[co-author: Inikki Mitchell and Shane Sanderson]

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

Inside this issue:

• The Phantom-Case Menace: Managing the Use of AI in Court Filings
• Piercing the Shield and Blunting the Sword: A Fourth Circuit Appeal Challenges Whether Courts Should Protect Made-for-Litigation Studies
• “Industry Standards” Not a Defense in Design Defect Cases, Says Pennsylvania Supreme Court in Plurality Opinion
• Draft Report by the Agency for Toxic Substances and Disease Registry Won’t Be Produced in Camp Lejeune Litigation
• EPA’s Progress Report on PFAS Previews its Continued Regulatory Focus
• Product Liability Litigation and the Judicial Panel on Multidistrict Litigation: A Year in Review

Hot Topics

The Phantom-Case Menace: Managing the Use of AI in Court Filings

Last summer, we noted caution regarding two parallel ways generative AI tools are impacting courtroom practice: (1) lawyers using generative AI and unwittingly citing non-existent cases; and (2) courts responding by imposing limits on the use of AI. As we predicted, both trends have continued.

Joining the New York lawyers who we discussed last year is a Colorado practitioner who drafted a motion with the help of ChatGPT, which cited cases whose existence and accuracy the lawyer did not verify. That lawyer also failed to inform the court after he realized that ChatGPT generated fictitious legal authority. Upon the court’s discovery, the lawyer first pointed the finger at a legal intern and later explained that his unverified use of ChatGPT was the source of the phantom cases. The Colorado Supreme Court suspended that lawyer from practice for a year.

Former Trump counsel Michael Cohen likewise submitted AI generated legal cases from Google Bard to his lawyer, who in turn included them in a New York federal court filing. Cohen subsequently averred to the court that he mistakenly believed that Google Bard was a “super-charged search engine” and did not “appreciate its unreliability as a tool for legal research.” Cohen also contended that because he is not a practicing lawyer, he had “no concept of the risks” involved with using AI as a legal research tool. The court has yet to determine whether sanctions will be imposed.

A growing list of judges have issued standing orders that direct litigants to disclose if their documents were AI generated. If so, those documents, including citations and legal analysis, must undergo human review and approval for accuracy. The Fifth Circuit is the first federal appellate court contemplating a similar court-imposed AI accuracy check, which would be implemented through an amendment to its certificate of compliance. Failure to accurately disclose AI use or misuse of AI may result in sanctions.

Last week, the Second Circuit emphasized that “such a rule is not necessary” to ensure that counsel provide accurate information to the court. There, a lawyer cited a phantom case in a reply brief to the Second Circuit. That case was provided by ChatGPT, the lawyer apparently did not verify its existence, and was unable to provide a copy of the case when ordered to do so. While the lawyer argued that it would be prudent for the court to advise litigants to exercise caution with this new technology, the court reminded counsel that the Federal Rules of Civil Procedure and related rules already require claims, defenses, and other legal contentions to be properly supported, nonfrivolous, and legally tenable. The lawyer was referred by the Second Circuit to the Court’s Grievance Panel.

Lawyers can avoid becoming an AI headline by:

· Verifying substantive information provided by a generative AI tool;

· Notifying the court and relevant parties immediately if a phantom case was cited; and

· Complying with applicable policies on generative AI use.

Takeaway: Improper use of AI tools in legal research continues to produce non-existent, phantom cases, prompting courts to consider stricter regulations and accuracy checks on AI generated documents. Caution and verification are required when using these tools.

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Piercing the Shield and Blunting the Sword: A Fourth Circuit Appeal Challenges Whether Courts Should Protect Made-for-Litigation Studies

A Fourth Circuit appeal, Peninsula Pathology Associates v. American International Industries, No. 23-1972 (4th Cir. filed Sep. 18, 2023), asks whether a party can seek discovery into a study that it suspects is a ploy to put the allegations of other plaintiffs before a jury. Peninsula stems from a plaintiff who alleges that he developed mesothelioma because of exposure to asbestos in cosmetic talc products. Gref v. Am. Int’l Indus., No. 1:20-cv-05589 (S.D.N.Y. filed July 20, 2020). The plaintiff’s experts relied on a study by other plaintiff-side expert witnesses to support causation. The study, a case series based on discovery from talc-asbestos lawsuits, reports that 75 anonymized individuals developed mesothelioma from cosmetic talc, which was alleged to be their only potential exposure to asbestos.

