In Re: Vioxx Prod Liability, et al

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In Re: Vioxx Prod Liability, et al

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Case: 09-30446

Document: 00511176837

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Date Filed: 07/16/2010

IN THE UNITED STATES COURT OF APPEALS United States Court of Appeals FOR THE FIFTH CIRCUIT Fifth Circuit FILED
July 16, 2010 N o . 09-30446 Lyle W. Cayce Clerk

I N RE: VIOXX PRODUCTS LIABILITY LITIGATION -----------------------------------------------------------------------------------------------G L E N N L. DIER, ET AL., Plaintiffs - Appellants v. M E R C K AND COMPANY, INC., A Foreign Corporation D e fe n d a n t - Appellee

A p p e a l from the United States District Court for the Eastern District of Louisiana U S D C No. 2:05-MD-1657

B e fo r e GARWOOD, STEWART, and CLEMENT, Circuit Judges. P E R CURIAM:* I n this mass tort multidistrict litigation (MDL) proceeding, thousands of p l a in t iffs alleged personal injuries resulting from the use of Vioxx, a drug m a n u fa c t u r e d by defendant Merck and Company, Inc. (Merck). Many of the

Pursuant to 5TH CIR. R. 47.5, the court has determined that this opinion should not be published and is not precedent except under the limited circumstances set forth in 5TH CIR. R. 47.5.4.

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No. 09-30446 lit ig a n t s have arrived at an opt-in Master Settlement Agreement (MSA) to r e s o lv e claims for those plaintiffs who meet certain criteria. Glenn L. Dier and h is fellow plaintiffs-appellants (the Dier plaintiffs) have not opted into the MSA. T h e district court issued a series of pre-trial orders, including pre-trial order 28 (P T O 28), which required that non-settling plaintiffs each produce a report from a doctor linking the alleged injury to use of Vioxx. The district court issued a s h o w cause order for the Dier plaintiffs' failure to comply with PTO 28 and later d is m is s e d the Dier plaintiffs' cases on that basis. We AFFIRM. I . FACTUAL AND PROCEDURAL BACKGROUND I n September 2004, Merck withdrew Vioxx from the market when data r e v e a le d an increased risk of cardiovascular thrombotic events associated with t h e drug. See In re Vioxx Prods. Liab. Litig., 401 F. Supp. 2d 565, 571 (E.D. La. 2 0 0 5 ). Litigation soon followed and thousands of claims were filed around the c o u n t r y . Id. 1. Multidistrict Litigation In February 2005, the Judicial Panel on Multidistrict Litigation ordered t h a t the Vioxx litigation be "centralized, designated as an MDL, and assigned to" J u d g e Eldon Fallon. Id. Judge Fallon then directed the parties to address w h e t h e r a class of personal injury plaintiffs could be certified under Rule 23. In N o v e m b e r 2006, he denied certification of a nationwide class because the p la in t i f f s ' claims raised choice-of-law hurdles and numerous individualized q u e s t i o n s of fact. In re Vioxx Prods. Liab. Litig., 239 F.R.D. 450, 458­59, 461 (E .D . La. 2006). 2 . The Master Settlement Agreement Settlement negotiations resulted in the MSA, which the parties presented t o the district court on November 9, 2007. The MSA established threshold c r it e r ia for plaintiffs' eligibility to opt in. Section 1.2.8 of the MSA imposed the r e q u ir e m e n t that any plaintiffs' counsel enrolling clients in the MSA must affirm 2

