In Re American Medical Systems, Inc. Pfizer, Inc.

Citations: 75 F.3d 1069; 1996 WL 63417Docket: 95-3303, 95-3327

Court: Court of Appeals for the Sixth Circuit; February 15, 1996; Federal Appellate Court

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Petitioners American Medical Systems, Inc. (AMS) and Pfizer, Inc. sought a writ of mandamus from the United States Court of Appeals for the Sixth Circuit to vacate orders conditionally certifying a class in a products liability lawsuit concerning AMS's penile prostheses. Although class certification decisions are typically not subject to mandamus relief, the court found extraordinary circumstances warranted intervention due to the district judge's significant procedural disregard. 

AMS, a subsidiary of Pfizer established in 1973, faced a lawsuit initiated by plaintiff Paul Vorhis, who had multiple AMS prostheses that failed or caused discomfort. Vorhis filed his action on December 5, 1994, alleging various claims including strict product liability and seeking class certification for others affected by AMS products. Following a motion for class certification filed by Vorhis on December 29, 1994, AMS attempted to defer the ruling, citing similar pending actions and a lack of personal jurisdiction. 

The district judge, however, did not address AMS’s motions to stay or dismiss. During the class certification hearing, the judge focused on Vorhis's suitability as a class representative, prompting AMS to challenge his qualifications based on his documented psychiatric issues, which AMS argued could impair his decision-making capacity on behalf of the class.

AMS argued that Vorhis was an unsuitable class representative due to his specific condition, Peyronie's disease, and because his issues were limited to just one type of AMS prosthesis, potentially excluding others with different devices. In response, the plaintiff presented testimony from Dr. Edelstein, Vorhis' psychiatrist, affirming his competency. The plaintiff also contended that all ten types of AMS devices shared a fundamental design, referencing a section 510(k) notice indicating similarity among the devices. Vorhis did not address AMS' second argument regarding his suitability.

During oral arguments, the district judge suggested that adding more class plaintiffs could render AMS' concerns about Vorhis moot. Following this, on February 28, 1995, the judge indicated that class certification seemed the most efficient approach, contingent upon the plaintiff amending his complaint to include additional suitable class representatives within 30 days. Vorhis subsequently filed an amended complaint on March 10, 1995, adding three plaintiffs and Pfizer as a defendant, although he did not obtain necessary court approval.

On March 16, 1995, the district judge issued an amended order certifying the class, determining that all requirements of Federal Rule of Civil Procedure 23(a) were met and that the class could be maintained under Rule 23(b)(3) due to predominant common legal or factual questions. The judge acknowledged a potential class size of 15,000 to 120,000, referencing a Sixth Circuit case that recognized a class of 35 as sufficient for numerosity. The court found commonality among plaintiffs who underwent surgery for AMS' devices and determined that their claims were typical and adequately represented by Vorhis and the newly added plaintiffs, asserting that their claims were aligned with those of the class for liability purposes.

The judge determined that the Plaintiffs' counsel possesses adequate qualifications to represent the class effectively, referencing the case Senter v. General Motors. The class was deemed maintainable under Rule 23(b)(3) due to the potential thousands of individuals with similar claims. The Plaintiffs have raised multiple causes of action, including fraudulent misrepresentation, negligence, and strict liability, indicating that a class action is preferable to individual lawsuits. The certified class includes all individuals in the U.S. who have had inflatable penile prostheses developed or sold by American Medical Systems, Inc. or Pfizer, Inc. Vorhis is identified as a representative for the class.

American Medical Systems filed a petition for a writ of mandamus to challenge the district court's class certification order, followed by an additional petition in response to an amended order. Pfizer also submitted a petition challenging the timing of its designation as a defendant. The court issued a request for responses from the district judge and other parties regarding these petitions. Meanwhile, a motion by the defendants to stay the class certification order was denied by the district court. The appellate court granted a stay concerning the notice to class members. The All Writs Statute allows for the issuance of writs necessary for the court's jurisdiction and can provide flexibility in cases where strict adherence to the final judgment rule could lead to injustice. Historical precedent shows that writs can be used to ensure lower courts operate within their jurisdiction or fulfill their duties. However, petitioners must show a clear abuse of discretion or usurpation of judicial power for the writ to be granted.