The Gref defendant, American International Industries (“A-I-I”) subpoenaed the experts’ employer, Peninsula Pathology Associates, for, among other things, the names of the 75 individuals. However, the district court quashed the subpoena, citing the article’s “minimal relevance” and the undue burden of the subpoena on the third party—in particular, the risk of violating indeterminate “medical ethics rules” regarding privacy rights. Peninsula Pathology Assocs. v. Am. Int’l Indus, No. 4:22-MC-1, 2022 WL 19574484, at *3 (E.D. Va. Dec. 23, 2022), aff’d sub nom. In re Subpoena for Documents Issued to Peninsula Pathology Assocs., No. 4:22MC1, 2023 WL 6192772 (E.D. Va. Aug. 14, 2023).

On appeal, A-I-I contends that the article is “particularly critical” evidence for the Gref plaintiff’s case, as it seeks to “fill the gap left by the complete dearth of epidemiological studies regarding end users of cosmetic talc and mesothelioma.” Opening Brief for Appellant at 22, 29, Peninsula Pathology Assocs. v. Am. Int’l Indus., No. 23-1972 (4th Cir. Dec 13, 2023). A-I-I also notes the low burden of providing 75 names and the absence of ethical concerns, since each individual voluntarily put their health information at issue in public case filings, waiving any privacy right. Id. at 24, 35–36.

Notably, A-I-I has encountered this litigation strategy before. In Bell v. American International Industries, a subpoena response identified Betty Bell, the plaintiff, as a participant in a similar anonymous case series. 627 F. Supp. 3d 520 (M.D.N.C. 2022). Contrary to the study’s premise of talc as the sole purported asbestos exposure, Ms. Bell had previously sworn that she was exposed to asbestos at her job. Id. at 525 n.2, 531. Thus, the inclusion of an individual with an alternate asbestos exposure led the Bell court to question the study’s credibility. Id. at 530.

While litigation-driven science is not new, Peninsula tests whether purported scientific “studies” based entirely on litigation discovery and testimony can be used as a sword to bolster a plaintiff’s claim, while their premises and findings are simultaneously shielded from legal scrutiny.

Takeaway: The Fourth Circuit will decide if a party may examine the underlying facts of a made-for-litigation study where an expert relies on that study in separate litigation.

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“Industry Standards” Not a Defense in Design Defect Cases, Says Pennsylvania Supreme Court in Plurality Opinion

The Pennsylvania Supreme Court recently held in Sullivan v. Werner Co., 2023 WL 8859656 (Pa. Dec. 22, 2023) that evidence of a manufacturer’s compliance with industry or government standards is inadmissible as a defense in Pennsylvania under the risk-utility test in strict liability cases. Plaintiff Sullivan was working atop a scaffolding unit when it collapsed, causing him to fall and suffer various injuries, and Plaintiff alleged that design of the scaffolding was defective. Defendant Werner Company, a manufacturer of the scaffolding, sought to introduce into evidence industry and government standards for scaffolding, arguing that the evidence was relevant to the question of whether the product design was “unreasonably dangerous”—a core inquiry in design defect cases. Id. at *3.

In a three-justice plurality opinion, the Court disagreed. The inquiry in a design defect case, the Court explained, is whether the product itself is defective. Compliance evidence “diverts attention from the product’s attributes both to the manufacturer’s conduct and whether a standards-issuing organization would consider the product to be free from defects.” Id. at *11. It does not “prove any characteristic of the product.” Id. In other words, the Court’s view was that compliance evidence is not relevant to a design defect claim because it does not bear on whether a product is defective. The Court concluded that “[t]he focus in a design defect case must remain on the product and not on the manufacturer’s conduct.” Id. at *12.

As the dissent noted, plaintiffs may still be able to point to a manufacturer’s noncompliance with industry standards to show that a product is unsafe. Id. at *19. Because the plurality opinion did not address this issue, it could be read to leave intact plaintiffs’ right to introduce noncompliance evidence, which would put the parties on unequal footing in design defect cases brought under Pennsylvania law.

The scope and impact of the decision remains to be seen, however. For example, the plurality opinion described compliance evidence as inadmissible only “under the risk-utility test.” Id. at *9. But plaintiffs may prove breach of duty in design defect cases through the risk-utility test or the consumer expectations test. Id. at *10. Moreover, because it is only a plurality opinion, the holding—and the weight lower courts afford it—may be limited. See Commonwealth v. Bethea, 828 A.2d 1066, 1073 (Pa. 2003) (“When a court is faced with a plurality opinion, usually only the result carries precedential weight; the reasoning does not.”). Finally, plaintiffs in Pennsylvania can choose to pursue a design defect claim under either a strict liability or negligence theory, and compliance evidence should still be admissible in negligence cases.

