Friday, September 15, 2017

Equifax And The Long Legal Road In Data Breach Class Actions

Equifax, which knows more about you than your own mother, (1) failed to maintain its servers, (2) was hacked and lost sensitive personal data for 143 million people, (3) concealed that fact for months, (4) blamed another company for the problem, then (5) finally admitted it caused the problem. To make matters worse, after the hack but before disclosing it, three executives sold off nearly $2 million in Equifax stock.
“What should I do to protect myself?” is a difficult question to answer. The Federal Trade Commission put up a page recommending checking your credit reports, placing a credit freeze, placing a fraud alert, and filing your taxes early so that a scammer doesn’t file them for you and obtain your tax refund.
To call this situation “frustrating” would be an understatement. Virtually everyone with a credit history now bears the burden of making sure their own identity is safe due to Equifax’s negligence. People have already filed class-action lawsuits, and rightly so.
Data breaches are depressingly common. According to the Privacy Rights Clearinghouse, in 2016 alone, there were 397 publicly-disclosed hacking or malware breaching incidents. Every year, around 70 data breach security class actions are filed against companies ranging from email providers to health insurers to restaurants. The cases involve everything from medical information (which is among the most valuable on the black market) to email addresses to Social Security numbers.
It is no simple matter to sue a company for losing your sensitive personal information. The cases raise issues of standing, pleading, proximate causation, class certification, common-law tort limitations, state statute interpretation, and damages calculations that would send a law student running from the classroom and into the safety of the job as a barista (where their data would be stolen anyway, like in the Krottner case discussed below). That is also why this post is so long and filled with conflicting case law.
If you want the TL;DR (“too long; didn’t read”): the most likely outcome is that, after several years of difficult litigation and objections to settlements and appeals of those objections, Equifax will agree to better corporate security procedures, provide credit monitoring, identity theft insurance, and fraud resolution services, along with compensation for documented damages up to $10,000 and a modest cash payment in the realm of $50. The lawyers representing the consumers and the lawyers representing Equifax will spend hundreds of thousands of hours on the case. The lawyers for Equifax will probably make millions of dollars, paid monthly as they send their bills to Equifax, and the lawyers for the consumers will also probably make millions of dollars at a comparable hourly rate but paid at the very end of the case. (What I described above is essentially what happened in the Anthem data breach security litigation, the most comparable example we have to the Equifax situation.)
If this strikes you as absurd, you’re not alone. I think it’s absurd. I think Equifax should swiftly conduct an investigation, open its records to the plaintiffs’ lawyers and their experts, and then offer the settlement I described above. But I doubt they’ll do that. Instead, they will probably raise each and every objection they can, dragging out the litigation and driving up the hours that the plaintiffs’ lawyers have to put into the case, so that every single victory for consumers in the case, no matter how slight, will have to be hard won. I hope I’m wrong, but this is what past cases teach us. This post outlines some of the many fights that will arise in the case and explains how the eventual settlement of the case will likely look.

How Was Equifax Hacked?

For all the allure surrounding “zero day” exploits, in which a nefarious attacker discovers an unknown vulnerability in software, most computer security breaches are much more banal. Most unauthorized access involves either the use of phishing scams to trick people into revealing their passwords or known vulnerabilities in software that users or administrators failed to update in a timely manner. The Clinton campaign emails that were released by Wikileaks were obtained by way of a phishing scam directed at her campaign chairman, John Podesta. The WannaCry ransomware cryptoworm involved a known Windows vulnerability that had been patched two months before WannaCry was released. In the case of Equifax, the hack happened because Equifax failed to timely update its servers to correct a known vulnerability.
Equifax was hacked between May and July 2017, discovered the unauthorized access on July 29, 2017, then on September 7, 2017 revealed it had lost “names, Social Security numbers, birth dates, addresses and, in some instances, driver’s license numbers,” as well as “credit card numbers” and “dispute documents with personal identifying information.” Equifax first blamed the Apache Software Foundation by claiming the hack involved a previously-undisclosed vulnerability in the software, but then had to admit that the hack actually used a vulnerability that was already discovered and fixed by Apache in early March 2017. Equifax had simply not installed the security updates:

Over time, more information about the hack will be uncovered and disclosed. For example, why wasn’t the data encrypted or otherwise protected against an attack, and why was Equifax holding onto historical credit card data? After the breach, security researchers started poking around Equifax’s websites and noticed absurd problems, including a database protected by the account “admin” with the password “admin.” As it stands now, this already looks like textbook negligence. Equifax failed to do what millions of regular people do all the time: update their software to ensure that the latest security vulnerabilities have been patched.

How Many Equifax Lawsuit Have Been Filed?

More than thirty class actions have been filed so far, and it is likely that many more will be filed in the near future. Most of these will be filed in federal court, and a petition is already pending with the United States Judicial Panel on Multidistrict Litigation, a group of federal judges that decide whether or not all of the cases across the country in federal court should be “consolidated” into a single case for pretrial purposes. In all likelihood, that petition will be granted, just as it has been granted in prior data breach security litigations, including Ashley Madison, Anthem, Home Depot, Target, Zappos, and Sony.
That sort of consolidation is generally a good thing. It makes no sense to have multiple federal courts across the country all dealing with the same issues, which is wasteful and can create conflicting legal decisions. Consolidation also allows the court handling the cases to create a Plaintiffs’ Steering Committee, a group of court-appointed lawyers representing the consumers, so that there aren’t endless fights among different lawyers with different clients in different lawsuits. (I’m on two Plaintiffs’ Steering Committees in other litigations.)
That consolidation, however, would not affect class actions in state courts, so long as those class actions were not removed to federal court either because of the Class Action Fairness Act or because of a lack of personal jurisdiction over Equifax in states other than Georgia (where Equifax, Inc., is incorporated and where it has its principal place of business. (Don’t get me started on either of these issues, in my humble opinion they are both just ways to tilt the court system in favor of large corporate defendants.)

These Are Open-And-Shut Cases, Right?

Alas, no. Equifax, like every other corporate defendant that stupidly exposes your data to scam artists, has a multitude of defenses available thanks to years of anti-consumer court decisions.
I’ve written about class action lawsuits many times in the past, and how the courts have made it particularly difficult for any sort of consumer class action to succeed, like when the Supreme Court made it harder to certify class actions with Comcast v. Behrend. For this post, however, I will stick to privacy and data breach related cases.

Do You Have Standing To Sue Equifax For Losing Your Personal Information?

We start right at the top with the United States Supreme Court and Spokeo, Inc. v. Robins, a class action involving a “people search engine” that (allegedly) provided inaccurate information about people in violation of the Fair Credit Reporting Act (FRCA). In May 2016, the Supreme Court held that, to file a lawsuit (in legal jargon, to show standing) a plaintiff had to show an injury-in-fact by way of “concrete and particularized” injury that is “actual or imminent, not conjectural or hypothetical.”
The case was hailed by corporate defendants because it appeared to further limit the ability of consumers to bring class actions. Nonetheless, on August 15, 2017, the Court of Appeals for the Ninth Circuit released its new opinion in the case, finding that the plaintiff had indeed adequately alleged standing because the FCRA was meant to protect concrete interests and the alleged violations of it harmed those interests. We don’t know yet if the Supreme Court will review the case again and change the rules again.
The very first thing that defendants like Equifax argue is that consumers whose data was lost don’t have standing to sue for the loss of their data, because the threat of a future identity theft is not a “concrete and particularized” injury-in-fact that is “actual or imminent.” Some legal commentators and courts have said that the Circuit Courts have developed a split over this issue, with some courts finding standing and other courts denying it, but I’m not so sure. I think a close look at the facts of each case reveals several patterns:

  • Krottner v. Starbucks Corp., 628 F.3d 1139, 1142–43 (9th Cir. 2010) (finding standing for employees’ increased risk of future identity after theft of a laptop containing the unencrypted names, addresses, and social security numbers of 97,000 Starbucks employees)
  • Reilly v. Ceridian Corp., 664 F.3d 38, 40, 44 (3d Cir. 2011) (plaintiff-employees’ increased risk of identity theft theory too hypothetical and speculative to establish “certainly impending” injury-in-fact after unknown hacker penetrated payroll system firewall, because it was “not known whether the hacker read, copied, or understood” the system’s information and no evidence suggested past or future misuse of employee data or that the “intrusion was intentional or malicious”).
  • Katz v. Pershing, LLC, 672 F.3d 64, 80 (1st Cir. 2012) (brokerage account-holder’s increased risk of unauthorized access and identity theft theory insufficient to constitute “actual or impending injury” after defendant failed to properly maintain an electronic platform containing her account information, because plaintiff failed to “identify any incident in which her data has ever been accessed by an unauthorized person”)
  • Remijas v. Neiman Marcus Grp., 794 F.3d 688, 693 (7th Cir. 2015)(finding standing for a claim based on the risk of future identity theft, noting, “Why else would hackers break into a … database and steal consumers’ private information? Presumably, the purpose of the hack is, sooner or later, to make fraudulent charges or assume those consumers’ identities.”)
  • Galaria v. Nationwide Mut. Ins. Co., No. 15–3386, 663 Fed.Appx. 384, 387–89, 2016 WL 4728027 (6th Cir. Sept. 12, 2016) (finding standing for consumers’ increased risk of future identity theft because “[t]here is no need for speculation where Plaintiffs allege that their data has already been stolen and is now in the hands of ill-intentioned criminals”)
  • In re Horizon Healthcare Servs. Inc. Data Breach Litig., 846 F.3d 625, 641 (3d Cir., January 20, 2017)(In a case involving the theft of two laptops from a health insurer which contained personally identifiable information and protected health information, “Our precedent and congressional action lead us to conclude that the improper disclosure of one’s personal data in violation of FCRA is a cognizable injury for Article III standing purposes.”)
  • Beck v. McDonald, 848 F.3d 262, 277 (4th Cir., Feb. 6, 2017), cert. denied sub nom. Beck v. Shulkin, 137 S. Ct. 2307 (2017)(“We acknowledge that the named plaintiffs have been victimized by at least two admitted data breaches. … But absent a sufficient likelihood that Plaintiffs will again be wronged in a similar way these past events, disconcerting as they may be, are not sufficient to confer standing to seek injunctive relief.” Internal quotations omitted).
  • Attias v. Carefirst, Inc., 865 F.3d 620, 628 (D.C. Cir. August 1, 2017)(finding standing because “an unauthorized party has already accessed personally identifying data on CareFirst’s servers, and it is much less speculative—at the very least, it is plausible—to infer that this party has both the intent and the ability to use that data for ill.”)

As the Eighth Circuit held in a data breach security case just two weeks ago, “These cases came to differing conclusions on the question of standing. We need not reconcile this out-of-circuit precedent because the cases ultimately turned on the substance of the allegations before each court.” In re SuperValu, Inc., No. 16-2378, 2017 WL 3722455, at *4 (8th Cir. Aug. 30, 2017)(finding standing for plaintiffs whose identity had been stolen, but denying standing for others because, among other reasons, “the allegedly stolen Card Information does not include any personally identifying information, such as social security numbers, birth dates, or driver’s license numbers.”)
The Beck case decided earlier this year explains the differences between the outcomes:

Underlying the cases are common allegations that sufficed to push the threatened injury of future identity theft beyond the speculative to the sufficiently imminent. In GalariaRemijas, and Pisciotta, for example, the data thief intentionally targeted the personal information compromised in the data breaches. Galaria, 663 Fed.Appx. at 386, 2016 WL 4728027, at *1 (“[H]ackers broke into Nationwide’s computer network and stole the personal information of Plaintiffs and 1.1 million others.”); Remijas, 794 F.3d at 694 (“Why else would hackers break into a store’s database and steal consumers’ private information?”); Pisciotta, 499 F.3d at 632 (“scope and manner” of intrusion into banking website’s hosting facility was “sophisticated, intentional and malicious”). And, in Remijas and Krottner, at least one named plaintiff alleged misuse or access of that personal information by the thief. Remijas, 794 F.3d at 690 (9,200 of the 350,000 credit cards potentially exposed to malware “were known to have been used fraudulently”); Krottner, 628 F.3d at 1141 (named plaintiff alleged that, two months after theft of laptop containing his social security number, someone attempted to open a new account using his social security number).

Here, the Plaintiffs make no such claims. This in turn renders their contention of an enhanced risk of future identity theft too speculative. On this point, the data breaches in Beck and Watson occurred in February 2013 and July 2014, respectively. Yet, even after extensive discovery, the Beck plaintiffs have uncovered no evidence that the information contained on the stolen laptop has been accessed or misused or that they have suffered identity theft, nor, for that matter, that the thief stole the laptop with the intent to steal their private information.

Beck v. McDonald, 848 F.3d 262, 274 (4th Cir. 2017). That is to say, the mere possibility that maybe someone could have taken the sensitive personal information is not enough. But where it appears that sensitive personal information was actually accessed, particularly where the circumstances suggest a motive to use the information improperly, there is standing to bring a claim relating to the threat of future identity theft.
In the Equifax case, hackers broke into the database for a company in the business of possessing and using personally identifiable information and obtained “names, Social Security numbers, birth dates, addresses and, in some instances, driver’s license numbers,” as well as “credit card numbers” and “dispute documents with personal identifying information.” That would likely be sufficient to confer standing on plaintiffs who allege the threat of future identity theft under any of the above cases.
Ironically, the only Circuit Court that doesn’t seem to have grappled with this issue much is the Eleventh Circuit, which is the appellate court for the Northern District of Georgia, the federal court where Equifax is based, and where the current petitions for consolidation have argued the cases should be heard for pre-trial purposes. The closest they came to the issue was Resnick v. AvMed, Inc., 693 F.3d 1317 (11th Cir. 2012), which found standing for plaintiffs who had already been victims of identity fraud. There’s a good chance, however, that the Eleventh Circuit will rule on these issues before the Equifax case reaches them, because the same issues arose in the Community Health Services data breach litigation, although earlier this year the district court denied the plaintiffs an interlocutory appeal on the issue. We’ll thus have to wait and see what the Eleventh Circuit does.

If Equifax Victims Have Standing, Do They Have A Claim?