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No. 09-30446 t h a t she had recommended to 100% of her clients that they accept the terms of t h e MSA and must attempt to withdraw from representing clients who refused t o accept the MSA terms. The MSA also designated Judge Fallon as its chief a d m in is tr a to r . 3 . The Pre-trial Orders O n November 9, 2007 the district court entered several pre-trial orders w it h respect to the claims of those plaintiffs who could not or chose not to p a r tic ip a t e in the MSA. PTO 281 required non-settling plaintiffs to notify their h e a lt h c a r e providers that they must preserve evidence pertaining to the p la in t iffs ' use of Vioxx. Plaintiffs were also required to produce pharmacy r e c o r d s and medical authorizations, answers to interrogatories, and a Rule 2 6 (a )(2 ) report from a medical expert attesting that the plaintiff sustained an in ju r y caused by Vioxx and that the injury occurred within a specified time p e r io d . Failure to comply could result in dismissal of the plaintiffs' claims with p r e ju d ic e .2 P r e -t r ia l order 30 (PTO 30) imposed a stay of discovery so that plaintiffs c o u ld consider the MSA, with exceptions for discovery activities required by PTO 2 8 and previously scheduled de bene esse depositions. Pre-trial order 31 (PTO 31) e n fo r c e d the terms of Section 1.2.8 of the MSA by requiring all counsel of record f o r plaintiffs to register all claims in which they had an interest and sign a " R e g is t r a t io n Affidavit," in which they had to attest to whether they agreed to t h e terms of the MSA and would recommend that their clients enroll in the MSA.

PTO 28 is characterized as a Lone Pine order, named for Lore v. Lone Pine Corp., No. L-33606-85, 1986 WL 637507 (N.J. Super. Ct. Law Div. Nov. 18, 1986). "Lone Pine orders are designed to handle the complex issues and potential burdens on defendants and the court in mass tort litigation." Acuna v. Brown & Root Inc., 200 F.3d 335, 340 (5th Cir. 2000). Pre-trial Order 29 (PTO 29) is virtually identical to PTO 28, differing primarily because it applies to plaintiffs whose claims were transferred to the MDL after November 9, 2007 and therefore sets different deadlines.
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No. 09-30446 4 . Dier Plaintiffs' Dismissal T h e Dier plaintiffs brought their Vioxx suits against Merck in state and f e d e r a l courts in New York. Each case was then transferred to the MDL. The D ie r plaintiffs have not opted into the MSA. S h o r t ly after the MSA was announced and the pre-trial orders were e n te r e d , a group of plaintiffs (the Oldfather plaintiffs) filed a motion in the d is t r ic t court requesting modification or suspension of PTO 28 on the basis that it s requirements were premature and unfairly burdensome. The district court r e je c t e d the Oldfather plaintiffs' arguments, but nonetheless extended the d e a d li n e s for PTO 28 "to ensure that all Plaintiffs have a fair opportunity to c o m p ly with this provision of PTO 28." In re Vioxx Prods. Liab. Litig., 557 F. S u p p . 2d 741, 745 (E.D. La. 2008). O n e month after the Oldfather ruling, in June 2008, another group of p la in t iffs (the Agard plaintiffs)3 filed a motion making substantially the same a r g u m e n t s as the Oldfather plaintiffs in opposition to PTO 28. They requested a n o t h e r extension and sought to eliminate the expert report requirement of PTO 2 8 . The Agard plaintiffs also argued that Judge Fallon's roles as MSA chief a d m in is t r a t o r and as coordinating judge of the MDL proceeding created an in c u r a b le conflict of interest, requiring Judge Fallon to resign as MSA a d m in is t r a t o r . They further asserted that the MSA should be vacated or d e c la r e d void because it had not been subject to the requirements of Rule 23. In D e c e m b e r 2008, the district court denied the Agard motion in its entirety. I n October 2008, the district court entered an order (the Conference Order) in s t r u c t in g eligible but non-settling plaintiffs to appear at one of three c o n fe r e n c e s to be held in different locations nationally. The stated purpose of the o r d e r was "to ensure that plaintiffs who are eligible for the Vioxx settlement
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The Agard plaintiffs were also represented by the Law Office of Ronald R. Benjamin, counsel for the Dier plaintiffs. The Agard plaintiffs included some of the Dier plaintiffs.

