Dechert Re:Torts - Key Developments in Product Liability and Mass Torts

Issue 11 - November 2023

Dechert Re:Torts is a monthly newsletter covering news and developments related to product liability and mass torts litigation.

Inside this issue:

Recent Nuclear Verdicts Highlight Danger Of Punitive Damages
FDA's Remote Control: Virtual Inspection Tools are Here to Stay
California’s Chemical Crackdown
PFAS Product Testing Not Enough to Powder Over Blemishes in Class Action Pleadings

Hot Topics

Recent Nuclear Verdicts Highlight Danger of Punitive Damages

In October and November 2023, four separate products liability trials ended with large plaintiff verdicts. Three of these verdicts were against Monsanto in Roundup weed killer cases in Philadelphia, San Diego, and St. Louis; the fourth was against Mitsubishi, also in Philadelphia. The bulk of the awards—91 percent of the $3 billion total—was punitive damages alone.

Roundup Verdicts

On October 27, 2023, a jury in Philadelphia awarded $175 million to a plaintiff who was diagnosed with non-Hodgkin’s lymphoma at age 60 after using Roundup weed killer for more than 20 years. Caranci v. Monsanto Co., Case No. 210602213 (Phila. Ct. Com. Pl.). Monsanto was found liable for negligently designing Roundup to include glyphosate, an alleged carcinogen, and also failing to warn consumers that Roundup could cause cancer. The verdict comprised $25 million in compensatory damages and $150 million in punitive damages.

A few days later, a jury in San Diego awarded $332 million to a plaintiff who was diagnosed with non-Hodgkin’s lymphoma at age 51 after using Roundup weed killer for decades. Dennis v. Monsanto Co., Case No. 37-2021-00047326-CU-PO-CTL (San Diego Cty. Super. Ct.). Unlike in Philadelphia, the San Diego jury found Monsanto liable for failure to warn about Roundup’s alleged health risks—but not for negligent design. The verdict comprised $7 million in compensatory damages and $325 million in punitive damages.

Then, on November 20, 2023, a jury in Missouri awarded $1.56 billion to three plaintiffs who claimed Roundup caused their non-Hodgkin’s lymphomas. Draeger v. Monsanto Co., Case No. 22AC-CC00137 (Cole Cty. Cir. Ct.). Each plaintiff was individually awarded $500 million in punitive damages.

These three verdicts against Monsanto—totaling more than $2 billion, with $1.9 billion in punitive damages alone—followed a verdict against Monsanto that was a mere $1.25 million. That case, in St. Louis, Missouri, was the first to snap Monsanto’s nine-trial winning streak in Roundup, with the jury finding that Monsanto failed to warn of Roundup’s alleged risks but declining to award punitive damages. Durnell v. Monsanto Co., Case No. 1922-CC00221 (City of St. Louis Cir. Ct.).

Mitsubishi Verdict

On October 30, 2023, another jury in Philadelphia awarded nearly $980 million to a single plaintiff who was left paralyzed after the seat belt in his 1992 Mitsubishi vehicle failed to restrain him in a 2017 crash. Amagasu v. Mitsubishi Motors N. Am., Case No. 181102406 (Phila. Ct. Com. Pl.). The jury found that Mitsubishi improperly designed the seatbelt to give too much slack. The verdict comprised nearly $180 million in compensatory damages and $800 million in punitive damages.

Takeaway: Several recent verdicts awarded significant punitive damages based on alleged wrongdoing by the defendants. Some of these awards may be reduced under U.S. Supreme Court precedent in State Farm Mut. Auto. Ins. Co. v. Campbell, 538 U.S. 2003 (2003), which Dechert discussed in detail on the case’s 20th anniversary earlier this year. Nevertheless, pre-trial strategy, including motions to exclude evidence and argument, and trial strategy, including jury selection and corporate witness testimony, can be key in defending against plaintiffs’ case on punitive damages.

Learn about Dechert's Product Liability and Mass Torts services.