At first blush, this seems ridiculous: of course the victims have a claim! Alas, the law is not so simple. There is no single “data breach” claim.
In data breach security lawsuits, the most commonly alleged claim is negligence, the same common law state tort used for car accidents, slip-and-falls, and dog bites. Negligence involves the defendant breaching a duty it had to the plaintiff and thereby causing the plaintiff harm, the familiar “duty-breach-causation-harm” elements taught to every 1L in law school. The LawFare blog had a post on the duty element earlier this week, collecting a couple cases hostile to the victims of data breaches, like the questionable Pennsylvania Superior court case Dittman v. UPMC, 2017 PA Super 8, 154 A.3d 318, 320 (2017), which inexplicably held it was “unnecessary to require employers to incur potentially significant costs to increase security measures when there is no true way to prevent breaches altogether,” which is akin to holding that there is no true way to prevent car accidents altogether, and so no person can be held accountable for drinking before driving.
Some courts also apply the “economic loss rule,” which prohibits negligence claims where the plaintiff has suffered only financial losses, but not any physical harm. The economic loss rule is more like a slice of Swiss cheese than a “rule,” given the vast number of exceptions recognized by most states, but it can sometimes still preclude negligence claims arising from purely economic losses.
Nonetheless, courts have generally found that most states recognize the legal “duty” necessary to support a negligence claim following a data breach. See, e.g., In re Target Corp. Data Sec. Breach Litig., 66 F. Supp. 3d 1154, 1176 (D. Minn. 2014)(dismissing negligence claims for plaintiffs in Alaska, California, Illinois, Iowa, and Massachusetts, but allowing all other states’ negligence claims to proceed.)
The second most commonly alleged claim is a violation of state consumer protection laws, which come under various names, including unfair and deceptive practices, unfair competition, unfair trade practices, consumer fraud, and so on. Each state has a different consumer protection act, and each state’s courts have interpreted their act differently, so this becomes a prolonged state-by-state analysis raising all of the same issues, such as whether consumers have standing to raise claims involving future threats of harm, whether the act covers data breaches, and whether the act is enforceable by consumers or just by the state attorney general. The opinion in the Target case linked above includes a thorough description of most of these issues, as does the opinion in the Sony case.
After negligence and unfair practices come a whole host of potential claims depending on the states involved, including everything from breach of contract, to breach of implied contract, to negligent misrepresentation, to unjust enrichment, and so on. For each claim, all of the same issues come up relating to standing, duty, and whether or not the claim can truly be used for a data breach case.
The Equifax situation, however, opens up the use of an interesting theory: because Equifax is a credit reporting agency, it is subject to the Fair Credit Reporting Act. Under 15 U.S.C. § 1681e, consumer reporting agencies “shall maintain reasonable procedures designed to … limit the furnishing of consumer reports…” Equifax’s failure to do so could subject them to liability under 15 U.S.C. § 1681n, which creates civil liability for “willful noncompliance” with the FCRA, and 15 U.S.C. § 1681o, which creates civil liability for “negligent noncompliance” with the FCRA. I’ve already seen complaints against Equifax that allege these claims. We can expect to see extensive arguments about whether or not Equifax’s actions constitute “noncompliance” at all, and whether or not that noncompliance was “willful.”
And, of course, the FCRA comes with its own long trail of complicated case law. An article by two defense lawyers in the American Bar Association’s Business Law Today explained how corporations can use Spokeo and other cases to thwart consumers’ attempts to certify a class action, which would leave each consumer fighting the case on their own.
Here’s the point: to many consumers’ surprise, bringing a claim against a company that negligently lost your sensitive personal information is hardly simple, because there’s no unified “data breach” cause of action, and companies like Equifax use every opportunity they have to limit the number of claims the consumers have.

What Can I Expect From The Equifax Lawsuits?

You can expect to wait. As I mentioned towards the beginning of this post, it would be fantastic if Equifax would swiftly investigate what happened, open up its records to the consumer lawyers, and then offer a reasonable settlement. But that never happens. Instead, defendants challenge standing, challenge the causes of action alleged by the plaintiffs, challenge the certification of a class action, object to the discovery requests made by the plaintiffs (here’s a recent post of mine that goes deep into the discovery “proportionality” standard in the Federal Rules of Civil Procedure, and the many ways defendants use it to avoid producing evidence), failed to provide all of the documents they have relating to discovery requests, move for summary judgment, and seek interlocutory appeals before they ever sit down to discuss her reasonable settlement offer. Then, even once a settlement is reached, it has to be approved by the court, a process that can take years itself given the number of objections and appeals that class-action settlements typically raise these days.
As one example of the protracted courses these cases take, Target revealed a security breach in December 2013 and litigation began immediately. Target first entered into a settlement in the consumer class-action cases in November 2015, but several class members filed objections, resulting in an appeal and a remand, and in May 2017 the district court approved the new settlement — but that settlement itself requires approval by the appellate court, so the consumers are still waiting.

So What Kind Of A Settlement Are We Talking About?

The Target settlement, which involved credit card and debit card information along with names, mailing addresses, email addresses, and phone numbers, provided for consumers to be reimbursed for all of their documented losses from the data breach, up to a maximum of $10,000, which is more than anyone in the class could prove they incurred. The average award is likely around $40, and more than 225,000 people submitted claims to the settlement. Assuming the current settlement is approved, Target will reform its data security practices, the class will be paid $10 million total, and the lawyers for the class will be paid around $6.75 million (paid separately from the $10 million).
The Home Depot settlement, which involved 40 million consumers’ payment data and 53 million customers’ email addresses, provided for a $13 million fund for consumers, $6.5 million for internet and “dark web” monitoring services, and $7.5 million in attorney fees.
The proposed settlement in the Anthem data breach security litigation (a settlement which hasn’t yet been approved by the court and which will likely be subject to objections and appeals, too) is somewhat similar, but with some extra credit monitoring. Class members will receive two years of identity fraud insurance, identity theft insurance, and fraud resolution services. Anyone who has their own credit monitoring can receive cash, which will likely be between $36 and $50. Additionally, $15 million will be set aside for class members to accommodate out-of-pocket claims up to $10,000. The lawyers will seek up to $37.9 million for attorney fees and $3 million in reimbursements for costs they spent (we don’t know yet what the court will approve, that’s just the highest the lawyers can request according to the settlement agreement).
A quick fact to think about regarding Equifax: in the Anthem litigation, approximately $23 million (paid by Anthem) will be spent just on giving class members notice and administering the settlement. If this sounds ridiculous, it’s because there are nearly 50 million class members. The settlement administrators are going to try to mail all of them postcards with detachable claim forms and buy 180 million impressions on social media to let people know about the settlement. All in all, it’s a fairly cheap way — less than $0.50 per class member — to involve 50 million people in something.
The Anthem case is the most analogous to Equifax: names, dates of birth, Social Security numbers, and health care ID numbers were stolen, along with other data, which is why I think it’s a reasonable place to look for guidance on how the Equifax case will be resolved.

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Tuesday, August 22, 2017

“President” of FAMU Band Charged in Tragic Hazing Death

“President” of FAMU Band Charged in Tragic Hazing Death
It’s been almost a year since Robert Champion was beaten to death in a hazing incident but Dante Martin has become the 12th person charged. Champion was killed during an alleged hazing incident where band members beat him on Florida A&M University’s band bus C in 2011. His senseless death made national headlines and raised questions about hazing at FAMU.

Hazing Attorney Las Vegas
Martin was allegedly the unofficial president of Bus C in 2011, reports USA Today. He was added as a defendant in the criminal case according to new court documents.
The charges filed by the prosecution: felony hazing in Champion’s death.

Detectives allege that Martin organized the hazing events on Bus C although prosecutors have not confirmed that, according to USA Today. Martin has also pled not guilty to a misdemeanor charge of hazing in a related incident.

The tragic events that led to Champions death involved a hazing ritual known as ‘crossing Bus C.’ Initiates of the ritual had to move from the front to the back of the bus while other band members assaulted them using their hands, feet, and other objects. Hazing is a serious offense that seems to be commonplace at all levels of sports, school, and social organizations that many states have taken steps to punish.
It’s considered more than just simple assault, however, even though it’s as serious crime in itself. Hazing requires that the injury happens as a result of some kind of initiation ritual into a club or organization. It is also possible to charge someone with hazing if no injury occurs but the initiation is dangerous enough to likely cause harm.

Reports of ‘crossing Bus C’ indicate that it was part of the initiation into the group, according to Orlando Sentinel. It’s also clear that Champion died of injuries that could be linked to physical assault. The trial will determine whether the defendants were actually participants in a hazing incident. In Martin’s case, there have been no allegations that he ever hit anyone according to his attorney. But that doesn’t negate the charges.

Hazing isn’t just the act itself. In many states, it’s also illegal to organize such rituals or to encourage others to participate. The charges against the defendants are all criminal but that doesn’t preclude civil charges as well. The investigation into Robert Champion’s death appears to be ongoing for now. Dante Martin is the latest person charged in the incident but he may not be the last.

Hazing is a strange phenomenon associated with the desire to be part of a group. It is difficult to understand why so many people subject themselves to so much pain and suffering in order to “belong.” It does not help that the vast majority of the participants in these rituals are younger; school age or slightly older – hazing is extremely common in the military as well. It may have something to do with the vulnerability of that age, in conjunction with the fact that some parts of the brain, particularly the frontal cortex, which regulates violent or antisocial behavior, and decision-making, is not fully developed until well into a person’s twenties.

