riegel, and it’s 

the duty of all courts to apply that precedent 

faithfully. 


Plaintiffs Might Try to Use Preemption 

Caselaw from Other Fields 

Plaintiffs sometimes cite to express preemption 

cases decided under different statutory 

schemes. But express preemption 

depends on the precise language of the 

relevant statute, which, in the medical 

device context, is §360k(a), a provision that 

has been authoritatively construed in Riegel. 

That said, cases interpreting identical 

express preemption provisions, i.e., those 

that employ the “different from, or in addition 

to” language, can sometimes be helpful 

for bolstering defendants’ arguments. 

We’ll talk more about this below. 

Plaintiffs Might Deny that the Device 

Received Premarket Approval 

Sometimes the complaint doesn’t say anything 

about whether the device that the 

plaintiff received is PMA- approved, and 

sometimes the plaintiff erroneously alleges 

that the device is not PMA- approved. Happily, 

the FDA’s decision to grant Premarket 

Approval to a medical device is a matter 

of public record. In fact, the FDA even 

maintains an online database of premarket 

approvals. Therefore, defendants can easily 

correct plaintiffs’ errors without discovery, 

and it’s entirely appropriate for a court to 

take judicial notice of a device’s Premarket 

Approval. See, e.g., Funk v. Stryker Corp., 

631 F.3d 777, 783 (5th Cir. 2011). 

Plaintiffs Might Claim that the Specific 

Component of a Device That Failed Did 

Not Receive Premarket Approval 

Medical devices often have complicated 

regulatory histories. For example, a component 

of the device might previously have 

been approved by the FDA through something 

other than the Premarket Approval 

process. Plaintiffs might say that this component 

wasn’t PMA- approved, and that 

therefore preemption doesn’t apply. The 

response is that the FDA considers a device 

as a whole when reviewing a Premarket 

Approval application, and that Premarket 

Approval, once granted, applies to all 

aspects and components of the device. See, 

e.g., Gross v. Stryker Corp., F. Supp. 2d 

, 2012 WL 876719, at *14–15 (W.D. Pa. 

Mar. 14, 2012). This is true, for example, 

“even where a component of a premarketapproved 

device had previously been 

approved through the §510(k) process.” 

Duggan v. Medtronic, Inc., 840 F. Supp. 2d 

466, 471 (D. Mass. 2012). Plaintiffs cannot 

avoid express preemption by isolating individual 

components of the device. 

Plaintiffs Might Invoke the 

“Presumption Against Preemption” 

Although often invoked by plaintiffs, the 

“presumption against preemption” is a red 

herring. While this presumption might 

apply in some contexts, it does not apply to 

state law claims that fall within the scope 

of §360k(a). “When a federal law contains 

an express preemption clause,” courts must 

“‘focus on the plain wording of the clause, 

which necessarily contains the best evidence 

of Congress’ preemptive intent.’” 

Chamber of Commerce of U.S. v. Whiting, 

131 S. Ct. 1968, 1977 (2011) (quoting CSX 

Transp., Inc. v. Easterwood, 507 U.S. 658, 

664 (1993)). In the medical device arena, 

Congress has spoken with utmost clarity: 

State law may not impose requirements 

that are “different from, or in addition to” 

the requirements imposed by federal law. 

Given this unambiguous language, it is not 

surprising that Riegel, the Supreme Court’s 

authoritative interpretation of §360k(a), 

doesn’t even mention the presumption. 

Plaintiffs Might Conflate Express 

Preemption with Conflict Preemption 

Once a device has received Premarket 

Approval, the manufacturer generally can’t 

make any changes to its design specifications, 

manufacturing processes, or labeling 

without seeking approval from the 

FDA. But plaintiffs will sometimes point 

out that, under certain circumstances, federal 

law does permit manufacturers to 

strengthen warnings pending approval of 

a proposed change to an earlier approved 

warning. 21 C.F.R. §814.39. Based on this 

possibility, plaintiffs will sometimes argue 

that a state failure- to- warn claim does not 

conflict with federal law because federal 

law does not absolutely prohibit a manufacturer 

from changing a device’s labeling. 

Yet the absence of a conflict between federal 

and state law is irrelevant to express 

preemption under §360k(a), which prohibits 

all state law requirements that are different 

from or in addition to the federal 

requirements, including state law requirements 

that do not conflict with the federal 

requirements. If state law requires something 

that federal law only permits, such as 

the issuance of a stronger warning, it is an 

additional requirement that is plainly preempted. 

See McMullen v. Medtronic, Inc., 

421 F.3d 482, 489 (7th Cir. 2005). 

In this connection, it is effective to point 

the court to the Supreme Court’s recent 

decision in National Meat Association v. 

Harris, 132 S. Ct. 965 (2012), which—interpreting 

the Federal Meat Inspection Act’s 

similarly worded express preemption provision—held 

that a state law claim is pre-

empted if it converts a federal “may” into a 

state law “must.” Id. at 970. 

Plaintiffs Might Point Out that the 

Device Has Been Recalled 

Saying that a device has been recalled by the 

FDA conjures up images of a defective product—and 

importantly for preemption purposes, 

suggests (incorrectly) that the FDA 

has revoked the device’s Premarket Approval. 

For a defendant, it’s important not 

to run from a product recall—maybe even 

take it head-on in the opening brief—since 

it’s irrelevant for preemption purposes. A 

recall neither invalidates a device’s Premarket 

Approval nor negates the federal 

requirements applicable to a device with 

such approval. As a result, courts have repeatedly 

dismissed state law claims on 

preemption grounds in product liability 

cases involving recalled medical devices. 

See, e.g., Bryant, 623 F.3d at 1205 n.4; Erickson 

v. Boston Scientific Corp., 846 F. 

Supp. 2d 1085, 1093 (C.D. Cal. 2011). Moreover, 

it is helpful to educate the court about 

what a medical device “recall” actually is. 

Rarely, if ever, does a “recall”—which is often 

referred to by regulators and medical 

device companies as a “correction,” a “removal,” 

or a “field action”—require that implanted 

PMA- approved medical devices be 

explanted from patients and sent back to the 

manufacturer, as the term “recall” implies. 

Defanging the “Parallel Claim” 

Riegel recognized but did not analyze a narrow 

exception to express preemption for 

state law claims that genuinely “‘parallel,’ 

rather than add to, federal requirements.” 

552 U.S. at 330. And unsurprisingly, plaintiffs 

have tried mightily to cast their claims 

as “parallel” ones. It’s a judgment call 

whether and to what extent to anticipate 

a parallel claim argument in an opening 

brief. But if there’s a chance that the plaintiff 

will make the argument, we usually 

think it’s better to anticipate the issue and 

thereby frame the terms of the discussion. 

As is often the case, the best place to 

start is the U.S. Supreme Court’s decisions, 

which explain that a state law requirement 

must be “identical” (Lohr, 518 U.S. at 495), 

or at least “genuinely equivalent” (Bates v. 

Dow Agrosciences LLC, 544 U.S. 431, 454 

(2005)), to a pre- existing federal requirement 

to be considered “parallel.” 

One thing to keep in mind is that, contrary 

to what plaintiffs sometimes argue, a 

state law requirement is not parallel to the 

federal requirements merely because it is 

“consistent” with the federal requirements. 

Although the absence of a conflict is relevant 

to an implied preemption analysis, it is 

irrelevant to the express preemption analysis 

because any state law requirement that 

is neither identical nor genuinely equivalent 

to a federal requirement is “different 

from, or in addition to” the federal requirements, 

even if it is “consistent” with those 

requirements. 

It can be helpful to provide the court 

with an example of a valid parallel claim, 

so as to reassure the court that device 

manufacturers aren’t looking for blanket 

immunity. For example, if the Premarket 

Approval for, say, a catheter requires that 

the catheter be 0.25 inches in diameter, 

but, because of a manufacturing defect, the 

particular catheter implanted in the patient 

is only 0.1 inches in diameter, the claim 

would not be expressly preempted under 

the Medical Device Amendments and the 

plaintiff may be able to successfully plead 

a parallel claim (assuming, of course, that 

the narrowness of the catheter was what 

caused his or her injury, and that there is a 

genuine state law basis for the claim). 

At any rate, after defining a parallel 

claim and giving an example of one, we’ve 

found it useful in our briefs to provide a 

crisp statement of what, in our view, are 

the requisite elements of a properly alleged, 

non- preempted parallel claim. The precise 

formulation will of course vary with the 

jurisdiction, but we think a sound default 

position—backed by the weight of federal 

appellate authority—is that the plaintiff 

must (1) identify a specific federal requirement 

applicable to the device; (2) show 

that the device did not comply with that 

specific federal requirement; (3) identify 

a pre- existing state cause of action that 

makes actionable that noncompliance; 

and (4) show that the deviation from the 

federal requirement caused his or her injuries. 

See, e.g., Walker, 670 F.3d at 580–81; 

Wolicki- Gables, 634 F.3d at 1301; Funk, 631 

F.3d at 782; Bryant, 623 F.3d at 1207. And 

of course, each of these elements has to 

be alleged with the specificity and factual 

elaboration required under the applicable 

pleading standards. 

Some defendants miss opportunities to 

push back against a plaintiff’s attempt to 

allege a parallel claim. At a minimum, we 

suggest that defendants run through the 

following check-list: 

• Has the plaintiff actually identified a 

specific federal requirement (and not 

merely non- binding or discretionary 

guidance) 

It’s importantnot to run 

from a product recall— 

maybe even take it head-on 

in the opening brief— 

since it’s irrelevant for 

preemption purposes. 

• When the plaintiff does try to establish 

a deviation from a federal requirement, 

it’s important to carefully scrutinize the 

evidence cited by plaintiff. For example, 

does the evidence presented by the 

plaintiff—say, a warning letter related 

to a facility inspection—actually relate 

to the plaintiff’s device We’ve seen 

plaintiffs cite warning letters that concern 

facilities that were not involved in 

the production of the plaintiff’s device; 

batches or lots that did not contain 

plaintiff’s device; and time periods other 

than when the plaintiff’s device was constructed. 

Remember, plaintiff’s counsel 

often throw everything against the 

wall, hoping that something will stick. 

It’s the defendant’s job to demonstrate 

that nothing sticks. 

• Consider also whether the state law 

requirement underlying a particular 

claim is in fact identical to the federal 

requirement allegedly violated by the 

manufacturer. For example, because 

a state law duty to warn consumers or 

doctors is not identical to the federal 

requirement that a manufacturer file 

certain reports with the FDA, a violation 

of the federal reporting requirement 

does not properly support a state 

law failure- to- warn claim. See Heisner 



v. Genzyme Corp., 2010 WL 894054, at 

*3 (N.D. Ill. Mar. 8, 2010); cf. Pliva, Inc. 

v. Mensing, 131 S. Ct. 2567, 2576 (2011). 

• Consider whether there is a pre- existing 

state law duty or claim or whether 

plaintiff is simply seeking to enforce a 

requirement that exists only by virtue 

of federal law. If there is no pre- existing 

state law duty or claim, then there can 

be no parallel claim. 

• Has the plaintiff sufficiently tied the 

alleged federal violation to the harm that 

he or she allegedly suffered 

Finally, don’t forget that discretion is 

sometimes the better part of valor. If the 

complaint really does do a thorough job 

alleging a parallel claim—and therefore 

the judge might be tempted to let the complaint 

survive a motion to dismiss—consider 

whether it might be better to defer 

the preemption arguments for a motion 

for summary judgment, following limited 

or staged discovery, where the record will 

be better developed. As medical device 

defense counsel, we should be careful not 

to create bad law that the rest of us will have 

to deal with! 


Practice Pointers for the Implied- 

Preemption Argument 

When litigating preemption in the medical 

device context, it’s important not to forget 

about implied preemption. The mere fact 

that Medical Device Amendments contain 

an express- preemption provision, 21 

U.S.C. §360k(a), does not preclude operation 

of implied- preemption principles 

where appropriate. See Geier, 529 U.S. at 

869. After all, there is both statutory and 

decisional authority that supports implied 

preemption. See 21 U.S.C. §337(a); Buckman, 

531 U.S. 341. Thus, even if a claim 

is not expressly preempted, it might be 

impliedly preempted. 

As previewed above, the U.S. Supreme 

Court held in Buckman that there is no 

“doubt that it is the Federal Government 

rather than private litigants who are authorized 

to file suit for noncompliance with the 

medical device provisions” of federal law. 

531 U.S. at 349 n.4. As a result, taken together, 

“Riegel and Buckman create a narrow 

gap through which a plaintiff’s state 

law claim must fit if it is to escape express 

or implied preemption.” Bryant, 623 F.3d at 

1204. In order to avoid dismissal, a “plaintiff 

must be suing for conduct that violates 

the FDCA (or else his claim is expressly preempted 

by §360k(a)), but the plaintiff must 

not be suing because the conduct violates 

the FDCA ([because] such a claim would 

be impliedly preempted under Buckman).” 

Bryant, 623 F.3d at 1204 (internal quotation 

marks omitted). In other words, “[f]or 

a state-law claim to survive the claim must 

be premised on conduct that both (1) violates 

the FDCA and (2) would give rise to 

a recovery under state law even in the absence 

of the FDCA.” Riley v. Cordis Corp., 

625 F. Supp. 2d 769, 777 (D. Minn. 2009). 

The most strategically significant use of 

implied preemption is knocking out the 

sorts of claims that are least vulnerable to 

express preemption, because they are premised 

on asserted violations of federal law. 

But implied preemption can also be used 

as a second basis for dismissing a state law 

claim, to give the presiding judge added 

comfort that his or her decision is correct 

and will not be reversed on appeal. 

Consider a breach-of-implied-warranty 

claim that challenges the safety and effectiveness 

of a medical device with Premarket 

Approval. Such a claim is expressly 

preempted because success on this claim 

depends on a jury’s finding that the device 

was not, in fact, safe and effective. That is, 

state law would require the manufacturer 

to have done something different from 

or in addition to the federally imposed 

requirements in order to honor the safetyand- 

effectiveness warranty—be that provide 

additional warnings or use a different 

design. 

This claim also is impliedly preempted. 

The FDA conducts a “timeconsuming 

inquiry into the risks and efficacy of each 

device.” Buckman, 531 U.S. at 348. The 

jury’s finding of liability on an impliedwarranty 

invariably would contradict 

the FDA’s conclusive determination, via 

the Premarket Approval process, that the 

device was safe and effective, and would 

“[a]lter[] the balance struck by the FDA” by 

imposing a state law requirement “to protect 

safety to a greater degree” than determined 

to be appropriate by the agency. 

Farina v. Nokia Inc., 625 F.3d 97, 126 (3rd 

Cir. 2010) (citing Buckman, 531 U.S. at 

350–51). As the Third Circuit recognized, 

“[a]l low ing juries to perform their own 

risk- utility analysis and second- guess the 

[agency’s] conclusion would disrupt the 

expert balancing underlying the federal 

scheme.” Id. 

Loose Ends 

Finally, defendants shouldn’t forget about 

traditional state law bases for dismissal 

just because they have a strong federal preemption 

argument. All too often, we see 

motions to dismiss that leave these arguments 

on the table—even when many of 

them complement preemption nicely. You 

might consider, for example: 

• Is there a valid statute of limitations or 

statute of repose defense 

• Are there any relevant standing requirements 

Consumer protection statutes, 

for example, sometimes require that the 

product be purchased by the plaintiff for 

household use. 

• Are strict liability and implied warranty 

claims barred by Restatement (Second) 

of Torts Section 402A, cmt. k, Restatement 

(Third) of Torts: Products Liability 

Section 6(c), or any equivalent doctrine 

regarding “unavoidably unsafe” products 

as a matter of state law 

• Do warranty claims in this jurisdiction 

require a showing of privity 

• Have alleged misrepresentations or 

a purported express warranty been 

pleaded with sufficient particularity 

• Are there state law limitations on negligence 

per se For example, state law 

might not recognize negligence per se 

claims based on violations of regulations 

(as opposed to statutes) or might contain 

a doctrine analogous to Buckman (i.e., 

to the effect that negligence per se isn’t 

recognized when it would amount to an 

end-run around the absence of a private 

right of action). 

Conclusion 

Given the powerful defense tool that federal 

preemption can be in a medical device 

product liability action, it’s important to 

consider the availability of express preemption 

and implied preemption arguments 

early on in the case assessment process. But 

no matter how strong the preemption arguments 

seem, don’t leave traditional state 

law defenses on the table. Together, federal 

preemption and traditional state law 

defenses can often successfully knock out 

claims involving a medical device.

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From the Chair 

By Gary Schuman 

Many 

Accomplishments, 

but Continued Growth 

New, as well as existing, 

subcommittees provide 

excellent opportunities for 

members to participate 

in our committee’s 

growth and success. 


■ Gary Schuman is chair of DRI’s Life, Health and Disability Committee. Mr. Schuman is Senior Counsel–Litigation for Combined 

Insurance Company of America, in Glenview, Illinois. He is responsible for providing legal advice to the company’s claims, underwriting, 

and policyholder service departments, as well as managing nationwide life, health, and disability insurance contract and 

bad faith litigation. Mr. Schuman lectures frequently and is widely published on a variety of related topics.

As the chair of DRI’s Life, Health and Disability (LHD) 

Committee, it is a privilege to write this introduction to 

the following collection of articles written by members of 

our committee. My two-year term is nearly over, and I’m 

proud to report our committee has made 

many accomplishments. 

The LHD Committee focuses on issues 

affecting life and health insurance, including 

underwriting, claims, regulatory, 

and compliance matters under the various 

state laws, as well as ERISA issues. Our 

members consist of more than 500 outside 

and in-house counsel, as well as claims professionals 

employed by or representing this 

industry. 

Our committee continues to be the leading 

resource for LHD attorneys seeking to 

maintain and update their industry knowledge 

and contacts. If you practice in this 

area, I welcome and encourage you to join 

our committee now and enjoy the many 

benefits of membership. 

The LHD Committee contributes to DRI 

in many ways. This issue of For The Defense 

represents one of the many ways we reach 

out to our members as well as the DRI 

community. Examples include our annual 

ERISA litigation compendium; two newsletters 

dedicated to general life, health, and 

disability issues as well as ERISA, namely 

Life, Health and Disability News and DRI 

ERISA Report; a compendium on federal 

court removal; periodic webcasts and web 

news flashes; and a new one-day seminar 

for new lawyers, which was held last 

November. 

The committee’s showcase event is our 

tremendously successful annual LHD/ 

ERISA Claims Seminar, this year held in 

Chicago drawing a record attendance of 

more than 500 attorneys and claims professionals. 

This seminar not only provided 

plenary programs of interest presented by 

national experts and a federal magistrate 

judge, but also breakout sessions for those 

attendees interested in specific areas of the 

law such as ERISA, health care, and life 

insurance. 

Membership continues to grow and we 

want to provide our members with a wide 

range and variety of information and services 

relevant to LHD. In fact, 2012 already 

has been a very exciting year for our committee. 

We have a number of very active 

subcommittees and their work for the 

year is well underway. We have added a 

new Social Media Law Subcommittee as it 

relates to LHD. At least two webinars are 

being planned for presentation later this 

year by our Life Insurance Subcommittee, 

and we just completed a webinar on 

the recent U.S. Supreme Court decision on 

health care. 

These new, as well as our existing, subcommittees 

provide excellent opportunities 

for new and current members to 

participate in our committee’s growth and 

success. I strongly encourage anyone interested 

to become actively involved in one of 

these subcommittees. This will not only 

permit you to enhance your knowledge 

in this very interesting area of the law but 

also to network and to interact with the 

industry’s best and brightest practitioners 

throughout the country. 

Our committee has had many successes. 

We must continue to grow through the production 

of timely programs and publications 

with information important to our 

members as well as DRI. 

I want to personally thank all our current 

members for their many and varied 

contributions. I also want to extend a welcome 

to all of you who are considering joining 

our committee. It has been a privilege 

and pleasure to chair this committee. 



Who Pressed 

“Enter,” Anyway 

By Michelle Thurber Czapski 

and Matthew R. Rechtien 

Enforcing 

Contracts in an 

Electronic World 

A brief review of the 

scope, applicability, 

and construction of 

the Uniform Electronic 

Transactions Act, as well 

as how courts have used it 

in determining identity. 

On any given day the average American may buy a few 

items online, do some Internet banking, book a plane 

ticket with his or her smart phone, and check or change 

insurance coverage on his or her home computer. All of 

these activities now seem very normal to 

consumers, but it is a new era for practitioners 

involved in disputes about these 

transactions. 

Conducting business online when parties 

form contracts electronically presents 

many issues, including how and when businesses 

can enforce them, how the familiar 

rules govern concepts such as offer and 

acceptance for these transactions, or how 

they stand legally as evidence. 

These issues can become even more 

acute in the context of life insurance 

because disputes most often arise after one 

of the contracting parties is no longer alive 

to explain his or her intentions or even 

whether he or she “signed” an electronic 

insurance contract document at all. In 

this scenario, it is easy to understand why 

courts may force insurers and other companies 

that engage in electronic commerce 

to show who pressed “enter,” anyway. 

Fortunately, the National Conference 

of Commissioners on Uniform State Laws 

(NCCUSL), informally known as the Uniform 

Law Commission, has stepped into 

the electronic arena to provide some guidance 

with the Uniform Electronic Transactions 

Act (UETA). Now adopted in most 

states, the UETA provides basic rules and 

guidelines for courts and practitioners to 

follow in evaluating the efficacy of electronic 

transactions. The UETA rules on 

attribution and the handful of opinions 

construing it also can guide a business in 

determining when and how it will accept 

an electronic symbol as a “signature” so 

that it can have assurance that the person 

purporting to do business with it really is 

that person. 

This article briefly will review the history 

of the UETA, explain its scope, applicability, 

and construction, and how you 

can use it to sort out the identity of someone 

doing business electronically, as well 

as how courts have used it in determin- 


■ Michelle Thurber Czapski is a partner and Matthew R. Rechtien is an associate in Bodman PLC’s Detroit 

office. Ms. Czapski chairs the firm’s Insurance Industry Team and specializes in life, health, disability, and 

insurance coverage disputes, complex commercial litigation, and class actions. She is the marketing chair of 

the DRI Life, Health and Disability Committee and vice chair of the Class Action SLG of the Commercial Litigation 

Committee. Mr. Rechtien specializes in commercial litigation, insurance, and construction law. He is a 

licensed professional engineer in Michigan and Washington.

ing identity. We also offer some practical 

tips for navigating the electronic seas as 

smoothly as possible. 

The History of the UETA 

The UETA was promulgated by the NCCUSL 

in 1999 to “establish[] the legal equivalence 

of electronic records and signatures with 

paper writings and manually- signed signatures, 

removing barriers to electronic commerce.” 

See Unif. Electronic Transactions 

Act (1999), http://www. uniformlaws.org/shared/ 

docs/electronic%20transactions/eta1299.pdf. 

As of this writing, 47 states, the District 

of Columbia, and the Virgin Islands have 

enacted the UETA in some form or another. 

Of the jurisdictions that the NCCUSL 

tracks, only New York, Washington, Illinois, 

and Puerto Rico have abstained, and 

Washington has legislation pending and 

probably will become the forty- eighth state 

to enact the UETA. Of course, the various 

state enactments often depart from the 

UETA to one degree or another, but the 

variations are minor, and this article will 

not attempt to catalog them. 

In terms of timing, two jurisdictions had 

enacted the UETA as early as 1999, California 

and Pennsylvania. Georgia was the last 

jurisdiction to enact it, in 2009. Other than 

a smattering of jurisdictions that enacted 

the UETA during the period beginning 

in 2002 through 2004—Wisconsin, Colorado, 

Connecticut, the Virgin Islands, 

South Carolina, Missouri, Massachusetts, 

and Alaska—all of the other UETA jurisdictions 

had enacted it by 2001. 

As conceived, the UETA was a landmark 

model statute, the first “comprehensive 

effort to prepare state law for the electronic 

commerce era.” Unif. Electronic Transactions 

Act (1999) (URL above). Indeed, 

although when it was promulgated “[m] 

any states ha[d] already adopted legislation 

pertaining to such matters as digital 

signatures,” the UETA represented “the 

first national effort at providing some uniform 

rules to govern transactions in electronic 

commerce that should serve in every 

state.” Id. 

Scope, Applicability, and Construction 

The UETA does not apply to every electronic 

signature or record. Section 3 of the 

UETA defines its scope, specifying that 

it applies to “electronic records and electronic 

signatures relating to a transaction,” 

subject to express exceptions, and 

section 2(16) defines a “transaction” as “an 

action or set of actions occurring between 

two or more persons relating to the conduct 

of business, commercial, or governmental 

affairs.” 

The UETA does not apply to transactions 

“to the extent” that they are “governed by” 

(1) the law governing the creation and the 

execution of wills and testamentary trusts; 

(2) the Uniform Commercial Code, other 

than sections 1-107 and 1-206, article 2, 

and article 2A; (3) the Uniform Computer 

Information Transactions Act (UCITA); 

or (4) other laws specifically identified by 

an enacting state. Unif. Electronic Transactions 

Act §3 (b). For example, Oklahoma 

has carved out an exception for any 

transaction governed by certain consumer 

protection laws. 12A Okla. Stat. Ann. §15- 

103(b)(4). 

Insurers will want to note that although 

the UETA does not apply to transactions 

related to wills and testamentary trusts, 

it does apply to life insurance policies. So 

in the case of an insured who made policy 

changes online before dying, his or her 

state’s version of the UETA would govern 

the validity of those changes if he or she 

was in a jurisdiction that had enacted it. 

The UETA does apply to electronic 

records or signatures “otherwise excluded 

from application of” the act as “specified” 

under section 3 (b) “to the extent” that laws 

“other than those specified” in section 3 

(b) govern those transactions. Unif. Electronic 

Transactions Act §3(c). Section 3(b) 

outlines broad exceptions; we discussed 

them above. Importantly, the UETA does 

not necessarily displace other laws governing 

an underlying transaction: “A transaction 

subject to [the UETA] is also subject 

to other applicable substantive law.” Unif. 

Electronic Transactions Act §3(d). 

And section 5 of the UETA allows parties 

to opt out of it altogether. Indeed, nothing 

in the UETA “require[s] a record or 

signature to be created, generated, sent, 

communicated, received, stored, or otherwise 

processed or used by electronic means 

or in electronic form.” Unif. Electronic 

Transactions Act §5(a). The UETA applies 

only to “parties each of which has agreed to 

conduct transactions by electronic means,” 

a fact “determined from the context and 

surrounding circumstances, including the 

parties’ conduct.” Unif. Electronic Transactions 

Act §5(b). Consistent with this, “the 

effect of any of [the UETA] provisions may 

be varied by agreement….” Unif. Electronic 

Transactions Act §5(d). 