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No. 09-30446 p r o g r a m but who have not enrolled in the program . . . have all necessary in fo r m a t io n available to them so that they can make informed choices." The o r d e r directed counsel and plaintiffs themselves to appear in person at one of the c o n fe r e n c e s , although it expressly allowed plaintiffs to avoid this requirement fo r reasons of "physical or economic hardship." Many of the Dier plaintiffs c la im e d hardship and were excused from attendance. The Dier plaintiffs also m o v e d the district court to vacate the order, contending that the only conceivable p u r p o s e of the conferences was for the court to engage in "advocacy for the s e t t le m e n t in an environment that is necessarily going to be viewed as coercive b y the individual plaintiffs." The district court denied the motion. I n November 2008, Merck moved for an Order to Show Cause as to s ix t y - o n e plaintiffs (including the Dier plaintiffs) for "failure to provide a c a s e -s p e c ific expert report as required by . . . PTO 28." In December 2008, the d is t r ic t court issued an Order to Show Cause. The Dier plaintiffs filed responses, a r g u in g that they were in substantial compliance with PTO 28 and that New Y o r k law only required general causation proof. In April 2009, the district court d is m is s e d the Dier plaintiffs' complaints with prejudice for failure to comply w it h PTO 28. I I . DISCUSSION A . Standing to Challenge the MSA T h e Dier plaintiffs first challenge the validity of the MSA. Standing, h o w e v e r , is a prerequisite to this court's exercise of jurisdiction. Doe v. T a n g ip a h o a Parish Sch. Bd., 494 F.3d 494, 496 n.1 (5th Cir. 2007) (en banc). T h is court has recognized that, in the context of class settlements, non-settling p a r tie s generally have no standing to challenge the settlement. Transam. R e fin in g Corp. v. Dravo Corp., 952 F.2d 898, 900 (5th Cir. 1992); see also Agretti v . ANR Freight Sys., 982 F.2d 242, 246 (7th Cir. 1992) ("`[N]on-settling d e fe n d a n t s in a multiple defendant litigation context have no standing to object 5

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No. 09-30446 t o the fairness or adequacy of the settlement by other defendants.'") (quoting 2 H ERBERT B. NEWBERG, NEWBERG ON CLASS ACTIONS § 11.54 (2d ed. 1985)). The r a t io n a le behind this general rule is that settlement will not affect any s u b s t a n t iv e legal rights of non-settling parties. Transam. Refining Corp., 952 F .2 d at 900. An exception to the general rule may apply if the settlement agreement s t r ip s non-settling parties of rights to contribution or indemnity, see id., or in s o m e other manner results in "plain legal prejudice" to a non-settling party. A g r e tti, 982 F.2d at 246­47; see also Bass v. Phoenix Seadrill/78, Ltd., 749 F.2d 1 1 5 4 , 1160 n.10 (5th Cir. 1985) (stating that the court may consider "an attempt b y a non-party to the settlement to void portions of the agreement that purport t o affect the rights of non-settlors"). But "[m]ere allegations of injury in fact or t a c t ic a l disadvantage as a result of a settlement simply do not rise to the level o f plain legal prejudice." Agretti, 982 F.2d at 247. Because the MSA was structured as an "opt-in" private settlement rather t h a n an "opt-out" agreement, the Dier plaintiffs cannot show that they have s u ffe r e d the type of legal prejudice that would afford them standing to challenge t h e MSA. The Dier plaintiffs therefore lack standing to challenge the MSA. B. Judge Fallon's Decision to Not Recuse T h e Dier plaintiffs contend that Judge Fallon cannot serve as both p r e s id in g judge in the Vioxx MDL and chief administrator of the MSA without p r e s e n t in g the appearance of partiality. They assert that Judge Fallon's dual r o le s "clearly permit[ ] an inference" that he encouraged participation in the M S A . Therefore, they argue, Judge Fallon must either recuse himself from the c a s e or resign as chief administrator of the MSA. Addressing the Dier plaintiffs' contentions in its order of December 10, 2 0 0 8 , the district court declined to recuse on the basis that:

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No. 09-30446 T h e facts of the instant case do not warrant recusal. As Chief A d m in is t r a t o r of the [MSA], the Court serves in an administrative c a p a c it y that has no substantive effect on its management of the M D L proceedings. See In re Vioxx Prods. Liab. Litig., MDL No. 1 6 5 7 , 2008 WL 4091672, at *2 (E.D. La. Aug. 27, 2008) (explaining t h a t the Court "has consistently exercised its inherent authority o v e r the MDL proceedings in coordination with its express authority u n d e r the terms of the Settlement Agreement to ensure that the s e t t le m e n t proceedings move forward in a uniform and efficient m a n n e r "). The Court played no role in drafting the private s e t t le m e n t agreement reached by the parties; the Court has taken n o position as to what types of claims should or should not have b e e n included in the settlement; and, finally, the Court has c o n s is t e n t ly stated that it neither encourages nor discourages p a r t ic ip a t io n in the settlement. " A motion to disqualify is committed to the sound discretion of the judge a n d her decision will only be reversed if there has been an abuse of that d is c r e t io n ." In re Hipp, Inc., 5 F.3d 109, 116 (5th Cir. 1993). The federal recusal s t a t u t e provides that "[a]ny justice, judge, or magistrate judge of the United S t a te s shall disqualify himself in any proceeding in which his impartiality might r e a s o n a b ly be questioned." 28 U.S.C. § 455. "The very purpose of § 455(a) is to p r o m o t e confidence in the judiciary by avoiding even the appearance of im p r o p r ie t y whenever possible." Liljeberg v. Health Servs. Acquisition Corp., 486 U .S . 847, 865 (1988) (citing S. REP. NO. 93-419, at 5 (1974) and H.R. REP. NO. 931 4 5 3 , at 5 (1974)). "Thus, it is critically important in a case of this kind to id e n tify the facts that might reasonably cause an objective observer to question [t h e judge's] impartiality." Id. In applying § 455, the court employs an objective t e s t , finding recusal warranted"if the reasonable man, were he to know all the c ir c u m s t a n c e s , would harbor doubts about the judge's impartiality." IQ Prods. C o . v. Pennzoil Prods. Co., 305 F.3d 368, 378 (5th Cir. 2002) (quotation omitted). 1. Encouraging Participation in Settlement T h e Dier plaintiffs submit that the district court's statement that it "has c o n s is t e n t ly stated that it neither encourages nor discourages participation in 7

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No. 09-30446 t h e settlement" takes "too myopic a view" of the court's role as both chief a d m in is t r a t o r of the MSA and as presiding judge in the MDL litigation. They p o in t to the Conference Order, which required all non-settling plaintiffs to a p p e a r at conferences "to ensure that plaintiffs who are eligible for the Vioxx s e t t le m e n t program but who have not enrolled in the program have all necessary in fo r m a t io n available to them so they can make informed choices," and argue t h a t this order permits the inference that the district court encouraged s e t t le m e n t . The Conference Order, however, did not inappropriately encourage s e t t le m e n t . It "is not unusual to require the parties as well as counsel to appear a t settlement conferences." Bilello v. Abbott Labs., 825 F. Supp. 475, 479 (E .D .N .Y . 1993). For example, Federal Rule of Appellate Procedure 33 authorizes c o u r ts of appeals to "direct the attorneys--and, when appropriate, the p a r tie s -- t o participate in one or more conferences to address any matter that m a y aid in disposing of the proceedings, including . . . discussing settlement. A ju d g e or other person designated by the court may preside over the conference." F ED. R. APP. P. 33. Nothing about the settlement conferences would give a r e a s o n a b le observer any doubt about Judge Fallon's impartiality. 2 . Appearance of Partiality I n support of their argument that the district court's impartiality could r e a s o n a b ly be questioned, the Dier plaintiffs assert that at least one plaintiff la c k e d confidence in the district court's impartiality as a result of its dual r e s p o n s ib ilit ie s . But because the test for impartiality is an objective one, see IQ P r o d s . Co., 305 F.3d at 378, an individual plaintiff's subjective beliefs are ir r e le v a n t to the analysis. For the reasons articulated by Judge Fallon, his decision not to recuse falls w e ll within the bounds of his discretionary authority. C . Pre-Trial Order 28 Requiring Production of a Doctor's Report