“President” of FAMU Band Charged in Tragic Hazing Death published first on
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Wednesday, July 19, 2017

As trucker’s firing shows, electronic log devices not a cure-all

He admitted to using a fake logbook instead of electronic log devices, and racking up dangerous 20-hour road stints. His speaking out exposes the system’s flaws

electronic log devices

Technology will make us more safe. But it will not prevent all truck accidents. As lawyers, we hear and read about people scamming the system to get around the … Read More

The post As trucker’s firing shows, electronic log devices not a cure-all appeared first on Truck Accident Attorney Round Table.

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Wednesday, July 12, 2017

A Plaintiff’s Guide To Fed.R.Civ.P. 26 Discovery Proportionality

Civil litigators often spend more time in discovery disputes than in trials. Few plaintiffs or defendants are keen on spending time in a deposition, collecting documents, or handing over to their opponent evidence that could be used against them later. Yet, as the Supreme Court said 70 years ago while interpreting the original Rules of Civil Procedure, “[m]utual knowledge of all the relevant facts gathered by both parties is essential to proper litigation. To that end, either party may compel the other to disgorge whatever facts he has in his possession.”[1]
In December 2015, the “proportionality” amendments to Rule 26 of the Federal Rules of Civil Procedure were amended. One clause was removed as not reflecting the law (the “reasonably calculated” clause), one clause was omitted as unnecessary (the clause about discovering the existence of documents and witnesses), a phrase was moved from one subsection to another (the phrase about proportionality), and a proportionality factor was added (about the parties’ “relative access to information”).
In the big picture, these changes were exceedingly modest. Nonetheless, as Judge Pitman of the Southern District of New York wrote just a few weeks after thereafter, “[g]iven the recent amendments to the Federal Rules of Civil Procedure that became effective December 1, 2015, proportionality “has become ‘the new black,’” in discovery litigation, with parties invoking the objection with increasing frequency.”[2] These days, defense lawyers for massive corporations talk about “proportionality” non-stop, objecting to every discovery request, no matter how inexpensive or important to the case, as “not proportionate.” Judge Pitman was unimpressed: “the 2015 Amendments constitute a reemphasis on the importance of proportionality in discovery but not a substantive change in the law.”[3]
There are thousands of blog posts written by defense lawyers about how the proportionality amendments changed everything, and I’ve grown tired of seeing these arguments pop up in Court. So, without further adieu, here’s a Plaintiff’s Guide Rule 26’s Discovery Proportionality Standard.
This post has a lot of citations in it, and those citations has a lot of quotes, so I’ve switched over to footnote citing. Many of these citations are drawn from Duke Law Center for Judicial Studies’ “Revised Guidelines and Practices for Implementing the 2015 Discovery Amendments to Achieve Proportionality,” annotated version (June 15, 2017). Duke updates the annotations monthly, so check for the most recent version.

The Actual Changes To The Text Of Rule 26(b)

Fed.R.Civ.P. 26(b)(1) now says,

Unless otherwise limited by court order, the scope of discovery is as follows: Parties may obtain discovery regarding any nonprivileged matter that is relevant to any party’s claim or defense and proportional to the needs of the case, considering the importance of the issues at stake in the action, the amount in controversy, the parties’ relative access to relevant information, the parties’ resources, the importance of the discovery in resolving the issues, and whether the burden or expense of the proposed discovery outweighs its likely benefit. Information within this scope of discovery need not be admissible in evidence to be discoverable.

The 2015 Amendments changed the text of Rule 26(b) in three ways:

  • First, the language defining the scope of permissible discovery was changed to omit discovery “reasonably calculated to lead to the discovery of admissible evidence.”
  • Second, the language describing relevant evidence was changed to omit discovery of “the existence, description, nature, custody, condition, and location of any documents or other tangible things and the identity and location of persons who know of any discoverable matter,” but only because, as the Advisory Committee Note states, “discovery of such matters is so deeply entrenched in practice that it is no longer necessary to clutter the long text of Rule 26 with these examples.”
  • Third, when it comes to “proportionality,” which was already part of Rule 26(b), “[t]he considerations that bear on proportionality are moved from present Rule 26(b)(2)(C)(iii), slightly rearranged and with one addition.” See Advisory Committee Notes.  That “one addition” was the explicit instruction that courts consider “the parties’ relative access to relevant information.”


The Scope Of Relevance Under The 2015 Proportionality Amendments

The 2015 Amendments changed the language defining the scope of relevance,[4] but, substantively, the scope of relevance remains the same as it has for nearly forty years: “any matter that bears on, or that reasonably could lead to other matter that could bear on any party’s claim or defense.”[5] Judge Campbell, who chaired the Advisory Committee responsible for the 2015 Amendments, re-affirmed that, even after the Amendments, “[c]ourts generally recognize that relevancy for purposes of discovery is broader than relevancy for purposes of trial.”[6]

The Requesting Party Bears The Burden Of Establishing Relevance, The Objecting Party Bears The Burden Of Establishing The Discovery Is Not Proportionate To The Needs Of The Case

The burdens of persuasion were unchanged, with the requesting party bearing the burden of establishing relevance and the objecting party bearing the burden of establishing the discovery is improper. [7] The requesting party need only show relevance; the requesting party does not bear any burden to show proportionality.[8] Boilerplate claims that discovery is not proportionate are insufficient.[9] Instead, the objecting party needs to specifically show how the proposed discovery is not proportionate.[10]

Proportionate Discovery Is About Knowing When Discovery Has Reached “Diminishing Returns” 

As Chief Justice Roberts wrote soon after the 2015 Amendments, “the pretrial process must provide parties with efficient access to what is needed to prove a claim or defense, but eliminate unnecessary or wasteful discovery.”[11] As several District Courts have held, proportionality is often a question of “whether discovery production has reached a point of diminishing returns,” and about the “marginal utility” of additional discovery once the core discovery in the case has been completed.[12] Stated another way, proportionality is a method to avoid going in circles or getting side-tracked, not an excuse for cutting corners.
Sometimes, the best proportionality analysis is the most simple one: “the sheer number of attorneys who have made appearances in the case (24 by the Court’s count) is a persuasive demonstration of the importance of the issues at stake here, the value of the case, and that the parties have significant resources available to them.”[13] Nonetheless, let’s take a look at the case law on each proportionality factor mentioned by Rule 26(b).

The Importance Of Issues At Stake In The Action

The Advisory Committee Notes reiterated that “the monetary stakes are only one factor, to be balanced against other factors,” and reaffirmed the 1983 Amendments’ Note recognizing “the significance of the substantive issues, as measured in philosophic, social, or institutional terms.” Even a single severe injury from a common product can tip this factor in favor of a plaintiff.[14]

The Amount In Controversy

Few cases have interpreted this factor in depth. The cases that have done so have generally involved a single plaintiff, and the question was whether the cost of the proposed discovery would exceed the amount in controversy.[15] Moreover, courts have been quick to note that discovery in a low-damages case can still be proportionate if the litigation could vindicate other interests.[16]

The Parties’ Relative Access To Relevant Information

Access to information was one of the few explicit changes to the text of Rule 26(b). The Advisory Committee Notes address “information asymmetry,” where one “party may have vast amounts of information, including information that can be readily retrieved and information that is more difficult to retrieve. In practice these circumstances often mean that the burden of responding to discovery lies heavier on the party who has more information, and properly so.” Where relevant evidence is in the sole possession of the defendant, discovery is generally proportionate to the needs of the case,[17] particularly where the evidence is held by a multi-national corporation with sophisticated access to data that they do not permit outsiders to review.[18]

The Parties’ Resources

As the Advisory Committee Notes state, “consideration of the parties’ resources does not … justify unlimited discovery requests addressed to a wealthy party.” Nonetheless, the underlying purpose of this factor, must be remembered: “[t]he court must apply the standards in an even-handed manner that will prevent use of discovery to wage a war of attrition or as a device to coerce a party, whether financially weak or affluent.” Id., (emphasis added).