The UETA instructs that it be “construed 

and applied” so that it would “facilitate 

electronic transactions consistent 

with other applicable law… consistent 

with reasonable practices concerning electronic 

transactions and with the continued 

expansion of those practices… to effectuate 

its general purpose to make uniform 

the law with respect to the subject of [the 

UETA] among States enacting it.” Unif. 

Electronic Transactions Act §6. 

Substance in General 

The operative language of the UETA containing 

instruction on how to handle electronic 

transactions from a legal perspective 

appears in section 7: 

(a) A record or signature may not be 

denied legal effect or enforceability 

solely because it is in electronic 

form. 

(b) A contract may not be denied 

legal effect or enforceability solely 

because an electronic record was 

used in its formation. 

(c) If a law requires a record to be in 

writing, an electronic record satisfies 

the law. 

(d) If a law requires a signature, an electronic 

signature satisfies the law. 

Section 7 elevates electronic records and 

signatures to a level on par with paper and 

manual signatures. Section 13 of the UETA 

does the same for evidence: “In a proceeding, 

evidence of a record or signature may 

not be excluded solely because it is in electronic 

form.” 

Notably, however, these provisions “do[] 

not attempt to create a whole new system of 

legal rules for the electronic marketplace” 

but only attempt “to make sure that transactions 

in the electronic marketplace are as 

enforceable as transactions memorialized 

on paper and with manual signatures….” 

See Unif. Law Comm’n, Electronic Transactions 

Act Summary, http://uniformlaws.org/ 

ActSummary.aspxtitle=Electronic%20Transactions 

%20Act (last visited Aug. 22, 2012). 

Recognizing these principles, one court 

observed that while “evidence of a record 



As conceived,the 

UETA was a landmark 

model statute, the first 

“comprehensive effort to 

prepare state law for the 

electronic commerce era.” 


or signature shall not be excluded solely 

because it is in electronic form… such 

records may be excluded on other evidentiary 

bases” because the UETA does not 

“alter the requirement that an electronic 

record must satisfy evidentiary rules otherwise 

applicable to a document[,]” and 

a party “must still establish the proper 

foundation for admissibility….” Springborn 

v. Allstate Ins. Co., No. 292064 (Mich. 

Ct. of App. Oct. 7, 2010) (per curiam) 

(unpublished). 

As the Uniform Law Commission has 

explained, “[a]lmost all of the other rules in 

[the] UETA [other than the four basic rules 

in section 7 discussed above] serve the fundamental 

principles set out in Section 7, 

and tend to answer basic legal questions 

about the use of electronic records and signatures.” 

See Unif. Law Comm’s, Electronic 

Transactions Act Summary, supra. Stated 

differently, the remainder of the UETA puts 

the meat on section 7’s skeleton. 

For example, section 2 defines key terms 

used in section 7 and elsewhere in the 

UETA such as “record,” “contract,” “electronic,” 

“electronic signature,” and “electronic 

record.” Section 10 deals with when 

“a change or error in an electronic record 

occurs in a transmission between parties 

to a transaction.” Section 11 addresses the 

application of notarization requirements to 

electronic records. 

Section 12 generally allows the entities 

that it covers to satisfy document retention 

laws by retaining electronic records. 

Section 8 similarly allows parties to satisfy 

laws requiring a “person to provide, 

send, or deliver information in writing to 

another person” by supplying this information 

with electronic records. Section 

14 deals with “automated transactions,” 

meaning transactions occurring between 

“electronic agents of the parties.” 

Section 15 is the modern analog to 

the ubiquitous “mailbox” rule and governs 

when information is legally “sent” 

or “received” in electronic form. Finally, 

section 16 addresses the treatment of 

electronic “transferable records,” meaning 

negotiable instruments such as notes 

and documents of title under the Uniform 

Commercial Code in paper form. 

Electronic Signatures 

Section 9 is crucial to accomplishing the 

main purpose of the UETA. Section 9 

fleshes out when the law will consider an 

electronic signature attributable to a person, 

or, from the point of view of a company 

offering to conduct business with its 

customers in this way, when the company 

can rely upon an electronic expression as 

assent to a business agreement. 

Given the ever- presence of cybersecurity 

and identity theft threats and the 

difficulty involved in ascertaining identity 

when individuals conduct so many transactions 

over the Internet, electronic signature 

enforceability has become critical to 

a smooth functioning economy. Indeed, 

establishing the authenticity and the effect 

of an “electronic signature” can present 

thorny questions never envisioned when 

we simply used paper and ink. Accordingly, 

the UETA answers key questions such as 

what is an “electronic signature,” to whom 

does it belong, and what is its legal effect 

In answer to the first question, what is 

an electronic signature, section 2 of the 

UETA defines an “[e]lectronic signature” 

as an “electronic sound, symbol, or process 

attached to or logically associated with a 

record and executed or adopted by a person 

with the intent to sign the record.” (emphasis 

added). 

In answer to the second question, to 

whom does an electronic signature belong, 

section 9 of the UETA specifies that “[a]n 

electronic record or electronic signature 

is attributable to a person if it was the act 

of the person.” (emphasis added). Section 9 

continues: “The act of the person may be 

shown in any manner, including a showing 

of the efficacy of any security procedure 

applied to determine the person to which 

the electronic record or electronic signature 

was attributable.” 

In short, one, but not the only way to 

prove that an “electronic signature” is “the 

act of the person” to whom it is attributed 

is through proving the “efficacy” of 

the security procedures associated with its 

generation. 

In answer to the final question, what is 

the electronic signature’s effect, section 9 of 

the UETA answers as follows: “[t]he effect 

of an electronic record or electronic signature 

attributed to a person… is determined 

from the context and surrounding 

circumstances at the time of its creation, 

execution, or adoption, including the parties’ 

agreement, if any, and otherwise provided 

by law.” 

Caselaw on the Attribution of 

Electronic Signatures 

Although the UETA in some form has 

been on the books in at least 39 jurisdictions 

since 2001, a nationwide survey of the 

UETA- related reported opinions suggests 

that the law has not generated much controversy. 

Of the few court opinions to construe 

the statute a number have focused on 

the electronic signature, the critical transaction 

element, and provide a glimpse of 

the issues likely to arise in litigation. 

What Constitutes an 

“Electronic Signature” 

One of the signaturerelated issues to have 

reached appellate review is what constitutes 

an electronic signature. Think of your 

last electronic transaction. Which of your 

various mouse clicks meant that you had 

“signed” a contract How does the law 

interpret sending an e-mail Is an e-mail 

confirmation sufficient 

Cunningham v. Zurich American Ins. 

Co., 352 S.W.3d 519, 529–31 (Tex. App. 

2011), considered whether an insurance 

carrier’s attorney’s e-mail to a medical malpractice 

plaintiff formed a binding settlement 

contract. The e-mail contained the 

essential terms of a settlement agreement, 

but obviously, it did not have a manual signature, 

and under Texas law, settlement 

agreements between attorneys or parties 

in a pending lawsuit must be in writing 

and signed. 

Applying Tex. Bus. & Com. Code 

§322.002 and §322.009, which correspond

to sections 2 and 9 of the UETA, Cunningham 

held that the attorney’s e-mail “signature 

block” containing the attorney’s name 

and contact information did not constitute 

an “electronic signature ” attributable 

to the sender without other evidence that 

the sender intended the block to serve as 

a signature. 

Cunningham rested on the UETA 

requirements that an “electronic signature” 

be “executed or adopted by” the attorney, 

“with the intent to sign the record,” 

and the electronic signature be “the act of 

the” attorney. In citing this language, the 

court noted that evidence didn’t exist that 

the attorney actually typed the signature 

block, or agreed or intended it to serve as 

a signature and further observed that “[t] 

here is nothing to show that the signature 

block was… not generated automatically 

by her email client.” The court also emphasized 

that even if the attorney had typed the 

block, “nothing in the email suggests that 

she did so with the intention that the block 

be her signature….” 

Accordingly, the court declined 

to hold that the mere sending by [the 

attorney] of an email containing a signature 

block satisfies the signature 

requirement when no evidence suggest 

that the information was typed purposefully 

rather than generated automatically, 

that [the attorney] intended 

the typing of her name to be her signature, 

or that the parties had previously 

agreed that this action would constitute 

a signature. 

When Is an “Electronic 

Signature” Attributable 

The second question noted above is, assuming 

that an “electronic signature” does 

exist, when have you established attribution 

sufficiently In other words, how do 

you know that the person with whom you 

have concluded a transaction is really that 

person 

This is a question addressed by the recent 

decision in Zulkiewski v. American General 

Life Insurance Company, No. 299025 

(Mich. Ct. App. June 12, 2012) (per curiam) 

(unpublished). Zulkiewski involved an insured 

physician who, shortly before committing 

suicide, purportedly accessed his 

life insurer’s “eService” system, signed up 

to do business electronically, and electronically 

changed the beneficiary designation 

from his parents to his new bride. 

After the insured’s death, the widow, 

who was the beneficiary of record, claimed 

entitlement to the proceeds. However, so 

did the insured’s parents, who claimed that 

the insured did not actually make the electronic 

beneficiary change, and therefore, it 

was invalid. Before the insurer could file 

an interpleader action, the widow sued 

the insurer, seeking the proceeds of the 

policy. The insurer answered and filed a 

third-party interpleader complaint and 

counterclaim against the widow and the 

parents. The parents answered and countersued 

the insurer for breach of the insurance 

contract. 

So the parents jointly and the widow of 

the deceased separately sued the insurer 

even though it filed a complaint for interpleader 

in which it offered to deposit the 

entire policy proceeds with the court. Both 

the widow and the insurer promptly moved 

for summary judgment, both of which 

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the trial court granted after finding the 

absence of a genuine issue of fact about 

whether the beneficiary change was attributable 

to the deceased. 

The parents appealed, arguing that 

even though they did not have proof that 

an imposter had changed the beneficiary 

designation, the insurer nevertheless 

owed them the benefit. The parents further 

argued that the insurer had presented 

insufficient evidence about the security 

of its “eService” system as was required 

to prove attribution under Mich. Comp. 

Laws §450.839(1), corresponding to section 

9 of the UETA, or that the decedent actually 

made the change. The Zulkiewski court 

rejected this argument, holding that showing 

the efficacy of a security procedure was 

not a requirement but merely “one method 

by which to show attribution,” and the 

insurer had presented sufficient evidence to 

avoid a genuine issue of whether the change 

“was the act of the [deceased]” as required 

by Mich. Comp. Laws §450.839(1). 

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In particular, the court pointed out the 

“safeguards” built into the insurer’s “eService” 

system for “subsequent beneficiary 

change[s][,]” including requiring knowledge 

of the insured’s policy number, social 

security number, mother’s maiden name, 

and e-mail address, and its transmission 

of related notifications to the insured by 

both regular mail and by e-mail. Finally, 

One of the signaturerelated 

issues to have 

reached appellate review 

is what constitutes an 

electronic signature. 

the court relied on the affidavit of the 

widow—the implied imposter—in which 

she “den[ied] her… involvement in making 

the disputed change” and stated “ that 

[the] decedent was highly computer- literate 

and had also made [her] the beneficiary of 

other insurance policies.” 

Holmes v. Air Liquide USA LLC, 2012 

WL 267194, at *3 (S.D. Tex. Jan. 30, 2012), 

dealt with similar issues. In Holmes, a 

plaintiff claimed not to remember “giving 

her assent” to what indisputably qualified 

as an “electronic signature” to an 

agreement to arbitrate and argued that 

“the Court simply cannot know for sure 

whether [her] computer- generated acceptance 

of the [arbitration] agreement represents 

her signature.” The court gave the 

plaintiff’s overly rigorous standard short 

shrift, pointing out that “the inability to 

be 100 percent certain is not unique to 

electronic signatures” and the burden of 

proving attribution under the UETA, corresponding 

here to Tex. Bus. & Com. Code 

§322.001 to §322.021, is lower. 

This is, of course, consistent with the 

UETA goal of putting the electronic on par 

with the physical. The court attributed the 

signature to the plaintiff based on proof 

that whoever created the electronic signature 

on the arbitration agreement would 

have to have had the plaintiff’s “unique log 

in information to access her computer, her 


email, her eHR site.” Such measures, the 

court wrote, made it “highly unlikely” that 

the assent was that of anyone other than 

the plaintiff. Indeed, the court held “that 

[the] Defendants have met their burden of 

establishing, by a preponderance of evidence, 

that a valid agreement to arbitrate 

exists between the parties.” 

The attribution of an electronic signature 

was also disputed in Martyn v. J.W. 

Korth & Co., 2011 WL 2144618, at *2–3 

(W.D. Mich. June 1, 2011). In Martyn, the 

court attributed a signature on an agreement 

to arbitrate to the plaintiff for numerous 

reasons. First, after undertaking a 

“cursory inspection of the [agreement] 

Form” the court concluded that the plaintiff’s 

“signature appear[ed] on the document.” 

Second, the plaintiff failed to proffer 

proof to dispute that he signed the document 

electronically. Third, the defendant 

established that the plaintiff would have 

had to sign the form to ply his trade as a 

FINRA- registered broker. Fourth, the defendant 

offered other extrinsic evidence, 

such as e-mail and fax exchanges, indicating 

that the plaintiff had executed the 

document. 

Furthermore, the form used in Martyn 

contained a section titled, “Individual/Applicant’s 

Acknowledgement and 

Consent,” which stated that the “Applicant 

or applicant’s agent has typed applicant’s 

name under this section to attest 

to the completeness and accuracy of this 

record” and “[t]he applicant recognizes 

that this typed name constitutes, in every 

way, use or aspect, his legally binding signature.” 

Additionally, the court noted that 

the plaintiff’s typed name appeared below 

those statements and directly below text 

that read “Signature of the Applicant.” As 

in Holmes, the court rejected out of hand 

the plaintiff’s argument that he “‘ha[d] no 

recollection of signing this contract,’” citing 

a mountain of authority holding that 

this was not a defense that courts would 

accept when it came to manual signatures, 

again reflecting the UETA’s elevation of 

electronic signatures to the same level. 

The enforceability of an electronically 

signed arbitration agreement was again 

disputed in Adams v. Superior Court, 2010 

WL 602515, at *3–5 (Cal. Ct. App. Feb. 22, 

2010). This time, the court, relying on the 

UETA, agreed with a plaintiff’s argument 

that the defendant did not present evidence 

to demonstrate that “she typed in the electronic 

evidence and, even if she did, there 

is no evidence she actually agreed to arbitrate.” 

Relying on Cal. Civ. Code §1633.9, 

which corresponds to the UETA section 9, 

the court in Adams would not attribute a 

signature to a plaintiff to enforce the agreement 

because some fields in the agreement 

“were filled in by someone other than [the 

plaintiff] before the form was sent to her 

for editing.” Explaining the decision further 

the court also noted that the plaintiff 

did not create a login, numerous people 

“could have… edited” the agreement, and 

there was “no electronic record of when [the 

plaintiff’s] full legal name was entered in the 

space following the arbitration agreement.” 

In short, the court concluded that without 

“affirmative evidence” that the plaintiff 

had “filled in her full legal name on the 

form” the defendant had failed to prove 

attribution by a preponderance of the evidence. 

The Adams court noted that the only 

“evidence offered to contradict [the plaintiff’s] 

denial was… testimony that [the 

plaintiff] had to scroll all the way to the 

bottom of the form and click on ‘save’ to 

exit the form and” transmit it, which simply 

was “not evidence that she typed in her 

full legal name.” The court also commented 

that the form’s “security procedure did not 

operate here to make it more likely than not 

[that] it was [the plaintiff] who typed in the 

electronic signature.” 

Finally, burying the lead, the court noted 

that even if the electronic signature had 

belonged to the plaintiff, the court would 

not have enforced the arbitration agreement 

for apparently paternalistic reasons: 

“This is another example of an employer 

burying a predispute arbitration agreement 

in paperwork that does not facilitate 

an informed choice on the part of the 

employee.” 

When Is an “Electronic 

Signature” Effective 

Although section 7 of the UETA is quite 

definitive about the effect of an “electronic 

signature,” specifying that “…[a] signature 

may not be denied legal effect or enforceability 

solely because it is in electronic 

form,” parties do occasionally challenge 

that rule. Indeed, the plaintiff in Martyn, 

2011 WL 2144618, at *2–3 (W.D. Mich. June

1, 2011), did just that. In Martyn, the court 

granted a defendant’s motion to compel 

arbitration. The Martyn court cited both 

Mich. Comp. Laws §450.837, modeled after 

the UETA, and federal law, 15 U.S.C. §7001, 

to hold that the plaintiff’s typed name on 

an electronic document that stated that the 

“applicant recognizes that this typed name 

constitutes, in every way, use or aspect, his 

legally binding signature,” sufficiently permitted 

the court to enforce the agreement. 

In re Piranha, Inc., 83 F. App’x 19, 22–23 

(5th Cir. 2003), involved a more nuanced 

argument concerning the “effect” of an 

“electronic signature attributed to a person.” 

In Piranha, the Fifth Circuit affirmed 

the Bankruptcy court’s refusal to enforce 

the electronic signature of a person who 

contended that he filed the signaturebearing 

form in error three hours after 

it was forwarded to him by e-mail by the 

bankrupt party’s legal department. Relying 

on the language of UETA section 9(b) 

as enacted in 6 Del. Code Ann. §109(b), 

the court declined to fault the Bankruptcy 

court’s consideration of that context, meaning 

the person’s mistake, in not enforcing 

the electronic signature. 

The court rejected the counterargument, 

which centered on section 6 Del. Cod. Ann. 

§107(a), which dictated that “‘[a]… signature 

may not be denied legal effect or 

enforceability solely because it is in electronic 

form,’” noting that the person did 

not “attempt to deny the legal effect of his 

signature ‘solely because it is in electronic 

form,’ but because he did not ‘execute[], 

adopt[][,] or authorize[]’ it….” 

A Word About the Electronic 

Signatures in Global and 

National Commerce Act 

On June 30, 2000, the United States Congress 

enacted the Electronic Signatures 

in Global and National Commerce Act 

(ESIGN), codified at 15 U.S.C. §7001 et 

seq., which, similar to the UETA, supports 

using electronic records and signatures 

in interstate and foreign commerce by 

placing them on equal footing with paper 

records and manual signatures. ESIGN covers 

ground that has some relationship to 

the UETA. At core, ESIGN specifies that a 

contract or signature “may not be denied 

legal effect, validity, or enforceability solely 

because it is in electronic form.” 

Nevertheless, the UETA and ESIGN are 

not identical in scope or in substance. NC- 

CUSL, for one, takes the position that the 

UETA is “more comprehensive” than ESIGN 

in that it “include[s] subjects not addressed” 

by ESIGN, and the UETA addresses various 

issues differently. In terms of scope, for example, 

while the UETA addresses attribution, 

ESIGN does not. 

ESIGN also lacks provisions to deal with 

the admissibility of electronic records, 

party agreements concerning the use of 

electronic media, electronic records transmission 

timing questions, mistakes or 

errors in electronic communications, and 

the scope of transferable records. Therefore, 

although ESIGN may bolster a litigant’s 

effort to enforce electronic transactions, 

the UETA will provide the support that the 

litigant will need to address signature attribution 

and legal effect successfully. 

Practical Pointers 

Although you cannot offer your client an 

iron-clad guarantee that the client can 

enforce an electronic transaction as written 

(or a paper transaction, for that matter), 

here are some suggestions for dealing 

with the realities of today’s Internet business 

environment so that the UETA won’t 

trip up your client. 

• The more security hurdles associated 

with an electronic signature, the better. 

Obviously, security measures should 

make it as difficult as possible for anyone 

other than the person to whom your client 

would need to attribute a signature 

to have created the signature. As Zulkiewski 

shows, whoever creates an electronic 

signature should have to know 

things that only the real contracting 

party would have known. Zulkiewski, 

No. 299025 (Mich. Ct. App. June 12, 

2012) (per curiam) (unpublished). See 

also Holmes, 2012 WL 267194, at *3 (S.D. 

Tex. Jan. 30, 2012). 

• Create, save, and keep screen shots of 

electronic signatures. 

• Just as would happen with a manual signature, 

having other forms of confirming 

evidence—paper correspondence 

reflecting the contract or an affidavit 

from the most likely imposter—would 

help. Zulkiewski, No. 299025 (Mich. 

Ct. App. June 12, 2012) (per curiam) 

(unpublished). See also Martyn, 2011 

WL 2144618, at *2–3 (W.D. Mich. June 

1, 2011). 

• The “I don’t remember” defense will lose 

when someone tries to use it to deny an 

electronic signature’s legitimacy. 

• When electronic transactions involve 

“consumer protection” issues—adhesion 

contracts and vast discrepancies in 

bargaining power—a court may go further 

to avoid attribution. See Adams, 

2010 WL 602515, at *3–5 (Cal. Ct. App. 

Feb. 22, 2010). 

• Use very explicit language on e-forms: 

“Applicant [name] has typed applicant’s 

name under this section to attest to 

the completeness and accuracy of this 

record”; “Applicant recognizes that this 

typed name constitutes, in every way, 

use or aspect, his legally binding signature”; 

and “Signature of the Applicant.” 

See Martyn, 2011 WL 2144618, at *2–3 

(W.D. Mich. June 1, 2011). 

• Your client can become the master of 

its transactions. A client can agree to a 

modified version of the UETA for electronic 

transactions, or a client can opt 

out of the UETA and agree to other, more 

specific rules of engagement, especially 

in business- to- business transactions. 

• In addition, if you or a client mistakenly 

signs something electronically, attempt 

to retract it as soon as possible. 

Conclusion 

We undeniably have entered an electronic 

age. Business is moving inexorably toward 

a paperless environment. As practitioners 

and counselors we must stay abreast of the 

types of activities that courts will uphold 

as valid electronic actions and which types 

they will not. In most circumstances, a signature 

as the key to an electronic transaction 

is the most vulnerable to attack. 

However, with proper security measures 

and confirmatory activities, your client can 

protect electronic signatures. 

While the UETA offers guidance, we will 

not know its precise legal contours until 

more courts rule on its terms. Meanwhile, 

put yourself in your client’s shoes: have 

you done all that you can to make sure that 

your client’s customers “are who they say” 

and “mean what they’ve clicked” when they 

press “enter” 



The Vexation of 

Conflicting Claims 

By E. Ford Stephens 

Rule and Statutory 

Interpleaders in 

Federal Court 

At the end of the day, 

interpleader remains 

a valuable tool for 

stakeholders to avoid 

the expense of double 

litigation and the risk 

of double liability. 

Entities such as banks, escrow agents, and insurers that 

hold assets or proceeds on behalf of others can find themselves 

dealing with claimants competing for the same 

funds. An interpleader allows a stakeholder that “fears the 

prospect of multiple liability to file suit, 

deposit the property with the court, and 

withdraw from the proceedings.” Metropolitan 

Life Ins. Co. v. Price, 501 F.3d 271, 

275 (3d Cir. 2007). 

The typical interpleader action has 

two distinct stages. A court determines 

whether the interpleader action is proper 

and whether to discharge the filing party, 

known as the stakeholder, from liability. 

Then, the court determines the rights of 

the claimants, who the stakeholder names 

as defendants in the action. This article 

focuses on the first stage of federal interpleader 

actions. 

There are two types of interpleaders in 

the federal courts. Perhaps the more commonly 

known interpleader is provided by 

Federal Rule of Civil Procedures 22 and 

known as “rule interpleader.” The other is 

authorized by 28 U.S.C. §1335, and known 

as “statutory interpleader.” 

These interpleaders share some of the 

same characteristics, such as the circumstances 

under which a stakeholder may file 

an action. However, they differ significantly 

regarding subject matter jurisdiction, personal 

jurisdiction, and service of process. 

Similarities exist between the two types 

of interpleaders when it comes to claimant 

counterclaims, possible reimbursement for 

costs and attorneys’ fees, and discharging a 

stakeholder from further liability. 

Fear of Exposure to Double Liability 

or the Vexation of Conflicting Claims 

As reflected in both rule interpleader and 

statutory interpleader, a stakeholder facing 

competing claims may bring an action 

against the claimants to require them to 

interplead their claims in one action. See 

Fed. R. Civ. P. 22 (“Persons with claims that 

may expose a plaintiff to double or multiple 

liability may be joined as defendants and 

required to interplead”); 28 U.S.C. §1335 

(authorizing an interpleader when “[t]wo 

or more adverse claimants, of diverse citizenship 

as defined in subsection (a) or (d) 


■ E. Ford Stephens is a partner at Christian & Barton, LLP, in Richmond, Virginia, focusing on insurance litigation and appeals. 

He has handled insurance- related appeals in the Fourth Circuit, the Fifth Circuit, and the Supreme Court of Virginia. Mr. Stephens 

is listed in Virginia Super Lawyers Magazine for business litigation, and is a frequent speaker and author on insurance 

topics. He is active in several DRI committees, recently having been named as vice chair of the Life, Health and Disability Committee, 

and is a member of the International Association of Defense Counsel.

of [28 U.S.C. §1332], are claiming or may 

claim to be entitled to such money or property, 

or to any one or more of the benefits 

arising by virtue of any note, bond, certificate, 

policy or other instrument, or arising 

by virtue of any such obligation”). Courts 

may entertain an interpleader even though 

the titles or claims of the conflicting claimants 

do not have a common origin, or are 

not identical, but are adverse to and independent 

of one another. Id. 

The “purpose of an interpleader bill is as 

much to protect a stakeholder from the expense 

of double litigation, however groundless, 

as it is to protect him from the risk of 

double liability.” Metropolitan Life Ins. Co. 

v. Segaritis, 20 F. Supp. 739, 741 (E.D. Pa. 

1937). As a result, courts typically describe 

the threshold for bringing such an action 

this way: “So long as there exists a ‘real and 

reasonable fear of exposure to double liability 

or the vexation of conflicting claims, 

jurisdiction in interpleader is not dependent 

upon the merits of the claims of the parties 

interpleaded.’” The Union Central Life Ins. 

Co. v. Hamilton Steel Products, 448 F.2d 

501, 504 (7th Cir. 1971) (quoting Bierman 

v. Marcus, 246 F.2d 200, 202 (3d Cir. 1957), 

cert. denied sub nom., Milmar Estate, Inc. 

v. Marcus, 356 U.S. 933 (1958)). 

This holds true even when a stakeholder 

believes that only one of the competing 

claims is meritorious, assuming that the 

stakeholder acts in good faith. Hunter v. 

Federal Life Ins. Co., 111 F.2d 551, 556 (8th 

Cir. 1940); National Life Ins. Co. v. Alembik- 

Eisner, 582 F. Supp. 2d 1362, 1367 (N.D. Ga. 

2008) (“The fact that one claimant eventually 

disclaimed any right to the proceeds 

did not make the interpleader action 

inappropriate.”). 

