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In re Watson Fentanyl Patch Products Liability Litigation

United States District Court, Seventh Circuit

August 27, 2013

IN RE: WATSON FENTANYL PATCH PRODUCTS LIABILITY LITIGATION. MDL No. 2372
v.
ACTAVIS, INC., f/k/a Watson Pharmaceuticals, Inc., et al., Defendants. STEVEN HAYES, et al., Plaintiffs,

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. ยง 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 (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 ...


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