The Importance Of The Discovery In Resolving The Issues

To satisfy the “importance” factor, the discovery must only be “more than tangentially related to the issues that are actually at stake in the litigation.”[19] Even where the cost is considerable, the importance factor is satisfied where “the probative value of the sought after discovery is potentially substantial because it may be relevant to factual issues at the heart of [plaintiff’s claims].”[20]

Whether The Burden Or Expense Of The Proposed Discovery Outweighs Its Likely Benefit

Corporate defendants often refer to the “burden” of discovery as if it was the sole factor underlying proportionality, but “no single factor is designed to outweigh the other factors in determining whether the discovery sought is proportional.”[21] All discovery is inherently burdensome, and the question is whether that burden is undue in light of the importance of the issues at stake in the action, the amount in controversy, the parties’ relative access to relevant information, the parties’ resources, and the importance of the discovery in resolving the issues.[22] For example, if a defendant has “far superior access to the information,” as in this litigation, such access “necessitates a stronger showing of burden and expense” before the discovery will be disallowed.[23] Further, even where there is a “considerable expense already incurred in defense of this case,” additional discovery can nonetheless be proportionate where a defendant has “chosen to rigorously defend th[e] action” and thereby place the plaintiff in the position of needing to do more to prevail in dispositive motion practice and at trial.[24]
Critically, claims of undue burden must be backed by evidence quantifying the difficulty or expense.[25] “Without offering evidence explaining the nature of the alleged burden it faces in producing the proposed discovery, [a party] has not met its burden of showing that the burden or expense … outweighs the likely benefit of such discovery.”[26] Further, a sophisticated party cannot rely on their own decisions that have made document production difficult or expensive.[27]
Finally, a party does not get credit for the “burden” of discovery productions made in other cases, and, in such a situation, the objecting party should come forward with “alternative methods of discovery enabling some lesser degree of production.”[28]


[1] Hickman v. Taylor, 329 U.S. 495, 507, 67 S. Ct. 385, 392, 91 L. Ed. 451 (1947)

[2] Vaigasi v. Solow Mgmt. Corp., 2016 WL 616386, at *13 (S.D.N.Y. Feb. 16, 2016)(internal quotation omitted).

[3] Vaigasi v. Solow Mgmt. Corp., 2016 WL 616386, at *13 (S.D.N.Y. Feb. 16, 2016).

[4] The phrase “reasonably calculated to lead to the discovery of admissible evidence” was deleted.

[5] Henry v. Morgan’s Hotel Grp., Inc., 2016 WL 303114, at *3 (S.D.N.Y. Jan. 25, 2016)(citing State Farm Mut. Auto. Ins. Co. v. Fayda, 2015 WL 7871037, at *2 (S.D.N.Y. Dec. 3, 2015)(quoting Oppenheimer Fund, Inc. v. Sanders, 437 U.S. 340, 351 (1978))).

[6] In re Bard, 317 F.R.D. at 566. Accord In re: Am. Med. Sys., Inc., MDL No. 2325, 2016 WL 3077904, at *4 (S.D.W. Va. May 31, 2016)(“it remains true that relevancy in discovery is broader than relevancy for purposes of admissibility at trial,” and, “notwithstanding Rule 26(b)(1)’s recent amendment placing an emphasis on the proportionality of discovery, the discovery rules, including Rule 26, are still to be accorded broad and liberal construction.”)

[7] Cont’l W. Insur. Co. v. Opechee Constr. Corp., 2016 WL 865232, at *1 (D.N.H. Mar. 2, 2016) (“Once a showing of relevance has been made, the objecting party bears the burden of showing that discovery request is improper.”); Carter v. H2R Rest. Holdings, LLC, 2017 WL 2439439, at *4 (N.D. Tex. June 6, 2017) (amendments “do not alter the basic allocation of the burden on the party resisting discovery”); William Powell Co. v. Nat. Indemnity Co., 2017 WL 1326504, at *5 (S.D. Ohio Apr. 11, 2017)(“the amended rule did not shift the burden of proving proportionality to the party seeking discovery”); United States ex rel. Shamesh v. CA., Inc., 2016 WL 74394, at *8 (D.D.C. Jan. 6, 2016) (“Once the relevancy of the materials being sought has been established, the objecting party then bears the burden of ‘showing why discovery should not be permitted.’”).

[8] In re: Bard IVC Filters Prod. Liab. Litig., 2016 WL 4943393, at *2 (D. Ariz. Sept. 16, 2016) (“[A]mendment does not place the burden of proving proportionality on the party seeking discovery.”); State Farm Mut. Auto. Ins. v. Fayda, 2015 WL 7871037, at *2 (S.D.N.Y. Dec. 3, 2015)(“The burden of demonstrating relevance remains on the party seeking discovery, but the newly-revised rule does not place on that party the burden of addressing all proportionality considerations.” Quotation omitted). Accord Nerium Skincare, Inc. v. Olson, No. 3:16-CV-1217-B, 2017 WL 277634, at *3 (N.D. Tex. Jan. 20, 2017)(“a party seeking to resist discovery on these grounds still bears the burden of making a specific objection and showing that the discovery fails the proportionality calculation mandated by [Rule 26] by coming forward with specific information to address [the proportionality factors]…”

[9] Ramos v. Town of E. Hartford, 2016 WL 7340282, at *2 (D. Conn. Dec. 19, 2016) (“[t]he 2015 revision of the Federal Rules precludes the use of the type of boilerplate objections on which Defendants rely.”); Leibovitz v. The City of New York, 2017 WL 462515, at *2 (S.D.N.Y. Feb. 3, 2017) (Court overruled defendant’s “general, boilerplate objections to each of plaintiff’s requests for production” because “such objections violate Fed.R.Civ.P. 34(b)(2)(B).”).

[10] Fischer v. Forrest, 2017 WL 773694 (S.D.N.Y. Feb. 27, 2017)(“It is time, once again, to issue a discovery wake-up call to the Bar in this District” to state grounds for objecting to discovery request with specificity under Rule 34); Raab v. Smith & Nephew, Inc., 2016 WL 2587188, at *4 (S.D. W. Va. May 4, 2016) (defendant failed to provide specific objection to discovery requests); Allen-Pieroni v. Sw. Corr., LLC, 2016 WL 1750325, at *4 (N.D. Tex. May 2, 2016) (“Party seeking to resist discovery on these grounds still bears the burden of making a specific objection and showing that the discovery fail[ed] the proportionality calculation mandated by Rule 26(b) by coming forward with specific information to address.”).

[11] 2015 Year-End Report on the Federal Judiciary, p. 7 (emphases added).

[12] Abbott v. Wyoming Cty. Sheriff’s Office, No. 15-CV-531W, 2017 WL 2115381, at *2 (W.D.N.Y. May 16, 2017)( Considerations of proportionality can include reviewing whether discovery production has reached a point of diminishing returns. See Alaska Elec. Pension Fund v. Bank of Am. Corp., No. 14-CV-7126 (JMF), 2016 WL 6779901, at *3 (S.D.N.Y. Nov. 16, 2016) (“Rule 26(b)(1)’s proportionality requirement means [that a document’s] ‘marginal utility’ must also be considered.”) (citations omitted); Updike v. Clackamas County, No. 3:15-CV-00723-SI, 2016 WL 111424, at *1 (D. Or. Jan. 11, 2016) (“There is a tension, however, among the objectives of Rule 1. As more discovery is obtained, more is learned. But at some point, discovery yields only diminishing returns and increasing expenses. In addition, as more discovery is taken, the greater the delay in resolving the dispute. Finding a just and appropriate balance is the goal, and it is one of the key responsibilities of the court in managing a case before trial to assist the parties in achieving that balance.”)

[13] Wal-Mart Stores, Inc. v. Texas Alcoholic Beverage Comm’n, No. A-15-CV-134-RP, 2016 WL 5922315, at *2 (W.D. Tex. Oct. 11, 2016).

[14] Fassett v. Sears Holdings Corp., 319 F.R.D. 143, 150 (M.D. Pa. 2017)(“Although this is not a case involving, for instance, constitutional rights or matters of national significance, to these particular litigants, it is a matter of grave import. Further, its outcome may impact the marketability of a widely sold piece of home machinery or some of its components.”)