Moreover, at least one treatise has 

stated that “courts should not dismiss an 

interpleader action simply because the 

claims confronting plaintiff have not been 

asserted.” 7 Charles Alan Wright, Arthur 

R. Miller & Mary Kay Kane, Federal Practice 

& Procedure §1701 (2001). See also 

Alembik- Eisner, 582 F. Supp. 2d at 1366 

(“an actual claim need not exist but rather 

only the possibility that more than one person 

will claim”). Finally, a stakeholder can 

file an interpleader even if it asserts some 

interest in the res or denies liability in 

whole or in part to any or all of the claimants. 

Fed. R. Civ. P. 22; Reliance National 

Ins. Co. v. Great Lakes Aviation, Ltd., 430 

F.3d 412, 417 (7th Cir. 2005). 

Yet, some courts have defined an outer 

limit for filing an interpleader, as when an 

“adverse claim may be so wanting in substance 

that interpleader may not be justified.” 

Bierman v. Marcus, 246 F.2d 200, 202 

(3d Cir. 1957) (dismissing an interpleader 

complaint as not predicated upon any bona 

fide fear of vexatious conflicting claims). In 

addition, a stakeholder typically cannot file 

an interpleader after it already has paid the 

funds at issue. See Lincoln National Life Ins. 

Co. v. Barton, 250 F.R.D. 388 (S.D. Ill. 2008). 

In sum, if a stakeholder has contested 

assets or funds in its possession and it can 

articulate a reasonable fear of exposure to 

double liability or the vexation of conflicting 

claims to such funds, it typically can 

file an interpleader. 

Key Differences Between Rule 

and Statutory Interpleaders 

When it comes to subject matter jurisdiction, 

personal jurisdiction, and service of 

process, significant differences exist between 

rule interpleader and statutory interpleader. 

Practitioners not familiar with the 

latter type of interpleader may be pleasantly 

surprised by the advantages that it offers. 

An interpleader action based upon Federal 

Rule of Civil Procedure 22 “does not 

provide an independent basis for jurisdiction….” 

Correspondent Services Corp. 

v. First Equities Corp. of Florida, 338 F.3d 

119, 124 (2d Cir. 2003). To exercise its powers 

under rule interpleader, a federal court 

must first have subject matter jurisdiction, 

such as diversity jurisdiction under 

28 U.S.C. §1332. In other words, without a 

federal question, a stakeholder must establish 

diversity jurisdiction; i.e., complete 

diversity of citizenship between it and the 

claimants, and that the amount in controversy 

exceeds the sum or value of $75,000, 

exclusive of interest and costs. See, e.g., St. 

Louis Union Trust Co. v. Stone, 570 F.2d 833, 

835 (8th Cir. 1978). 

On the other hand, as explained below, 

statutory interpleader (1) has a lower 

threshold for the amount in controversy; 

(2) requires only “minimal” diversity 

among the claimants; (3) requires a stakeholder 

to deposit the funds at issue or a 

bond with the court; and (4) allows nationwide 

service of process. 

First, with statutory interpleader, the 

amount in controversy can be less than 

$75,000; the res can be as small as $500. 28 

U.S.C. §1335(a). 

Second, a stakeholder does not need 

to establish complete diversity for statutory 

interpleader. There need be only two 

adverse claimants of diverse citizenship 

as defined in 28 U.S.C. §1332, who are 

claiming or may claim to be entitled to the 

funds at issue. 28 U.S.C. §1335(a)(1). This 

is referred to as minimal diversity, “[t]hat 

is, diversity of citizenship between two or 

more claimants without regard to the circumstances 

that other rival claimants may 

be cocitizens.” State Farm Fire & Casualty 

Co. v. Tashire, 386 U.S. 523, 530 (1967). 

Indeed, courts have noted that there need 

not be diversity between the stakeholder 

and all of the claimants as long as minimal 

diversity exists between at least two of 

the claimants. See, e.g., Blue Cross & Blue 

Shield v. Nooney Krombach Co., 170 F.R.D. 

467, 471 (E.D. Mo. 1997). 

Third, a prerequisite for jurisdiction under 

28 U.S.C. §1335(a)(2) is that a stakeholder 

must deposit with the court either 

the funds at issue or a bond payable to the 

clerk of the court in such amount and with 

surety as required by the court. It creates 

a jurisdictional defect when a stakeholder 

fails to deposit the funds in question into 

the registry of a court, but the stakeholder 

can cure that defect. Lincoln Gen’l Ins. Co. 

v. State Farm Mut. Auto. Ins. Co., 425 F. 

Supp. 2d 738, 742 (E.D. Va. 2006). This simultaneous 

deposit requirement can present 

a bit of a “chicken and egg” situation; the 

funds must be deposited into the court, 28 

U.S.C. §1335(a)(2), for the court to have jurisdiction, 

but Federal Rule of Civil Procedure 

67, which governs the deposit of funds 

into court, requires that the party making 

such a deposit provide “notice to every other 

party” and secure “leave of court.” 

One way to deal with this situation is to 

file, along with a complaint for interpleader, 

a draft order to deposit the funds as well as 

the funds themselves. Counsel should consider 

contacting the clerk’s office before filing 

to make sure that the draft order has the 

necessary language about how the court 

will hold the funds. Also, if the court’s local 

rules do not require a separate motion 

and supporting brief under Federal Rule of 

Civil Procedure 67, counsel should consider 



explaining the deposit requirement of 28 

U.S.C. §1335 in the cover letter to the court 

when filing the complaint. It also may be a 

good idea for the stakeholder to serve copies 

of the pleadings regarding the deposit of 

the funds on the claimants along with copies 

of the complaint. 

The fourth difference between rule 

interpleader and statutory interpleader is 

Once the… defendants 

are before a court, it is time 

for the stakeholder to begin 

making its exit from the case. 

nationwide service. As noted above, a district 

court may issue its process, which 

“shall be addressed to and served by the 

United States marshals for the respective 

districts where the claimants reside or may 

be found.” 28 U.S.C. §2361. 

As one court has noted, “28 U.S.C. §1335, 

and the nationwide service of process provision 

of 28 U.S.C. §2361, empowers federal 

district courts to entertain interpleader 

actions irrespective of an individual claimant’s 

contacts (or lack of contacts) with the 

forum state.” McGuckin v. Metropolitan 

Life Ins. Co., 1996 U.S. Dist. Lexis 2826, 

at *3 (E.D. Pa. 1996). See also The Equitable 

Life Assur. Society v. Miller, 229 F. Supp. 

1018, 1020 (D. Minn. 1964) (“The availability 

of nationwide service of process under 

the Federal interpleader (28 U.S.C. §2361) 

provides a party who may be subjected to 

multiple liability with a remedy in Federal 

courts which would be otherwise unavailable 

to him in any State court”). Whereas a 

stakeholder might have difficulty rounding 

up the claimants if it were to rely solely on 

a state long arm statute or state law means 

of service, it should have no such difficulty 

with a statutory interpleader in a federal 

court under 28 U.S.C. §2361. 

Service under 28 U.S.C. §2361 probably 

can be made through a waiver of 

service of summons. The statute provides 

that defendants are to be served by “the 

United States marshals for the respective 

districts where the claimants reside or may 


be found.” Id. This is not the typical means 

of service under Federal Rule of Civil Procedure 

4. See, e.g., Fed. R. Civ. P. 4(c)(3) 

(service by U.S. marshal is only allowed 

by court order). However, under Federal 

Rule of Civil Procedure 4(k)(1)(C), “filing a 

waiver of service establishes personal jurisdiction 

over a defendant… when authorized 

by federal statute.” Id. As one court 

has explained: 

[U]nder the Rules Enabling Act [28 

U.S.C. §2072], all federal statutes that 

are inconsistent with the Federal Rules 

of Civil Procedure are to be considered 

modified to the extent necessary to harmonize 

the two. Thus, when the federal 

interpleader statute provides for service 

by a U.S. Marshal, “that statute should 

be considered modified by the 1983 revision 

of Federal Rule of Civil Procedure 4 

to authorize service by adult nonparties 

under Rule 4(c)(2)(A)… by mail under 

Rule 4(c)(2)(C)(ii).” 

McGuckin, 1996 U.S. Dist. Lexis 2826, 

at *4–5 (citations omitted). As a result, 

according to Federal Rule of Civil Procedure 

4(d)(4), when an interpleader stakeholder 

as plaintiff files a waiver executed by 

a defendant, proof of service should not be 

required, and the federal rules should apply 

as if a summons and complaint had been 

served at the time of the filing of the waiver. 

The Responses—Answers, 

Counterclaims, and Defaults 

Once they have been served as defendants 

in either a rule interpleader or a statutory 

interpleader, claimants typically file 

answers asserting their claims over the 

funds in dispute. 

Sometimes claimants also assert counterclaims 

against the stakeholder. Fortunately, 

the interpleader process can offer 

a stakeholder some protection from affirmative 

claims if they are based on a claimant’s 

assertion that the stakeholder should 

have paid him or her as opposed to the 

other claimants. 

For instance, in The Prudential Ins. Co. 

of Am. v. Hovis, 553 F.3d 258 (3d Cir. 2009), 

the Third Circuit held that bringing a valid 

interpleader action can shield a stakeholder 

from further liability to the claimants, not 

only with respect to the amount owed, but 

also with respect to counterclaims when 

the stakeholder bears no blame for the existence 

of the ownership controversy and 

the counterclaims are directly related to the 

stakeholder’s failure to resolve the underlying 

dispute in favor of one of the claimants. 

As the court observed, “[t]o allow [the 

insurer] to be exposed to liability under 

these circumstances would run counter to 

the very idea behind the interpleader remedy—namely, 

that a ‘stakeholder should not 

be obliged at his peril to determine which 

claimant has the better claim.’” Id. at 265. 

The Third Circuit went on to explain: 

“Put another way, where a stakeholder is 

allowed to bring an interpleader action, 

rather than choosing between adverse 

claimants, its failure to choose between 

the adverse claimants (rather than bringing 

an interpleader action) cannot itself 

be a breach of a legal duty.” Id. at 265 (citations 

omitted). See also Lexington Ins. Co. 

v. Jacobs Industrial Maintenance Co., 435 

F. App’x 144, 149 (3d Cir. 2011) (“counterclaims 

[that] merely recapitulate the 

ownership dispute… fall within the discharge 

of liability”). If a stakeholder properly 

brings an interpleader, the stakeholder 

should enjoy some protection from counterclaims 

based on an assertion by one 

claimant that the stakeholder should have 

paid him or her in the first place. 

Yet the interpleader process is less likely 

to afford a stakeholder protection if a 

claimant asserts a claim that is based on 

liability other than a contention that the 

stakeholder should have made a decision 

to pay him or her. For example, in United 

States of America v. High Technology Products, 

Inc., 497 F.3d 637 (6th Cir. 2007), the 

Sixth Circuit concluded that although the 

United States had properly brought an 

interpleader seeking the determination of 

which claimant owned certain isotopes in 

its custody, the court held that the interpleader 

process did not shield the United 

States from a claim by one of the defendants 

that the isotopes had been damaged 

while in its possession. 

Although less likely, in some instances, 

especially when the amount in controversy 

is low or the claimants are pro se, the 

claimants might not file any responses at 

all. As the Fourth Circuit has noted, “[i]t is 

presumably not often that every named defendant 

to an interpleader action declines 

to appear and accept his share of a fund 

incontestably put at his disposal.” Nation-

wide v. Eason, 736 F.2d 130, 132 (4th Cir. 

1984). In Eason, the court noted that one 

possible disposition of the insurance funds 

in that case might have been as abandoned 

property that would escheat to the state. Id. 

at 134. The court would not order returning 

the funds to the insurer because the insurer 

had disclaimed interest in them when it 

filed the interpleader. Id. 

(noting the following as the relevant factors 

to consider: “1) whether the case is simple, 

2) whether the interpleaderplaintiff 

performed any unique services for the 

claimants or the court, 3) whether the 

interpleaderplaintiff acted in good faith 

and with diligence, 4) whether the services 

rendered benefitted the interpleaderplaintiff, 

and 5) whether the claimants 

improperly protracted the proceedings.”). 

Reimbursement of the 

Stakeholder, Amount of Such 

Awards, and Dismissal 

Once the claimant defendants are before a 

court, it is time for the stakeholder to begin 

making its exit from the case. Unless it 

brought the interpleader under 28 U.S.C. 

§1335, the stakeholder would need to 

deposit the contested funds with the court 

as specified by Federal Rule of Civil Procedure 

67. The stakeholder may want to seek 

reimbursement of its interpleader costs and 

expenses from the funds. 

Although neither Federal Rule of Civil 

Procedure 22 nor 28 U.S.C. §1335 contains 

an express provision authorizing the 

reimbursement of interpleader costs and 

expenses, most courts recognize that they 

have the discretion to do so. See, e.g., Trustees 

of the Plumbers & Pipefitters Nat’l Pension 

Fund v. Sprague, 251 F. App’x 155, 156 

(4th Cir. 2007) (“federal courts have held 

that it is proper for an interpleader plaintiff 

to be reimbursed for costs associated with 

bringing the action forward”). 

Courts reimbursing stakeholders have 

done so for several reasons. Some courts 

have recognized that a stakeholder “by 

seeking resolution of the multiple claims 

to the proceeds, benefits the claimants, 

and should not have to absorb attorneys’ 

fees in avoiding the possibility of multiple 

litigation.” Sun Life Assur. Co. of Canada 

v. Bew, 530 F. Supp. 2d 773, 775 (E.D. 

Va. 2007) (citation omitted). Similarly, an 

interpleader is “brought for the benefit of 

resolving the dispute between the claimants 

and Plaintiff is a disinterested party.” 

Jefferson Pilot Fin. Ins. Co. v. Buckley, 2005 

U.S. Dist. Lexis 44067, at *6 (E.D. Va. 2005). 

Other courts have cited these reasons, 

as well as others, in forming a test that 

they use to determine whether reimbursing 

costs and fees is appropriate. See, e.g., 

Prudential Ins. Co. v. Robinson- Downs, 

2011 U.S. Dist. Lexis 30563 (M.D. La. 2011) 

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Lawyers representing a stakeholder seeking 

reimbursement should emphasize the 

stakeholder’s good faith in bringing an 

interpleader and the benefits that the process 

affords to the claimants. 

Other courts have declined to reimburse 

a stakeholder when they have found that 

the expenses to interplead funds are the 

ordinary cost of doing business. See, e.g., 

Travelers Indem. Co. v. Israel, 354 F.2d 488, 

490 (2d Cir. 1965) (“We are not impressed 

with the notion that whenever a minor 

problem arises in the payment of insurance 

policies, insurers may, as a matter of 

course, transfer a part of their ordinary 

cost of doing business of their insureds by 

bringing an action for interpleader.”). 

Rather than benefiting the claimants by 

filing an interpleader, some courts view 

stakeholders as having benefited themselves. 

See, e.g., Companion Life Ins. Co. 

v. Schaffer, 442 F. Supp. 826, 830 (S.D.N.Y. 

1977) (“[c]onflicting claims to the proceeds 

of a policy are inevitable and normal risks 

of the insurance business. Interpleader 

relieves the insurance company of multiple 

suits and eventuates in its discharge. 

Accordingly the action is brought primarily 

in the company’s own self- interest.”). 

Accord, N.Y. Life Ins. Co. v. Apostolidis, 2012 

U.S. Dist. Lexis 7995 (E.D.N.Y. 2012); Unum 

Life Ins. Co. of Am. v. Scott, 2012 U.S. Dist. 

Lexis 8869 (D. Conn. 2012). These cases 

tend to involve insurance companies as 

stakeholders, as opposed to other entities. 

If a court reimburses a stakeholder, an 

award typically does not involve a great 

deal of money because “all that is necessary 

is the preparation of a petition, the deposit 

in court or posting of a bond, service 

on the claimants, and the preparation of an 

order discharging the stakeholder.” Federal 

Practice and Procedure, §1719. Courts 

have also noted that “there is an important 

policy interest in seeing that the fee award 

does not deplete the fund at the expense of 

the party who is ultimately deemed entitled 

to it.” Trustees of Directors Guild of America- 

Producer Pension Benefits Plans v. Tise, 234 

F.3d 415, 426 (9th Cir. 2000). As a result, 

some courts have reduced the fees requested. 

See Allianz Life Ins. v. Agorio, 2012 U.S. Dist. 

Lexis 16949 (N.D. Cal. 2012) (granting only 

$3,581 of a request for $45,111.24, basing the 

award on reductions of both the requested 

rate and the amount of time expended). 


Sometimes courts will expressly limit 

awards to a percentage of the funds at 

issue, even if the stakeholder’s actual fees 

and costs were higher. Robinson- Downs, 

2011 U.S. Dist. Lexis 30563, at *4 (noting 

that the request was about one-third of the 

amount in controversy and reducing it to 

25 percent of the amount). On the other 

hand, courts have awarded the full amount 

requested when the case was not simple, 

the insurer acted in good faith, and a claimant’s 

counterclaim protracted the litigation. 

See Alembik- Eisner, 582 F. Supp. 2d, at 

1372 (awarding the full request of approximately 

$48,000 in costs and fees incurred 

by the insurer). 

Instead of immediately seeking to litigate 

the issue of reimbursement, a stakeholder’s 

counsel first should consider seeking 

an agreement with the claimants’ lawyers 

regarding an award. Counsel should document 

whatever added costs were incurred 

because of the actions of claimants in litigation, 

such as filing a counterclaim that 

merely recapitulated the ownership dispute. 

Yet, stakeholders should consider 

reducing the amount of their requests if the 

costs and fees exceed 25–30 percent of the 

contested funds. 

The benefits for a stakeholder’s counsel of 

approaching opposing counsel first are that 

it can save on the costs and fees of moving 

for an award, and the stakeholder may find 

that “a bird in hand is worth more than two 

in the bush.” Likewise, the claimants may 

realize that reaching an agreement has advantages. 

Not only would an agreement 

stop the stakeholder from incurring more 

potentially reimbursable costs and fees, the 

claimants also would save fees and costs associated 

with litigating the reimbursement 

issue. The parties can include such an agreement 

in a consent order, which would also 

dismiss the stakeholder. 

The last step is for a court to dismiss the 

stakeholder from the interpleader, which 

concludes the first stage of an interpleader 

action. A court “‘may issue an order discharging 

the stakeholder, if the stakeholder 

is disinterested, enjoining the parties from 

prosecuting any other proceeding related to 

the same subject matter, and directing the 

claimants to interplead….’” United States of 

America v. High Technology Products, Inc., 

497 F.3d 637, 641 (6th Cir. 2007) (citation 

omitted). Under 28 U.S.C. §2361, a dismissal 

can include a discharge of the stakeholder 

from further liability and an order permanently 

“restraining [the claimants] from 

instituting or prosecuting any proceeding 

in any State or United States court affecting 

the property, instrument or obligation 

involved in the interpleader action….” Id. 

One final note, the dismissal of the 

stakeholder will not likely disturb a court’s 

jurisdiction under 28 U.S.C. §1335 because 

it is based on the minimal diversity of 

the claimants. Similarly, under rule interpleader, 

a court typically can dismiss a 

stakeholder without destroying the court’s 

diversity jurisdiction. See, e.g., Leimbach 

v. Allen, 976 F.2d 912, 917 (4th Cir. 1992) 

(“We know of no reason not to follow the 

standard rule in diversity cases that if jurisdiction 

is present when the case is filed, 

a change in citizenship will not destroy 

jurisdiction. We think the dismissal of the 

insurers in this case should have no greater 

effect….”). 

Conclusion 

Interpleaders in the federal courts can offer 

relief to stakeholders as long as the stakeholders 

can articulate a reasonable fear of 

exposure to double liability or the vexation 

of conflicting claims. Between rule interpleader 

and statutory interpleader, the latter 

offers the advantages of a lower amount 

of the res, minimal diversity, and nationwide 

service. The one potentially complicating 

factor of statutory interpleader is the 

need to deposit the contested funds with 

the court immediately upon filing the action, 

but counsel can address that by simultaneously 

filing a motion to deposit and a 

supporting brief or a motion to deposit and 

a cover letter to explain why the proceeds 

have accompanied the complaint. 

Once in a stakeholder has filed an interpleader, 

it typically is protected from counterclaims 

based on a claimant’s contention 

that the stakeholder should have conveyed 

the contested assets to him or her. Most 

courts will reimburse a stakeholder for the 

costs and fees associated with filing an interpleader, 

but the reimbursement can amount 

to less than the total that a stakeholder actually 

incurred. At the end of the day, even 

without full reimbursement, interpleader 

remains a valuable tool for stakeholders to 

avoid the expense of double litigation and 

the risk of double liability.


Social Security 

Disability Decisions 

By Eric P. Mathisen 

and Kimberly A. Jones 

Should Disability 

Insurers Be 

Concerned 

An overview of the 

caselaw and practical 

advice to keep in mind, 

including the potential 

implications of Social 

Security disability benefits 

awards, to help you 

litigate ERISA disability 

matters effectively. 

Should disability insurers have concerns about Social 

Security disability benefits decisions The short answer to 

the question is “yes.” Disability benefits are one of the most 

frequently litigated employee benefit claims under the 

Employee Retirement Income Security Act 

of 1974, as amended (ERISA). 29 U.S.C. 

§1001 et seq. These claims usually involve 

an employersponsored long-term disability 

plan that places a burden on the claimant 

to prove that he or she is disabled under 

the terms of the plan. 

Long-term disability claimants often 

also apply for Social Security disability 

benefits, and claimants who receive them 

inevitably argue that the determination 

for these benefits should result in awards 

of disability benefits under ERISA plans. To 

litigate ERISA disability matters effectively, 

it is important to recognize the potential 

implications of Social Security disability 

benefits awards. This article offers an overview 

of the case law and practical advice to 

keep in mind during litigation. 

Courts’ Perceptions of Social 

Security Disability Benefits Awards 

The circuit courts of appeals are fairly 

uniform in holding that although a favorable 

Social Security disability benefit decision 

may be instructive and may provide 

some evidentiary guidance in determining 

whether an ERISA disability benefit determination 

is arbitrary and capricious, an 

ERISA plan claim administrator does not 

need to abide by a Social Security disability 

benefit decision and doesn’t have an obligation 

to assign additional weight to it. On 

the other hand, an ERISA plan administrator 

cannot entirely ignore the determination 

because courts will scrutinize whether 

an ERISA plan administrator considered a 

favorable Social Security disability benefit 

award in making a long-term disability decision. 

See, e.g., Paramore v. Delta Air Lines, 

129 F.3d 1446, 1452, n.5 (11th Cir. 1997). 

For instance, the Ninth Circuit has found 

that “complete disregard” for a Social Security 

disability benefit decision in making 

an unfavorable ERISA plan decision 

without any explanation indicates that the 

denial may not have resulted from a principled 

and deliberative reasoning process. 

■ Eric P. Mathisen is a shareholder with Ogletree Deakins Nash Smoak & Stewart PC, working from the 

firm’s offices in Chicago, Illinois, and Valparaiso, Indiana. Mr. Mathisen represents insurers, employers, 

and plan administrators in class action and single plaintiff employee benefit litigation throughout the United 

States. Kimberly A. Jones is an associate and a member of the Employee Benefits Litigation Practice Group 

in the firm’s Chicago office. 



ERISA litigatorsshould… 

recognize that a favorable 

Social Security decision 

generally is not admissible if 

it was not submitted during 

the ERISA claim process. 

Montour v. Hartford Life & Acc. Ins. Co., 

588 F.3d 623, 635 (9th Cir. 2009). Additionally, 

the Fifth Circuit has noted an exception 

to the general rule, under which an 

ERISA plan administrator doesn’t need to 

accept a Social Security disability determination 

as the final word on disability, 

finding a Social Security disability benefit 

decision relevant to a claim administrator’s 

decision if the claim administrator’s 

general policy is to follow the Social Security 

decision when determining eligibility. 

Moller v. El Campo Aluminum Co., 97 F.3d 

85, 87–88 (5th Cir. 1996). 

ERISA litigators should also recognize 

that a favorable Social Security decision 

generally is not admissible if it was not 

submitted during the ERISA claim process. 

Courts examining an ERISA disability 

benefit determination under a deferential 

review standard generally are limited to reviewing 

the evidence and information that 

was before the plan administrator at the 

time of the final decision. A Social Security 

disability benefit award that a claimant did 

not submit to an ERISA plan administrator 

until after the final ERISA plan determination 

concludes is not part of the ERISA 

plan administrative record and, therefore, 

generally is not considered in determining 

whether to uphold the ERISA benefit determination. 

See, e.g., Rugby v. Unum Life Ins. 

Co. of Am., 391 F. App’x 579 (8th Cir. 2010). 

Since Social Security disability benefits 

decisions can often take months or 

years, claimants frequently submit a determination 

well after a plan administrator 

has made an ERISA disability determination. 

Defense attorneys should, therefore, 

object when claimants want to submit 


Social Security disability benefit evidence 

on the ground that it is irrelevant in determining 

the reasonableness of a long-term 

disability decision when the plan administrator 

never had it to consider. 

ERISA Plans Do Not Need 

to Abide by Social Security 

Disability Benefits Awards 

Courts generally do not view Social Security 

disability benefits awards to oblige ERISA 

claim administrators to make the same decisions 

as the Social Security Administration 

because of the unique rules and proceedings 

underlying Social Security disability benefits 

determinations. See, e.g., Ladd v. ITT 

Corp., 148 F.3d 753, 755–56 (7th Cir. 1998). 

Identifying the distinctions between a 


and an ERISA disability determination for 

a reviewing court is imperative when litigating 

an ERISA disability claim because the 

basis for a Social Security disability benefit 

decision could be entirely immaterial to the 

plan terms guiding an ERISA claim administrator’s 

decision. Simply put, one disability 

determination does not beget the other. 

No Treating Physician Rule 

The Supreme Court pointed out some of 

these major differences in Black & Decker 

Disability Plan v. Nord, 538 U.S. 822 (2003), 

holding that the treating physician rule 

that applies in Social Security cases, which 

emanates from 20 C.F.R. §404.1527(d)(2) 

and requires administrative law judges to 

assign extra weight to the opinions of treating 

physicians, did not apply to ERISA disability 

determinations for several reasons. 

The Court focused on the fundamental 

differences in the regulatory scheme 

and purpose of the two federal acts. Social 

Security disability is an obligatory and 

nationwide program, but ERISA disability 

plans are voluntary, flexible, employersponsored 

programs. 

To administer a large benefits system 

efficiently, the commissioner of Social 

Security published detailed regulations 

governing benefit adjudications, including 

regulations formally implementing the 

treating physician rule to create the necessary 

“uniformity and regularity” in 

Social Security disability benefits decisions 

among administrative law judges throughout 

the country. In contrast, ERISA benefits 

plans involve private contracts. ERISA 

plan sponsors have significant leeway to 

design their benefits plans as they see fit, 

and ERISA does not mandate the type of 

benefits that employers must provide when 

they choose to offer plans. Therefore, while 

an administrative law judge must use a 

uniform set of federal criteria to determine 

a Social Security claimant’s disability status 

for benefit purposes, an ERISA claimant’s 

disability determination depends on 

the express terms of the particular plan. 

