Retractable Technologies, Inc. v. Becton Dickinson and Company

Filing 347

MEMORANDUM ORDER - Courts overruled all of BDs objections to Dr. Scotts opinions and anticipated testimony, BDs Motion to Preclude the Expert Testimony of Carol A. Scott is hereby DENIED. Signed by Magistrate Judge Roy S. Payne on 2/27/13. (ehs, )

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IN THE UNITED STATES DISTRICT COURT FOR THE EASTERN DISTRICT OF TEXAS MARSHALL DIVISION RETRACTABLE TECHNOLOGIES, INC., et al. v. BECTON, DICKINSON AND CO. § § § § § § Case No. 2:08-CV-16-MHS-RSP MEMORANDUM ORDER Plaintiff Retractable Technologies, Inc. (“RTI”) alleges violations of the Sherman and Clayton Acts, violations of the Texas Antitrust Act, false advertising in violation of the Lanham Act, product disparagement, tortious interference with prospective contract or business relations, and unfair competition by Defendant Becton, Dickinson and Company (“BD”). (Dkt. No. 73.) Before the Court is BD’s Motion to Preclude the Expert Testimony of Carol A. Scott, who has been retained as an expert witness by RTI. (Dkt. No. 157, filed January 6, 2012.) BD’s motion seeks to exclude opinions and evidence concerning the brochure survey, the patient safe survey, and corrective advertising damages. Scott’s report, which includes all the survey materials, is attached as an exhibit to BD’s motion. (Scott Rep., Dkt. No. 157-3.) BD has taken a shotgun approach to objecting to Scott’s report, raising numerous objections and citing 30 cases in support of its motion. The Court has considered every objection raised in BD’s motion. However, more attention has necessarily been given to those objections that are more thoroughly briefed and appear to be more important to the parties. Having considered all of BD’s objections individually and as whole, the Court finds that BD’s objections do not warrant excluding Dr. Scott’s report and testimony, and instead more properly go to the weight of the evidence. Accordingly, BD’s Motion to Preclude the Expert Testimony of Carol A. Scott is DENIED. APPLICABLE LAW A. Expert Testimony An expert witness may provide opinion testimony if “(a) the expert’s scientific, technical, or other specialized knowledge will help the trier of fact to understand the evidence or to determine a fact in issue; (b) the testimony is based on sufficient facts or data; (c) the testimony is the product of reliable principles and methods; and (d) the expert has reliably applied the principles and methods to the facts of the case.” Fed. R. Evid. 702. A trial court is “charged with a ‘gatekeeping role,’ the objective of which is to ensure that expert testimony admitted into evidence is both reliable and relevant.” Sundance, Inc. v. DeMonte Fabricating Ltd., 550 F.3d 1356, 1360 (Fed. Cir. 2008). B. Survey Evidence In the Fifth Circuit, survey evidence may be admitted if it is “pertinent to the inquiry, upon a showing that the poll is reliable and was compiled in accordance with accepted survey methods.” C. A. May Marine Supply Co. v. Brunswick Corp., 649 F.2d 1049, 1054 (5th Cir. 1981). “In assessing the validity of a survey [courts] look to two factors: first, the manner of conducting the survey, including especially the adequacy of the universe; and second, the way in which participants are questioned.” Scott Fetzer Co. v. House of Vacuums Inc., 381 F.3d 477, 487 (5th Cir. 2004). However, usually, “methodological flaws in a survey bear on the weight the survey should receive, not the survey’s admissibility.” Id. at 488. -2- DIS SCUSSION A. Brochure Su B urvey 1. Objec ction to Lea ading Questi ions BD objects to Scott offer B o ring any opi inion based upon questi ions 5 and 6 of the broc chure survey on the ground that they are improper closed, lead n ds a r ding questio ons. (Mot. a 12-13, Dkt No. at t. 157.) Qu uestions 4-6 are reproduc below: ced *** *** -3- (Scott Re Ex. 5 at 6-7, Dkt. No 157-3.) ep. 6 o. a. Question 5 With respect to question 5, BD argu that Scot should hav provided a simpler ch W ues tt ve hoice for indica ating reduction of accid dental needle esticks—one that does n include the phrase “t the e not to lowest ex xtent feasible in actual clinical settin c ngs.” RTI re esponds that question 5 is not a bias or t sed leading because it is posed in the form of a “quasi-fil question where “re b s t lter n” espondents c could write in their own an nswer (Q5); [or] choose more than one option (Q5).” (Re at 9-10, Dkt. e esp. , No. 217.) ) The brochure survey wa directed to medical professiona who are involved in the T e as als n purchasin process for syringes used in insti ng f u itutional clin nical settings (See Scott Rep. Ex. 5 at 2s. t 3, Dkt. No. 157-3.) In this con N ntext, the co omplained o answer ch of hoice does not appear to be unduly le eading or bia ased. See Sh Seidman Diamond, Reference G hari n Guide on Sur rvey Researc in ch, Federal Judicial Cen J nter, Reference Manual