[15] Bell v. Reading Hosp., No. CV 13-5927, 2016 WL 162991, at *3 (E.D. Pa. Jan. 14, 2016)(“It appears that the discovery conducted to date, as well as the discovery requests currently at issue, would certainly not exceed the amount of controversy in this matter.”).

[16] Schultz v. Sentinel Ins. Co., Ltd, 2016 WL 3149686, at *7 (D.S.D. June 3, 2016)(“The court applies the proportionality requirement built into Rule 26, but rejects Sentinel’s characterization of the value of Ms. Schultz’s case as a $17,000 case that benefits her alone. … If punitive damages are awarded, Ms. Schultz has the potential to affect Sentinel’s alleged business practices and to remedy the situation for many insureds, not just herself.”)

[17] Albritton v. CVS Caremark Corp., 2016 WL 3580790, at *4 (W.D. Ky. June 28, 2016)(“Here, proportionality favors the Plaintiff. … It is highly unlikely that Plaintiff could discover similar information from another source or in another manner. Defendants are in the best position to produce these documents.”); Schultz v. Sentinel Ins. Co., Ltd, 2016 WL 3149686, at *6 (D.S.D. June 3, 2016)(“The amended rule also specifies one additional factor to be considered in determining proportionality: the parties’ access to relevant information. This factor definitely favors Sentinel, who ‘holds all the cards’ on the discovery sought by Ms. Schultz.”)

[18] Labrier v. State Farm Fire & Cas. Co., 314 F.R.D. 637, 643 (W.D. Mo. 2016)(“LaBrier does not have access to the information she seeks, other than through the discovery, as it is in State Farm’s own database and the database of its vendor, Xactware. In terms of resources, LaBrier is an individual, while State Farm is a corporation with a national presence, with sophisticated access to data. As discussed in the preceding section, the burden or expense of the discovery outweighs its likely benefit, particularly in light of State Farm’s refusal to permit an outsider to access its computer system or even provide complete lists of its data fields.”)

[19] Flynn v. Square One Distribution, Inc., No. 6:16-MC-25-ORL-37TBS, 2016 WL 2997673, at *4 (M.D. Fla. May 25, 2016)

[20] In re Suboxone (Buprenorphine Hydrochloride & Naloxone) Antitrust Litig., No. 13-MD-2445, 2016 WL 3519618, at *7 (E.D. Pa. June 28, 2016)(emphases added).

[21] Capetillo v. Primecare Med., Inc., 2016 WL 3551625, at *2 (E.D. Pa. June 29, 2016).

[22] Black v. Buffalo Meat Serv., Inc., No. 2016 WL 4363506, at *6 (W.D.N.Y. Aug. 16, 2016)(“In effect, the concept of undue burden that has been in Rule 26 for the last thirty plus years has been replaced by proportionality, with the burden as one factor to determine whether the discovery demand is proportionate to the case.”)

[23] Doe v. Trustees of Boston Coll., 2015 WL 9048225 (D. Mass. Dec. 16, 2015).

[24] Vay v. Huston, 2016 WL 1408116, at *6 (W.D. Pa. Apr. 11, 2016).

[25] Zoobuh, Inc. v. Better Broadcasting, LLC, 2017 WL 1476135, at *4–*5 (D. Utah Apr. 24, 2017) (defendant failed to provide “some quantification . . . of the material in its possession that [was] responsive” and thus failed to establish undue burden); Fish v. Kobach, 2016 WL 893787, at *1 (D. Kan. Mar. 8, 2016) (“Objections based on undue burden must be clearly supported by an affidavit or other evidentiary proof of the time or expense involved in responding to the discovery request.”); Scott Hutchison Enter., Inc. v. Cranberry Pipeline Corp., 2016 WL 5219633, at *3 (S.D. W. Va. Sept. 20, 2016) (collection of cases that require specific proof); McKinney/Pearl Rest. Partners, L.P. v. Metro. Life Ins. Co., 2016 WL 98603, at *3 (N.D. Tex. Jan. 8, 2016) (party resisting discovery must show that “requested discovery was overbroad, burdensome, or oppressive by submitting affidavits or offering evidence revealing the nature of the burden.”).

[26] William Powell Co. v. Nat’l Indem. Co., 2017 WL 1326504, at *12 (S.D. Ohio Apr. 11, 2017)

[27] Wagoner v. Lewis Gale Med. Ctr., LLC, 2016 WL 3893135, at *3 (W.D. Va. July 14, 2016)(rejecting claim of undue burden where defendant “did not preserve e-mails in an readily searchable format, making it costly to produce relevant e-mails when faced with a lawsuit.”)

[28] Siriano v. Goodman Mfg. Co., L.P., 2015 WL 8259548, at *6 (S.D. Ohio Dec. 9, 2015)(“[T]o date, Defendants have expended relatively little in complying with discovery in this matter. Defendants’ production thus far consists of the electronic disclosure of documents previously collected and reviewed pursuant to discovery in other, related cases. … Defendants have not proposed alternative methods of discovery enabling some lesser degree of production, such as limiting the search to certain offices or files.”)

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Friday, July 7, 2017

Truck crashes drop 73% after speed-limiters made mandatory

Study shows speed-related truck crashes caused by at-fault truckers slowed dramatically after Ontario required all trucks to have speed-limiter devices

Truck crashes

The naysayers were wrong about speed-limiters preventing truck crashes.

Groups like Owner-Operator Independent Drivers Association (OOIDA) pedaled doom and gloom predictions about how requiring speed-limiters on trucks would create a dangerous speed differential with cars … Read More

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Truck crashes drop 73% after speed-limiters made mandatory posted first on

Friday, June 30, 2017

Attorney Steven Gursten named to prestigious Trucking Trial Lawyers Top 10

Longtime truck accident lawyer Steve Gursten named to national invitation-only group comprised of the most successful trucking trial lawyers

Trucking Trial Lawyers

There are several reasons why I’m passionate about being a truck accident attorney.

The most important ones are the opportunities I’ve had to seek justice for those injured in trucking accidents, and while doing this to … Read More

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Sunday, June 25, 2017

Daubert In Product Liability Cases: Mid-2017 Update

I’ve written about the Supreme Court’s Daubert opinion many times before, tagging it with the label “junk science.” The phrase “junk science” never actually appeared in Daubert, but rooting it out has been the animating concern behind the application of Daubert. See, e.g., Amorgianos v. National RR Passenger Corp., 303 F. 3d 256, 267 (2nd Cir., 2002)(“The flexible Daubert inquiry gives the district court the discretion needed to ensure that the courtroom door remains closed to junk science while admitting reliable expert testimony that will assist the trier of fact.”)
In federal courts today, Daubert has become a magical incantation for defense lawyers in product liability lawsuits. Drug companies gleefully get drugs approved by the FDA with the thinnest of scientific evidence—often relying on “surrogate markers” or underpowered clinical trials—and then claim that plaintiffs injured by their drugs cannot present their case to a jury until they have produced vastly more scientific evidence than the company or the FDA would use. Car manufacturers regularly demand plaintiffs conduct testing that the companies themselves never did.
Today we’re going to review the state of the art, as it were, of Daubert in product liability cases by examining the four most recent published Court of Appeals opinions. Those opinions are:

  • Adams v. Toyota Motor Corp., No. 15-2507, 2017 WL 2485204 (8th Cir. June 9, 2017)
  • In re Zoloft (Sertraline Hydrochloride) Prod. Liab. Litig., 16-2247, 2017 WL 2385279 (3d Cir. June 2, 2017)
  • Wendell v. GlaxoSmithKline LLC, No. 14-16321, 2017 WL 2381122 (9th Cir. June 2, 2017)
  • Nease v. Ford Motor Co., 848 F.3d 219 (4th Cir. 2017)

Plaintiffs lost Zoloft and Nease, and won Adams and Wendell. But it would be foolish to look at these cases simply as a scorecard: the real issue here for future cases is how the courts decided the cases.
All of these cases have one thing in common: the defendants framed Daubert as a matter of pseudoscientific absolutes, and the Courts of Appeals rejected the defendants at every turn. In the cases that follow, defendants argued that any difference between a test and an accident renders the test unreliable, that plaintiffs cannot go to a jury without statistically significant evidence, that opinions developed in litigation are inherently unreliable, that a doctor’s differential diagnosis is an unacceptable scientific methodology, that plaintiffs’ experts must completely eliminate all potential alternative causes, and that case studies are scientifically irrelevant—and the appellate courts rejected each and every one of those arguments.
Like the Supreme Court intended, Daubert is “flexible” because science itself is flexible. Daubert is a means by which courts ensure that juries aren’t subjected to unsupported speculation; it’s not a grocery list of arbitrary requirements.

