Hayes v. Actavis, Inc. (In re Watson Fentanyl Patch Prods. Liab. Litig.), Case Nos. 12 C 6296

• Decision Date: 27 August 2013
• Docket Number: 13 C 3366.,Case Nos. 12 C 6296,MDL No. 2372.
• Citation: 977 F.Supp.2d 885
• Parties: In re WATSON FENTANYL PATCH PRODUCTS LIABILITY LITIGATION. Steven Hayes, et al., Plaintiffs, v. Actavis, Inc., f/k/a Watson Pharmaceuticals, Inc., et al., Defendants.
• Court: U.S. District Court — Northern District of Illinois

977 F.Supp.2d 885

In re WATSON FENTANYL PATCH PRODUCTS LIABILITY LITIGATION.Steven Hayes, et al., Plaintiffs,

v.Actavis, Inc., f/k/a Watson Pharmaceuticals, Inc., et al., Defendants.

Case Nos. 12 C 6296, 13 C 3366.

MDL No. 2372.

United States District Court,

N.D. Illinois,

Eastern Division.

Aug. 27, 2013.

Michael E. Heygood, Heygood, Orr & Pearson, Dallas, TX, for Plaintiffs.

Jeffrey Daniel Geoppinger, Ulmer & Berne LLP, Cincinnati, OH, for Defendants.

MEMORANDUM OPINION AND ORDER

MATTHEW F. KENNELLY, District Judge:

This Court is presiding over coordinated pretrial proceedings in related product liability cases against Watson Pharmaceuticals, Inc. (now known as Actavis, Inc.) and various related entities, pursuant to an order by the Judicial Panel on Multidistrict Litigation entered under 28 U.S.C. § 1407. This decision concerns one of those cases, Hayes v. Actavis, Inc.

Background

The overwhelming majority of the cases that compose the MDL proceeding were filed by a single law firm, Heygood, Orr & Pearson of Dallas, Texas. All of the cases brought by the Heygood firm have ended up with negotiated settlements. That includes the Hayes case, which is a wrongful death suit. The parties dispute whether the settlement in the Hayes case requires court approval, and if so by what court. This boils down to a dispute over what state's law applies.

The deceased, Eric Hayes, was an Ohio resident who died in Ohio. The fentanyl patch that allegedly caused his death was prescribed, purchased, and applied in Ohio. The beneficiaries who are the named plaintiffs in this lawsuit are Ohio citizens and residents. The defendants are Delaware and Nevada corporations with their principal places of business in Utah (Watson Laboratories—Delaware), New Jersey (Watson Pharma), and California (Watson Laboratories—Nevada). It appears that the fentanyl patch that Hayes used was designed and manufactured in Utah (with, potentially, some design activity in California) and was distributed by Watson Pharma, whose principal place of business is in New Jersey. Watson Nevada holds the FDA approval for the patches. Plaintiffs' claim involves allegations of manufacturing and design defects.

The present case was brought by Steven Hayes, Lara Hayes, and “August LaPlante, as the guardian ad litem for Lilium Hayes, a minor.” It was filed directly in this district, initially assigned at random to another judge, and then transferred to the undersigned judge as related to the pending MDL proceeding.

The present case is one of a handful of cases that originated in other districts but were directly filed here pursuant to an agreed-upon procedure, common in MDL product liability cases, that the Court approved. The Court's approval of direct filing of non–Illinois cases came about as the result of a request by the parties contained in a status report they filed on April 23, 2013. By that point, settlement negotiations involving nearly all of the cases brought by the Heygood firm were quite advanced or had been completed.

The April 23, 2013 status report included the following statement:

There are a few claims (less than 5) where formal lawsuits had not yet been filed before a settlement was reached although, for various reasons, the settlement still requires court approval (i.e. the claims settled before the lawsuit was filed and transferred to the MDL but still need court approval of the proposed settlement). Since these cases are unfiled, counsel for the parties to the settlements have been discussing where these court approvals should take place. These discussions are still ongoing. However, the parties have agreed that, in certain cases, assuming such is acceptable with this Court, a new lawsuit will be filed in the Northern District of Illinois and, upon transfer to Judge Kennelly, motions for approval of those settlements and corresponding papers will be filed with this Court. For any of the unfiled cases that may fall in this category, the parties anticipate having such unfiled cases filed in the Northern District of Illinois within the next 2 weeks.