To obtain a writ of mandamus, petitioners must demonstrate that they lack adequate alternative means for relief and prove their right to the writ is "clear and indisputable." The court established a framework for evaluating mandamus relief in In re Bendectin Prod. Liab. Litig., which includes five key factors: (1) absence of adequate means, such as direct appeal; (2) potential irreparable damage not rectifiable by appeal; (3) clear legal error in the district court's order; (4) persistent disregard of federal rules or repetitive errors; and (5) emergence of new and significant legal issues. These factors are to be balanced rather than all required for relief.

Petitioners argue for a writ on several grounds: the district court failed to meet the Sixth Circuit's class certification standards, lacked a factual record for Rule 23 elements, certified a class without an adequate representative, did not define the class, disregarded prior scheduling orders in similar cases, committed repeated errors, and reached a decision that could negatively impact medical care and judicial administration. 

The analysis begins by assessing whether the lower court committed clear error, specifically focusing on the adherence to class certification standards and the necessity for an adequate factual foundation. The Supreme Court mandates a rigorous analysis by district courts to ensure all prerequisites of Rule 23 are satisfied before class certification. While the court has discretion in this matter, it must operate within the confines of Rule 23. Mere reference to the rule is insufficient; a thorough examination of the facts is required to confirm that each condition is fulfilled. The determination of maintainability typically should rely on evidence beyond the pleadings, with the party seeking certification bearing the burden of proof. Rule 23(a) stipulates four prerequisites that must be satisfied before a class can be certified, and the applicant must also fit into at least one category under Rule 23(b). Each factor will be analyzed individually.

Rule 23(a)(1) mandates that a class must be so numerous that joining all members is impracticable, which justifies the need for a class action. There is no strict numerical threshold for determining impracticability; rather, the requirement is evaluated based on specific case facts. Vorhis initially estimated the class size to be in the thousands, later amending it to "over 150,000." The district judge estimated the class size at 15,000 to 120,000, a conclusion that seems reasonable given AMS's long-standing market presence, although the defendant did not contest this aspect. 

For certification, Rule 23(a)(2) requires common questions of law or fact among class members. This commonality is closely tied to the impracticability requirement and forms the basis for class actions. The Supreme Court has characterized class actions as an exception to individual litigation, appropriate when issues are common to the class. However, plaintiffs only provided general assertions of common issues without identifying specific defects shared by all. AMS countered with evidence that it has produced multiple models since 1973, suggesting that claims of liability, misrepresentation, negligence, and other issues will vary by model and year. Each plaintiff's circumstances differ significantly due to various factors, including surgical errors and device malfunctions, necessitating specific evidence from their urologists regarding reliance, causation, and damages. 

The amended complaint indicates that plaintiffs received different models and have distinct complaints related to those models. Due to the lack of specific allegations supporting commonality, plaintiffs did not satisfy their burden of proof under Rule 23(a)(2). The district judge's failure to adequately consider the evidence of model diversity and the absence of a common cause for prosthesis malfunction constitutes a significant oversight.

A Judicial Panel on Multidistrict Litigation denied the consolidation of federal AMS penile prostheses cases under 28 U.S.C. § 1407, determining that the factual commonality among the actions was insufficient for transfer. The district judge, aware of this ruling, did not adequately scrutinize the commonality issue. Rule 23(a)(3) necessitates that the claims of representative parties be typical of the class. Typicality assesses the relationship between the named plaintiff's injury and the conduct affecting the class, allowing for a collective attribution of the challenged conduct. Vorhis' claim involves an AMS penile prosthesis that allegedly could not be inflated due to a leak, potentially linked to a past surgery. The diversity of claims among plaintiffs undermines typicality; York, Kennedy, and Gordy each report different malfunctions with distinct models. The district judge failed to analyze these differences, merely restating the rule's language. 