Adams v. Toyota (Eighth Circuit)

Adams v. Toyota Motor Corp., No. 15-2507, 2017 WL 2485204 (8th Cir. June 9, 2017) is a product liability case, one of many unintended acceleration cases brought against Toyota. The plaintiff’s expert testified that, at high temperatures, the throttle pulleys would fuse together, and that this thermal-induced sticking defect had caused the accident. Toyota raised two Daubert challenges, arguing that the expert rendered his own test invalid by repositioning the cruise control arm and that the expert’s analysis was insufficient to conclude that same defect had caused the accident.
The Eighth Circuit rejected both arguments, reiterating that “the inquiry envisioned by Rule 702 is … a flexible one,” and that these issues could all be addressed with “[v]igorous cross-examination, presentation of contrary evidence, and careful instruction on the burden of proof.” Id. at *5 quoting Daubert at 549 and 596. Put simply, the expert explained what he did:

Though the parties dispute the significance of Stilson’s repositioning the cruise control arm during his thermal testing, Stilson thoroughly explained how he modified the cruise control system and why he did so. He testified that, in his opinion as an engineer, the modification did not affect the validity of the thermal testing because the cruise control system operated independently of the throttle mechanism that was the subject of his testing. He explained that his testing supported the conclusion that the throttle pulleys fused together when subjected to high temperatures.

Id. at *5. At first blush this seems rather obvious—of course the expert should explain what they did—but an expert’s failure to explain their work is often at the root of a Daubert exclusion, whereas an expert’s explanation is often the key in avoiding exclusion of an expert.
In light of that explanation, the Eighth Circuit had no trouble affirming the District Court, with the usual reminders that the Daubert “gatekeeper” function is about excluding junk science, and isn’t about demanding scientific certainty from experts:

“[T]he district court must … function as a gatekeeper who ‘separates expert opinion evidence based on good grounds from subjective speculation that masquerades as scientific knowledge.’ ” Presley, 553 F.3d at 643 (quoting Glastetter v. Novartis Pharm. Corp., 252 F.3d 986, 989 (8th Cir. 2001)). However, Stilson’s opinion as to causation need not be a “scientific absolute in order to be admissible.” Bonner v. ISP Tech., Inc., 259 F.3d 924, 929 (8th Cir. 2001). We conclude that Stilson’s opinions represented more than “vague theorizing based on general principles,” Pro Serv. Auto., LLC v. Lenan Corp., 469 F.3d 1210, 1216 (8th Cir. 2006), or “unsupported speculation,” Daubert, 509 U.S. at 590, 113 S.Ct. 2786. The district court did not abuse its broad discretion in allowing Stilson’s expert opinion pursuant to Rule 702.

Id. (emphasis added).
The Adams case was also notable for its discussion of “other similar incidents” evidence. The defendants argued that “proponents must show that the other-incidents were caused by the same or similar defect,” essentially forcing plaintiffs into holding a mini-trial over each incident, something that is often not impossible. The Eighth Circuit rejected that rule, reiterating again “[t]here are no hard or fast rules as to what degree of similarity there must be to make the evidence admissible.” Id. at *3 (quoting Henwood v. Chaney, 156 F.2d 392, 397 (8th Cir. 1946).

In re Zoloft (Third Circuit)

In re Zoloft (Sertraline Hydrochloride) Prod. Liab. Litig.,, No. 16-2247, 2017 WL 2385279 (3d Cir. June 2, 2017) involved the Zoloft birth defects MDL, in which the trial court excluded the plaintiffs’ epidemiological expert from testifying. I wrote about the District Court’s opinion back when it came out in March 2016, criticizing the District Court’s reliance on “statistical significance” when deciding Daubert. As I noted then, the American Statistical Association agrees that “statistical significance” is more a term of art than an actual scientific principle. The bedrock principles of “p ≤ 0.05” and “95% confidence interval” are hardly “scientific.” Instead, they were pulled out of thin air decades ago by a eugenicist. (More about that in this post.)
 Here’s the good news: the Third Circuit refused to establish a “bright-line rule” requiring “statistical significance.” As the Court wrote,

Central to this case is the question of whether statistical significance is necessary to prove causality. We decline to state a bright-line rule. Instead, we reiterate that plaintiffs ultimately must prove a causal connection between Zoloft and birth defects. A causal connection may exist despite the lack of significant findings, due to issues such as random misclassification or insufficient power. Conversely, a causal connection may not exist despite the presence of significant findings. If a causal connection does not actually exist, significant findings can still occur due to, inter alia, inability to control for a confounding effect or detection bias. A standard based on replication of statistically significant findings obscures the essential issue: a causal connection. Given this, the requisite proof necessary to establish causation will vary greatly case by case. This is not to suggest, however, that statistical significance is irrelevant. Despite the problems with treating statistical significance as a magic criterion, it remains an important metric to distinguish between results supporting a true association and those resulting from mere chance. Discussions of statistical significance should thus not understate or overstate its importance.

Id. at *3 (emphasis added). The Third Circuit took great care to explain, “the course of the proceedings make clear that the replication of significant results was not dispositive in establishing whether the testimony of either Dr. BĂ©rard or Dr. Jewell was reliable. In fact, the District Court expressly rejected Pfizer’s argument that the existence of a statistically significant, replicated result is a threshold issue before an expert can conduct the Bradford–Hill analysis.” Id. at *5.
Also more good news: the Third Circuit specifically recognized that a plaintiff can establish causation with a variety of methodologies, including the “weight of the evidence,” the “Bradford Hill criteria,” or a “differential diagnosis.” Id. at *5. These are all “flexible methodologies … [that] can be implemented in multiple ways.” Id. The critical part for Daubert purposes isn’t whether or not an expert applied a general methodology in a particular way, but whether they applied the methodology they chose consistently. As the Third Circuit described its prior opinion, In re Paoli R.R. Yard PCB Litigation, “[w]hile we did not require the expert to run specific tests or ascertain full information in order for the differential diagnosis to be reliable, we did require him to explain why his conclusion remained reliable in the face of alternate causes.”
The Third Circuit laid down a common sense, clear roadmap for plaintiffs to follow:

In short, despite the fact that both the Bradford Hill and the weight of the evidence analyses are generally reliable, the “techniques” used to implement the analysis must be 1) reliable and 2) reliably applied. In discussing the conclusions produced by such techniques in light of the Bradford Hill criteria, an expert must explain 1) how conclusions are drawn for each Bradford Hill criterion and 2) how the criteria are weighed relative to one another. Here, we accept that the Bradford Hill and weight of the evidence analyses are generally reliable. We also assume that the “techniques” used to implement the analysis (here, meta-analysis, trend analysis, and reanalysis) are themselves reliable.

Id. at *6.
Here’s the bad news: the expert hadn’t followed that roadmap. He “did not 1) reliably apply the ‘techniques’ to the body of evidence or 2) adequately explain how this analysis supports specified Bradford Hill criteria.” Id.