on Scientific Evidence, 387-394 (3d ed.) (discu o c d ussing s). principles and metho of formu ods ulating surv questions Therefor the Court finds that BD’s vey re, t objection to question 5 merely go to the we n n oes eight of the e evidence. -4- b. Question 6 With respect to question 6, BD argues that it was improper to ask respondents to “‘indicate the percentage reduction you expect “Safe”, “Safety”, or “Safety-Engineered” products to provide,’ without first asking whether respondents had any such expectation.” (Mot. at 12, Dkt. No. 157). RTI responds that the question is not improper because respondents could “choose any amount from zero to one hundred percent (Q6); or choose ‘don’t know / not sure’ (Q5, Q6).” (Resp. at 10, Dkt. No. 217.) BD concedes that the responses to other questions (presumably questions 4 and 5), “show that respondents did not have any such expectation” that safety products would reduce needlesticks by any given percentage reduction. (Mot. at 12, Dkt. No. 157.) This suggests that the brochure survey’s design is sufficiently robust such that the alleged deficiency in question 6 does not render the survey as a whole unreliable, and that BD’s objection is best addressed through cross-examination. Accordingly, the Court finds that BD’s objection to question 6 only goes to the weight of the evidence and does not warrant exclusion. 2. Objection to the Brochure Survey’s Controls BD contends that the brochure survey must be excluded because Scott failed to use an experimental control group. BD argues that in conducting a false advertising survey, a control group should be shown a control advertisement (a control stimulus) that is similar to the allegedly false advertisement but does not contain the allegedly misleading message. The expert then compares the responses to the control advertisement and the responses to the allegedly false advertisement to determine the degree to which the allegedly false advertisement is deceptive or misleading. Without an adequate control, BD contends that Scott cannot separate the effects of the respondents’ preexisting knowledge or beliefs from the effects of the allegedly false advertisement. (See Mot. at 7-9, Dkt. No. 157.) -5- RTI responds that the survey was designed to determine what messages are conveyed by BD’s advertisement, and not to determine whether the advertisement caused deception. Because the survey was not testing causation, RTI contends that no control group was necessary. RTI maintains that a control group was nonetheless present because half of the respondents were asked general questions regarding their beliefs (questions 4-6 reproduced above) prior to being showing the advertisement (while the experimental group was asked the same questions after being shown the advertisement), which permits Scott to determine whether the advertisement alone created those beliefs. (See Resp. at 2-3, Dkt. No. 217.) “[B]efore a court can determine the truth or falsity of an advertisement’s message, it must first determine what message was actually conveyed to the viewing audience.” Johnson & Johnson * Merck Consumer Pharm. Co. v. SmithKline Beecham Corp., 960 F.2d 294, 298 (2d Cir. 1992). Surveys have generally been accepted as proof of the message conveyed by an advertisement. Id.; see also Scotts Co. v. United Industries Corp., 315 F.3d 264, 280 (4th Cir. 2002) (“The purpose of consumer surveys in false advertising cases is to determine the message actually conveyed to consumers.”). In the Fifth Circuit, survey evidence may be admitted if it is “pertinent to the inquiry, upon a showing that the poll is reliable and was compiled in accordance with accepted survey methods.” C. A. May Marine Supply Co. v. Brunswick Corp., 649 F.2d 1049, 1054 (5th Cir. 1981). See generally, Scott Fetzer Co. v. House of Vacuums Inc., supra. The Court finds that BD’s criticism of the brochure survey’s controls does not warrant excluding the survey, and but instead goes to the weight of the evidence. The Court is persuaded that questions 4-6, which were posed to a subset of respondents prior to being shown the stimulus, provide some basis to control for the respondents’ preexisting beliefs. -6- The cases cited by BD do not compel a different result. In Pharmacia Corp. v. GlaxoSmithKline Consumer Healthcare L.P., survey evidence was offered to prove that the comparative ad at issue contained an implied message that defendant’s product was superior to plaintiff’s product. 