Considering all of these factors, the Supreme 

Court reasoned in Nord that nothing 

in ERISA, the U.S. Department of Labor regulations, 

or the U.S. secretary of Labor guidance 

required ERISA plans to defer especially 

to treating physicians’ opinions. The Court 

expressly rejected the application of the treating 

physician rule in ERISA cases, specifying 

that courts cannot require claim administrators 

“to accord special weight” to a treating 

physician’s opinion and cannot “impose a 

discrete burden of explanation” when a claim 

administrator credits evidence that contradicts 

a treating physician’s opinion. 

The distinction that requires applying 

the treating physician rule to a Social Security 

disability claim decision but not to an 

ERISA disability benefit decision is important 

when an ERISA disability claim decision 

is at odds with the conclusion of a 

claimant’s treating physician. If a claimant 

submits a favorable Social Security disability 

benefit decision as evidence of disability, 

but that decision was based primarily on 

the opinion of a treating physician, a court 

should not view the favorable Social Security 

award as persuasive evidence, especially 

if the ERISA plan administrator has 

reasonably explained its grounds for disagreeing 

with the treating physician. 

ERISA claim administrators are not required 

to accept treating physician opinions 

blindly, and defense lawyers need to make 

sure that a reviewing court understands 

this. With that said, it bears repeating that 

lawyers who advise claim administrators 

should warn them against ignoring a Social 

Security disability benefit award or a 

treating physician’s opinion because the Supreme 

Court in Nord also held that a claim 

administrator may not arbitrarily refuse to 

credit a claimant’s reliable evidence, which 

includes the opinion of a treating physician. 

Nord, 538 U.S. at 833.

Different Rules, Definitions, 

and Evidence 

Another reason courts generally refuse to 

find that a favorable Social Security disability 

award compels an ERISA plan disability 

award is because the other Social Security 

Administration proceedings and rules, in 

addition to those governing the treating 

physician rule, differ from those governing 

an ERISA claim. As the Tenth Circuit 

pointed out, a Social Security determination 

does not mandate a similar ERISA 

plan decision because “those [Social Security] 

proceedings are entirely different and 

separate from a claim under ERISA, with 

different parties, different evidentiary 

standards, and different bodies of law governing 

their outcomes.” Wagner-Harding v. 

Farmland Indus. Inc. Emp. Ret. Plan, 26 F. 

App’x 811, 817 (10th Cir. 2001). 

For instance, Social Security adjudicators 

often make their decisions based on 

entirely different medical evidence than 

the evidence compiled and submitted during 

an ERISA claim review. For example, in 

Ray v. Sun Life & Health Ins., 752 F. Supp. 

2d 1229 (N.D. Ala. 2010), one reason that 

the Social Security decision did not settle 

the claimant’s disability status under the 

ERISA plan was because neither the court 

nor the plan administrator had access to 

the Social Security Administration record, 

so they could not analyze the information 

used by the federal agency to make a decision, 

a record which “presumably was different 

from” the ERISA plan record, the 

Ray court reasoned. 

Courts have found that Social Security 

disability benefits decisions based on evidence 

not presented to ERISA administrators 

are not helpful in reviewing ERISA 

plan-related decisions. See Madden v. ITT 

Long Term Disability Plan for Salaried 

Emps., 914 F.2d 1279, 1286 (9th Cir. 1990) 

(stating that “if [this] argument were correct, 

ERISA fiduciaries would be stripped of 

all administrative discretion, as they would 

be required to follow the Department of 

Health and Human Services’ decisions 

regarding social security benefits, even 

where the Plan determines benefits under 

different standards or the medical evidence 

presented is to the contrary”), cert. denied, 

498 U.S. 1087 (1991); Block v. Pitney Bowes, 

Inc., 952 F.2d 1450 (D.C. Cir. 1992). 

Indeed, the criteria for determining disability 

under the Social Security Act are 

rarely the same as the criteria for a specific 

ERISA disability plan. Courts have 

acknowledged this distinction as another 

reason why a Social Security award cannot 

have a controlling weight. Pari- Fasano 

v. ITT Hartford Life and Acc. Ins. Co., 230 

F.3d 415, 420 (1st Cir. 2000) (finding that a 


should only have a controlling weight in 

the “rare case in which the statutory criteria 

are identical to the criteria set forth in 

the insurance plan”); Smith v. Cont’l Cas. 

Co., 369 F.3d 412, 418–19 (4th Cir. 2004) 

(holding that using Social Security procedures 

for purposes of evaluating a disability 

claim under an employersponsored 

plan was an error); Raskin v. Unum Provident 

Corp., 121 F. App’x 96 (6th Cir. 2005) 

(recognizing that benefits determinations 

under the Social Security Administration 

follow a different set of procedures from 

ERISA claims because the Social Security 

Administration procedures are designed to 

meet the need of efficiently and uniformly 

administering a large system). 

Under Social Security disability rules, 

a claimant is disabled if he or she cannot 

perform “any substantial gainful activity,” 

but a claimant can satisfy this definition 

in many ways. For instance, Social Security 

regulations automatically view a claimant 

as disabled due to his or her age, or if he 

or she has certain medical conditions, and 

without first evaluating associated restrictions 

and limitations. Under the Social 

Security medical- vocational “grid rules,” 

the rules automatically may deem a claimant 

“disabled” based on age, even if he or 

she has the functional capacity to perform 

sedentary or even light work. 

In contrast, most ERISA plans focus on 

an individual’s ability to perform the material 

and substantial duties of his or her 

own occupation, or any gainful occupation. 

Clearly, when an ERISA plan has a distinct 

test or process for deciding disability status, 

a Social Security disability benefit determination 

based on “medical listings” or 

“grid rules” cannot oblige the ERISA claim 

administrator to reach the same conclusion. 

See Pepe v. Newspaper & Mail Deliverers’- 

Publishers’ Pension Fund, 559 F.3d 140, 149 

(2d Cir. 2009) (finding that the Social Security 

Administration determination of disability 

did not satisfy the plan requirement 

that the claimant must be found “totally and 

permanently disabled” by a medical examiner 

appointed by the trustees); Jenkins v. 

Price Waterhouse Long Term Disability Plan, 

564 F.3d 856 (7th Cir. 2009) (finding that private 

disability determinations must be analyzed 

separately because the Social Security 

Administration uses various shortcuts that 

private insurers do not use); Smith v. A. T. 

Massey Coal Co., 2006 WL 285985, at *7 (S.D. 

W. Va. Feb. 3, 2006); Gannon v. Metro. Life 

Ins. Co., 360 F.3d 211, 215 (1st Cir. 2004). 

Since ERISA plan- related and Social Security 

Administration definitions and rules 

vary greatly it is essential to read a Social 

Security disability benefit decision submitted 

by a claimant carefully because it may 

undercut his or her ERISA disability claim. 

Likewise, carefully reviewing a Social 

Security disability benefit decision may 

reveal that the Social Security Administration 

found the claimant disabled due 

to an entirely different medical condition 

than that for which he or she sought benefits 

under an ERISA plan. An attorney certainly 

should emphasize these differences 

noted by the ERISA claim reviewer during 

the claim review process during litigation 

so that the adjudicator doesn’t assign 

undue weight to the Social Security decision. 

See Gilbertson v. Allied Signal, Inc., 

172 F. App’x 857, 862 (10th Cir. 2006). 

A defense attorney should also carefully 

read an ERISA plan before arguing 

that a favorable Social Security disability 

benefit decision is irrelevant to the ERISA 

plan administrator’s decision. Some ERISA 

plans require the administrator to treat a 

Social Security determination as “proof” 

of disability, which will almost certainly 

mean that the ERISA plan will need to 

make a similar decision to the Social Security 

Administration decision. See, e.g., Wilcott 

v. Matlack, Inc., 64 F.3d 1458, 1461 

(10th Cir. 1995). 

Evidence of Conflict of Interest 

Since the Supreme Court decision in Metropolitan 

Life Insurance Co. v. Glenn, 554 U.S. 

105 (2008), claimants now regularly attempt 

to use to a favorable Social Security disability 

benefit decision as evidence of an ERISA 

claim administrator’s conflict of interest. 

In Glenn, the Supreme Court found that 

the handling of a Social Security disability 

award was evidence that the insurer’s struc- 



tural conflict of interest as both the payor 

and the decider of benefits had affected its 

benefit determination. The Court found it 

troubling that the ERISA claim administrator 

had encouraged the claimant to apply for 

Social Security benefits, had benefitted financially 

by offsetting the Social Security 

disability benefit amount from the longterm 

disability benefit, but had ignored the 

Social Securityadjudicators 

often make their decisions 

based on entirely different 

medical evidence than 

the evidence compiled 

and submitted during an 

ERISA claim review. 


Social Security disability finding entirely in 

denying long-term disability benefits. 

Plaintiffs’ attorneys now regularly use 

the reasoning from Glenn to bolster a 

claimant’s argument that a claim administrator’s 

decision was tainted by conflict 

of interest. The scenario identified in Glenn 

is not unusual because many ERISA plans 

require claimants to apply for Social Security 

disability benefits and may even provide 

legal assistance to claimants to pursue 

them. In these situations, if an ERISA claim 

administrator later decides to deny longterm 

disability benefits, it must be careful 

to reconcile the Social Security determination 

with the ERISA plan denial. The Social 

Security decision cannot be ignored. 

Indeed, since Glenn, numerous courts 

have found an ERISA plan’s disregard of a 

Social Security disability benefit decision a 

relevant factor that a court should consider in 

determining whether an administrator’s denial 

of benefits was arbitrary and capricious, 

particularly after prompting or requiring a 

claimant to apply for Social Security disability, 

without some explanation by the claim 

administrator of its reasoning. Holmstrom v. 

Metropolitan Life Ins. Co., 615 F.3d 758 (7th 

Cir. 2010); McGahey v. Harvard Univ. Flexible 

Benefits Plan, 685 F. Supp. 2d 168, 178 (D. 

Mass. 2009); Winebarger v. Liberty Life Assur. 

Co. of Boston, 571 F. Supp. 2d 719, 725 (W.D. 

Va. 2008); Hackett v. Standard, 559 F.3d 825 

(8th Cir. 2009); Brown v. Hartford Life Ins. 

Co., 301 F. App’x 772, 776 (10th Cir. 2008). 

While other courts have not found 

inconsistency in encouraging a claimant 

to seek Social Security disability benefits 

and, at the same time, denying ERISA disability 

benefits, it is wise to advise ERISA 

claim administrators to address a favorable 

Social Security decision as specifically 

as possible and to explain why the Social 

Security disability benefit decision was not 

compelling in deciding whether a claimant 

was entitled to disability benefits under an 

ERISA plan. Piepenhagen v. Old Dominion 

Freight Line, Inc., 395 F. App’x 950, 2010 

WL 3623225 (4th Cir. 2010). 

Other Unique Issues 

A defense attorney has several other issues 

to beware of when defending an ERISA 

disability denial that involves a favorable 

Social Security disability benefit determination. 

First, an attorney should pay 

attention to when the Social Security 

Administration awarded disability benefits 

and, moreover, when the claim administrator 

became aware of that decision. As 

mentioned above, generally courts will not 

consider a favorable Social Security disability 

benefit decision as evidence if it was not 

submitted to the ERISA plan administrator 

before the administrator made a final decision, 

especially when a deferential standard 

of review would apply. See, e.g., Rugby v. 

Unum Life Ins. Co. of Am., 391 F. App’x 579 

(8th Cir. 2010); Barker v. Retirement Plan 

of Internat’l Paper Co., 804 F. Supp. 2d 501, 

507 n.1 (D.S.C. 2011) (“Because the award 

was not presented to the administrator for 

consideration, this court will not consider 

the award in its analysis.); Miller v. Mellon 

Long Term Disability Plan, 2011 WL 

4345813 (W.D. Pa. Sept. 15, 2011). 

Some courts have considered a favorable 

Social Security disability benefit award that 

an administrator learned about late in the 

game under certain circumstances. In Arnold 

v. Oneok, Inc. Long Term Disability 

Plan, 782 F. Supp. 2d 1288, 1290 (N.D. Ok. 

2001), the court considered a Social Security 

decision finalized after the ERISA plan administrator 

had made a long-term disability 

decision, finding that although it “normally 

confines its review to the materials in the 

Administrative Record, it may consider new 

evidence that is 1) necessary, 2) could not 

have been submitted during the administrative 

appeal process, 3) is not cumulative, 

and 4) is not simply better evidence than 

that submitted during the claims review.” 

When seeking to bar a claimant’s attorney 

from admitting information about a 

favorable Social Security disability benefit 

approved after an ERISA plan administrator 

has already made a decision, referring 

to the ERISA statute and U.S. Department 

of Labor claim regulations can help. 

Both anticipate a two-step review process: 

(1) consideration of a claim for benefits 

and, if denied in whole or in part, (2) a full 

and fair review of the decision. 

Neither the statute nor the regulations 

anticipate a process that remains perpetually 

open to consider new evidence after 

an ERISA claim administrator has rendered 

a final decision. Among other things, 

the regulations specifically allow ERISA 

plans to adopt various deadlines for filing 

administrative appeals. Keeping a claim 

perpetually open and allowing a claimant 

to submit new evidence at any time would 

render these deadlines meaningless. 

Defense practitioners in the Fifth Circuit 

should know that the Fifth Circuit hasn’t settled 

whether or not a claimant’s attorney can 

add new evidence to the ERISA claim record 

after the administrator has made a final disability 

benefit decision as litigation evidence 

as long as the attorney does it before filing 

a lawsuit, or if a court can only consider the 

evidence in the record that the administrator 

had before making a final disability 

benefit decision. Vega v. National Life Ins. 

Services, Inc., 188 F.3d 287 (5th Cir. 1999); 

Keele v. JP Morgan Chase Long Term Disability 

Plan, 221 F. App’x 316 (5th Cir. 2007). 

Unlike ERISA plans, the Social Security 

Administration rarely revisits eligibility 

for Social Security disability benefits once 

it awards benefits. Therefore, when defending 

ERISA claims decisions, an attorney 

may encounter an ERISA claim denial 

that includes evidence of a Social Security 

disability benefit award from the very 

remote past. The Social Security Administration 

could not have had the same information 

that was available to the ERISA 

plan administrator if the Social Security

Administration reviewed the Social Security 

disability claim many years earlier. A 

defense attorney should bring this information 

to a court’s attention and should 

explain why a Social Security disability 

benefit award from the very remote past 

doesn’t constitute persuasive evidence that 

a claimant had a disability when the ERISA 

plan administrator reviewed the claimant’s 

more recent ERISA claim. 

Courts typically have not imposed a duty 

on a claim administrator to gather additional 

Social Security information such as 

determination letters or evidence relied on 

by the Social Security Administration when 

a claimant fails to provide the information. 

Pinto v. Reliance Standard Life Ins. Co., 214 

F.3d 377, 394 n.8 (3d Cir. 2000), overruled 

on other grounds by Metropolitan Life Ins. 

Co. v. Glenn; Ciarlone v. Lincoln Nat’l Life 

Ins. Co., 2009 WL 1010849 (D. Mass. Apr. 

16, 2009) (refusing to consider the Social Security 

disability benefit award because the 

claimant never submitted it, and Lincoln 

was not required to assume the claimant’s 

responsibility for fact gathering). 

However, it appears that in the last few 

years some courts have imposed a duty on 

ERISA plan administrators to inquire and 

seek additional evidence if an administrator 

has been made aware that a favorable Social 

Security decision was made. This particularly 

happens when a plan administrator 

maintains that it didn’t have adequate evidence 

to make a determination, or when 

a firm retained by the plan administrator 

handles the claimant’s Social Security claim. 

See Timmerman v. Hartford Life & Acc. Ins. 

Co., 2010 WL 412553 (D.S.C. Jan. 28, 2010). 

While it is well established that ERISA 

plans may offset the amount of Social Security 

disability benefits, plaintiffs’ attorneys 

recently have challenged the right to 

offset Social Security disability benefits 

awarded to dependents. In Schultz v. Aviall, 

Inc. Long Term Disability Plan, 670 F.3d 

834 (7th Cir. 2012), the plaintiffs’ attorneys 

argued that Prudential should not have offset 

the dependent benefit because the plan 

only allowed offsets for “loss of time disability” 

benefits. The plaintiffs’ counsel 

argued that a child’s Social Security benefit 

was based on his or her parent’s disability, 

not on his or her own loss of time. 

The Seventh Circuit disagreed, holding 

that the dependent benefits compensated 

the households for loss of income that they 

had suffered due to the disability of one 

of their breadwinners. A child receives 

Social Security “by reason of the parentemployee’s 

disability, [and] those benefits 

are disability benefits based on the employee’s 

“loss of time.” Id. at 838. 

Although Prudential’s interpretation 

of its plan language prevailed, plaintiffs’ 

attorneys will continue to attack these offsets. 

Therefore, attorneys should remind 

clients drafting disability plans that they 

need to write clear and concise offset provisions. 

ERISA plans are entitled to a great 

deal of leeway to design the plans, and they 

should use this freedom to their benefit. 

Practice Pointers 

The most important takeaway for practitioners 

advising ERISA plan administrators 

or defending clients that have made 

adverse claim decisions is that they should 

not disregard a favorable Social Security 

disability award. Courts recognize that in 

most situations a favorable Social Security 

Administration decision does not dictate 

an ERISA plan administrator’s decision, 

but ERISA plan administrators continue 

to run into trouble when they completely 

ignore a favorable decision altogether— 

especially after receiving a financial benefit 

from the decision. 

As the Second Circuit noted in Hobson 

v. Metropolitan Life Ins. Co., 574 F.3d 75 

(2d Cir. 2009), ERISA plan administrators 

that deny benefits are encouraged simply 

to explain why they reached different decisions 

than the Social Security Administration. 

See also Calvert v. Firstar Fin., Inc., 409 

F.3d 286, 295 (6th Cir. 2005) (“the failure of 

a plan administrator to discuss a disability 

determination by the [Social Security Administration] 

may be considered as a factor 

in determining the arbitrariness of the 

plan’s decision to deny benefits”). 

When defending an ERISA plan administrator’s 

decision to deny benefits despite 

a favorable Social Security disability benefit 

decision, an attorney should pay attention 

to exactly what a claimant submitted 

to the ERISA plan administrator. If a claimant 

only submits a notice of a Social Security 

disability benefit award with basic 

information such as the award date and 

amount of the benefit, a defense attorney 

must point out that such limited information 

is insufficient to cast doubt on the 

ERISA plan’s decision. 

When more substantial information 

from the Social Security Administration is 

available in the record, highlight the rationale 

for the Social Security Administration 

disability finding and how it differs from 

the issues involved in the ERISA disability 

determination. As detailed above, the 

Social Security Administration may find 

someone disabled even though that person 

can perform sedentary work, or based on a 

different medical condition than the condition 

for which the claimant has sought 

ERISA benefits. It is also important to 

emphasize limitations in an ERISA plan, 

such as pre- existing conditions, mental illness, 

self- reported symptoms, fibromyalgia, 

and alcohol or substance abuse, which 

may not apply to a Social Security disability 

benefit determination. 

For example, when an ERISA plan’s 

mental illness limitation may be at issue, a 

claimant may try to avoid that limitation by 

arguing that he or she has a physical condition. 

But reviewing that claimant’s Social 

Security Administration decision and file 

may reveal that the disability award was 

based solely on a mental illness. In such a 

case, the Social Security Administration 

evidence may directly support denying 

benefits under the ERISA plan. 

Despite the Supreme Court emphasis in 

Nord regarding the differences between Social 

Security and ERISA disability determinations, 

and despite the well- established 

principle that Social Security Administration 

decisions do not dictate ERISA plan 

administrators’ decisions, claimants continue 

efforts to focus the courts’ attention 

on favorable Social Security Administration 

decisions. Defense attorneys should 

remind their clients not to ignore reliable 

evidence, particularly given how frequently 

claimants’ attorneys focus litigation on favorable 

Social Security disability decisions. 

Someone defending an ERISA longterm 

disability claim denial that involves 

a favorable Social Security Administration 

decision will need to point out the ERISA 

plan administrator’s explanation in the 

administrative record to clarify why the 

results differ. A well- reasoned and carefully 

explained ERISA decision will likely 

survive judicial review and will help bolster 

favorable decisions in the future. 



Discovery in 

ERISA Cases 

By Kathleen S. Massing 

and Russell S. Buhite 

Did Amara 

Change the 

Landscape 

The boundaries of 

discovery in ERISA cases 

may now be pushed even 

further, bringing new 

concerns to defendants, 

changing how ERISA 

cases will look, and 

creating challenges 

for attorneys advising 

clients on potential 

discovery and costs. 

The Supreme Court issued its opinion in Cigna Corp. v. 

Amara, 131 S. Ct. 1866, on May 16, 2011. In Amara, the 

employer, Cigna, had replaced its traditional defined benefit 

pension plan with a cash balance plan in 1998. 

Under the new plan, upon retirement 

an existing participant would receive the 

greater of the value of the old benefit as of 

December 31, 1997, or the new benefit at the 

point of retirement. Communications to 

participants about the conversion did not 

include information detailing certain differences 

between the old plan and the new 

plan. Id. at 1871. 

The district court held that the new summary 

plan description was misleading and 

that an Employee Retirement Income Security 

Act (ERISA) §204(h) notice about the 

prospective reduction in the old plan’s benefits 

was insufficient. The court concluded 

that the misleading communications had 

caused plan participants “likely harm” and 

addressed potentially appropriate ways to 

remedy the Cigna violations. Id. at 1875. 

Relying on ERISA §502(a)(1)(B), the district 

court granted relief to plan members 

by reforming the plan and ordering Cigna 

to provide benefits in accordance with the 

reformed plan. Id. The Second Circuit summarily 

affirmed the district court decision. 

Certification was granted by the 

Supreme Court on whether the “likely 

harm” standard employed by the lower 

court was the correct standard to apply to 

the plaintiffs’ claims. Justice Breyer, delivering 

the opinion of the Court, held that 

ERISA §502(a)(1)(B) did not authorize the 

court to reform the plan, though it did 

authorize the court to enforce the terms of 

an existing plan as relief. The Court further 

held that summary plan description terms 

are not plan terms but rather “provide communication 

with beneficiaries about the 

plan, but… their statements do not themselves 

constitute the terms of the plan for 

purposes of §502(a)(1)((B).” Id. at 1878. 

However, the Court did not stop there 

with an analysis of the claims made by 

the plaintiffs under ERISA §502(a)(1)(B), 

but instead reviewed ERISA §502(a)(3) to 

determine if it would make “appropriate 


■ Kathleen S. Massing is an associate and Russell S. Buhite is a shareholder in the Tampa, Florida, office 

of Marshall Dennehey Warner Coleman & Goggin PC. Ms. Massing is a member of the Professional Liability 

Department. She focuses her practice on coverage litigation, with a particular emphasis on ERISA benefit 

claims and insurance disputes. With more than 20 years of experience, Mr. Buhite focuses his practice on 

life, health, and disability insurance coverage litigation in state and federal courts, as well as handling a myriad 

of ERISA and other employee benefit matters for corporate clients.

equitable relief” available to the plaintiffs. 

Id. In a lengthy analysis, which Justice Scalia’s 

dissent noted largely consists of dicta, 

the Court went on to state that the “appropriate 

equitable relief” contemplated under 

ERISA §502(a)(3) included all categories 

of relief that “were typically available in 

equity” before law and equity merged. 

Id. The Court explained that based on the 

claims at issue in Amara, equitable remedies 

could include reformation, equitable 

estoppel, and surcharge. Id. at 1878. 

The Court explained that courts cannot 

use the “likely harm” standard to analyze 

a claim under ERISA §502(a)(3) because 

the ERISA notice provisions did not identify 

a standard; therefore, the standard that 

courts must use must come from the law 

of equity, which ultimately depends on the 

type of equitable relief sought. As stated in 

the majority opinion in Amara, “[L]ooking 

to the law of equity, there is no general 

principle that ‘detrimental reliance’ must 

be proved before a remedy is decreed. To 

the extent any such requirement arises, it is 

because the specific remedy being contemplated 

imposes such a requirement.” Id. at 

1881. The Court vacated the district court 

decision and remanded the matter for the 

lower court to determine whether it appropriately 

could exercise its discretion under 

ERISA §502(a)(3). 

Amara has arguably clarified what 

“appropriate equitable relief” in ERISA 

§502(a)(3) means, which may include not 

only those types of remedies traditionally 

thought of as “equitable,” such as reformation 

and estoppel, but also monetary damages—traditionally 

unavailable to ERISA 

plaintiffs—in the form of “surcharge” 

claims. 

Clarifying the equitable relief available 

to plaintiffs asserting ERISA §502(a)(3) 

claims, and in particular making monetary 

relief available, unintentionally makes 

this ERISA “catchall” provision, §502(a) 

(3), that much more attractive to plaintiffs’ 

counsel by perhaps leading them to couple 

their traditional ERISA §502(a)(1)(B) benefit 

claims with claims for equitable monetary 

relief under ERISA §502(a)(3) breach 

of fiduciary duty claims. 

But how will these two recovery provisions 

affect ERISA litigation How will 

courts grapple with the very different discovery 

issues and standards associated 

with a claim for benefits as opposed to a 

claim for equitable relief for a fiduciary 

breach 

Following the Supreme Court holding in 

MetLife v. Glenn, 554 U.S. 105 (2008), which 

plaintiffs’ attorneys have generally used 

to bolster arguments in favor of expanding 

discovery in ERISA cases, Amara may 

press the boundaries of discovery in ERISA 

cases even further, bringing new concerns 

to defendants, changing how ERISA cases 

will look, and creating challenges for attorneys 

advising clients on potential discovery 

and costs. The holding in Amara may 

even interfere with the fundamental purpose 

of ERISA—to provide protection to 

employees while at the same time limiting 

the complexity and expense associated 

with benefit plans for employers. 

Breach of Fiduciary 

Discovery Under ERISA 

Federal courts interpreting ERISA must 

take into account the competing interests 

of Congress’s desire to offer employees 

enhanced welfare benefits protection, on 

the one hand, and the desire to avoid a system 

that is so complex that administrative 

costs or litigation expenses unduly discourage 

employers from offering welfare benefit 

plans in the first place. Varity Corp. v. 

Howe, 516 U.S. 489, 497 (1996). 

In balancing these competing interests, 

judicial review of claims for benefits 

arising under ERISA §502(a)(1)(B) 

was traditionally limited to reviewing the 

administrative record. Courts typically did 

not allow discovery that ventured beyond 

the record. With some exception, courts 

typically held that discovery beyond the 

administrative record would circumvent 

the ERISA rules requiring development of 

the record through exhaustion of administrative 

remedies. 