Joint Status Report (dkt. no. 28) at 3. Following receipt of the status report, the Court entered an order permitting the parties to file the handful of settled but not-yet-filed cases in this district. See Order of Apr. 23, 2013 (dkt. no. 29).

The plaintiffs in the present case thereafter filed the case in this district and then moved for approval of the settlement. Defendants objected, saying that Ohio law applies and that Ohio law requires approval of the settlement by an Ohio probate court. Plaintiffs contend that California supplies the applicable law and that California law permits the court in which a wrongful death suit is filed to approve a settlement. Plaintiffs argue alternatively that even if Ohio law applies, it permits this Court to approve the settlement in the present case.¹

Discussion

The parties agree that the settlement requires court approval and that state law governs the question of approval. Some states require court approval of settlements of wrongful death cases; some require approval of settlements of cases involving minors, and some require both. Ohio, in particular, requires approval by an Ohio probate court.

Both parties begin their analysis of the choice of law issue with Illinois law, which both sides contend supplies the applicable choice of law rules. That would, in fact, be the usual rule: a federal district court sitting in diversity applies the forum state's choice-of-law rules. Klaxon Co. v. Stentor Elec. Mfg. Co., 313 U.S. 487, 496, 61 S.Ct. 1020, 85 L.Ed. 1477 (1941). But unlike the usual case filed in this district, the present case has no connection with Illinois other than the fortuity that the JPML authorized an MDL proceeding to take place here, supervised by the undersigned judge. Illinois is essentially an artificial forum created for purposes of convenience and efficiency. That is doubly true for the present case, which was filed here only by virtue of a court-approved direct-filing procedure whose sole purpose was to maximize convenience and save the parties' and judicial resources.

Given these circumstances, it would not make a great deal of sense to apply Illinois law in this case, or even Illinois' choice of law rules. Indeed, the prevailing rule in this situation is that in a case that was directly filed in the MDL transferee court but that originated elsewhere, the law (including the choice of law rules) that applies is the law of the state where the case originated. See, e.g., In re Yasmin and Yaz (Drospirenone) Marketing, Sales Practices and Prods. Liab. Litig., MDL No. 2100, No. 3:09–md–02100–DRH–PMF, 2011 WL 1375011, at *5 (S.D.Ill. Apr. 12, 2011); In re Bausch & Lomb Inc. Contacts Lens Solution Prods. Liab. Litig., MDL No. 1785, 2007 WL 3046682, at *3 (D.S.C. Oct. 11, 2007) (noting that “it would be an odd result to subject plaintiffs to [the law of the MDL forum] simply because they took advantage of the direct filing procedure—a procedure that provides benefits to all parties and preserves judicial resources”). The Court agrees with the cases just cited and concludes that the choice of law rules that apply are those of the state where the case originated. Cf. In re Temporomandibular Joint (TMJ) Implants Prods. Liab. Litig., 97 F.3d 1050, 1055 (8th Cir.1996) (“When considering questions of state law ..., [an MDL] transferee court must apply the state law that would have applied to the cases had they not been transferred for consolidation.”).

This, however, leads not to an answer but to another question: where did this case originate? Judge Herndon concluded in the In re Yasmin case, which like the present one involved product liability claims, that it was appropriate to treat a foreign direct-filed case as if it had been filed “in the state where the plaintiff purchased and was prescribed the subject [product].” In re Yasmin, 2011 WL 1375011, at *6. In the present case, that would indicate that Ohio law applies, as defendants contend.

Plaintiffs argue for the application of California law, pointing out that their complaint in the case relies on California's wrongful death statute. That argument is a non-starter. The Court is unaware of any choice of law principle, nor have plaintiffs identified one, that permits a plaintiff to choose the law that applies simply by picking it in his complaint. Plaintiffs do, however, have an alternative argument. They contend that the case could have been filed in California in the first place in view of the fact that one of the defendants has its principle place of business there (and perhaps for other reasons as well). Because plaintiffs evidently want Californialaw to apply, the Court thinks that it is fair to assume that had plaintiffs not been able to file the case directly in this district, they would have filed it in California and then sought transfer to this district.

Despite this, the Court concludes that Ohio law applies to the question under advisement. The Court reaches this conclusion by any of three independent routes. The first is the...