Regulatory Review

FDA's Remote Control: Virtual Inspection Tools are Here to Stay

As we previously discussed, in April 2021, the FDA published temporary guidance that permitted the agency to utilize digital tools to conduct remote interactive evaluations (“RIEs”) of facilities where drugs were manufactured. The guidance was intended to be in effect only for the duration of the declared public health emergency. In new draft guidance published on October 25, 2023, the FDA is now seeking to permanently incorporate the use of these remote monitoring tools for all drug inspection programs, including Preapproval Inspections (“PAIs”), Prelicense Inspections (“PLIs”), Postapproval Inspections (“PoAIs"), Surveillance Inspections, Follow-Up and Compliance Inspections, and Bioresearch Monitoring (“BIMO”) Inspections.

The FDA will employ risk management methods and tools to determine when to request a facility’s participation in an RIE. Once the FDA determines that an RIE is appropriate, FDA will notify the facility and request written confirmation of the facility’s willingness and ability to participate. Although facilities can decline to participate, the draft guidance cautions that “Declining FDA’s request to perform a remote interactive evaluation could impede our ability to make a timely regulatory decision.”

While the guidance provides specific considerations for different types of inspections, all remote evaluations include some combination of videoconferences, livestreaming, and document evaluation through FDA IT platforms. FDA will request that entities preparing for an RIE ensure proper internet connectivity, access to encrypted and password-protected files, and the ability to view any documents kept in paper format digitally, either by secure share or via screen sharing.

Upon completion of an RIE, the FDA will hold a closeout meeting with the facility’s management. A written list of observations will be presented to the facility, but FDA will not issue a Form FDA 483, Inspectional Observations, because FDA does not view an interactive evaluation as an inspection, as described in the Federal Food, Drug, and Cosmetic Act. However, if an RIE is used as a supplement to an inspection, any observations from the RIE would be issued on a Form FDA 483. Facilities are encouraged to respond to RIE written observations during the discussion with FDA or provide written responses within 15 U.S. business days. The information collected may be used for various regulatory purposes, including supporting FDA’s assessment of pending applications, precluding the need for an inspection, and supporting regulatory meetings or enforcement actions. This report and any written list of observations may be subject to a disclosure request under the Freedom of Information Act.

The FDA has requested comments on the proposed guidance by December 26, 2023. Comments can be submitted online here.

Takeaway: The FDA is moving towards a more digital future with its new draft guidance proposing the permanent use of remote interactive evaluations for drug facilities. Interested parties should review and offer comment on the proposed guidance by December 26, 2023.

Learn about Dechert's Product Liability and Mass Torts services.

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California’s Chemical Crackdown

In October, California became the first U.S. state to ban certain chemicals in personal care products and food additives, mirroring E.U. regulators. California’s economy is the largest in the United States and the fifth largest in the world. It is almost impossible for companies to withdraw entirely from this significant market. And, because cost (among other reasons) precludes companies from adopting different formulas for the same products depending on their end point of sale, these tighter regulations will influence the consumer landscape beyond California.

On October 8, 2023, California’s Governor, Gavin Newsom, expanded the state’s chemical bans in personal care products, signing Assembly Bill 496, which amends the 2020 Toxic-Free Cosmetics Act (“TFCA”). This increases the total number of banned chemicals in California from 24 to 50. Among these chemicals are anthraquinone, found in some hair-coloring products, and vinyl acetate, a compound present in many nail polishes. In 2020, the European Chemicals Agency banned both chemicals for sale and use throughout the European Union. The ban of the 24 chemicals in the initial California legislation takes effect in 2025, and the ban of the 26 newly listed chemicals will be effective 2027.

On October 7, 2023, the governor also signed the California Food Safety Act, Assembly Bill 418, that will ban the sale of foods containing Red Dye 3, potassium bromate, propylparaben and brominated vegetable oil (“BVO”), an ingredient found in citrus-flavored beverages. When the law takes effect in 2027, any entity that violates the law will be liable for fines of up to $5,000, and subsequent violations will carry penalties of up to $10,000. This state law is the first of its kind in the United States, however the European Union has already banned these additives due to scientific research linking them to health concerns, including cancer, fertility problems, and behavioral problems in children. An analysis by California’s Assembly Committee on Health cited a study conducted by a state agency that concluded consumption of synthetic food dyes, including Red Dye 3, can result in hyperactivity and other neurobehavioral problems in some children. Initially, California’s legislation also aimed to ban titanium dioxide as a food additive that is commonly found in salad dressings, chewing gum, and drink mixes. However, it was removed from the legislation before reaching Governor Newsom’s desk to gain more support, and due to the FDA’s stance that it is safe as a regulated color additive in foods.