The landscape of discovery under 

ERISA claims for benefit denials alleged 

under ERISA §502(a)(1)(B) changed with 

the Supreme Court holding in Glenn. In 

Glenn, the Court held that conflicts are but 

one factor among many that a reviewing 

judge must take into account to determine 

whether a plan administrator’s conflict of 

interest factored into a decision to deny 

a claim for benefits. 554 U.S. at 116. The 

Court went on to note that a conflict of 

interest may be of particular importance if 

a plan administrator had a history of biased 

claims administration. Id. 

Due to the Glenn holding, and in particular, 

recognition by the Court that a history 

of claim denials may be particularly 

relevant in some instances, courts have 

expanded discovery regarding an administrator’s 

conflict in claim determination. 

The federal circuit courts of appeals have 

applied Glenn to varying degrees. Most 

have allowed limited discovery on issues 

related to an apparent or an alleged conflict 

of interest of the plan administrator. While 

a plaintiff’s opportunity to explore discovery 

may, in some instances, have expanded 

under Glenn, few courts have extended the 

opportunity to a plaintiff to explore “full 

discovery” as they might in other types of 

disputes. 

Conversely, courts traditionally have 

viewed ERISA claims for breach of fiduciary 

duty arising under ERISA §502(a)(3) 

in a very different light. ERISA §502(a)(3) 

specifies that 

[a] civil action may be brought— 

… 

(3) by a participant, beneficiary, or fiduciary 

(A) to enjoin any act or practice 

which violates any provision of this subchapter 

or the terms of the plan or (B) to 

obtain other appropriate equitable relief 

(i) to redress such violation or (ii) to 

enforce any provisions of this subchapter 

or the terms of the plan; 

29 U.S.C. §1132(a)(3). 

Sometimes referred to as a “catch-all” 

provision, ERISA §502(a)(3) remedies 

become unavailable when the act elsewhere 

provides adequate relief for a beneficiary’s 

injury. Furthermore, traditionally courts 

generally did not consider monetary damages 

as available equitable damages, making 

claims pursued under this provision, 

ERISA §502(a)(3), somewhat less appealing 

to plaintiffs’ counsel. 

While courts must defer to the decision 

of a plan administrator or fiduciary 

when an ERISA plan confers discretionary 

authority to the plan administrator to 

determine eligibility for benefits when the 

courts review claims asserted under ERISA 

§502(a)(1)(B), courts do not need to defer 

to a plan administrators or fiduciary in an 

ERISA §502(a)(3) action. 

Accordingly, courts typically have held 

that the law doesn’t require them to limit 



judicial review to the administrative record 

before the plan administrator or fiduciary 

in a case involving an ERISA §502(a)(3) 

claim. Jensen v. Goff, 520 F. Supp. 2d 1349, 

1355 (D. Wyo. 2007). See also Pennsylvania 

Chiropractic Assoc. v. Blue Cross Blue 

Shield Assoc., 2012 U.S. Dist. Lexis 7257, 

at *19 (D. Ill. Jan. 23, 2012) (allowing discovery 

to venture beyond the administrative 

record with respect to the plaintiffs’ 

§502(a)(3) claims, explaining that when a 

party does not ask for judicial review of 

an underlying decision, denying benefits 

limiting evidence to that provided in the 

administrative record is not warranted 

under ERISA). 

Because of the fundamental difference 

between claims asserted under ERISA 

§502(a)(1)(B) and §502(a)(3), courts typically 

have allowed discovery in the latter. 

See Jensen v. Goff, 520 F. Supp. 2d at 1356. 

In Kukarni v. Metropolitan Life Ins. Co., 

187 F. Supp. 2d 724, 728–29 (D. Ky. 2001), 

the court denied the defendants’ motions 

for a summary judgment regarding the 

plaintiff’s 29 U.S.C. §1132(a)(3) claim, explaining 

that summary judgment was 

inappropriate when a plaintiff had not yet 

had the opportunity to conduct discovery. 

The court stated that confining its review 

of the claim to the administrative record 

would amount to denying due process. Id. 

While courts largely will limit judicial 

review of denied benefit claims to the 

administrative record, and generally will 

tailor discovery in these cases to the issue 

of conflict of interest, courts have shown a 

clear willingness to allow broader discovery 

to proceed when they review ERISA 

§502(a)(3) claims, even when a plaintiff’s 

attorney has coupled one with a benefit 

claim asserted under §502(a)(1)(B). 

In Manieri v. Board of Trustees of the 

Operating Engineer’s Local 825 Pension 

Fund, 2008 U.S. Dist. Lexis 71247, at *9–10 

(D.N.J. 2008), the court denied the defendants’ 

request to limit the scope of discovery 

to the administrative record. The plaintiff 

had requested limited discovery, including 

depositions of certain individuals 

involved in administering the plan, with 

respect to the asserted breach of fiduciary 

duty claims. 

The court explained that discovery concerning 

a breach of fiduciary duty claim 

under ERISA did not fall prey to the same 


limitations and restrictions that governed 

claims regarding benefit denials. Id. at 

*13. The court further rejected the defendants’ 

argument that the plaintiff sought 

to circumvent the limitations on discovery 

imposed in denial of benefit actions 

by securing discovery under a breach of 

fiduciary duty claim, explaining that the 

fact that the district courts could choose 

which facts to consider when addressing 

each claim limited the potential for abuse. 

Id. at *14. 

Courts in other jurisdictions have, like 

the court in Manieri, held that discovery 

restrictions under ERISA do not apply to 

ERISA fiduciary duty claims. See generally 

Fowler v. Aetna Life Ins. Co., 615 F. Supp. 

2d 1130, 1136 (9th Cir. 2009) (allowing 

tailored discovery of a conflict of interest 

when the plaintiff had alleged claims under 

both ERISA §502(a)(1)(B) and §502(a)(3)); 

Hamilton v. Allen- Bradley Co., 244 F.3d 819, 

827 n.1 (11th Cir. 2001) (allowing a deposition 

to explore whether a plan fiduciary had 

fulfilled its fiduciary obligations). 

Discovery After Amara 

With Amara arguably clarifying what 

“appropriate equitable relief” means under 

ERISA, and with the availability of equitable 

remedies such as estoppel, reformation, 

and monetary relief in the form of surcharge, 

defense attorneys can expect that 

plaintiffs’ attorneys will attempt to use this 

provision of ERISA even more, initiating 

ERISA claims that may broaden the scope 

of allowable discovery for ERISA §502(a) 

(3) claims. 

Although a split exists among the circuits, 

it appears that most courts, in the 

wake of Amara, and in interpreting Variety 

Corp. v. Howe, 516 U.S. 489 (1996), have 

held that a plaintiff may simultaneously 

pursue claims for benefits under ERISA 

§502(a)(1)(B) and for breach of fiduciary 

duty under ERISA §502(a)(3). See, e.g., Lipstein 

v. United Healthcare Ins. Co., 2011 

U.S. Dist. Lexis 135202, at *3 (D.N.J. 2011) 

(holding that before discovery, plaintiffs 

should not be forced to choose between 

their claims for benefits and their claims 

for equitable relief); Younger v. Zurich Am. 

Ins. Co., 2012 U.S. Dist. Lexis 42190, at *8 

(S.D.N.Y. Mar. 26, 2012) (denying the defendant’s 

motion to dismiss the plaintiff’s 

claims, holding that claims brought under 

ERISA §502(a)(3) did not duplicate benefit 

claims brought under ERISA §502(a)(1) 

(B)). This should concern ERISA defense 

practitioners. 

As the defendants in Mainieri noted, a 

litigant can legitimately argue that plaintiffs’ 

attorneys will attempt to circumvent 

discovery limitations in benefit denial 

claims by also pursuing claims under 

ERISA §502(a)(3), which permits much 

broader discovery. Discovery regarding 

the drafting of summaries of plan descriptions, 

notices, and plans likely will become 

relevant to these equitable causes of action. 

Similarly, documents and deposition evidence 

related to plan changes may become 

discoverable. 

A limited survey of ERISA attorneys 

representing claimants reveals that since 

Amara they have expanded somewhat the 

discovery that they seek in ERISA litigation. 

For example, one Eleventh Circuit 

practitioner takes the position that 

Amara overrules that circuit’s jurisprudence 

regarding judicial consideration of 

all the plan documents with respect to a 

court’s interpretion of what constitutes an 

ERISA plan. As a result, he contends that 

this requires undertaking more discovery 

designed to determine what constitutes the 

plan documents and taking a closer look at 

the communications to plan participants. 

Other practitioners have opined that 

the Amara decision likely will increase the 

attractiveness of ERISA class actions, particularly 

in the context of stock-drop cases, 

by making available a wide range of equitable 

remedies, including monetary relief, 

which would certainly lead to increased 

discovery for both plan participants and 

plan providers seeking to establish, or to 

defeat, class certification. 

However, as noted by Justice Scalia in 

his Amara dissent, bringing a claim for 

class relief under ERISA §502(a)(3) may 

be inappropriate, as many equitable remedies 

contemplate individualized reliance 

or individualized harm. Cigna v. Amara, 

131 S. Ct. at 1885. See also Churchill v. Cigna 

Corp., 2011 U.S. Dist. Lexis 90716, at *21 (D. 

Pa. 2011) (citing Newton v. Merrill Lynch, 

Pierce, Fenner & Smith, Inc., 259 F.3d 154, 

172 (3d Cir. 2001) (“[I]f proof of the essential 

elements of the cause of action requires 

individual treatment, then the class certification 

is unsuitable.”)).

Recognizing the difficulty, and perhaps 

improbability, of certifying a class for 

which the essential elements of the cause 

of action call for individualized treatment 

of the claims, the Supreme Court handed 

down the decision in Wal-Mart Stores Inc. 

v. Dukes, 131 S. Ct. 2541 (2011), just one 

month after deciding Amara. 

In Dukes, the Court overturned certification 

of a class of Wal-Mart employees 

alleging violations of Title VII by discrimination 

against female employees. 

The plaintiffs sought both injunctive and 

declaratory relief, including an award of 

back pay. Id. at 2547. 

The Court, in examining the class certification 

approved by both the district and 

circuit courts, explained that the “commonality” 

requirement for a class action 

requires that the plaintiffs demonstrate 

that the class members suffered the same 

injury that litigation can resolve class wide 

and that their claims depend upon a common 

contention. Id. at 2551. Ultimately 

holding that “commonality” did not exist 

in the claims asserted, the Court explained 

that the plaintiffs had failed to demonstrate 

“significant proof” that Wal-Mart operated 

under a general policy of discrimination so 

that the Court could not discern even a single 

common question to support class certification. 

Id. at 2556. 

Further, the Court went on to explain 

that while Federal Rule of Civil Procedure 

23(b)(2) contemplates requests for 

monetary relief, it does so only when such 

requests are incidental to the injunctive or 

declaratory relief sought. Id. at 2557. The 

Court explained that Rule 23(b)(2) contemplates 

relief to the class as a whole, but 

it does not authorize class certification 

when each class member would be entitled 

to an individualized award of monetary 

damages. Id. The Court explained that 

permitting the combination of individualized 

and class wide relief in a Federal Rule 

of Civil Procedure 23(b)(2) claim is inconsistent 

with the structure of the rule, as 

classes certified under this provision share 

the most traditional justifications for class 

treatment—that individual adjudications 

would be impossible or unworkable. 

The Court concluded that plaintiffs cannot 

pursue individualized monetary claims 

under Federal Rule of Civil Procedure 23(b) 

(2); plaintiffs must pursue these claims 

under Federal Rule of Civil Procedure 23(b) 

(3), which would offer procedural protections 

appropriate for the claims and allow 

individual plaintiffs to opt out of litigation 

if they so chose. Id. at 2558. 

The effect that Dukes and Amara will 

have on the scope of class actions and class 

action discovery in the ERISA context is 

not yet known. In Merrimon v. Unum Life 

Ins. Co. of Am., 2012 U.S. Dist. Lexis 15516 

(D. Me. Feb. 13, 2012), the court analyzed 

a request to certify an ERISA class consisting 

of plaintiff beneficiaries under ERISA 

plans insured by Unum, which provided 

and offered retained asset accounts for beneficiaries 

of the plans’ life insurance policy, 

which the plaintiffs argued failed to 

account for interest to funds held for disbursement 

adequately. Id. at *36. 

Over Unum’s objection to certification 

on the ground that the claims of each individual 

class member would turn on unique 

facts, including the knowledge and the 

motivation of the class members to maintain 

the benefits in the particular fund 

at issue, the court granted the plaintiffs’ 

request for class certification. Id. at *40. 

The court, recognizing the Supreme Court’s 

holding in Dukes, explained that the commonality 

of the claims did not rest on the 

plaintiffs’ varying motivations for leaving 

money in the accounts at issue, but 

rather, on allegations concerning Unum’s 

own decision to maintain the fund for its 

own interest and benefit, rather than for 

the benefit and interest of its beneficiaries. 

Id. at *41. 

Clearly, the holding in Amara, which 

opens the door to additional equitable 

relief, and perhaps alternative theories 

for obtaining relief, has the potential 

to increase the costs of ERISA litigation 

greatly and to circumvent ERISA’s purpose 

wholly of creating a system of employee 

benefit protection that is not so complex 

that it unduly discourages employers from 

offering benefit plans. Varity Corp. v. Howe, 

516 U.S. at 497. 

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ERISA Section 

502(a)(3) 

By Aaron E. Pohlmann 

Equitable Defenses 

and “Appropriate 

Equitable Relief” 

While the Supreme Court 

considers McCutchen 

this term, practitioners 

should keep abreast of 

the mercurial landscape 

surrounding this section 

of ERISA and, if called 

upon to address it, 

carefully consider the 

factual and analytical 

nuances differentiating 

various cases. 

In this challenging economic climate, Employee Retirement 

Income Security Act (ERISA) health plan subrogation 

and reimbursement claims have gained significant 

attention. Employers and insurers seeking to protect finite 

health plan assets, injured employees, and 

plaintiffs’ personal injury attorneys strenuously 

litigate subrogation and reimbursement 

claims. Consequently, the law in this 

area is rapidly evolving. 

On June 25, 2012, the Supreme Court 

granted certiorari to review U.S. Airways, 

Inc. v. McCutchen, 663 F.3d 671 (3d Cir. 

2011), presumably to resolve a circuit split 

regarding “equitable limitations” on ERISA 

section 502(a)(3), 29 U.S.C. §1132(a)(3), 

claims for reimbursement from third-party 

tort recoveries. 

The Third and Ninth Circuits have held 

that equitable principles such as unjust 

enrichment and the common law “makewhole” 

and “commonfund” doctrines 

can curtail reimbursement recoveries, 

despite express plan language disclaiming 

their application. See U.S. Airways, Inc. v. 

McCutchen, 663 F.3d 671 (3d Cir. 2011); CGI 

Techs. & Solutions v. Rose, 2012 U.S. App. 

Lexis 12556 (9th Cir. June 20, 2012). 

These courts disagreed with the Eleventh, 

Eighth, Seventh, Sixth, and Fifth Circuits 

to the extent that they “categorically 

excluded” application of such doctrines 

when a plan specifically disavows them. 

See Zurich Am. Ins. Co. v. O’Hara, 604 F.3d 

1232 (11th Cir. 2010); Longaberger Co. v. 

Kolt, 586 F.3d 459 (6th Cir. 2009); Administrative 

Comm. of Wal-Mart Stores, Inc. 

Assocs.’ Health & Welfare Plan v. Shank, 

500 F.3d 834 (8th Cir. 2007); Administrative 

Comm. of Wal-Mart Stores, Inc. Assocs.’ 

Health & Welfare Plan v. Varco, 338 F.3d 

680 (7th Cir. 2003); Bombadier Aerospace 

Employee Welfare Benefits Plan v. Ferrer, 

Poirot and Wansbrough, 354 F.3d 348 (5th 

Cir. 2003); Wal-Mart Stores, Inc. Assocs.’ 

Health and Welfare Plan v. Wells, 213 F.3d 

398 (7th Cir. 2000). 

How the Supreme Court will weigh such 

common law and equitable limitations 

against the policies underlying ERISA and 

strict enforcement of the terms of ERISA 

plans may significantly affect claims for 

“appropriate equitable relief” under ERISA 


■ Aaron E. Pohlmann is a partner in the Atlanta office of Smith Moore Leatherwood LLP. Since completing a federal judicial 

clerkship, Mr. Pohlmann has dedicated his practice to representing insurers, employers, and third-party administrators in 

ERISA and life, health, and disability insurance litigation. He has authored numerous articles and contributed to several books 

on ERISA, has held a number of leadership positions in the American Bar Association, and is an active member of the DRI Life, 

Health and Disability Committee.

section 502(a)(3). To resolve the circuit split, 

the Court may address a question that it 

declined to consider in Sereboff v. Mid Atl. 

Med. Srvs., Inc., 547 U.S. 356 (2006), namely 

whether a claim for ERISA plan reimbursement 

constitutes “appropriate” equitable 

relief if it “contravene[s] principles like the 

make-whole doctrine.” Id. at 368. 

ERISA Plan Reimbursement Claims 

A typical ERISA reimbursement claim 

involves facts similar to the following. 

An employer offers a group health plan 

for the benefit of its employees, generally 

funded in part by employee contributions. 

An employee, a participant in the 

plan, is injured in a non-work related accident, 

often a motor vehicle accident. The 

plan pays the medical expenses resulting 

from the employee’s accident- related injuries, 

and often, the employee pays very 

little of the expense him- or herself. The 

employee sues the at-fault tortfeasor in a 

personal injury lawsuit and claims medical 

expenses, including all of the expenses 

paid by the plan, as an element of his or her 

“damages.” The employee either settles the 

lawsuit or obtains a judgment, which generally 

takes into account all of his or her 

alleged damages, including all the medical 

expenses that the employer paid on his 

or her behalf. 

The plan authorizes the employer to 

obtain full reimbursement of benefits paid 

for an employee’s injuries from any monies 

recovered through an Employee’s lawsuit 

against a third-party tortfeasor. This plan 

reimbursement intends to ensure the plan’s 

solvency to the benefit of all employees 

and to reduce the costs to all employees by 

keeping contribution levels as low as possible. 

To further these goals, the health plan 

expressly allows first priority reimbursement 

from settlement funds or judgments, 

irrespective of whether an employee has 

been fully compensated or “made whole” 

by a settlement or a judgment, and regardless 

of an employee’s responsibility for paying 

personal injury attorney’s fees. 

The employee and his or her personal injury 

attorney in this hypothetical situation 

resist the employer’s reimbursement claim, 

asserting among other things, (1) that the 

employee will not be “made whole” if the 

plan is reimbursed from the third-party 

tort recovery, invoking the make-whole 

doctrine; and (2) that the employee’s attorney’s 

fees should be deducted from the 

reimbursement amount since the thirdparty 

tort recovery secured reimbursement 

for the plan in the first place, invoking the 

common-fund doctrine. 

A plan fiduciary ultimately sues to 

recover the plan benefits under section 

502(a)(3) of ERISA, which authorizes a plan 

“participant, beneficiary, or fiduciary (A) to 

enjoin any act or practice which violates 

any provision of [ERISA] or the terms of 

the plan, or (B) to obtain other appropriate 

equitable relief (i) to redress such violations 

or (ii) to enforce any provisions of [ERISA] 

or the terms of the plan….” 29 U.S.C. §1132 

(a)(3). Among the “appropriate equitable 

relief” that a plan fiduciary may seek is an 

equitable lien, a constructive trust on plan 

benefits, or both, that equitably ought to be 

returned to the plan for the benefit of all 

plan participants and beneficiaries. 

The Supreme Court Analysis 

of Section 502(a)(3) 

Between 1993 and 2011, the Supreme Court 

analyzed claims for relief under ERISA 

section 502(a)(3) no fewer than six times. 

See Mertens v. Hewett Assoc., 508 U.S. 

248 (1993); Varity Corp. v. Howe, 516 U.S. 

489 (1996); Harris Trust & Sav. Bank. v. 

Salomon Smith Barney, Inc., 530 U.S. 238 

(2000); Great-West Life & Annuity Ins. 

Co. v. Knudson, 534 U.S. 204 (2002); Sereboff 

v. Mid Atl. Med. Srvs., Inc., 547 U.S. 

356 (2006); Cigna Corp. v. Amara, 131 

S. Ct. 1866 (2011). Primarily, the scope of 

“appropriate equitable relief” has occupied 

the Court’s attention, but importantly, the 

Court has not yet addressed how “appropriate” 

qualifies “equitable relief.” 

In Knudson and Sereboff, the Court 

addressed health plan reimbursement 

claims under ERISA section 502(a)(3), discussing 

whether claims seeking to recover 

health benefits from third-party tort recoveries 

were “legal” or “equitable.” Previously, 

in Mertens, the Court “construed 

[ERISA §502(a)(3)] to authorize ‘those categories 

of relief that were typically available 

in equity,’ and thus rejected a claim that 

[the Court] found sought ‘nothing other 

than compensatory damages.’” Sereboff, 

547 U.S. at 361 (quoting Mertens, 508 U.S. 

at 255–56). In Knudson, the Court “elaborated 

on this construction,” and determined 

that Great-West’s ERISA section 

502(a)(3) reimbursement claim “was ‘not 

equitable—the imposition of a constructive 

trust or equitable lien on particular 

property—but legal—the imposition 

of personal liability for the benefits that 

[Great-West] conferred upon [Knudson].’” 

Sereboff, 547 U.S. at 362 (quoting Knudson, 

534 U.S. at 214). The Court reached this 

Between 1993 and 2011, 

the Supreme Court analyzed 

claims for relief under 

ERISA section 502(a)(3) 

no fewer than six times. 

conclusion because the Knudsons never 

possessed their personal injury settlement 

funds, and therefore, they did not “hold 

particular funds that, in good conscience, 

belong[ed] to” Great-West. Knudson, 534 

U.S. at 214. 

In Sereboff the Court wrote that the 

“impediment to characterizing the relief as 

equitable in Knudson is not present here” 

because “the portion of the tort settlement 

due to” the plan was in the Sereboffs’ 

“investment accounts.” Sereboff, 547 U.S. 

at 363. The Court held that the reimbursement 

provisions of the ERISA plan created 

an “equitable lien by agreement,” which 

allowed the plan administrator to “follow 

a portion of the recovery into the Sereboffs’ 

hands as soon as the settlement fund was 

identified, and impose on that portion a 

constructive trust or equitable lien.” Id. at 

364–65 (internal quotations omitted). 

The Court briefly noted the Sereboffs’ 

argument that certain “equitable defenses,” 

such as “the defense that subrogation may 

be pursued only after a victim had been 

made whole for his injuries,” should apply. 

Id. at 368 & n.2. The Court held that these 

alleged “equitable defenses” were “beside 

the point” in actions to “enforce an equitable 

lien by agreement” and declined to consider 

whether a reimbursement claim was 

“appropriate” equitable relief under ERISA 

section 502(a)(3) if it “contravened princi- 



ples like the make-whole doctrine” because 

that issue was not raised below. Id. at 368. 

Most recently, in Amara, the district 

court found that Cigna failed to disclose 

detrimental features of changes to a 

defined pension benefit plan and that Cigna’s 

“descriptions of the plan were incomplete 

and inaccurate” and “intentionally 

misled its employees.” 131 S. Ct. at 1874. 

In the wake of Knudson, 

Sereboff, and Amara, 

the circuits have taken 

contrasting views of 

“appropriate equitable 

relief” under ERISA 

section 502(a)(3). 

Invoking ERISA section 502(a)(1)(B), the 

district court ordered and the Second Circuit 

affirmed that (1) a court could reform 

the terms of the plan, (2) Cigna must 

enforce the plan as reformed, and (3) Cigna 

must pay retired beneficiaries money owed 

under the plan as reformed. Id. at 1879–80. 

The Supreme Court held that ERISA 

section 502(a)(1)(B) did not authorize 

this relief, but section 502(a)(3) may have 

because the remedies “resemble[d] traditional 

forms of equitable relief,” namely, 

reformation, estoppel, and surcharge. Id. 

The Court vacated and remanded, stating 

that whether “the general principles [that 

it had] discussed [were] properly applicable 

in this case is for [the district court] or the 

Court of Appeals to determine in the first 

instance.” Id. at 1882. 

In the wake of Knudson, Sereboff, and 

Amara, the circuits have taken contrasting 

views of “appropriate equitable relief” 

under ERISA section 502(a)(3). The disagreement 

centers on whether “equitable 

limitations” or “federal common law,” such 

as the make-whole and commonfund doctrines, 

can limit ERISA plan reimbursement 

recoveries when they are expressly 

disclaimed by a plan. 


A number of issues are at play, including 

(1) whether the Supreme Court analysis of 

the scope of equitable relief under ERISA 

section 502(a)(3) necessarily implies that 

these doctrines should apply even if a plan 

purports to invalidate them; (2) whether 

the doctrines constitute true “equitable 

defenses” or are merely common law 

“interpretive” gap- fillers that plans can 

expressly reject; (3) whether the policies 

underlying ERISA and the primacy of the 

terms of ERISA plans should prevail over 

alleged equitable considerations of perceived 

“fairness” to plan participants and 

their personal injury attorneys; (4) whether 

courts evaluating ERISA reimbursement 

claims based on settlements of underlying 

tort actions should routinely conduct 

“mini- trials” of liability and damages that 

the personal injury actions never tried; and 

(5) if these doctrines do apply despite plan 

language to the contrary, whether the federal 

courts nevertheless have the discretion 

to order full reimbursement to a plan after 

weighing the equities of a case. 

Zurich American v. O’Hara 

Zurich Amer. Ins. Co. v. O’Hara, 604 F.3d 

1232 (11th Cir. 2010), epitomizes the 

majority of circuit court opinions, holding 

that the make-whole and commonfund 

doctrines should not apply when a 

plan expressly disclaims them. See also 

Shank, 500 F.3d at 839 (“[n]othing in the 

statute suggests Congress intended that 

section 502(a)(3)’s limitation of the [plan’s] 

recovery to ‘appropriate equitable relief’ 

would upset these contractually- defined 

expectations [such as a make-whole doctrine 

disclaimer]. Indeed, ERISA’s mandate 

that ‘[e]very employee benefit plan shall be 

established and maintained pursuant to 

a written instrument,’ 29 U.S.C. §1102(a) 

(1), establishes the primacy of the written 

plan”); Varco, 338 F.3d at 691–92 (“it 

is inappropriate to fashion a common law 

rule that would override the express terms 

of a private plan unless the overridden plan 

provision conflicts with statutory provisions 

or other policies underlying ERISA…. 