Wendell v. GlaxoSmithKline (Ninth Circuit)

Wendell v. GlaxoSmithKline LLC, No. 14-16321, 2017 WL 2381122 (9th Cir. June 2, 2017), involved a non-MDL medication product liability claim that two anti-inflammatory drugs (Purinethol and Remicade) that were prescribed to treat inflammatory bowel disease causes Hepatosplenic T-cell lymphoma, a rare and aggressive form of non-Hodgkin’s lymphoma. The district court excluded the plaintiff’s experts on Daubert grounds and granted summary judgment, which the Ninth Circuit reversed.
The district court opinion reads like a wish-list for defense lawyers in drug and medical device cases. The district court:

  • “focused on the fact that the experts developed their opinions specifically for litigation, and had never conducted independent research on the relationship between 6–MP and anti-TNF drugs and the development of HSTCL.”
  • “noted that both doctors conceded that although their opinions were based on a reasonable degree of medical certainty, they ‘would not satisfy the standards required for publication in peer-reviewed medical journals.’”
  • “determined that the lack of animal or epidemiological studies showing a causal link between HSTCL and the combination of 6MP and anti-TNF drugs also undermined the experts’ methodology.”
  • “found that the experts did not show ‘that all of the observed differences in these incidence rates are statistically significant or that they account for plausible alternative causes of HSTCL, such as IBD itself.’ Further, the doctors did not present scientific evidence to support their opinion that IBD is not a risk factor for HSTCL.”

Id. at *4. I’ve seen defense lawyers for drug and medical device companies raise all of these arguments before, all with the implication that Daubert imposes an arbitrary barrier requiring independent research, peer-reviewed publications, epidemiological studies, statistically significant results, and an indisputable refutation of all other alternative causes the defense lawyers dream up.
The Ninth Circuit was having none of it:

The district court looked too narrowly at each individual consideration, without taking into account the broader picture of the experts’ overall methodology. It improperly ignored the experts’ experience, reliance on a variety of literature and studies, and review of Maxx’s medical records and history, as well as the fundamental importance of differential diagnosis by experienced doctors treating troubled patients. The district court also overemphasized the facts that (1) the experts did not develop their opinions based on independent research and (2) the experts did not cite epidemiological studies. We hold that all together, these mistakes warrant reversal.

Id. at *4. The plaintiff’s experts were two “highly qualified doctors” with ample experience in researching and treating non-Hodgkin’s lymphoma, and they applied the same differential diagnosis they regularly do while treating patients. The methodologies applied were simple and straightforward. As for the first expert,

Dr. Shustov based his opinions “on medical records as well as [his] education, training and experience, knowledge of the pertinent medical literature and [his] knowledge of the epidemiology, diagnosis and natural history of HSTCL.” He explained: “I reviewed the literature, I pulled the facts out of the literature.” He found that the literature shows there is an increased risk of HSTCL in patients taking 6–MP over the general population. After reviewing the literature, he “compiled the numbers about frequency of diseases, about frequency of inflammatory bowel disease and [he] looked at the biological causation of lymphoma pertaining to this case.”
Dr. Shustov stated that he performs differential diagnosis in attempting to diagnose every patient, and that he has applied the same technique to determine the cause of a disease. When performing a differential diagnosis, he first assumes the pertinence of all potential causes, then rules out the ones as to which there is no plausible evidence of causation, and then determines the most likely cause among those that cannot be excluded. We have recognized that this method of conducting a differential diagnosis is scientifically sound.

Id. at *5 (emphasis added). As for the second,

Dr. Weisenburger based his opinion on “a summary of the medical records of [Maxx] as well as copies of the pathology reports, and the original slides of the diagnostic bone marrow,” which he evaluated with over 30 years of experience diagnosing non-Hodgkin lymphoma. He stated that he considered that Maxx’s HSTCL might have been idiopathic, and that although he was not entirely able to rule that possibility out, “[w]hen you have a patient with obvious and known risk factors, you tend to assume that those risk factors were the cause.” He did not base that assumption on pure conjecture. As he discussed throughout his deposition testimony and in his expert report, the literature shows that patients exposed to 6–MP and anti-TNF drugs are at an increased risk for HSTCL. Dr. Weisenburger also weighed other risk factors, including Maxx’s sex and age, and determined that those were “weak risk factors; whereas, the disease he had, particularly in the setting of the drugs he received would be considered very strong risk factors.”

Id. at *6 (emphasis added).
Nothing more was needed. “The proposed testimony was sufficiently reliable that the Plaintiffs’ experts should have been allowed to testify under Daubert. The district court improperly required more. The Supreme Court in Daubert aimed at screening out unreliable or bogus expert testimony. Nothing in Daubert, or its progeny, properly understood, suggests that the most experienced and credentialed doctors in a given field should be barred from testifying based on a differential diagnosis.” Id.
As the Ninth Circuit explained at length,

  • there is no requirement for expert opinions being “developed independently of litigation,”
  • the “district court also wrongly conflated the standards for publication in a peer-reviewed journal with the standards for admitting expert testimony in a courtroom,”
  • neither animal nor epidemiological studies are “necessary for an expert’s testimony to be found reliable and admissible,”
  • that case studies are useful in “support[ing] other proof of causation” (citing Rider v. Sandoz Pharm. Corp., 295 F.3d 1194, 1199 (11th Cir. 2002)),
  • there is no need for a plaintiff to identify the exact “mechanism whereby a particular agent causes a particular effect,” because “[c]ausation can be proved even when we don’t know precisely how the damage occurred, if there is sufficiently compelling proof that the agent must have caused the damage somehow,” (citing Daubert II, 43 F.3d 1311, 1314 (9th Cir. 1995)), and,
  • “We do not require experts to eliminate all other possible causes of a condition for the expert’s testimony to be reliable. It is enough that the proposed cause ‘be a substantial causative factor,’” (quoting Messick v. Novartis Pharm. Corp., 747 F.3d 1193, 1199 (9th Cir. 2014).

Defendants are fond of quoting Rosen v. Ciba-Geigy Corp., 78 F. 3d 316 (7th Cir., 1996), “Law lags science; it does not lead it.” This quote was always dubious: the full quote begins with “the courtroom is not the place for scientific guesswork” and ends with “[t]here may be evidence to back up Fozzard’s claim, but none was presented to the district court.” In Wendell, the Ninth Circuit delivered an even more potent retort:

Perhaps in some cases there will be a plethora of peer reviewed evidence that specifically shows causation. However, such literature is not required in each and every case. “The first several victims of a new toxic tort should not be barred from having their day in court simply because the medical literature, which will eventually show the connection between the victims’ condition and the toxic substance, has not yet been completed.” Clausen, 339 F.3d at 1060 (quoting Turner v. Iowa Fire Equip. Co., 229 F.3d 1202, 1209 (8th Cir. 2000)). In the case of a rare disease like HSTCL, the Supreme Court’s mandate that in determining the admissibility of expert testimony, the focus “must be solely on principles and methodology, not on the conclusions that they generate,” is especially important. Daubert, 509 U.S. at 595, 113 S.Ct. 2786.

Id. at *7 (emphasis added).

Nease v. Ford (Fourth Circuit)

Finally, there’s Nease v. Ford Motor Co., 848 F.3d 219 (4th Cir. 2017), another unintentional acceleration product liability case involving a 2001 Ford Ranger pickup truck and the claim that the speed control cable became stuck, preventing him from slowing down. The plaintiff’s expert opined that the speed control assembly allows contaminants in that cause the throttle to become stuck open.
As the Fourth Circuit said, “[t]esting was of critical importance in this case as Sero conceded that the speed control cable in the Neases’ Ranger was not bound or wedged; the cable ‘moved freely’ when Sero performed a post-accident inspection of the Neases’ Ranger. Id. at 231. In other words, because there really wasn’t anything for the expert to base their opinion on, neither inspection, nor literature, nor industry practice, nor other similar incidents, testing would have been the only way to demonstrate his theory. Unfortunately, “Sero, however, conducted no testing whatsoever to arrive at his opinion.” Similarly, “he offered no data from any other studies or accident records to prove that the older designs were less likely to bind than the one incorporated in the Neases’ 2001 Ranger.” 234. The Fourth Circuit recognized “Daubert is a flexible test and no single factor, even testing, is dispositive,” id. at 232, but found that the expert’s testimony simply couldn’t pass any of Daubert’s “reliability markers.”

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