Johnson v. Smithkline Beecham Corp.
| Decision Date | 09 March 2015 |
| Docket Number | Civ. No. 11-5782 |
| Parties | GLENDA JOHNSON, et al. v. SMITHKLINE BEECHAM CORPORATION, et al. |
| Court | U.S. District Court — Eastern District of Pennsylvania |
MEMORANDUM
Special Master William T. Hangley has recommended that I impose sanctions on Hagens Berman Sobol Shapiro LLP for the firm's bad faith and dishonesty in litigating three products liability actions it brought against the manufacturers and distributors of thalidomide. Mr. Hangley found that Hagens Berman continued to prosecute the actions well after it knew they were baseless, time-barred, or both. Unfortunately, the firm's dishonesty in resisting sanctions and its Objections to Mr. Hangley's Report and Recommendation only confirm his findings. Accordingly, I will overrule the Objections and approve and adopt the Report. Pursuant to 28 U.S.C. § 1927 and the Court's inherent authority, I impose sanctions on the law firm of Hagens Berman Sobol Shapiro LLP.
I have previously set out the tortuous background of this litigation. See Johnson v. SmithKline Beecham Corp., ___ F. Supp. 3d ___, 2014 WL 5285943, at *1-4 (E.D. Pa. Oct. 16, 2014). Briefly, from 2011 to 2013, forty-nine Plaintiffs filed suit in Pennsylvania state court, alleging that some 50 years before, thalidomide caused them to suffer severe birth defects. Invoking diversity jurisdiction, Defendants removed all the cases, which were assigned to me and other Judges of this Court. The Third Circuit, upholding my refusal to remand, ruled that this Court had diversity jurisdiction. Johnson v. SmithKline Beecham Corp., 724 F.3d 337 (3dCir. 2013). All thalidomide cases were then consolidated before me for pretrial purposes. (Case No. 11-5782, Doc. No. 94.) During discovery, three additional Plaintiffs filed suit in this Court. All fifty-two Plaintiffs are represented by Hagens Berman and local counsel.
Given that Plaintiffs' injuries occurred in the late 1950s or early 1960s, Hagens Berman anticipated a statute of limitations affirmative defense, pleading with specificity that Defendants' fraudulent concealment respecting thalidomide's dangerousness had tolled the running of the limitations clock. Some Plaintiffs also invoked equitable tolling, alleging that they could not reasonably have discovered until very recently that thalidomide had caused their injuries.
Plaintiffs' claims were subject to a one- or two-year limitations period. See 42 Pa. Cons. Stat. § 5524(2), (7) (); id. § 5521(b) (). Defendants thus argued vigorously that they should not be compelled to defend against claims that were so obviously time-barred. Because I was obligated to accept Plaintiffs' allegations as true, however, I denied Defendants' dismissal motions, noting that "I cannot determine, at this early stage in the litigation, the viability of Plaintiffs'" tolling allegations. (Case No. 11-5782, Doc. No. 92.)
Defendants then made repeated attempts to discover when each Plaintiff knew or reasonably should have known that thalidomide had caused his or her birth defects. See generally Mest v. Cabot Corp., 449 F.3d 502, 510 (3d Cir. 2006) (); Fine v. Checcio, 870 A.2d 850, 859 (Pa. 2005) (). Defendants would likely have had greater success trying to nail butter to a tree. As I have described, Plaintiffs provided no responses, misleading "collective" responses, or absurd responses to these discovery efforts. See Johnson, 2014 WL 5285943, at *3-4.
After Defendants demonstrated that contrary to my Orders, several Plaintiffs had failed to produce highly probative evidence—including online posts that they have known for decades that thalidomide caused their birth defects—Defendants urged me to dismiss all Plaintiffs' Complaints with prejudice. (Doc. No. 232.) Once again, I declined to do so. Instead, on June 17, 2014, I proposed appointing Mr. Hangley to serve as Special Discovery Master pursuant to Rule 53. (Doc. No. 239); Fed. R. Civ. P. 53(b)(1). On June 26—after all Parties stated that they had no objection—I appointed Mr. Hangley. (Doc. No. 256.)
Plaintiffs' obstructive efforts notwithstanding, Defendants had obtained compelling evidence that the claims of several Plaintiffs were not viable. As Mr. Hangley described:
Less than two months after the Court's denial of the Rule 12(b)(6) motions, [D]efendants learned that several of the [P]laintiffs could not sue for the simple reason that they had already done that once; indeed, in at least one instance, a [P]laintiff was continuing to receive monthly settlement payments from a [D]efendant it was suing a second time for the same alleged tort.