Takeaway: Manufacturers may be precluded from using evidence of their compliance with industry or government standards as a defense in design defect cases applying the risk-utility test under Pennsylvania law.

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

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Environmental Edit

Draft Report by the Agency for Toxic Substances and Disease Registry Won’t Be Produced in Camp Lejeune Litigation

Plaintiffs in In re: Camp Lejeune Water Litigation were unsuccessful in a recent attempt to compel production of a draft Cancer Incidence Study (“CIS”) by the Agency for Toxic Substances and Disease Registry (“ATSDR”), a federal public health agency. The litigation involves more than 1,000 lawsuits filed against the United States under the Camp Lejeune Justice Act in the Eastern District of North Carolina regarding alleged harm from exposure to water at Camp Lejeune. In Re: Camp Lejeune Water Litigation, No. 7:23-CV-897, 2023 WL 8791671, at *1 (E.D.N.C. Dec. 19, 2023). The draft CIS at issue was “undertaken to determine whether residential workplace exposures to the drinking water contaminants at Camp Lejeune are associated with increased risks of specific cancers in Marines/Navy Personnel and civilian employees.” Id. (internal citations omitted). Plaintiffs argued it should be produced even though the CIS was still undergoing the process of peer review, which is required under the ATSDR authorizing statute. Id.

The court denied plaintiffs’ motion to compel, holding that the draft CIS was covered by the deliberative process privilege, which “protects documents reflecting advisory opinions, recommendations and deliberations comprising part of a process by which governmental decisions and policies are formulated.” Id. at *2 (internal citations omitted). Plaintiffs sought to circumvent this privilege by also seeking “data files containing ATSDR’s analyses of the data underlying the draft CIS.” Id. at *3 (internal citations omitted). While purely factual information is not protected by the deliberative process privilege, the data sought by Plaintiffs contained “analyses which reveal the agency’s deliberations” and are therefore intertwined with the protected deliberative material. Id. at *4. In addition, the court found the documents were “predecisional,” and the content could substantially change during the review process. Id.

The deliberative process privilege is “qualified,” and may be overcome by “the existence of a sufficient need for the information that outweighs any harm from its production.” Id. Here, the court held that while the documents were relevant, “the public interest in both maintaining the integrity of ATSDR’s peer review procedure and avoiding the damage resulting from premature release of any draft CIS outweighs Plaintiffs’ need.” Id. at *2, *4-6 (internal citations omitted). The court expressed concern about the “integrity of the scientific review process” and noted that production of an incomplete CIS could result in “public confusion,” and could “undermine the public’s trust in and credibility of ATSDR’s scientific products.” Id. at *6.

Takeaway: Motions to compel public health agency documents will be carefully scrutinized, particularly to ensure the integrity of the scientific review process and in situations where producing draft documents could cause greater confusion than the clarity they provide.

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EPA’s Progress Report on PFAS Previews its Continued Regulatory Focus

At the end of 2023, EPA released the Second Annual Progress Report regarding its Strategic Roadmap on per- and polyfluoroalkyl substances (“PFAS”). EPA outlined the milestones it has already met, including a framework for evaluating new PFAS and new uses of existing PFAS, as well as its expected activity for 2024. This forthcoming activity includes finalizing proposed regulations that are likely to have significant impacts, as well as proposing new regulations.

Specifically, EPA anticipates finalizing its enforceable national drinking water standards for six PFAS in early 2024. Those standards, originally proposed in March 2023, will require public water systems to monitor for any exceedances of Maximum Contaminant Levels (“MCLs”). The proposed MCLs are lower than many state-level MCLs and may lead those states to match the new federal MCLs. Early in 2024, EPA also expects to take final action to list perfluorooctanoic acid (“PFOA”) and perfluorooctanesulfonic acid (“PFOS”) as hazardous substances under the Comprehensive Environmental Response, Compensation, and Liability Act (“CERCLA”). If finalized, the rule would broaden EPA’s authority in significant ways including to direct potentially responsible parties to investigate and remediate sites where PFAS have been found. The designation may also lead to additional litigation.