Those cases which have applied the federal 

common fund doctrine in the favor of 

individual ERISA participants have done 

so, correctly, only in the absence of controlling 

plan language”); Bombadier, 354 

F.3d at 361 (“neither the federal nor Texas 

common fund doctrine may be invoked 

to prevent or reduce the Plan’s recovery of 

the funds that it advanced to [the beneficiary] 

up to the full amount of his recovery 

from the tortfeasor”); Wells, 213 F.3d at 402 

(suggesting that in an action under ERISA 

§502(a)(3), the parties to an ERISA plan 

could alter the “background of commonsense 

understandings and legal principles 

[such as the commonfund doctrine] 

that… operate as default rules to govern in 

the absence of a clear expression of the parties’ 

intent that they not govern”). 

In O’Hara, Zurich sued an employee, 

O’Hara, to recover $262,611.92 in selffunded 

health plan benefits from a settlement 

fund of $1,286,457.11. O’Hara had 

been injured in a head-on motor vehicle accident. 

The ERISA plan language expressly 

allowed Zurich to obtain full reimbursement 

of plan benefits and also specified that 

“no court costs or attorneys’ fees may be 

deducted from the Plan’s recovery without 

the Plan’s express written consent; any socalled 

‘Fund Doctrine’ or ‘Common Fund 

Doctrine’ or ‘Attorney’s Fund Doctrine’ 

shall not defeat this right….” 604 F.3d at 

1234. The plan further established that “regardless 

of whether a covered person has 

been fully compensated or made whole, the 

Plan may collect from covered persons the 

proceeds of any full or partial recovery that 

a covered person or his or her legal representative 

obtain, whether in the form of a 

settlement or judgment….” Id. 

O’Hara argued that enforcing the plan’s 

reimbursement provisions was not “appropriate” 

because “he was not made whole by 

his third-party recovery.” Id. at 1236. Specifically, 

O’Hara argued that 

as a matter of equity and in order to 

effectuate ERISA’s policy of protecting 

plan beneficiaries, the make-whole 

rule must be applied because allowing 

Zurich to recoup the medical expenses 

it paid on his behalf unduly punishes 

him [O’Hara] by requiring him to forfeit 

a substantial portion of the compensation 

he received for his other losses, 

including future wages and bodily integrity, 

and unjustly enriches Zurich. Id. 

Citing Eleventh Circuit precedent, the 

court held that “the make-whole doctrine 

is a default rule that applies only in the 

absence of specific and unambiguous language 

precluding it.” Id. (citing Cagle v.

Bruner, 112 F.3d 1510 (11th Cir. 1997)). The 

court observed that “[a]pplying federal 

common law to override the plan’s controlling 

language, which expressly provides 

for reimbursement regardless of whether 

O’Hara was made whole by his third-party 

recovery, would frustrate, rather than 

effectuate, ERISA’s purpose to protect contractually 

defined benefits.” Id. at 1237. 

Moreover, the court held that “[a]pplying 

federal common law to deny an employer 

its right to reimbursement pursuant to a 

written plan would also frustrate ERISA’s 

purposes by discouraging employers from 

offering welfare benefit plans in the first 

place.” Id. 

The court emphasized that “[a]lthough 

O’Hara himself will be in a better position 

if the subrogation provision is not enforced, 

plan fiduciaries must ‘take impartial 

account of the interests of all beneficiaries.’” 

Id. Regarding the “equities” of the 

case, the court emphasized that it would 

be unfair to allow O’Hara to “partake of the 

benefits of the Plan and then after [he] had 

received a substantial settlement, invoke 

common law principles to establish a legal 

justification for [his] refusal to satisfy [his] 

end of the bargain.” Id. at 1238 (quoting 

Ryan v. Federal Express Corp., 78 F.3d 123, 

127–28 (3d Cir. 1996)). 

Although O’Hara did not challenge the 

district court’s finding that the plan precluded 

deducting O’Hara’s attorney’s fees 

from Zurich’s recovery, the court nevertheless 

held that “because the Plan clearly and 

unambiguously disclaimed the ‘common 

fund doctrine,’ the district court correctly 

found that Zurich was owed the entire 

amount it paid on O’Hara’s behalf without 

a deduction of attorney’s fees.” Id. at n.4. 

The Court concluded that 

[b]ecause full reimbursement according 

to the terms of the Plan’s clear and 

unambiguous subrogation provision is 

necessary not only to effectuate ERISA’s 

policy of preserving the integrity of 

written plans but to protect the interests 

and expectations of all plan participants 

and beneficiaries, such relief is 

both ‘appropriate’ and ‘equitable’ under 

ERISA §502(a)(3). 

U.S. Airways v. McCutchen 

In U.S. Airways, Inc. v. McCutchen, 663 

F.3d 671 (3d Cir. 2011), U.S. Airways sued 

McCutchen, a plan participant, seeking 

reimbursement of $66,866 in medical 

benefits paid on McCutchen’s behalf. 

McCutchen settled his personal injury 

lawsuit for $10,000 and obtained another 

$100,000 in underinsured motorist benefits 

for a total third-party recovery of 

$110,000. After paying a 40 percent contingency 

fee, McCutchen’s net recovery was 

less than $66,000. Nevertheless, U.S. Airways 

demanded full reimbursement of the 

plan benefits paid for McCutchen’s injuries, 

based on the express reimbursement provisions 

of the plan. 663 F.3d at 673. 

McCutchen argued that “it would be 

unfair and inequitable to reimburse U.S. 

Airways in full when he [McCutchen] has 

not been fully compensated for his injuries, 

including pain and suffering,” and 

“U.S. Airways, which made no contribution 

to his attorneys’ fees and expenses, 

would be unjustly enriched if it were now 

permitted to recover from him without 

any allowance for those costs, in essence to 

reap what McCutchen has sown.” Id. at 673. 

The court observed that “if legal costs are 

not taken into account, U.S. Airways will 

effectively be reaching into its beneficiary’s 

pocket, putting him in a worse position 

than if he had not pursued a third-party 

recovery at all.” Id. The court noted that 

the case “squarely present[ed] the question 

that Sereboff left open: whether §502(a)(3)’s 

requirement that equitable relief be ‘appropriate’ 

means that a fiduciary like U.S. 

Airways is limited in its recovery from a 

beneficiary like McCutchen by the equitable 

defenses and principles that were ‘typically 

available in equity.’” Id. at 675–76. 

The court held that “applying the traditional 

equitable principle of unjust 

enrichment,… the [district court] judgment 

requiring McCutchen to provide full 

reimbursement to U.S. Airways constitutes 

inappropriate and inequitable relief.” 

Id. at 679. The court emphasized that “the 

amount of the judgment exceed[ed] the net 

amount of McCutchen’s third-party recovery, 

[and left] him with less than full payment 

for his emergency medical bills, thus 

undermining the entire purpose of the 

Plan.” Id. 

The court also commented that full 

reimbursement “amounts to a windfall 

for U.S. Airways, which did not exercise 

its subrogation rights or contribute to the 

cost of obtaining the third-party recovery. 

Equity abhors a windfall.” Id. The court 

expressly disagreed with O’Hara and other 

circuit court opinions, which, according to 

the Third Circuit, have found reimbursement 

claims under ERISA §502(a)(3) to 

seek “equitable” relief without then asking 

whether the relief sought was “appropriate.” 

Id. at 678. 

The court analyzed Mertens, Knudson, 

and Sereboff to support that “‘appropriate 

equitable relief’ must be something 

less than all equitable relief,” and further 

that “[r]emedies that peculiarly belong to 

traditional categories of equitable relief 

would typically have been defeated by 

equitable principles and defenses.” Id. at 

676. Additionally, the court opined that 

Amara reflected the Supreme Court view 

that “when courts were sitting in equity 

in the days of the divided bench (or even 

when they apply equitable principles today) 

contractual language was not as sacrosanct 

as it is normally considered to be 

when applying breach of contract principles….” 

Id. at 678–79. Thus, the court disagreed 

“with those circuits that have held 

it would be pioneering federal common law 

to apply equitable limitations on an equitable 

claim.” Id. The court did not decide 

what would constitute “appropriate equitable 

relief,” but it remanded the case to the 

district court to make that determination. 

The court did not specifically address 

application of the “make-whole” doctrine, 

which it described as an “equitable doctrine,” 

because McCutchen did not raise the 

issue on appeal. Id. at 676 n.2. However, the 

Ninth Circuit has agreed with McCutchen, 

holding that “notwithstanding the express 

terms of the Plan disclaiming the application 

of the make whole doctrine and the 

common fund doctrine, it is within the district 

court’s broad equitable powers under 

§502(a)(3) not to give those provisions controlling 

weight in fashioning ‘appropriate 

equitable relief.’” CGI Techs. & Solutions, 

Inc. v. Rose, 2012 U.S. App. Lexis 12556, at 

*28–29 (9th Cir. June 20, 2012). 

Comparing O’Hara with McCutchen 

O’Hara and McCutchen appear to conflict 

irreconcilably on whether common 

law equitable principles can limit ERISA 

reimbursement recoveries when a plan 

expressly and unambiguously disclaims 



their application. Both cases balance the 

policies underlying ERISA and the relative 

equities, and yet, reach different conclusions. 

The most obvious factual distinction 

is that in McCutchen the plan’s reimbursement 

amount exceeded the net sum of 

the employee’s third-party recovery. The 

Third Circuit opinion in McCutchen was 

influenced by the perceived “inequity” of 

One issuethat the 

Supreme Court may address 

is whether the makewhole 

doctrine is even an 

“equitable defense” at all. 

that situation, which the court described 

as “unprecedented” in its case law. Id. at 

272 n.3. 

In O’Hara, the Eleventh Circuit emphasized 

that reimbursement of plan assets 

“inures to the benefit of all participants 

and beneficiaries by reducing the total cost 

of the Plan.” 604 F.3d at 1238. If the plan 

did not recover the medical benefits, “the 

cost of those benefits would be defrayed 

by other plan members and beneficiaries 

in the form of higher premium payments.” 

Id. Moreover, plan fiduciaries must “ensure 

that the assets of employee health plans 

are preserved in order to satisfy present 

and future claims.” Id. The Eleventh Circuit 

reasoned: 

Because maintaining the financial viability 

of self-funded ERISA plans is often 

unfeasible in the absence of reimbursement 

and subrogation provisions like 

the one at issue in this case… denying 

[the plan] its right to reimbursement 

would harm other plan members 

and beneficiaries by reducing the funds 

available to pay those claims. 

Id. In the Eleventh Circuit’s view, these 

considerations conformed most congruously 

with ERISA’s “repeatedly emphasized 

purpose to protect contractually defined 

benefits.” Id. at 1237 (quoting Massachusetts 

Mut. Life Ins. Co. v. Russell, 473 U.S. 

134, 148 (1985)). In an amicus brief in 


support of U.S. Airways, three industry 

groups, the National Association of Subrogation 

Professionals, the Self- Insurance 

Institute of America, Inc., and the Western 

Pennsylvania Teamsters and Employers 

Welfare Fund, made similar arguments. 

See 2012 WL 1957772 (May 25, 2012). 

McCutchen, in contrast, emphasized 

that the Third Circuit viewed it as “unjust” 

to require a plan participant to reimburse 

a health plan fully when the amount of the 

reimbursement exceeded the net amount of 

the participant’s third-party recovery, and 

further, full reimbursement constituted a 

“windfall” to the plan. On the first point, 

it is not clear whether the Third Circuit 

would find full reimbursement “unjust” if 

a plan paid significantly less benefits than 

an employee received from a third-party 

recovery. That factual distinction would 

exist in many, if not most reimbursement 

cases. 

Second, the “windfall” argument seems 

misplaced given that the reimbursement 

claim enforces a contractual right that 

protects plan assets. See Schwade v. Total 

Plastics, Inc., 2012 U.S. Dist. Lexis 37091, 

at *25 (M.D. Fla. Feb. 22, 2012). It rings 

particularly hollow when a plan participant 

can recover or has recovered “medical 

expenses” as an element of damages 

in an underlying tort case, even when a 

health plan has paid them fully. If a plan 

member can keep that money, which equitably 

ought to return to the plan, he or she 

obtains a “windfall.” 

One issue that the Supreme Court may 

address is whether the make-whole doctrine 

is even an “equitable defense” at 

all. While McCutchen assumes that it is, 

many courts have determined that “[t]he 

make-whole doctrine is not an equitable 

defense.” Aetna Life Ins. Co. v. Kohler, 2011 

U.S. Dist. Lexis 54887, at *11–12 (N.D. Cal. 

May 23, 2011). Arguably, “[a]t most, the 

make whole doctrine operates as a default 

rule” of contract construction, that has not 

been adopted by all federal circuits. Cagle, 

112 F.3d at 1521. Compare Bash v. State 

Farm Mut. Auto. Ins. Co., 2010 U.S. Dist. 

Lexis 39956, at *21 (E.D. Mich. Apr. 23, 

2010) (stating that the make-whole doctrine 

“itself is simply a default rule of construction 

‘that an insurer cannot enforce its 

own subrogation [or reimbursement] rights 

unless and until the insured has been made 

whole by any recovery’”), with Paris v. Iron 

Workers Trust Fund, Local No. 5, 2000 U.S. 

App. Lexis 6883, at *7–8 (4th Cir. Apr. 17, 

2000) (“[a]pplying the same doctrines and 

rules of construction to ERISA contracts 

that generally apply to insurance contracts, 

such as the make-whole doctrine or the 

rule requiring courts to construe insurance 

contracts strictly against their drafters, 

would frustrate the purposes of ERISA.”). 

Cutting v. Jerome Foods, 993 F.2d 1293 

(7th Cir. 1993), addressed the distinction 

between substantive and remedial rights 

under ERISA versus an “interpretive principle” 

such as the make-whole doctrine: 

As it happens, the so-called universal 

[make-whole] rule of subrogation for 

which the Cuttings contend is a rule 

of interpretation. No one doubts that 

the beneficiary of… an employee welfare 

or benefits plan can if he wants sign 

away his make-whole right. The right 

exists only when the parties are silent. 

It is a gap filler. We need not consider 

the judges’ power to impose substantive 

or remedial, as distinct from merely 

interpretive, common law principles, on 

ERISA plans; need not consider, that is, 

the extent to which common law reasoning 

can be used to enlarge (or contract) 

the rights of an ERISA beneficiary 

or participant. The scope of that power 

is uncertain,… because of the possibility 

of conflict between a specific substantive 

or remedial principle, such as 

equitable estoppel, and the substantive 

or remedial principles set forth in 

ERISA itself, such as the requirement 

(with which equitable estoppel might be 

thought inconsistent) that all plan benefits 

be in writing. We are dealing only 

with an interpretive principle. 

Id. at 1297 (citations omitted). 

Conclusion 

The Supreme Court will consider 

McCutchen in the October 2012 term. How 

many issues the Court will resolve that 

now percolate among the circuits remain 

unknown. In the meantime, ERISA practitioners 

should keep abreast of the mercurial 

legal landscape surrounding ERISA 

section 502(a)(3) claims, and if called upon 

to address it, carefully consider the factual 

and analytical nuances differentiating the 

various cases.


How to Apply 

the Commonality 

Requirement 

By Michael Kentoff, 

Robin Sanders 

and Dawn Williams 

Wal-Mart Stores 

v. Dukes— 


Dukes’ real-life scope and 

effect on litigation will 

only gradually be revealed 

with time, decisionby-decision, 

but it does 

appear that in some 

critical ways the rules of 

engagement have changed. 

Commentators have hailed and denounced the U.S. 

Supreme Court decision in Wal-Mart Stores, Inc. v. Dukes, 

131 S. Ct. 2541 (2011), as “historic,” “stunning,” a “watershed 

decision,” “way wrong,” “hardly a revolutionary deci- 

sion,” and having, for better or worse, “revolutionized 

federal class action practice.” 

The defense bar generally views it as part 

of a gradual realignment of the class action 

process—perhaps in the spirit of the Private 

Securities Litigation Reform Act of 

1995 and the 2005 Class Action Fairness 

Act legislation—conceivably leading to a 

more equitable and principled system, even 

as disfavoring the plaintiffs’ bar and discouraging 

class action lawsuits. 

It is, of course, characterized by some as 

representing a vindication of big business 

■ Michael Kentoff, Robin Sanders, and Dawn 

Williams are members of Jorden Burt’s 

National Trial and Class Action Practice 

Teams, practicing from the firm’s Washington, 

D.C., office. Their practices are focused 

on class action and complex litigation on 

behalf of the financial services industry. All 

are members of the DRI Life, Health and Disability 

Committee, with Ms. Sanders and Ms. 

Williams being active members within 

the committee’s leadership. Ms. 

Sanders is also the chair of the ABA- 

TIPS Life Insurance Law Committee. 

The authors wish to thank Christine 

Stoddard for providing assistance 

with this article. 

interests over individual rights and others 

as no less than the “death knell” of the 

nationwide class action lawsuit. 

Whether Dukes represents a seismic 

shift in class action jurisprudence or simply 

confirms or clarifies long-held federal 

law, two portions of Justice Scalia’s decision 

caused the biggest ripples among class 

counsel, courts, and the press. 

First, the decision’s focus on the “commonality” 

prong of Federal Rule of Civil 

Procedure 23(a)(2), and the accompanying 

“heightening” of that standard, pushed 

an ordinarily quiet, seemingly reticent 

class certification requirement into the 

spotlight. 

Second, Dukes’ emphasis on the need for 

district courts to examine a lawsuit’s merits 

when determining whether a common 

contention is answerable on a class-wide 

basis may have resolved, once and for all, 

a nearly 40-year-old debate. Depending on 

point-of-view, Dukes either eviscerates or 

clarifies previous Supreme Court precedent 

as expressed in Eisen v. Carlisle & Jacquelin, 

417 U.S. 156, 177 (1974), that “nothing 

in either the language or history of Rule 

23… gives a court any authority to conduct 

a preliminary inquiry into the merits of a 

suit in order to determine whether it may 

be maintained as a class action.” 



On the surface, we cannot entirely 

predict just how class action procedure 

will differ moving forward in light of the 

Court’s June 2011 holding in Dukes. After 

all, trial courts have long shouldered the 

burden of performing a “rigorous analysis” 

to determine if plaintiffs have met 

each requirement for class certification 

under Federal Rule of Civil Procedure 23. 

The wordmost often 

used to characterize 

the commonality 

requirement after Dukes 

is “reinvigorated.” 


See Gen. Tel. Co. of Sw. v. Falcon, 457 U.S. 

147, 161 (1982) (holding that a class action 

“may only be certified if the trial court is 

satisfied, after a rigorous analysis, that the 

prerequisites of Rule 23(a) have been satisfied”). 

However, in Dukes, the Supreme 

Court articulated a more exacting commonality 

requirement and answer to the 

Eisen riddle that has reshaped, or at least 

provided more definition, to the task that 

a district court has before it when called 

upon to determine class certification. 

Significantly, the decision in Dukes is 

grounded largely in the due process “right 

of the defendant to present facts or raise 

defenses that are particular to individual 

class members[.]” Thorn v. Jefferson- Pilot 

Life Ins. Co., 445 F.3d 311, 318 (4th Cir. 

2006). Emphasizing the primacy of procedural 

due process, the Court pointed out 

that this right is, and always has been, protected 

by the Rules Enabling Act, which 

states that application of the federal rules, 

including Federal Rule of Civil Procedure 

23, “shall not abridge, enlarge or modify 

any substantive right.” Dukes, 131 S. Ct. at 

2561 (quoting 28 U.S.C. §2072 (2006)). This 

emphasis on procedural due process has 

already started to find its way into analyses 

by federal as well as state trial courts. 

This article will briefly discuss these 

and other key lessons from the Dukes decision. 

A large part of the post-Dukes analysis 

involves trying to discern the decision’s 

meaning and significance to both class 

action procedure and, for purposes of this 

article, future life, health, and disability 

insurance class actions. 

Commonality Makes Some Noise 

The word most often used to characterize 

the commonality requirement after Dukes 

is “reinvigorated.” In describing the necessary 

ingredients of a “rigorous analysis” 

of the commonality requirement of 

Federal Rule of Civil Procedure 23(a)(2), 

the Dukes court seems to have given the 

requirement new life. Of course, someone 

might question whether the commonality 

requirement was ever flush with vigor 

in the first place since historically, it has 

been thought of, by courts and litigants, as 

easy to satisfy—almost an after- thought, 

especially in the context of Federal Rule of 

Civil Procedure 23(b)(3) class actions for 

which a showing of the predominance of 

common issues was usually the class certification 

game. Perhaps a more accurate 

characterization of the post-Dukes commonality 

requirement would simply be 

“invigorated.” 

Before Dukes, a plaintiff class met the 

commonality test “when there [was] at least 

one issue, the resolution of which [would] 

affect all or a significant number of the 

putative class members.” Lightbourn v. 

Cnty. of El Paso, 118 F.3d 421, 426 (5th Cir. 

1997) (citing Forbush v. J.C. Penney Co., 994 

F.2d 1101, 1106 (5th Cir. 1993)). Frequently, 

in discussing this test, courts and litigants 

repeated the mantra, “the commonality 

hurdle is not particularly high,” which was 

a nice way for everyone to agree that spending 

much time discussing commonality 

was unnecessary. 

In consumer fraud class actions, plaintiffs 

often addressed the commonality 

requirement by raising common questions 

that tended to focus solely on the conduct 

of the defendant rather than on the experiences 

or actions of the consumers. Because 

courts customarily had paid scant attention 

to the commonality requirement anyway, 

this tactic often worked, even when 

the putative class might fail another, more 

stringent Federal Rule of Civil Procedure 

23 requirement such as predominance. 

In Dukes, however, the commonality 

requirement was the center of attention. 

The Court held that the “common contention” 

required under Federal Rule of Civil 

Procedure 23 “must be of such a nature that 

it is capable of classwide resolution—which 

means that determination of its truth or 

falsity will resolve an issue that is central to 

the validity of each one of the claims in one 

stroke.” Dukes, 131 S. Ct. at 2551 (emphasis 

added). Confusion surrounding the application 

of this heightened standard has 

resulted in conflicting district court class 

certification decisions and, not surprisingly, 

an increase in interlocutory appellate 

review. The Seventh Circuit Court of 

Appeals observed that commonality issues 

after Dukes “cr[y] out for a 23(f) appeal.” 

See McReynolds v. Merrill Lynch, 672 F.3d 

482, 488 (7th Cir. 2012). 

One such Federal Rule of Civil Procedure 

23(f) appeal offers a view of how 

the circuits may treat the commonality 

requirement in light of Dukes. In M.D. ex 

rel. Stukenberg v. Perry, 675 F.3d 832 (5th 

Cir. 2012), plaintiffs alleged that the State 

of Texas subjected all of the children in the 

state Permanent Managing Conservatorship 

to various harms, including depriving 

them of a number of rights in violation 

of Texas law. 

Although the district court found that 

the class raised common questions of both 

fact and law, on appeal, the Fifth Circuit 

Court of Appeals stated that the analysis 

had been insufficient under Dukes, even 

though it previously may have been reasonable 

under Fifth Circuit precedent. The district 

court, in the Fifth Circuit’s view, had 

failed to conduct a rigorous analysis, which 

would have had some overlap with the merits, 

and did not explain how a determination 

of common questions would resolve 

an issue central to every class member. Id. 

at 839–42. 

According to the court of appeals, in 

finding that allegations of “systemic deficiencies” 

in the state’s administration of 

the Permanent Managing Conservatorship 

raised common questions of fact, the 

district court failed to analyze adequately 

whether individual differences among 

class members would preclude a finding 

of commonality, and, due to that failure, 

a class-wide proceeding could not “generate 

common answers apt to drive the resolution 

of the litigation.” Id. at 841 (quoting 

Dukes, 131 S. Ct. at 2551).

This reasoning seems well-suited to 

certification analysis in insurance class 

actions. For instance, in Corwin v. Lawyers 

Title Ins. Co., 276 F.R.D. 484 (E.D. Mich. 

2011), the plaintiff brought a putative class 

action against a title insurer, alleging that 

discounts were not provided to purchasers 

who had previously been issued a title 

policy in connection with the same property. 

Id. at 485. In support of its motion for 

class certification, the plaintiff identified a 

series of common questions related to the 

defendant’s conduct and obligations. Id. at 

489–90. 

The court denied class certification 

because an absent class member would 

be unable to recover “unless he or she 

[could] establish that there was a previous 

title policy issued on the specific property 

in question.” Id. at 490. After discussing 

the Dukes holding on the commonality 

requirement, the court found that “[s]uch 

proof is uniquely individualized; it cannot 

be established on a classwide basis… 

instead of liability being established ‘in one 

stroke,’ it would take an assessment of each 

transaction to determine if the absent class 

member qualified for the discount rate.” Id. 

See also Scott v. First Am. Title Ins. Co., 276 

F.R.D. 471, 478 (E.D. Ky. 2011) (holding that 

the question of “whether the Class was entitled 

to the discounted [title insurance] rates 

on file [or]… whether First American was 

unjustly enriched… cannot be determined 

in ‘one stroke’ for all class members without 

inspection of individualized proof.”). 

Conversely, a showing that the challenged 

conduct of the insurer is somehow 

universal can, in some instances, keep the 

inquiry squarely focused on the defendant’s 

challenged conduct. In Churchill v. 

Cigna Corp., 2011 WL 3563489 (E.D. Pa. 

Aug. 12, 2011), for example, the plaintiffs 

alleged improper denial of health insurance 

claims seeking treatment for autism 

known as applied behavior analysis and 

early intensive behavioral treatment (collectively 

“ABA”). Id. at *1–2. Cigna denied 

these claims under an experimental or 

investigative treatment exclusion, which it 

allegedly did as part of an overarching, universal 

policy. Id. at *4. 

The district court found that the plaintiffs 

had satisfied the commonality requirement 

articulated in Dukes because, in 

contrast to the discretion that Wal-Mart 

gave store managers over employment decisions, 

“Cigna indisputably has a national 

policy of denying coverage for ABA to treat 

ASD [autism spectrum disorder].” Id. Thus, 

the court concluded, “the central question 

here is whether Cigna’s denial of medical 

coverage for ABA as a treatment for ASD 

on the basis that such treatment is investigative 

or experimental was proper, and the 

answer to this question will resolve each 

class member’s individual claim.” Id. 

At this early stage, the critical difference 

between claims that satisfy the commonality 

requirement of Dukes and those that 

do not appears to depend on the degree to 

which the plaintiff can portray the allegedly 

harmful conduct as standard and 

pervasive. For instance, the Eighth Circuit 

Court of Appeals has found that Dukes was 

factually distinguishable from a case in 

which the plaintiffs asserted warranty and 

negligence claims and alleging an inherent 

universal product defect. See Zurn Pex 

Plumbing Prods. Liab. Litig. v. Zurn Pex, 

Inc., 644 F.3d 604 (8th Cir. 2011). 