Rule 23(a)(4) requires that representatives must adequately protect class interests, essential for due process as class action judgments bind all members. Certification is inappropriate if member interests are antagonistic. Senter outlines two criteria for adequate representation: shared interests with unnamed members and a commitment to vigorously pursue class interests through competent counsel. The judge did not evaluate Vorhis' alignment with class interests or his ability to prosecute them effectively. Concerns about Vorhis' psychological history were raised, and the judge's orders lacked decisive findings regarding his suitability as a representative. The February and March orders further complicated matters by adding representatives without sufficient factual basis or record, failing to address Vorhis' status adequately.

Plaintiffs' complaint and motion for class certification lack persuasive evidence to support the necessary elements of Rule 23(a), leading to an inadequate factual record. The petitioners successfully demonstrated significant differences among the products and the uniqueness of each plaintiff's claims, rendering class certification inappropriate. The district judge certified the class under Rule 23(b)(3), which requires that common legal or factual questions predominate over individual issues and that a class action be the superior method for adjudicating the controversy. While Rule 23(b)(3) allows for class actions, it imposes a stricter requirement for predominance of common issues compared to Rule 23(a)(2). In mass tort cases, individualization of issues often justifies denial of class treatment, although some courts recognize the need for efficient resolution of numerous related claims. In cases where liability can be assessed on a class-wide basis due to uniform conduct by the defendant, class actions can be appropriate. However, this case reveals that the plaintiffs’ products differ, their claims are unique, and they received varying information from their physicians. Consequently, the absence of evidence for predominance of common issues led to the conclusion that certification was improper, as the individual issues outweighed any commonalities. The potential efficiencies of a class action do not outweigh the complexities of individual claims in this instance, supporting other courts' decisions to deny class certifications in similar liability actions.

The excerpt addresses the inadequacies in the district court's decision to certify a nationwide class in the context of product liability for penile prostheses. It highlights the complexities of managing a single litigation encompassing various models, design changes, and unique plaintiff issues over twenty-two years, which would overwhelm the district court. The district judge disregarded the Judicial Panel on Multidistrict Litigation (JPML) finding that consolidated claims would not enhance efficient litigation management and that no judicial crisis warranted such consolidation.

Additionally, the excerpt emphasizes the significance of differing state laws on negligence, as mandated by Erie R.R. v. Tompkins, which necessitates that a federal court apply the relevant state common law rather than general federal law. The nuanced differences in state negligence laws complicate the potential for a uniform jury instruction, further arguing against class certification. The plaintiffs failed to demonstrate that common issues predominated over individual ones, and the district judge did not adequately identify these issues or justify their predominance. Furthermore, the judge improperly shifted the burden of proof regarding class certification to the defendants, contrary to established legal principles that require the party seeking certification to prove its case. Consequently, the certification was deemed improper.

The district judge asserts that any perception of improper burden shifting in class certification proceedings disregards the comprehensive review of memoranda and documentation conducted before the hearing. The judge's guidance aimed to refine the argument to critical issues, a common practice in oral arguments. However, the plaintiffs' submissions failed to substantiate their request for class certification, and the judge's findings merely echoed Rule 23 language without meaningful analysis. Consequently, the process effectively imposed the burden on defendants to disprove the plaintiffs' entitlement to class certification.

Defendant Pfizer contends that its due process rights were violated due to the hasty certification of the class, having been named a defendant only three days after service, leaving no time for it to respond or conduct discovery. Although Rule 23 mandates prompt certification decisions, it does not require rushed actions, especially when existing records are insufficient. The court should have postponed the decision to allow for adequate discovery regarding class action maintainability.

The plaintiffs failed to meet the essential criteria of Rule 23(a) and did not demonstrate the appropriateness of class treatment under Rule 23(b)(3). The district judge neglected to perform a "rigorous analysis" of these criteria, resulting in an abuse of discretion by overlooking procedural requirements. 