EPA has also received public comments on whether it should include PFAS as a pollutant under its Air Emissions Reporting Requirements, which would require reporting of PFAS air emissions over 100 pounds. EPA will decide whether to include PFAS in this regulation by mid-2024. Further, in 2024 the Agency will invite public comments on its risk assessments for PFOA and PFOS in biosolids. EPA has previously indicated that the risk assessment could result in “numerical limitations and best management practices for these compounds” if EPA determines that their presence in biosolids “may adversely affect public health or the environment.”

EPA also previewed other notable activities, including listing certain PFAS as “hazardous constituents” under the Resource Conservation and Recovery Act (“RCRA”). Progress Report at 8. RCRA empowers EPA with “cradle to grave” control over solid waste containing hazardous constituents. Thus, the proposed regulation may lead to broader enforcement authority to mandate inspections, testing, compliance orders, and penalties in connection with investigation and cleanup activities.

EPA’s progress report further illuminates the “whole of government approach” it is taking with respect to PFAS. Progress Report at 11. That approach includes collaborating with states and local communities through various workshops and partnerships focused on subjects such as communications with citizens about PFAS and management of PFAS in biosolids.

Takeaway: EPA’s Second Annual Progress Report on its PFAS Strategic Roadmap signals the Agency’s continued focus on PFAS over the next calendar year, including finalizing proposed regulations, issuing new ones, and requesting public comments from stakeholders.

Learn more about PFAS developments, including EPA’s regulatory activity, on Dechert’s PFAS website.

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MDL Minute

Product Liability Litigation and the Judicial Panel on Multidistrict Litigation: A Year in Review

As we reported last year, the downward trend in the overall number of multidistrict litigations (“MDLs”) continued in 2023, dropping from 171 active litigations at the start of 2023 to 167 as of January 2024. But product liability litigation continues to comprise a significant portion of active MDL litigations, accounting for approximately 40% of pending MDLs in 2022 and 2023.

In 2023, the Judicial Panel on Multidistrict Litigation (“JPML”) considered 29 MDL petitions and granted approximately two thirds of those petitions, including five of the six petitions involving product liability litigations. For the product liability litigations that were centralized in 2023, the JPML concluded that centralization would be convenient for the parties and witnesses, avoid duplicative discovery, prevent inconsistent pretrial rulings, and streamline pretrial proceedings. In each of the five granted petitions, the venue determined by the JPML was preferred for at least one of the parties:

• In re: Hair Relaxer Marketing, Sales Practices, and Products Liability Litigation; MDL No. 3060 formed in N.D. Illinois before Judge Mary M. Rowland. Both parties listed the N.D. Illinois as one of their preferred venues, and while Judge Rowland does not have MDL experience, she was already presiding over two of the cases that ultimately ended up in that MDL.
• In re: Generac Solar Power Systems Marketing, Sales Practices and Products Liability Litigation; MDL No. 3078 formed in E.D. Wisconsin before Judge Lynn S. Adelman, an experienced MDL judge. Defendant and one of the plaintiffs listed the E.D. Wisconsin (where Defendant is headquartered) as one of their preferred venues.
• In re: Tepezza Marketing, Sales Practices, and Products Liability Litigation; MDL No. 3079 formed in N.D. Illinois before Judge Thomas M. Durkin, who has not previously presided over an MDL. Defendants and most plaintiffs listed the N.D. Illinois as one of their preferred venues, and the majority of actions (including the first-filed action) were already pending in the Northern District of Illinois.
• In re: Bard Implanted Port Catheter Products Liability Litigation; MDL No. 3081 formed in D. Arizona before Judge David G Campbell. Defendants listed the D. Arizona as a preferred venue, where Judge Campbell is currently presiding over another MDL involving a different Bard product.
• In re: Future Motion, Inc. Products Liability Litigation; MDL No. 3087 formed in N.D. California before Judge Beth Labson Freeman, an experienced MDL judge. Some plaintiffs listed N.D. California as their preferred venue, though the remaining plaintiffs and defendants did not. Notably, Future Motion’s headquarters and manufacturing facility are located within this district and related claims against Future Motion are pending in coordinated proceedings in California state court.

The JPML heard seven MDL petitions on January 25, 2024. Two of the pending petitions involve product liability litigation, In re Suboxone (Buprenorphine/Naloxone) Film Marketing, Sales Practices and Product Liability Litigation; MDL No.3092, and In re Glucagon-like Peptide-1 Receptor Agonists (GLP-1 RAs) Products Liability Litigation; MDL No. 3094.

Takeaway: Although the number of overall MDLs continues to decline, the JPML continues to grant a majority of the petitions put before it, including those involving product liability claims. We expect similar trends to hold in 2024.