While class certification decisions interpreting 

Dukes in life, health, and disability 

insurance class actions are at a relatively 

nascent developmental stage, the recent 

denial of class certification in Rowe v. Bankers 

Life and Cas. Co., 2012 WL 1068754 

(N.D. Ill. Mar. 29, 2012), demonstrates that 

simply alleging a broad, universal scheme 

in a series of common questions may no 

longer sufficiently meet the commonality 

requirement after Dukes. In Rowe, the 

plaintiffs alleged that Bankers engaged in 

a common scheme “through standardized 

misrepresentations and omissions as to 

the essential characteristics and true costs 

of its equity- indexed deferred annuities.” 

Id. at *7. And, in doing so, Bankers violated 

RICO and several California statutes, 

breached its fiduciary obligations, and was 

unjustly enriched. Id. at *3. 

As to the RICO claims, the court agreed 

with the representative plaintiff that 

whether Bankers participated in the “conduct” 

of the alleged enterprise’s affairs, was 

part of a RICO “enterprise,” and engaged in 

activity that amounted to a “pattern,” all 

qualified as common questions capable of 

class-wide resolution. Id. at *7. But the court 

found the failure to identify “any uniform 

misrepresentations or omissions made to 

each potential member of the nationwide 

class,” relying instead on the “bald assertion 

that each potential member… received 

the same disclosure form” fatal to the commonality 

and predominance requirements 

under Dukes, especially in light of a declaration 

submitted by Bankers contradicting 

any such “factual” assertion. Id. at *8. 

In Thao v. Midland Nat’l Life Ins., 2012 

WL 1900114 (E.D. Wis. May 24, 2012), the 

representative plaintiff put forward a theory 

of liability challenging an insurer’s 

alleged common interpretation of its policy 

provisions—in this case, a breach of 

contract claim challenging a life insurer’s 

ability to set its discretionary cost of insurance 

rates for universal life insurance products—and 

assiduously avoided claims that 

might implicate factual inquiries. Nonetheless, 

the district court, citing Dukes, subjected 

the merits of the plaintiff’s theory to 

a “rigorous analysis” and denied certification 

because different pricing preferences 

among policyholders meant that there was 

no “common grievance” appropriate for 

certification. See id. at *9–10. 

The holdings in Rowe and Thao reveal 

that for some courts the commonality 

requirement articulated by Dukes has 

stirred them to dig deeply into the facts and 

to review plaintiffs’ theories of liability at a 

merits level. 

Digging for “Significant Proof” 

Litigants on both sides of the aisle, attempting 

to parse the language of the Dukes 

decision to pick and choose those bullet 

points that best suit their particular circumstances, 

would be wise to remember that the 

Supreme Court did not issue the decision 

in a vacuum. Rather, the Court in Dukes 

weighed the expert, statistical, and anecdotal 

evidence submitted to the trial court 

and ultimately opined that the plaintiffs 

had failed to adduce “‘significant proof’ that 

Wal-Mart ‘operated under a general policy 

of discrimination.’” Dukes, 131 S. Ct. at 

2554 (quoting Falcon, 457 U.S. at 159 n.15). 

This pronouncement leaves a number of 

questions unanswered, including whether 

“significant proof” is the standard that 

plaintiffs must satisfy, whether a court may 

review the merits in determining whether 

plaintiffs have met that standard, what 

types and quantum of evidence suffice, 

and whether damages are measured in the 

same way. 



Is “Significant Proof” the 

Proper Standard 

The Court noted that Federal Rule of Civil 

Procedure 23 “does not set forth a mere 

pleading standard. A party seeking class 

certification must affirmatively demonstrate 

his compliance with the Rule—that 

is, he must be prepared to prove that there 

are in fact sufficiently numerous parties, 

The holdingsin Rowe and 

Thao reveal that for some 

courts the commonality 

requirement articulated by 

Dukes has stirred them to 

dig deeply into the facts and 

to review plaintiffs’ theories 

of liability at a merits level. 

common questions of law or fact, etc.” 

Dukes, 131 S. Ct. at 2551. In the particular 

context of Dukes, the plaintiffs were 

required to present “significant proof” that 

the common contention was answerable on 

a class-wide basis. Id. at 2553–54. 

Since Dukes specifically addressed the 

plaintiffs’ Title VII claims, courts have unsurprisingly 

applied the “significant proof” 

requirement uniformly in discrimination 

cases. See generally Ellis v. Costco Wholesale 

Corp., 657 F.3d 970, 982–83 (9th Cir. 

2011). Courts have echoed the “significant 

proof” standard in other types of cases as 

well, though often with little analysis. See, 

e.g., DL v. District of Columbia, 277 F.R.D. 38, 

46 (D.D.C. 2011) (assuming that “significant 

proof” was required, plaintiffs met that burden 

in an Individuals with Disabilities and 

Education Act lawsuit); Jermyn v. Best Buy 

Stores, L.P., 276 F.R.D. 167, 172–73 (S.D.N.Y. 

2011) (plaintiffs adduced “significant” and 

“substantial” evidence in a consumer protection 

claim); Ramos v. SimplexGrinnell LP, 796 

F. Supp. 2d 346, 356 (E.D.N.Y. 2011) (plaintiffs 

provided “significant proof” of labor law 

violations in a statutory claim action). Some 


state courts have even required “significant” 

proof of commonality. See Price v. Martin, 79 

So. 3d 960, 970–71 (La. 2011) (tort claims). 

In a putative class action involving supplemental 

health insurance policies, the 

Sixth Circuit’s recent adherence to the “rigorous 

analysis” standard in Gooch v. Life 

Investors Ins. Co. of Am., 672 F.3d 402 (6th 

Cir. 2012), is notable. The district court 

in Gooch had conducted a “limited factual 

inquiry” into the plaintiffs’ class allegations, 

a standard that the Sixth Circuit 

determined was “clearly wrong.” Id. at 417. 

Although the Sixth Circuit recognized that 

other circuits apply a preponderance of the 

evidence standard to resolve factual disputes 

related to class certification, the court 

concluded that applying the “rigorous analysis” 

standard was sufficient. Id. at 418 n.8. 

In finding that it had “no occasion to 

decide the evidentiary standard for factual 

findings during class certification,” 

the court explained that it saw “no reason 

to superimpose” a standard any more specific 

than the existing “rigorous analysis” 

requirement, particularly given that the 

Supreme Court recently had used the same 

requirement in Dukes. Id. 

Conversely, courts in the Second, 

Third, and Seventh Circuits continue to 

apply their pre-Dukes requirement that 

to achieve class certification a class must 

establish each element of Federal Rule of 

Civil Procedure 23 by a preponderance of 

the evidence. See Behrend v. Comcast Corp., 

655 F.3d 182, 190 (3d Cir. 2011); Messner v. 

Northshore Univ. Health Sys., 669 F.3d 802, 

811 (7th Cir. 2012); Romero v. H.B. Auto. 

Grp., Inc., 2012 WL 1514810, at *17 (S.D.N.Y. 

May 1, 2012). Moreover, at least two district 

court cases use these burden of proof standards—“significant 

proof” and “preponderance 

of the evidence”—interchangeably. 

See Romero, 2012 WL 1514810, at *17– 

19; White v. W. Beef Prop., Inc., 2011 WL 

6140512, at *3–6 (E.D.N.Y. Dec. 9, 2011). 

Thus, while courts always undertake a 

“rigorous analysis,” the additional hurdles 

that plaintiffs must clear before a court will 

certify a class depend on the circuit and 

may also depend on the subject matter of 

the litigation. 

Merits Analysis at the Class 

Certification Stage 

Regardless of which standard a court uses 

to evaluate plaintiffs’ evidence, how closely 

a court may assess the merits of plaintiffs’ 

claims has continued to nag nearly every 

judge to consider class certification over 

the last 40 years. Addressing the earlier 

language in Eisen, the Dukes court noted 

that frequently a “‘rigorous analysis’ will 

entail some overlap with the merits of the 

plaintiff’s underlying claim. That cannot be 

helped.” Dukes, 131 S. Ct. at 2551. See also 

Jamie S. v. Milwaukee Pub. Sch., 668 F.3d 

481, 493 (7th Cir. 2012) (same). 

Liberated from Eisen’s nebulous limitation 

on merits review, courts have interpreted 

this passage from Dukes to mean 

that (1) a court must consider the merits if 

they overlap with the Federal Rule of Civil 

Procedure 23 requirements, Ellis, 657 F.3d 

at 980–81; (2) a court cannot review the 

merits if making a Federal Rules of Civil 

Procedures 23 determination doesn’t call 

for it, Behrend, 655 F.3d at 190; and (3) “a 

court may not decline to certify a class 

merely because it believes the class’s claims 

will fail on the merits.” Messner, 669 F.3d at 

823. See also Ellis, 657 F.3d at 983 n.8. 

Although a trial court must resolve the 

factual disputes necessary to analyze class 

certification, “the court should not turn the 

class certification proceedings into a dress 

rehearsal for the trial on the merits.” Messner, 

669 F.3d at 811. Additionally, “findings 

for the purpose of class certification ‘do not 

bind the fact-finder on the merits.’” Behrend, 

655 F.3d at 190 (quoting In re Hydrogen 

Peroxide Antitrust Litig., 552 F.3d 305, 

311, 318 (3d Cir. 2008)). 

Expert Testimony: Is a Daubert 

Analysis Required 

The Dukes plaintiffs relied on statistical 

evidence, anecdotal reports, and expert 

testimony about Wal-Mart’s vulnerability 

to discriminatory practices, although 

the Court found that the evidence did not 

satisfy Federal Rule of Civil Procedure 23. 

Dukes, 131 S. Ct. at 2549. In analyzing the 

sufficiency of the evidence, the Court evaluated 

each of the three types of evidence 

separately. 

The Supreme Court expressed “doubt” 

about the district court’s conclusion that 

“Daubert did not apply to expert testimony 

at the certification stage of classaction 

proceedings.” Id. at 2554 (citing 

Daubert v. Merrell Dow Pharm., Inc., 509

U.S. 579 (1993)). That “doubt” has left the 

lower courts ample room to craft their own 

responses, most of which do not require a 

full Daubert analysis. 

Two circuit courts have since affirmatively 

rejected a full Daubert investigation 

as part of the class certification analysis. 

The Third Circuit interpreted the Supreme 

Court’s 

observation to require a district court to 

evaluate whether an expert is presenting 

a model which could evolve to become 

admissible evidence, and not requiring 

a district court to determine if a model is 

perfect at the certification stage. This is 

consistent with our jurisprudence which 

requires that at class certification stage, 

we evaluate expert models to determine 

whether the theory of proof is plausible. 

Behrend, 655 F.3d at 204 n.13. 

Similarly, the Eighth Circuit uses a “tailored” 

Daubert analysis, requiring district 

courts to resolve expert disputes only to the 

extent “necessary to determine the nature 

of the evidence that would be sufficient, 

if the plaintiff’s general allegations were 

true, to make out a prima facie case for the 

class.” Zurn Pex, 644 F.3d at 611. 

Conversely, the Seventh Circuit has 

followed its earlier precedent to reaffirm 

requiring a full Daubert analysis if an 

expert opinion is “critical” to class certification. 

Messner, 669 F.3d at 812. Although 

the Seventh Circuit viewed the expert opinion 

at issue in Messner as “critical,” the 

court noted that an expert opinion would 

not qualify as critical if a court would make 

a decision about a class certification motion 

based “on grounds not addressed by the 

witness.” Id. at 814. 

To add to the confusion, the Ninth Circuit 

in Ellis mentioned in passing that “[i] 

n its analysis of Costco’s motions to strike, 

the district court correctly applied the evidentiary 

standard set forth in Daubert.” 

657 F.3d at 982. Some district courts have 

interpreted that comment to require a 

Daubert review. See Stone v. Advance Am., 

278 F.R.D. 562, 566 (S.D. Cal. 2011). See also 

Tietsworth v. Sears, Roebuck & Co., 2012 

WL 1595112, at *7 (N.D. Cal. May 4, 2012). 

Others have decided that Ellis does 

not address the issue directly and have 

adopted the Eighth Circuit method. See 

Bruce v. Harley- Davidson Motor Co., 2012 

WL 769604, at *4 (C.D. Cal. Jan. 23, 2012) 

(applying a “‘tailored’ or ‘focused’ inquiry 

by which it assessed whether the experts’ 

opinions, based on their areas of expertise 

and the reliability of their analysis of the 

available evidence, should be considered 

in deciding the issues relating to class certification”); 

Fosmire v. Progressive Max Ins. 

Co., 277 F.R.D. 625, 628–29 (W.D. Wash. 

2011). And yet other courts have declined to 

address the issue. See Smith v. Ceva Logistics 

U.S., Inc., 2011 WL 3204682, at *6–7 

(C.D. Cal. July 25, 2011) (declining to decide 

whether to apply Daubert and observing 

that “[t]he appropriate scope of the Court’s 

inquiry into an expert’s testimony at the 

class certification stage is murky.”). 

In theory, a more stringent standard 

benefits the opponent of expert testimony—often 

the defendant in a life, health, 

and disability case, which will attempt 

to argue that plaintiffs seek certification 

of a class by presenting “junk” science or 

implausible expert theories. In practice, 

however, the technical “standard” used 

may not determine the outcome in the 

post-Dukes cases. Compare, e.g., Bruce, 

2012 WL 769604, at *5 (applying a more 

lenient standard to disqualify the expert), 

with Stone, 278 F.R.D. at 567–68 (denying 

a motion to exclude expert testimony after 

conducting s Daubert analysis). 

Can Plaintiffs Prove Damages 

on an Aggregate Basis 

After dispensing with plaintiffs’ attempts 

to prove that they could establish liability 

with common evidence, the Dukes 

court then rejected the plaintiffs’ proposed 

method of calculating what they characterized 

as “equitable” monetary relief. See 

131 S. Ct. at 2560–61. The plaintiffs suggested 

that the trial court sample class 

members and extrapolate their entitlement 

to back pay to the entire class. See 131 

S. Ct. at 2550 (citing Hilao v. Estate of Marcos, 

103 F.3d 767, 782–87 (1996)). But the 

Court labeled that method “trial by formula” 

and pronounced that Wal-Mart was 

entitled to “individualized determinations 

of each employee’s eligibility for backpay.” 

Id. at 2561. 

The U.S. District Court for the Eastern 

District of New York synthesized the holding 

as follows: 

Wal-Mart’s rejection of “Trial by Formula” 

means that the underlying substantive 

law determines whether 

individual proceedings are required; 

a litigant may not convert an individual 

question into a common question 

by concocting a method of classwide 

proof that subverts rights created by the 

underlying substantive law. When determining 

whether a question is common 

to the class, the court must look to the 

underlying substantive law to determine 

whether the proposed method of classwide 

proof prevents the party opposing 

class certification from asserting its substantive 

rights. 

United States v. City of New York, 276 F.R.D. 

22, 37 (E.D.N.Y. 2011) (rejecting certification 

of a class seeking non- economic 

damages because those amounts would 

have to be determined on an individual 

basis). See also Stone, 278 F.R.D. at 566 

n.1 (“The Supreme Court’s disapproval 

of the Hilao method largely eliminates a 

‘trial by formula’ approach to use statistics 

to extrapolate average damages for an 

entire class, at least when the statute contains 

an individualized defense”); Barnes v. 

District of Columbia, 278 F.R.D. 14, 20–22 

(D.D.C. 2011) (allowing statistical sampling 

to determine “general” damages for “the 

injury to human dignity that is presumed 

when a person is strip searched or overdetained,” 

but decertifying the class for “special” 

damages, such as emotional distress 

or lost wages). 

Since the Dukes Court’s characterization 

of plaintiffs’ proposed method of calculation 

as “trial by formula” arose in a 

case seeking back pay for a Federal Rule of 

Civil Procedure 23(b)(2) class, some courts 

have refused to apply the Court’s reasoning 

to Federal Rule of Civil Procedure 23(b)(3) 

classes. One court opined that Dukes does 

not “prevent Plaintiffs from seeking certification 

of a Rule 23(b)(3) class—as opposed 

to a Rule 23(b)(2) class—where the amount 

of damages for each class member may 

depend on an individualized analysis.” 

Troy v. Kehe Food Distribs., Inc., 276 F.R.D. 

642, 657 (W.D. Wash. 2011). 

Yet other decisions note that even if 

plaintiffs cannot use statistical sampling 

to calculate individual damages, that shortcoming 

will not preclude class certification 

in circuits where differing damages do not 

defeat certification. See Jimenez v. Allstate 

Ins. Co., 2012 WL 1366052, at *15, 21 (C.D. 



Cal. Apr. 18, 2012); Johnson v. Gen. Mills, 

Inc., 276 F.R.D. 519, 524 (C.D. Cal. 2011) 

(individualized damages do not defeat class 

certification when plaintiffs can show liability 

with common proof). Thus, while 

life, health, and disability insurers attorneys 

should argue that the necessity of 

individualized damage determinations 

militates against class certification—for 

due process, manageability, and other reasons—attorneys 

cannot know with certainty 

if that argument will prevail. 

State Courts React 

Although Dukes promises to impact federal 

class action proceedings profoundly, 

it may similarly affect state court actions 

since many states closely model their class 

certification rules after Federal Rule if 

Civil Procedure 23 and often look to federal 

court class certification decisions for 

guidance. While the state courts have not 

issued a torrent of insurance- related class 

certification decisions since Dukes, those 

courts that have had the opportunity have, 

at a minimum, cited Dukes in their class 

certification analyses. 

Notably, how these states have relied 

on the Dukes decision has varied significantly. 

Some courts explicitly have recognized 

that Dukes has “reinvigorated” the 

commonality element of a usual class certification 

analysis, while others seem to have 

distanced themselves from Dukes to such 

an extent that it seems that the state policy 

favors class certification. 

To date, the most notable post-Dukes 

state court class certification decisions have 

come from Colorado. On October 31, 2011, 

the Colorado Supreme Court issued two 

en banc decisions outlining numerous elements 

regarding Colorado’s class certification 

standards: Jackson v. Unocal Corp., 

262 P.3d 874 (Colo. 2011), and State Farm 

Mut. Auto. Ins. Co. v. Reyher, 266 P.3d 383 

(Colo. 2011). In these decisions, the Colorado 

Supreme Court noted the differences 

between the Colorado class certification 

rule and its federal counterpart, while also 

implicitly rejecting Dukes by easing the 

standards for Colorado state court class 

certification. 

The Jackson decision, in particular, is 

significant because, among other things, 

it addressed the burden of proof necessary 

for those seeking class certification and, 


in doing so, explicitly rejected those decisions 

from federal courts applying a preponderance 

of the evidence standard. 262 

P.3d at 882–84. The court also concluded 

that certifying courts did not need to subject 

expert opinions proffered as part of 

class certification briefing to the Colorado 

equivalent of a Daubert investigation. Id. at 

885–87. Ultimately, the court adopted an 

amorphous standard of proof, stating that 

the Colorado class certification rule “is a 

case management tool and neither the rule 

nor our caselaw imposes a specific burden 

of proof on the trial court’s certification 

decision.” Id. at 881. 

Thus, while the court recognized that 

even under the Colorado class certification 

rule, courts must undertake a “rigorous 

analysis” when making class certification 

decisions, it took a pass on defining the 

standard by which Colorado courts should 

accomplish this analysis and ignored the 

substantive effect that the class certification 

rule has on a case and its parties by 

describing the rule simply as a “case management 

tool.” Id. at 881–82. Finally, to 

further distance the Colorado class certification 

rule from its federal counterpart, 

the court contrasted Colorado practice to 

that of federal courts that have adopted a 

preponderance of the evidence burden of 

proof in keeping with “a policy limiting 

class actions.” Id. at 883 n.7. And it further 

explained that the Colorado policy is to 

“liberally constru[e] C.R.C.P. 23 in favor of 

class certification.” Id. at 883–84. 

In contrast to Colorado, other states, including 

California, Connecticut, Florida, 

Georgia, Louisiana, and Missouri, appear 

much more prepared to adopt and follow 

the standards articulated in Dukes. Of note, 

a Florida circuit court recently denied class 

certification in Schirmer v. Citizens Prop. 

Ins. Corp., 2012 WL 781878 (Fla. Cir. Ct. 

Mar. 2, 2012), due to, among other reasons, 

the plaintiffs’ failure to satisfy Dukes’ articulation 

of the commonality element found 

in Federal Rule of Civil Procedure 23, as 

well as the Florida counterpart to the federal 

rule. 

The claim in Schirmer was breach of 

contract based on the interpretation of an 

insurance policy claims settlement provision, 

and the trial would consider whether 

the defendant insurer breached its contract 

with the putative class members, if the class 

achieved certification, by not incorporating 

general contractor overhead and profit into 

certain claims payments. Schirmer, 2012 

WL 781878, at *1–2. 

In denying class certification, the court 

examined the type of evidence that the 

plaintiffs would present to demonstrate 

the “common answers” necessary for the 

commonality element and held that “the 

answers to the putative ‘common’ questions… 

would depend on the individual 

facts and each individual’s claim. The 

‘answers’ [that the representative plaintiff] 

would provide to prove his own claim 

would not resolve any issue that is ‘central 

to the validity of each one of the [putative 

class members’] claims in one stroke.’” Id. 

at *16 (citing Dukes, 131 S. Ct. at 2551). See 

also Duran v. U.S. Bank Nat’l Ass’n, 137 

Cal. Rptr. 3d 391, 429 (Cal. Ct. App. 2012); 

Price v. Martin, 79 So. 3d 960, 969–72 (La. 

2011); Rite Aid of Georgia v. Peacock, 2012 

WL 954650, at *2–4 (Ga. Ct. App. Mar. 

22, 2012); Smith v. Missouri Highways and 

Transportation Comm., 2012 WL 1511751, 

at *4 (Mo. Ct. App. Apr. 30, 2012). 

Moreover, we may be able to gauge the 

Dukes holding’s effect on future state court 

class certification decisions from how the 

Schirmer court viewed the representative 

plaintiff’s proposal to accept the defendant’s 

standardized damages estimates 

when determining whether the plaintiff 

had satisfied the predominance element: 

the Schirmer court rejected the proposal 

because using such estimates would implicate 

the due process rights of the putative 

class members individual claims and damages. 

Schirmer, 2012 WL 781878, at *15. 

As reflected by both the federal and 

the state court decisions discussed above, 

courts and counsel have not yet come to 

terms with how to interpret, analyze, and 

apply, or distinguish Dukes. As Colorado’s 

Jackson decision makes plain, however, 

state courts may in the coming years interpret 

Dukes as permitting them to further 

their states’ policies of either promoting or 

deterring class action litigation. 

If this judicial policy making becomes 

prevalent, practitioners will have to wait to 

find how the other branches of government 

will respond, if they respond at all. Just as 

state attorneys general filed more quasisovereign 

lawsuits in the wake of the Class 

Dukes, continued on page 90


Who Is to Blame 

for Enrollment 

Deficiencies 

By Joshua Bachrach, 

Edna S. Kersting 

and Russell Birner 

Evidence of 

Insurability and 

Conversion Claims 

Courts continue to reject 

claims for benefits that 

contradict the plain 

language in life insurance 

policies, and have also 

refused to create special 

duties under ERISA 

to find coverage. 

Many employers make life insurance available as a benefit 

of employment under plans governed by the Employee 

Retirement Income Security Act of 1974 (ERISA). This 

coverage, however, usually comes with certain restrictions. 

For example, the policy and benefit plan 

might limit the amount of coverage or 

when a claimant may enroll. Coverage 

above a “basic” amount or outside of an 

open enrollment period may require submission 

of evidence of insurability, also 

referred to as “proof of good health,” by the 

applicant and acceptance of the evidence of 

insurability by the insurer. 

When a person’s individual coverage terminates 

under a group policy, the policy 

may allow the person to obtain an individual 

“conversion” policy. Someone usually 

must apply for and pay the first premium 

■ Joshua Bachrach is a partner in Wilson 

Elser’s Philadelphia office, representing clients 

nationwide in ERISA and other disputes 

over disability, life, and health coverage, and 

pension benefits. Edna S. Kersting is a partner 

in Wilson Elser’s Chicago office. She 

practices in the area of ERISA litigation, representing 

clients in life, health, and disability 

matters in state and federal courts 

nationwide. Russell H. Birner is of 

counsel in Wilson Elser’s Philadelphia 

office and represents clients in 

insurance- related litigation. All three 

are active members of the DRI Life, 

Health and Disability Committee. 

for a conversion policy within 31 days after 

the individual coverage terminates. Claims 

arise when the procedures described above 

are not followed. 

In the case of coverage requiring proof of 

good health, an employer might simply pay 

premiums without obtaining the required 

evidence of insurability. Since an employer 

usually has responsibility for enrollment of 

employees in an employer- offered plan, the 

insurer would not have a way to know that 

it has received premiums for someone who 

has not met the requirements for proper 

enrollment. 

An employer also, for example, could 

continue to pay premiums for a person who 

is no longer eligible for coverage under the 

group policy, such as someone who no longer 

meets the policy’s active work requirement. 

Sometimes a person who could have 

applied for conversion coverage fails to 

do so, for various reasons. Unfortunately, 

when this happens the person does not 

discover the problem until after the time 

allowed under the policy to apply for conversion 

coverage has expired. 

Claimants seeking benefits under these 

scenarios generally argue, without much 

success, that an insurer is estopped from 

denying coverage. More recently, following 

the Supreme Court decision in Cigna 



v. Amara, 131 S. Ct. 1866 (2011), claimants 

have based asserted breach of fiduciary duty 

under section 502(a)(3) of ERISA. They have 

not achieved much more success, however. 

As explained below, courts continue to 

reject claims for benefits that contradict the 

plain language in the policy. Courts have 

also refused to create special duties under 

ERISA to find coverage. 

ERISA Law 

ERISA provides the exclusive remedies 

to a claimant seeking benefits under an 

ERISA plan. Under section 502(a)(1)(B) of 

ERISA, 29 U.S.C. §1132(a)(1)(B), a claimant 

may only seek benefits under the terms 

of the plan or a declaration of coverage. 

ERISA section 502(a)(2), 29 U.S.C. §1132(a) 

(2), only permits a claim on behalf of the 

plan as a whole and will not apply under 

the circumstances described in the unfortunate 

scenarios above. Finally, a claimant 

may only seek “other appropriate equitable 

relief” under ERISA section 502(a)(3), 

29 U.S.C. §1132(a)(3), based on a breach of 

fiduciary duty. 

A claim for benefits under ERISA section 

502(a)(1)(B) based on the scenarios 

presented here must fail. As explained 

by the Supreme Court in Kennedy v. Plan 

Adm’r for DuPont Sav. & Inv. Plan, 129 

S. Ct. 865, 875 (2009), a plaintiff’s claim 

under this section of ERISA “stands or 

falls by the terms of the plan,… a straightforward 

rule of hewing to the directives of 

the plan documents….” The requirement 

of proof of good health, or in a conversion 

case a timely application for a conversion 

policy, are stated terms of a plan. Therefore, 

a court cannot ignore them. 