Further, the remaining Bendectin factors indicate that the petitioners lack other means of relief and would suffer irreparable harm if their petition is denied. Class certification can be reviewed on direct appeal after final case disposition, but a clearly erroneous certification can justify extraordinary relief via a writ.

Petitioners in Bendectin contended that the district judge improperly compelled them into a "non-opt out" class for settlement, which the court deemed caused irreparable harm not correctable through direct appeal, as the appeals court had already dismissed an interlocutory appeal of the certification order. The petitioners faced prejudice from having to divert efforts toward a settlement offer, despite prior trial preparations, and many would require new legal representation due to conflicts arising from differing plaintiff interests. The court identified clear errors by the lower court, notably its erroneous assumption that class certification was justified if some plaintiffs could potentially succeed while others could not. Crucially, the district court failed to conduct a necessary fact-finding inquiry regarding the existence of a limited fund to satisfy claims and did not allow petitioners to contest this issue, rendering the certification erroneous as a matter of law. Similar to the petitioners in Bendectin, the current petitioners could not pursue interlocutory review, and the district judge neglected to make requisite findings under Rule 23, significantly exceeding his jurisdictional bounds. The court expressed concern over the district judge's blatant disregard for judicial process and potential bias favoring class certification, concluding that the petitioners’ rights to fair process necessitated the issuance of a writ. The failures indicated a likelihood of ongoing judicial misconduct, paralleling the circumstances that warranted mandamus relief in Bendectin.

Concerns have been raised regarding the judge's decision to certify a nationwide class despite existing cases at more advanced litigation stages. While no strict rule mandates federal district courts to defer to each other, the principle of avoiding duplicative litigation is emphasized, drawing on precedents such as Colorado River Water Conservation District v. United States and Kerotest Mfg. Co. v. C-O-Two Fire Equipment Co. The certification orders could disrupt preexisting cases and waste judicial resources, which cannot be remedied on appeal. The document suggests that AMS' motion to dismiss or transfer venue should have been considered, as it might eliminate the need for class certification deliberation.

The fourth and fifth Bendectin guidelines assess whether the order is a recurring error or introduces significant legal issues. Although these criteria may conflict, proof of either, alongside evidence that the other guidelines are met, can justify issuing a writ. Despite the absence of evidence for the fourth guideline, the overall satisfaction of the remaining guidelines supports the writ's issuance. The orders from February 28 and March 16 demonstrate a disregard for federal rules, with previous similar class certifications by the same judge being noted. Despite a national trend against class certification in medical product liability cases, this case represents the fourth such certification in the Southern District of Ohio within three years, highlighting a pattern of abuse of discretion by the district judge. Thus, the court finds it appropriate to exercise its mandamus powers to prevent further significant errors in the application of the Federal Rules of Civil Procedure.

Strict adherence to Rule 23 is crucial in class actions involving products liability cases related to drug or medical products that require FDA approval. Although class actions may be appropriate in some contexts, the prerequisites of commonality and typicality are typically challenging to meet. The court emphasizes that class certification decisions are subject to mandamus review when there is a significant disregard for Rule 23's requirements. The district court's failure to comply with these strictures, especially in previous medical product liability decisions, justifies the issuance of a writ of mandamus, compelling the district judge to decertify the plaintiff class. The stakes in class actions are notably high, influencing both plaintiffs' decisions to pursue individual claims and defendants' potential liabilities. The petitions for writ of mandamus are granted based on the outlined factors, and the district judge is directed to take corrective action regarding class certification.