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No. 09-30446 T h e Dier plaintiffs' final argument is that it was an abuse of discretion for t h e district court to issue the case-specific expert disclosure requirement in PTO 2 8 . They contend that Merck was aware of the nature of their alleged injuries a n d the injuries' purported link to Vioxx. They further assert that even if is s u a n c e of PTO 28 was generally within the district court's discretion, in in s t a n c e s where state law requires no expert opinion as part of the evidence to s u p p o r t the claim, imposing such a requirement is an abuse of discretion and c o n t r a v e n e s the Erie doctrine. See Erie R.R. Co. v. Tompkins, 304 U.S. 64, 78­80 (1 9 3 8 ). 1. The Court and Merck were Already Apprised of Plaintiffs' Injuries A district court's adoption of a Lone Pine order and decision to dismiss a c a s e for failing to comply with a Lone Pine order are reviewed for abuse of d is c r e t io n . Acuna, 200 F.3d at 340­41. Relying on Acuna, the district court stated that "it is not too much to ask a plaintiff to provide some kind of evidence to support their claim that Vioxx c a u s e d them personal injury." In re Vioxx Prods. Liab. Litig., 557 F. Supp. 2d at 7 4 4 . In Acuna, over 1,000 plaintiffs brought personal injury claims allegedly a r is in g from uranium mining activities. The district court issued pre-discovery L o n e Pine orders that required plaintiffs to provide expert affidavits specifying t h e injuries suffered by each plaintiff, the substances causing the injury, the d a t e s and circumstances of exposure to the injurious materials, and the scientific a n d medical bases for the expert's opinions. Acuna, 200 F.3d at 338. The district c o u r t ultimately dismissed plaintiffs' claims for failure to comply with the Lone P in e orders. Id. at 340. On appeal, plaintiffs challenged the Lone Pine orders as im p o s in g too high a burden at too early a stage in the litigation. Id. This court s t a t e d that "[i]n the federal courts, such orders are issued under the wide d is c r e t io n afforded district judges over the management of discovery under FED. R . CIV. P. 16." Id. The court then held that the Lone Pine orders 9

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No. 09-30446 e s s e n t ia lly required that information which plaintiffs should have h a d before filing their claims pursuant to FED. R. CIV. P. 11(b)(3). E a c h plaintiff should have had at least some information regarding t h e nature of his injuries, the circumstances under which he could h a v e been exposed to harmful substances, and the basis for b e lie v in g that the named defendants were responsible for his in ju r ie s . Id. (citing Beanal v. Freeport-McMoran, Inc., 197 F.3d 161, 165 (5th Cir. 1999)). T h u s , the Acuna court concluded that the district court did not commit an abuse o f discretion by dismissing plaintiffs' claims for failure to comply with the Lone P in e order. Id. at 341. The Dier plaintiffs contend that this case is distinguishable from Acuna b e c a u s e here the plaintiffs have alleged precise injuries and both the court and M e r c k are on notice of the nature of the injuries and the injuries' relationship to M e r c k 's conduct. These grounds are insufficient, however, to warrant bypassing t h e clear holding in Acuna that it is within a court's "discretion to take steps to m a n a g e the complex and potentially very burdensome discovery that the cases w o u ld require." Id. at 340. 2 . Requirement of Proof of Physical Injury for Emotional Distress Claims T h e Dier plaintiffs also argue that PTO 28 was improper because expert t e s t im o n y is not required for claims of negligent infliction of emotional distress u n d e r New York law.4 But the Dier plaintiffs all pleaded physical injuries, and n o n e attempted to withdraw those physical injury claims. Thus, PTO 28 would a p p ly regardless of whether the Dier plaintiffs might have had a viable negligent in flic t io n of emotional distress claim along with their physical injury claims. III. CONCLUSION F o r the foregoing reasons, we AFFIRM the judgment of the district court.

"[T]he substantive law of each plaintiff's home jurisdiction must be applied to his or her respective claims." In re Vioxx Prods. Liab. Litig., 239 F.R.D. 450, 458 (E.D. La. 2006).

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