292 F. Supp. 2d 594, 600 (D.N.J. 2003). The court, which was acting as the finder of fact, determined that the survey should be given no evidentiary weight because it did “not adequately control for consumers’ preexisting beliefs that comparative commercials imply some sort of superior efficacy.” Id. at 604-605. In other words, because it was known that consumers generally imply a claim of superiority from comparative advertising, a survey should control for this preexisting belief when it seeks to prove that the advertisement’s content itself implies a claim of superiority. BD has not shown that the advertising at issue in this case suffers from a similar well-known bias or flaw. In Proctor & Gamble Pharmaceuticals, Inc. v. Hoffmann-LaRoche, Inc., the consumer survey at issue was excluded because it suffered from several serious methodology flaws, and the court did not rely solely on the perceived inadequacy of the control stimulus. 2006 WL 2588002, at *22-25 (S.D.N.Y Sept. 6, 2006). The Court is not persuaded that Scott’s brochure survey is similarly flawed. 3. Objection to Using the Survey to Measure the Brochure’s Conveyed Messages BD raises several related arguments that go to the relevance and proper use of the brochure survey evidence. (Mot. at 9-11, Dkt. No. 157.) a. Relating the Brochure Survey Results to the Meaning of BD’s Safety Claims First, BD argues that it would be improper to permit RTI to argue that Scott’s results “relate to the meaning of ‘safety’ in reference to BD’s safety-engineered products . . . ” because -7- survey research has never been used to “set the standard to which objectively verifiable claims must be held.” (Id. at 10.) The two principal cases upon which BD relies do not appear to apply to the facts in this case. In Mead Johnson & Co. v. Abbott Laboratories, the appellate court found that the trial court erred by relying on flawed consumer survey evidence to find that the phrase “‘1st Choice of Doctors’ conveyed to consumers the message that at least a majority of physicians prefer [the product] on grounds of qualitative superiority” as opposed to the phrase’s objectively determinable meaning that “more physicians prefer this product than any of its rivals.” 201 F.3d 883, 883-85 (7th Cir. 2000). Similarly, in American Italian Pasta Co. v. New World Pasta Co., the appellate court found that the phrase “America’s Favorite Pasta,” both standing alone and in the context of the relevant advertising, was not a specific measurable claim that is actionable under the Lanham Act. 371 F.3d 387, 391-93 (8th Cir. 2004). Thus, the trial court erred in relying on consumer survey evidence to find that “America’s Favorite Pasta” conveyed to consumers a claim that the product at issue was the number one brand. Id. at 393. As explained by the American Italian Pasta court, both cases involved the use of survey evidence to establish a claim benchmark that was unsupported by the plain language of the advertisement: To allow a consumer survey to determine a claim’s benchmark would subject any advertisement or promotional statement to numerous variables, often unpredictable, and would introduce even more uncertainty into the market place. A manufacturer or advertiser who expended significant resources to substantiate a statement or forge a puffing statement could be blind-sided by a consumer survey that defines the advertising statement differently, subjecting the advertiser or manufacturer to unintended liability for a wholly unanticipated claim the advertisement’s plain language would not support. The resulting unpredictability could chill commercial speech, eliminating useful claims from packaging and advertisements. As the Seventh Circuit noted, the Lanham Act protects against misleading and false statements of fact, not misunderstood statements. -8- Id. at 393 3-394 (citing Mead John g nson, 201 F.3 at 886). 3d The same co T oncern is not presented in this case Unlike M t e. Mead Johnso and Ame on erican Italian Pasta, no part contends that the “saf P ty fety” claims at issue here are mere p e puffery or tha the at plain and ordinary meaning of the claims should apply BD itself argues tha the approp d m t s y. f at priate benchma is set by FDA and OSHA regula ark O ations. (See Mot. at 11, Dkt. No. 15 57.) Given t that a fact dispu exists wi respect to the meanin of the adv ute ith o ng vertising cla aims in this c case, and tha BD at has not offered evide o ence that for recloses the consideratio of survey evidence t on y that bears on this n issue, the Court is pe e ersuaded that the survey evidence is r t relevant and should not be excluded d d. b. Asking Re espondents About Thei Beliefs In ir nstead of the Message e Conveyed by the Stim d mulus BD next argu that broc B ues chure survey should be e y excluded bec cause courts exclude sur s rveys where respondents are asked wh their beli are as o a hat iefs opposed to w what message is conveye by ed the adver rtisement. (Mot. at 10-11, Dkt. No. 157.) The Court finds that this ob ( e s bjection doe not es warrant exclusion of the brochure survey. e f Questions 2 and 3 are cle Q a early directe to determ ed mining the messages conv veyed by th BD he brochure: *** -9- (Scott Rep. Ex. 5 at 5-6, Dkt. No. 157-3.) Moreover, BD itself has argued that a proper survey controls for respondents’ preexisting beliefs. (Mot. at 7-8, Dkt. No. 157.) The Court finds that it