In August 1993, Mr. Vorhis underwent surgery to replace his second prosthesis from American Medical Systems, Inc. (AMS). Plaintiff Robert York, a Cincinnati resident, received an AMS 700 inflatable penile prosthesis in January 1990, which has since malfunctioned and fails to fully inflate. Plaintiff James Kennedy from Garden City, Georgia, was implanted with an AMS Ultrex inflatable penile prosthesis, which malfunctioned on June 6, 1993, due to leaking components; these were replaced on June 16, 1993. Plaintiff John W. Gordy of Rockville, Maryland, had an AMS Hydroflex prosthesis implanted around August 9, 1985, which failed in 1993, leading to the implantation of a Dynaflex prosthesis on February 1, 1993; as of March 1, 1995, this prosthesis is also malfunctioning, inflating only on one side.

The document outlines prerequisites for a class action, including numerosity, common questions of law or fact, typicality of claims among class members, and adequacy of representation. A class action can proceed if these conditions are met and if common questions predominate over individual issues, with considerations for the interests of class members, existing litigation, forum preferences, and management challenges. The amended complaint raises several common legal questions, including the defects and dangers of inflatable penile implants, potential misrepresentations by the defendants to the FDA, the medical community, and the public, as well as issues of strict liability for injuries to class members.

Key issues include whether the penile implants were improperly designed, whether design defects existed when the Defendant introduced the implants into commerce, and whether these defects caused specific problems. The inquiry also encompasses the unreasonableness of the implants' danger due to defects, along with potential negligence by the Defendant in several areas: testing, design, material selection, failure to warn Plaintiffs about dangers, and failure to eliminate known risks. The document emphasizes the Defendant's conduct in researching, designing, marketing, manufacturing, and selling the implants, framing these actions as central to the case. It asserts that common law and fact questions persist among potential class members, all of whom suffered injuries from the same defective product due to the Defendant's uniform conduct. The argument for class certification hinges on the existence of these common issues, suggesting that a finding against the Defendant for negligence or intentional wrongdoing would significantly advance the litigation. The Plaintiffs’ claim that the Defendant's representation to the FDA about the implants' "substantial equivalence" establishes commonality is disputed, referencing the legal standards for demonstrating substantial equivalence under U.S. law. The Defendant's response included a declaration from a Development Engineering Manager detailing the evolution of various implant models since 1973, reinforcing the argument against the claims of commonality.

Carney Carlson, Director of Marketing at AMS, testified that the company has produced approximately eleven models of prostheses since 1973. Plaintiffs allege that the defendants misrepresented implant failures to the FDA, medical providers, and class members, citing FDA findings from 1988 and 1989 indicating non-compliance with reporting regulations and a policy of withholding failure information from the medical community. AMS countered with a declaration from Dr. Terrence R. Malloy, asserting no common complications associated with its penile prostheses. Under 28 U.S.C. 1407(a), civil actions with common factual questions may be transferred for coordinated pretrial proceedings, promoting convenience and efficiency. The petitioners argued the lower court did not adequately determine Vorhis as a suitable class representative, although the court had issued orders suggesting that adding other plaintiffs could resolve representation issues. The plaintiffs sought certification under Rule 23(b)(1)(A), but failure to meet Rule 23(a) requirements meant that this was unnecessary to consider. Petitioners referenced a Seventh Circuit case where a mandamus petition vacated a nationwide class certification for hemophiliacs due to significant risks to defendants, though this reasoning was not applied in the current ruling. The district judge expressed reluctance towards class actions, citing their complexity and the challenges they pose in decision-making regarding large groups.

The court expressed concerns about the financial disparities between plaintiffs and the American Medical System, emphasizing that individual plaintiffs often lack the resources to compete effectively against well-funded defendants, thereby necessitating class actions for equitable representation. The district judge noted that class certification was conditional and could be revoked, but asserted that conditional certification should not exempt the court from thoroughly assessing whether the certification criteria are met at that time. There were doubts regarding the seriousness of future considerations on class certification due to the judge's dismissive approach. Additionally, the involvement of the same counsel in multiple class actions raised suspicions of forum shopping. The court referenced several past cases related to class certification and decertification, highlighting a range of product liability issues and the importance of common questions in class action lawsuits. The excerpt also cites a specific case where a class was certified for individuals harmed by a single product, indicating a careful approach to certification criteria.