(Report, Doc. No. 414, at 6, available at Johnson v. SmithKline Beecham Corp., No. 11-5782, 2014 WL 6851277 (E.D. Pa. Dec. 4, 2014).) To avoid the considerable expense of conducting discovery on meritless or time-barred claims, on March 26, 2014, GSK and Grünenthal urged Hagens Berman "to undertake a careful review of the claims it made in all these cases." (Doc. No. 310, Exs. 10-11.) For cases Plaintiffs agreed to dismiss before April 11, GSK and Grünenthal offered to bear their own costs. (Id.) For cases "which remain pending after thatdate," however, GSK and Grünenthal would "not agree to bear [their] own costs and . . . reserved [their] right[s] to seek both costs and attorneys' fees under all applicable rules and statutes." (Id.)
Hagens Berman did not agree to dismiss any case before April 11. On the contrary, as Mr. Hangley has described, the Parties engaged in "[m]assive" discovery, with over 130 depositions being taken. (Report at 8-9.) The evidence then produced—to which Hagens Berman had access before April 11—belied the claims of almost all Plaintiffs and often contradicted critical allegations in their Complaints. This was certainly true respecting the three Plaintiffs whose claims are the focus of Defendants' Sanctions Motions: Jack Merica, Lawrence Boiardi, and Roel Garza.
Mr. Merica alleged that Defendants' fraudulent concealment precluded him from learning until 2012 that thalidomide caused his birth defects. Discovery revealed, however, that:
(1) Plaintiff's mother told him in in the 1960s that thalidomide caused his injuries; (2) Plaintiff's mother told Plaintiff's doctors in the 1960s that thalidomide caused his injuries; (3) in the 1970s, Plaintiff asked his mother why she had not sued the doctor who prescribed thalidomide or the drug's manufacturer; (4) in 1983, Plaintiff filed a Social Security Disability application seeking benefits for thalidomide-caused injuries; (5) in 1990 or 1991, Plaintiff's mother gave him the bottle of thalidomide pills that she had taken while she was pregnant with him; (6) in 1992—"thirty seconds" into their first date— Plaintiff told his now-wife that thalidomide caused his birth defects; and (7) in 2000, Plaintiff gave an interview to WeMedia Magazine during which he stated that he had injuries caused by thalidomide.
(Case No. 11-5782, Doc. No. 265 at 1-2 (internal citations omitted).) Remarkably, although he pled that Defendants' misrepresentations precluded him from filing suit for some 50 years, atdeposition, Mr. Merica testified that he had never been misled by Defendants. (Doc. No. 245 at 12-13.)
Hagens Berman did not oppose Defendants' Motion for Summary Judgment. (Doc. Nos. 245, 263.) In dismissing Mr. Merica's Complaint on July 14, 2014, I ruled that "his claims are time barred under both the laws of Pennsylvania (where Plaintiff brought suit) and Virginia (where Plaintiff's mother was prescribed the thalidomide)." (Doc. No. 265 at 2.)
Like the other Plaintiffs, Mr. Boiardi alleged that his mother had ingested thalidomide during the critical period in utero. Discovery revealed that this was not true. Mr. Boiardi, who is adopted, admitted that his birth mother's medical records do not show that she took thalidomide. (Case No. 11-5782, Doc. No. 258 at 2-3 & Ex. 5.) Moreover, his birth mother—whom Hagens Berman did not contact before filing suit—denied taking any medicine during her pregnancy. (Id. at Ex. 2.) Once again, Hagens Berman did not oppose summary judgment. Rather, the firm voluntarily dismissed his claims on July 25, 2014. (Doc. Nos. 277, 285.)
Mr. Garza acknowledged at his June 18, 2014 deposition that he knew of nothing to support the allegation in his Complaint that his mother took thalidomide during her pregnancy with him. (Doc. No. 281 at 7-8.) Contrary to his equitable tolling allegations, he also acknowledged that he had suspected since his youth that his birth defects were caused by medication his mother took during pregnancy, but never investigated those suspicions. (Id. at 9-10.) After Defendants moved for summary judgment, Hagens Berman voluntarily dismissed Mr. Garza's claims with prejudice on August 14, 2014. (Doc. Nos. 317, 318.)
In July and August, 2014, the GSK Defendants and Grünenthal filed the instant Motions (in which Defendant Sanofi has not joined). (Doc. Nos. 258 (Boiardi), 281 (Garza), 310 (Merica).) Moving pursuant to 28 U.S.C. § 1927 and the Court's inherent authority, they asked me to sanction Hagens Berman—not its local counsel or Plaintiffs themselves—for the firm's bad faith prosecuti...
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