makes little sense to require Scott to consider the effects of respondents’ preexisting beliefs on the survey’s findings, but not permit Scott to explain that portion of the brochure survey’s methodology and findings to the jury. BD’s objection on this ground is overruled. c. Brochure Survey Findings Conflict with FDA and OSHA Definitions Finally, BD argues that the brochure survey cannot be used to set the standard for assessing BD’s safety claims because the brochure survey’s findings conflict with definitions set by regulations promulgated by the FDA and OSHA. (Id. at 11.) The Court finds that BD has not adequately substantiated its contention that any FDA or OSHA regulation governs determining whether BD’s advertising claims in this case are false or misleading. The Sandoz case cited by BD explains that there are key differences between the statutes enforced by the FDA and OSHA, and the Lanham Act: [The Lanham Act] provides a private remedy to a commercial plaintiff who meets the burden of proving that its commercial interests have been harmed by a competitor's false advertising. The [Food, Drug, and Cosmetic Act] in contrast, is not focused on the truth or falsity of advertising claims. It requires the FDA to protect the public interest by “pass[ing] on the safety and efficacy of all new drugs and . . . promulgat[ing] regulations concerning the conditions under which various categories of OTC drugs . . . are safe, effective and not misbranded.” Sandoz Pharm. Corp. v. Richardson-Vicks, Inc., 902 F.2d 222, 230 (3d Cir. 1990). The issue presented in Sandoz was “whether a Lanham Act false labeling claim exists against a manufacturer who lists an ingredient as ‘inactive’ when FDA standards seem to require that such an ingredient be labeled as ‘active.’” Id. In other words, the gravamen of the plaintiff’s claim was that that the label was false because FDA labeling standards for drugs seemed to require that the ingredient be labeled as “active.” Because the FDA had not decided - 10 - whether the type of ingredient at issue must be labeled “active,” the appellate court found that the trial court erred in applying the FDA regulations on its own, and deciding that it should have been so labeled. Id. at 230-31. However, Sandoz does not stand for the proposition that any definition provided by a regulation necessarily governs determining whether a statement is actionable under the Lanham Act. Here, BD merely provides a string of citations to definitions given in regulations, without (1) any analysis or explanation of how those definitions apply to the advertising claims at issue in this case, or (2) any analysis of why the regulation at issue should control over the Lanham Act. Accordingly, BD’s objection is overruled. B. Patient Safe Survey BD argues the patient safe survey should be excluded because (1) “it was preordained that respondents would express interest in a product that they were told to assume would benefit their patients;” and (2) that the survey “is an unreliable measure of whether real potential customers would purchase the product and at what price” because respondents were told “to assume the truth of clinical claims that their healthcare facilities usually systematically test.” (Mot. at 13-14, Dkt. No. 157.) RTI provides a comprehensive defense of the survey in its response. (Resp. at 11-13, Dkt. No. 217.) The Court finds that these objections go to the weight of the evidence, and do not warrant exclusion of the patient safe survey. BD also objects, in conclusory fashion, that the survey lacks proper controls and uses leading questions. The Court has reviewed the questions associated with the patient safe survey, and finds that the record does not reveal reliability or methodology concerns that warrant exclusion of the survey. (See questions 18-22, Scott Rep. Ex. 5 at 13-14, Dkt. No. 157-3.) BD’s objections to the patient safe survey are overruled. - 11 - C. Corrective Advertising Damages Opinion BD objects to Scott’s “estimate of corrective advertising damages that is based on unsupported assumptions rather than reliable analysis.” (Mot. at 14, Dkt. No. 157.) The focus of . BD’s less than one page of argument dedicated to the corrective advertising damages opinion is that key assumptions in Scott’s analysis have no factual support. On this record, the Court finds that these criticisms more properly go to the weight of the evidence, and do not warrant exclusion. Accordingly, BD’s objections to the corrective advertising opinion are overruled. CONCLUSION Having considered and overruled all of BD’s objections to Dr. Scott’s opinions and anticipated testimony, BD’s Motion to Preclude the Expert Testimony of Carol A. Scott is hereby DENIED. SIGNED this 3rd day of January, 2012. SIGNED this 27th day of February, 2013. ____________________________________ ROY S. PAYNE UNITED STATES MAGISTRATE JUDGE - 12 -

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