California may be leading the way for the FDA and other states to impose similar restrictions. Less than a month after the California Food Safety Act was signed, the FDA also proposed a rule to ban the use of BVO. Although the FDA issued a rule in 1996 permitting the safe use of BVO as a food additive, the FDA states it “can no longer conclude that the use of BVO in food is safe,” because of “recent data from studies it conducted that demonstrate adverse health effects in animals at levels more closely approximating real-world human exposure.” New York may soon also follow California with Senate Bill S6055A, which seeks to ban the same food additives that the California Food Safety Act sought to ban.

Takeaway: California’s recent regulatory actions, banning certain chemicals in personal care products and food additives, will influence similar restrictions across the United States.

Learn about Dechert's Product Liability and Mass Torts services.

Environmental Edit

PFAS Product Testing Not Enough to Powder Over Blemishes in Class Action Pleadings

As per- and polyfluoroalkyl substances (“PFAS”) litigation continues to expand, one emergent area is putative class actions asserting misleading advertising claims based on the alleged presence of PFAS in consumer products. In these cases, the plaintiffs often base their allegations on general product testing, but a recent opinion from the Southern District of New York dismissed such claims and demanded allegations tied to the specific products at issue. See Hicks v. L’Oreal U.S.A., No. 22-cv-1989, 2023 WL 6386847 (S.D.N.Y. Sept. 30, 2023).

In Hicks, mascara users alleged that advertising the products as safe and appropriate for use was misleading because of the alleged presence of PFAS. Id. at *1. The plaintiffs pointed to a prior study that measured fluorine and PFAS levels in separate cosmetic products – not those at issue – and cited their own testing for certain PFAS in the company’s products. Id. at *2-3. The court ultimately dismissed the complaint without prejudice because the plaintiffs did not sufficiently plead injury-in-fact. Id. at *7-10.

Specifically, the plaintiffs did not plausibly allege that the mascaras they purchased contained PFAS or that there was a material risk that they did. Id. at *7. First, they did not allege that the study sampled any of the defendant’s products or that fluorine measurements mean PFAS are present. Id. Second, the plaintiffs did not allege with sufficient detail which specific products had detectable levels of PFAS or whether any of them were mascaras. Id. Third, while the plaintiffs pointed to testing for the presence of a carbon-fluorine bond, detecting a C-F bond is not necessarily evidence of PFAS. Id. at *7. Fourth, the plaintiffs’ allegations about separate testing had “glaring shortcomings,” including failing to identify how many of the defendants’ products were tested and what percentage of products had PFAS. Id. at *8. Without plausible allegations that PFAS in the subject products was “systematic and routine,” the plaintiffs could not “meaningfully link[]” the testing results to the products they purchased. Id. at *9. While the court granted leave to amend, it cautioned that plaintiffs must plead more details showing a plausible link between testing results and the purchased products. Id.

The dismissal in Hicks is part of a growing number of PFAS cases premised on product testing that have been dismissed by the Southern District of New York. In September, the court found that product testing revealing the presence of fluorine was not enough to plausibly allege the defendant’s product contained PFAS. Dalewitz v. Procter & Gamble Co., No. 22-cv-7323, 2023 WL 6215329, at *3 (S.D.N.Y. Sept. 22, 2023). And in another decision earlier this month, the court decided that the plaintiffs’ reliance on product testing did not “support their assertion that the products the named Plaintiffs purchased plausibly contained PFAS.” Esquibel v. Colgate-Palmolive Co., No. 23-cv-742, 2023 WL 7412169, at *3 (S.D.N.Y. Nov. 9, 2023). In both cases, the plaintiffs were given leave to amend their complaints.

Takeaway: Hicks and other cases identify limits of the plaintiffs’ reliance on product testing at the pleading stage in this emergent area of PFAS litigation. Even if the plaintiffs conduct their own testing, they must plausibly allege a connection between the results and the products that they actually purchased.

Learn more about PFAS development on Dechert’s PFAS website.

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