Evidence of Insurability Cases 

As previously explained, in these cases 

coverage requires the individual seeking 

coverage to submit evidence of insurability, 

and the plan insurer must approve 

the application. Courts have consistently 

rejected coverage claims that do not establish 

these facts since doing otherwise 

would diverge from the terms of the plan 

documents. 

One of the more recent cases involving 

failure to provide evidence of insurability 

is Flynn v. Sun Life Assur. Co., 809 F. Supp. 

2d 1175 (C.D. Cal. 2011). In Flynn, the plaintiff 

did not submit evidence of insurability 


in seeking coverage in excess of the guaranteed 

issue amount. The plaintiff relied 

on an election form in which the employee 

elected the higher amount of insurance. 

While the employee subsequently waived 

the life coverage and received extra compensation 

for doing so, in the end the 

court only needed to rely on the language 

in the policy to deny the claim. Because 

the employee never submitted evidence 

of insurability as the policy required, the 

employee legitimately could not receive 

coverage for the amount claimed. 

At times, a claimant might submit evidence 

of insurability that is incomplete. 

This is what happened in Rubio v. Sun Life 

Assur. Co. of Canada, 2009 U.S. Dist. Lexis 

122383 (E.D. La. Dec. 13, 2009). There, 

the employee submitted an evidence of 

insurability application, and the employer 

remitted premiums to the insurer. Unfortunately, 

some necessary information was 

missing from the application. Upon receipt 

Sun Life wrote to the applicant asking for 

the missing information. 

Before the applicant could provide the 

information, the person was killed in an 

accident. Although the insurer had continued 

to accept premiums, the court recognized 

that it was obligated to enter a 

judgment in favor of the defendant. Based 

on Fifth Circuit law, the court could not 

find coverage because the terms of the plan 

dictated the coverage and finding otherwise 

would contradict the plan terms. 

In numerous other cases involving similar 

facts, courts have refused to find coverage 

when the requirements stated in 

the plan for evidence of insurability were 

not met. Wagner v. Unison Admin. Servs., 

2009 U.S. Dist. Lexis 26568 (W.D. Pa. Mar. 

31, 2009) (“Plaintiff cannot maintain an 

ERISA claim to recover benefits because, 

quite simply, there are no benefits due to 

him.”); Tiffany v. Unum Life Ins. Co. of 

Am., 250 F.R.D. 314 (E.D. Mich. 2008) (dismissing 

the complaint and denying leave 

to amend as futile because the insured 

failed to submit proof of good health, contrary 

to the plain language in the policy); 

Kehoe v. Ryder Truck Rental, Inc., 2006 U.S. 

Dist. Lexis 62697 (E.D. La. Aug. 17, 2006) 

(describing the plan’s approval of evidence 

of insurability as a “condition precedent” to 

obtaining the insurance coverage); Karl v. 

Guardian Life Ins. Co. of Am., 790 F. Supp. 

569 (Md. 1992) (the decedent’s “subjective 

belief and expectation” that he was insured 

did not entitle the plaintiff to relief due to 

the unambiguous plan language). 

At least one court in an insurance case 

that did not involve ERISA also has refused 

to find coverage when evidence of insurability 

was not provided as required under 

the terms of the policy. See May v. Mutual 

Benefit Life Ins. Co., 124 A.D. 2d 566 (N.Y. 

App. Div. 1986). In May, the decedent had 

applied for term life coverage and submitted 

the premiums for the first two months. The 

application stated that “any insurance for 

which evidence of insurability is required 

will not become effective until the date such 

evidence is furnished to and found to be satisfactory 

by Mutual Benefit Life.” 

Following the applicant’s death, the 

claim for life insurance benefits was 

denied because the coverage was never 

approved. Because the application “clearly 

and unequivocally” stated that insurance 

would not become effective until evidence 

of insurability was approved by the insurer, 

the court held that it was “clearly proper 

for the defendants to deny the plaintiff’s 

request for payment of proceeds under the 

group policy since her decedent was never 

effectively covered [by] it.” 

One creative attorney argued that the 

insurer still had the responsibility to pay 

benefits when evidence of insurability 

was not submitted, based on the allegation 

that the insurer failed to train the 

employer properly in enrollment procedures. 

In Hird v. Bostrom Seating Inc., 

147 F. Supp. 2d 1190 (N.D. Ala. 2001), the 

employer erroneously told the employee 

that he was eligible for $120,000 in coverage, 

and corresponding premiums were 

submitted to the insurer. When the claim 

was denied, the plaintiff argued that the 

insurer shared the blame for failing to 

train the employer properly. The district 

court rejected the argument, concluding 

that the plaintiff had failed to prove that 

the insurer owed a fiduciary duty to train 

and supervise the employer in that the 

plaintiff had failed to offer evidence that 

the insurer was aware of any enrollment 

problems with the employer. 

Conversion Cases 

The typical group life insurance policy 

allows a person to obtain an individual

conversion policy when coverage under 

the group policy terminates. Someone usually 

must apply for this conversion policy 

within 31 days after the person’s group 

coverage ends, and the first premium also 

must be submitted within that time frame. 

Problems arise when someone does not 

request a conversion policy in time. In 

many of these cases, a claimant will argue 

that the former insured was not aware of 

the conversion right, and the insurer owed 

a duty to notify the person of the right once 

the group coverage ended. Courts have 

rejected these arguments as well. 

In Stocks v. Life Ins. Co. of N. Am., 2012 

U.S. Dist. Lexis 30737 (E.D. Wis. Mar. 8, 

2012), it was alleged that the defendant 

breached its fiduciary duty by failing to 

notify the decedent of the conversion 

privilege for life insurance. The court 

held that the defendant did not owe such 

a duty and entered judgment in favor of 

the defendant. 

The same conclusion was reached in 

Bicknell v. Lockheed Martin Group Benefits 

Plan, 410 F. App’x 570, 575 (3d Cir. 2011). In 

Bicknell, the plaintiff argued that the plan 

insurer was required to notify him of the 

conversion privilege at the time that the dependent’s 

eligibility under the group policy 

ended. The court rejected the argument, 

holding that the plan documents, which explained 

the conversion right, “were the only 

notice required by the [ERISA] Statute.” 

In both evidence of insurability and 

conversion cases, plaintiffs’ attorneys frequently 

argue that an insurer owes a duty 

to provide individual notice of the plan 

requirements to an employee. This argument 

must fail on many levels. The duty 

of disclosure under ERISA only applies to 

the plan administrator. 29 U.S.C. §1021(a). 

The plan insurer is almost never the plan 

administrator. Moreover, the duty of disclosure, 

when applicable, generally does 

not require individualized notice. Instead, 

it only requires that a plan distribute documents 

to participants that describe the 

terms of the plan. 29 U.S.C. §1021(a). 

Courts have rejected claims that a fiduciary 

was required to provide individualized 

notice to employees without a specific 

request from a participant. See Griggs v. E.I. 

Dupont de Nemours & Co., 237 F.3d 371, 

380–81 (4th Cir. 2001) (holding that the 

duty to inform did not extend to “individualized 

notice”); Chojnacki v. Georgia- Pacific 

Corp., 108 F.3d 810, 817–18 (7th Cir. 1997) 

(“ERISA does not require Plan Administrators 

to investigate each participant’s 

circumstances and prepare advisory opinions 

for literally thousands of employees”); 

Childers v. Northwest Airlines, Inc., 688 F. 

Supp. 1357, 1361 (D. Minn. 1988) (under 

ERISA, a fiduciary does not have a duty 

to provide individualized notice about the 

effect that a specific event may have on the 

eligibility of a participant or beneficiary to 

receive benefits). 

In Kerns v. Benefit Trust Life Ins. Co., 790 

F. Supp. 1456 (E.D. Mo. 1992), the court 

concluded that a fiduciary does not have a 

duty to notify beneficiaries with individualized 

information since this would impose 

an enormous burden on the plan administrator. 

A useful discussion of many of these 

cases is included in Bernstein v. Metro. 

Life Ins. Co., 453 F. Supp. 2d 554 (D. Conn. 

2006). Moreover, as stated by the Third Circuit, 

as long as a plan has complied with its 

duty to disclose, “participants have a duty 

to inform themselves of the details provided 

in their plans.” Jordan v. Fed. Express 

Corp., 116 F.3d 1005, 1016 (3d Cir. 1997). 

It is also worth noting that Congress did 

enact a provision in ERISA that requires 

an employer to provide notice to participants 

of their right to continue health coverage 

for a period of time after it otherwise 

would terminate by paying the premiums. 

29 U.S.C. §1161(a). However, this notice 

under the Consolidated Omnibus Budget 

Reconciliation Act (COBRA) only applies 

to health coverage. 

Courts uniformly have concluded that 

COBRA notice does not apply to other types 

of employee benefits plans, including life insurance. 

See Robin v. Metro. Life Ins. Co., 147 

F.3d 440, 442 n.4 (5th Cir. 1998) (“ERISA 

was amended in part by [COBRA] without, 

however, affecting life insurance”); Austell 

v. Raymond James & Assocs., 120 F.3d 32, 

33 (4th Cir. 1997) (rejecting the argument 

that COBRA applies to disability policies, 

reasoning that “the continuation requirement 

of COBRA is designed to focus on the 

provision of health care coverage”); Weeks 

v. Western Auto Supply Co., 2003 U.S. Dist. 

Lexis 10977, at *14 (W.D. Va. June 25, 2003) 

(“[T]he plain language of these provisions 

makes clear that the post- termination notice 

requirements apply to a ‘group health 

plan,’ defined as a ‘plan providing medical 

care,’ and not to a life insurance plan.”). 

Rejection of Estoppel Claims 

The elements of an estoppel claim under 

ERISA may vary slightly from circuit to 

circuit, but generally are (1) conduct or 

language amounting to a representation 

of material fact; (2) awareness of the true 

facts by the party to be estopped; (3) an 

intention on the part of the party to be 

estopped that the representation be acted 

on; (4) unawareness of the true facts by the 

party asserting the estoppel; and (5) detrimental 

and justifiable reliance by the party 

asserting estoppel. 

Several circuit courts have refused to 

find coverage under estoppel theories 

based on an insurer’s receipt of premiums. 

While the context of the claims is different, 

the holdings should also apply to claims 

involving the failure to provide evidence 

of insurability. 

In Sippel v. Reliance Standard Life Ins. 

Co., 128 F.3d 1261 (8th Cir. 1997), the 

decedent ended his employment with the 

policyholder but did not apply for conversion 

coverage before he died. The plaintiff 

argued that the defendant was estopped 

from denying coverage under a conversion 

policy because premiums were deducted 

by the employer. The court refused to recognize 

estoppel under these facts because 

it would create coverage contrary to the 

policy terms. The same conclusion applies 

when plaintiffs’ attorneys attempt to rely 

on when a plaintiff never submitted evidence 

of insurability or an insurer never 

approved the application. 

The Fourth Circuit also rejected an estoppel 

claim based on an insurer’s receipt 

of premiums. See White v. Provident Life & 

Accident Ins. Co., 114 F.3d 26 (4th Cir. 1997). 

The facts in White were even more favorable 

to the insured, but the court still concluded 

that the receipt of premiums did not prevent 

the insurer from denying coverage. 

In that case, the insurer not only 

accepted premiums but also erroneously 

issued a conversion policy. Four years later 

it discovered that the person was not eligible 

for individual conversion coverage 

because he was still insured under the 

group policy under the waiver of premium 

provision. The court refused to recognize 

federal common law claims of estoppel 



or waiver, discussed under the next heading 

below, under ERISA since the written 

terms of the plan could not be modified. 

A universally recognized element of estoppel 

is a person’s reasonable reliance. 

Courts have recognized that reliance can 

never be reasonable when the interpretation 

or representation that someone has relied 

on conflicts with unambiguous policy 

language. See, e.g., Mello v. Sara Lee Corp., 

431 F.3d 440, 444 (5th Cir. 2005); Sprague 

v. Gen. Motors Corp., 133 F.3d 388, 404 (6th 

Cir. 1998) (en banc); Pisciotta v. Teledyne Indus., 

Inc., 91 F.3d 1326, 1331 (9th Cir. 1996). 

Rejection of Waiver as a 

Basis for Recovery 

Unlike a claim based on estoppel, waiver 

does not require detrimental reliance. 

Instead, it requires the deliberate relinquishment 

of a known right. In addition 

to the Fourth Circuit in White, discussed 

above, the Second Circuit also has declined 

to apply waiver in ERISA cases. Juliano v. 

Health Maintenance Org. of N.J., Inc., 22 1 

F.3d 279, 288 (2d Cir. 2000). 

Other circuits equally have questioned 

the applicability of waiver in ERISA cases. 

They have expressly refused to apply waiver 

when the issue concerns coverage. Thomason 

v. Aetna Life Ins. Co., 9 F.3d 645, 647– 

48 (7th Cir. 1993) (declining to apply waiver 

when the insurer denied coverage after 

mistakenly notifying the plaintiff that the 

coverage was extended without cost); Glass 

v. United of Omaha Life Ins. Co., 33 F.3d 

1341, 1347–49 (11th Cir. 1994) (holding 

that the insurer did not waive the eligibility 

requirements of its plan when it enrolled 

the decedent in the insurance program, 

accepted premiums, and converted his life 

policy even though he was ineligible for the 

coverage under the policy). 

Only the Fifth Circuit has applied waiver 

to find coverage when an insurer accepted 

premiums. Pitts v. Am. Sec. Life Ins. Co., 931 

F.2d 351, 357 (5th Cir. 1991). However, the 

Fifth Circuit reached this conclusion not 

only because the insurer accepted premiums 

but also because the insurer paid some 

of the disputed claims under a health policy 

after learning that the terms of the policy 

had been breached. The facts presented 

in Pitts will rarely occur in a case involving 

evidence of insurability or conversion 

coverage. 


Claims for Breach of Fiduciary Duty 

ERISA section 502(a)(3) permits an action 

for breach of fiduciary duty “to obtain other 

appropriate equitable relief.” 29 U.S.C. 

§1132(a)(3). A claimant seeking benefits is 

not requesting “equitable relief,” therefore, 

a breach of fiduciary duty claim must fail. 

Great-West Life & Annuity Ins. Co. v. Knudson, 

534 U.S. 204, 210 (2002). Numerous 

courts have rejected claims for “equitable 

relief,” which in fact sought plan benefits, 

including Amschwand v. Spherion Corp., 

505 F.3d 342, 343 (5th Cir. 2007). 

In Amschwand, the employer switched 

plan insurers while the plaintiff was on 

medical leave for cancer. Under the new 

policy, coverage would not begin until 

the employee returned to work for one 

full day. The employer “confirmed” that 

the employee remained covered under the 

new policy; however, this was inaccurate. 

After the employee died, the wife sued 

the employer under 29 U.S.C. §1132(a)(3), 

seeking equitable relief. The Fifth Circuit 

rejected the “make whole” claim for benefits 

and upheld the district court’s grant 

of a summary judgment to the defendants. 

The breach of fiduciary duty claim was 

also rejected in Callery v. U.S. Life Ins. Co. in 

the City of New York, 392 F.3d 401, 405–06 

(10th Cir. 2004). There the plaintiff sought 

“equitable relief providing for payment of 

the insurance” benefits for her ex- husband. 

The plaintiff argued that she never received 

a copy of the policy or the summary plan 

description, both of which stated that coverage 

terminated upon divorce. Unaware of 

this language, the ex-wife continued to pay 

life insurance premiums for coverage for 

her ex-husband. 

The Tenth Circuit upheld the dismissal 

of the breach of fiduciary duty claim, concluding 

that the relief sought—the recovery 

of benefits under the policy—was “compensatory 

and not typically available in equity.” 

Similar claims were rejected in two 

Eighth Circuit decisions. Pichoff v. QHG of 

Springdale, Inc., 556 F.3d 728, 732 (8th Cir. 

2009) (holding that §1132(a)(3) does not allow 

a plaintiff to recover benefits that would 

have been paid to his estate had his policy 

not lapsed); Knieriem v. Group Health Plan, 

Inc., 434 F.3d 1058, 1063–64 (8th Cir. 2006) 

(rejecting argument that “surcharge” constitutes 

“appropriate equitable relief” under 

§1132(a)(3) when defendant held no funds 

or property belonging to plaintiff to form 

the basis of a constructive trust). 

The more recent Supreme Court decision 

in Cigna Corp. v. Amara, 131 S. Ct. 1866 

(2011), which some plaintiff attorneys have 

argued expands the scope of equitable relief, 

also would not permit coverage in these evidence 

of insurability and conversion cases. 

Briefly, Amara involved the employer’s conversion 

of its traditional defined benefit 

pension plan to a cash balance pension plan. 

The participants challenged the change, arguing 

that they did not receive “proper notice 

of changes to their benefits, particularly 

because the new plan in certain respects 

provided them with less generous benefits.” 

131 S. Ct. at 1870. Before the change, Cigna 

issued a newsletter describing the new pension 

plan and later published a summary of 

the material modifications to explain the 

conversion. Id. at 1871–72. 

The district court determined that “CIG- 

NA’s initial descriptions of its new plan 

were significantly incomplete and misled 

its employees.” Id. at 1872, 1875. In 

the majority decision, the Court discussed 

the possibility of relief in the form of a 

surcharge against the plan. Justice Scalia 

described this discussion as “blatant dictum,” 

however. 

Amara can be distinguished from these 

cases in many ways. In Knudson, 534 U.S. 

at 213, the Supreme Court held that a monetary 

remedy is equitable only when the 

money sought by the plaintiff is clearly 

traceable to funds in the defendant’s possession. 

In a case seeking plan benefits, a set 

fund does not exist to pay benefits, unlike 

the funded benefit plan in Amara. The life 

insurance payments come from a company’s 

general assets. Therefore, a beneficiary 

cannot meet the strict tracing requirements, 

and the decision in Amara does not support 

a claim for breach of fiduciary duty. 

Conclusion 

Participants and beneficiaries claiming 

benefits under the scenarios described 

above generally cannot prevail on their 

claims. When responding to these claims, 

defense attorneys should cite not only the 

plan language that was not satisfied but 

also the numerous cases that have rejected 

similar claims and theories.

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12.0344

Mensing, from page 43 

2011) (analyzing non- manufacturing seller 

claims relative to the Louisiana Products 

Liability Act). 

Defense attorneys also might consider 

focusing on jurisdictions with clear 

authority supporting affirmative defenses 

as a basis for fraudulent joinder. If “fraudulent 

joinder may exist when the plaintiff 

cannot establish a claim against the nondiverse 

defendant because of an affirmative 

defense,” then Mensing should apply 

to “preclude[] the cause of action against 

the nondiverse defendant.” In re Accutane 

Prods. Liab., No. 8:04MD-2523-T-30TBM, 

2012 WL 3194951, at *2 (M.D. Fla. July 31, 

2012). Cases in different jurisdictions finding 

fraudulent joinder under affirmative 

defenses such as the statute of limitations 

or prelawsuit screening requirements for 

medical negligence claims may serve as 

analogous examples to support Mensing’s 

application. 

Ultimately, case identification and court 

selection may prove critical to extending 

Mensing to fraudulent joinder arguments. 

 

Dukes, from page 84 

Action Fairness Act, practitioners will be 

on the alert as to whether the state courts 

will experience a corresponding uptick in 

such actions or state regulatory investigations 

initiated by those who view Dukes as 

“limiting class actions” in contravention 

of their policy goals. See Jackson, 262 P.3d 

at 883–84. 


However practitioners view Dukes, its 

background, and historical significance, 

the real-life scope and effect on litigation 

will only gradually be revealed with time, 

decision by decision. Does the Dukes holding 

with its various conclusions truly alter 

the balance of power on the class action 

battlefield Will small regional class action 

lawsuits increase Will attorneys general 

become more engaged in class actions 

Will plaintiffs’ attorneys seek discovery 

more aggressively, or will class actions 

involve more commonality challenges than 

in the past What Dukes portends strategically, 

we cannot predict. It does seem, however, 

that in some critical ways the rules of 

engagement have changed. 

“Off-Label”, from page 38 

approved. Obtaining FDA approval for each 

safe and effective use is costly and the costbenefit 

tradeoff is unfavorable when the 

potential patient population for the new 

(unapproved) use is small. 

The federal government should likewise 

find the present situation highly unsatisfactory, 

even if it produces some revenue and 

occasional media stories about “fighting 

healthcare fraud.” To begin with, a perverse 

consequence of the present system in which 

companies are at risk in false claims cases 

Statement of Ownership, Management, and Circulation 

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is that the Department of Justice, including 

United States Attorney’s Offices, not FDA, 

is de facto the primary regulator of drug 

company conduct, particularly in the areas 

of advertising, promotion, and sales. Congress 

never intended that arrangement and 

the government should not want that to be 

the arrangement. 

In addition, one part of the federal government 

(the Center for Medicare & Medicaid 

Services) is willing to pay for medically 

necessary and appropriate offlabel uses of 

prescription drugs, while another agency 

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of the same government (the Department 

of Justice) seeks huge sums of money from 

companies for promoting the same offlabel’s 

uses of the drug for which the government 

finds it appropriate to pay. This 

is a hardly orderly, let alone symmetrical, 

regulatory approach. 

How, then, might these various interests 

be reconciled First, FDA needs to abandon 

its present approach of distinguishing 

between “promotional activity” (impermissible) 

and “non- promotional activity” 

(permissible). This distinction is neither 

logical nor tenable. Because companies are 

in the business of selling their products, 

any statements they make potentially put 

them at risk for “promoting” their products. 

Further, given that it is lawful and sometimes 

the standard of care for a physician to 

prescribe a drug offlabel, the offlabel promotion 

of drugs to physicians with truthful, 

nonmisleading information should 

be permissible. FDA’s regulations should 

be narrowed and clarified to make explicit 

that offlabel promotion to physicians with 

truthful, nonmisleading statements is 

permissible. 

And finally, there should be statutory 

changes to bar criminal, civil false claim, 

or tort actions based upon truthful, nonmisleading 

offlabel statements about a 

drug when such statements are made to 

medical professionals. The government’s 

legitimate interest in punishing these types

of statements is doubtful, assuming it is 

constitutional, and such statements should 

not be fodder for private tort litigation. 

On the other hand, the government has 

an altogether legitimate interest in preventing 

generalized offlabel promotional activities 

being aimed at other than medical or 

scientific professionals. If industry were 

allowed to “pitch” its unapproved product 

wares to consumers, that would do great 

and ultimately irreparable damage to the 

drug review, approval, and labeling system. 

Thus, any clarification of the statutes and 

regulations to permit offlabel promotional 

activities directed to medical or scientific 

professionals should be accompanied by 

counterpart rules making clear that any 

such promotional activities directed over 

the heads of medical professionals to consumers 

would trigger liability and carry 

appropriately stiff penalties. 

The explosion of social media poses some 

special problems. Suppose, for example, a 

patient is, pursuant to a doctor’s prescription, 

taking a drug offlabel and that patient 

asks the pharmaceutical company for safety 

data on that offlabel use. The rules need to 

allow latitude to permit the pharmaceutical 

company to respond honestly to such an 

inquiry without being at risk for unlawful 

offlabel promotion of the drug. 

Conclusion 

The federal government and the medical 

products industry have been at war over 

offlabel promotion long enough. It is time 

to find a solution. Government must recognize 

that the direction of First Amendment 

law is against it. The Supreme Court’s decision 

last Term in Sorrell emphasizes this 

point. Industry, for its part, must recognize 

that it has too much invested in preserving 

the reality and the perception of a 

strong and effective FDA regulatory system 

to push to the limit an absolutist First 

Amendment offlabel promotion position. 

Litigation is not the answer to this problem. 

The answer will come through a negotiated 

consensus that then serves as the basis for 

balanced statutory and regulatory changes. 

 

Recent additions to 

The Defense Library Series 

Trade Secrets and Non-Competes 

A Compendium of State Law 

This second edition addresses changes to the laws surrounding trade secrets and restrictive 

covenants that have occurred since the first edition was published in 2008. Since that time, 

a number of states have seen significant changes to their laws and the issuance of case 

decisions that impacted their laws. 

A project of the DRI Commercial Litigation Committee, this valuable resource is authored 

by lawyers who regularly practice in the two closely related areas, advising employers in 

their states as they draft non-competes and seek protection for the secrets the employers 

have developed over the years. 

Product Liability 

Warnings, Instructions, and Recalls 

For decades, the pre-sale duty to warn and instruct has been and continues to be the basis of 

much consternation by manufacturers and product sellers and the bane of many defense 

lawyers trying to defend the myriad of cases alleging a failure to warn. Failing to comply 

with the post-sale duty to warn, on the other hand, has served as the basis of most punitive 

damage awards and has been recognized by experts in the area for its expansive nature in 

the realm of product liability law. This publication provides a comprehensive summary of 

the current U.S. common law, as well as international common, civil, and regulatory law, in 

both of these areas—pre-sale warnings and post-sale duties to warn or fix a defective 

product—and to demonstrate how the two areas are inextricably intertwined. 

The Collateral 

Source Rule 

A Compendium of 

State Law 

A product of DRI's Trial Tactics Committee, 

this compendium is designed to provide a 

resource for in-house counsel, claims 

representatives, and counsel practicing in 

American jurisdictions on the law governing 

monetary awards for past medical 

expenses in personal injury actions. The 

compendium will provide practitioners 

with the authority they need from around 

the country to fight for legal improvements 

that will compensate only actual medical 

economic loss, rather than "billed" amounts 

that bear no resemblance to the actual cost 

of medical services. 

Visit the Bookstore at www.dri.org or call 312.795.1101. 


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John J. Barr, Willow Grove 

Puerto Rico 

Rosa Maria Cruz-Niemiec, 

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Jana B. Baker, Charleston 

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Ryan Gilsenan, Charleston 

John B. Hagerty, Charleston 

John C. Hawk, Charleston 

Melissa Kay Hazell, 

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Ryan E. Huntley, Charleston 

Dana Woodrum Lang, 

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Eli A. Poliakoff, Charleston 

Harrison M. Trammell, 

Charleston 

William R. Warnock, 

Charleston 

Sarah Elizabeth Wetmore, 

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Joshua S. Whitley, 

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Glen Paul Caulk, Columbia 

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Jonathan Hammond, 

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Robert Charles Rogers, 

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Mark B. Goddard, 

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Lindsey Hendrick, 

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J.B. Henderson, Houston 

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Ashley Nichole Pate, Tyler 

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Stacey L. Minigh, Huntington 

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Nathan S. Fronk, Milwaukee 

Ryan Gehrke, Milwaukee 

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Japan 

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Why Courts Should Exclude Warning - DRI Today

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