Caselaw Update – Appellate Court Affirms Absolute Immunity For Expert Witness.

Lowis & Gellen’s Andrea H. Kott, Kevin J. Clancy and Joseph E. Comer won a recent victory in the Appellate Court of Illinois with broad implications and protections for expert witnesses in litigation. Sandler v. Sweet, et al., 2017 IL App (1st) 163313.

The plaintiff in this case was also a plaintiff in a prior lawsuit alleging medical malpractice against a hospital. In the prior case, the plaintiff alleged he suffered a brain injury after a suicide attempt while receiving inpatient psychiatric treatment. The hospital denied any brain injury occurred. In defending that litigation, the hospital retained Dr. Sweet as an expert witness. Dr. Sweet conducted a neuropsychological evaluation of the plaintiff and prepared two written reports of his findings, opining the plaintiff did not suffer a brain injury while at the hospital.

When that case was over, the plaintiff filed this subsequent lawsuit, naming Dr. Sweet and the hospital where he practices as defendants. Plaintiff raised claims for medical negligence, common law fraud, and breach of fiduciary duty. Plaintiff’s theory of the case was that Dr. Sweet failed to correctly diagnose his brain injury, which caused the plaintiff harm because he delayed in seeking treatment in reliance on the findings in Dr. Sweet’s reports. The Circuit Court dismissed the case and the Appellate Court affirmed.

In its opinion, the First District held the plaintiff could not state a claim for medical negligence or breach of fiduciary duty because he had no physician patient relationship with Dr. Sweet, a retained expert for the hospital, plaintiff’s adversary in the underlying litigation. The Appellate Court further held Dr. Sweet was entitled to absolute immunity from any suit based upon statements made in his reports, pursuant to the privilege for statements made in “judicial proceedings.”

Even though Dr. Sweet prepared his reports before any actual in court testimony, and before he was even listed on a disclosure of expert witnesses, the Court held they were still privileged because they were an integral part of the process leading up to the testimony. The “privilege of an expert witness extends not only to his or her testimony, but also to acts and communications which occur in connection with the preparation of that testimony.” Id. In addition, the Court held expert witnesses are entitled to absolute immunity regardless of whether they are retained by a party or appointed by the court. “The basic policy of ensuring frank and objective testimony should prevail regardless of how the witness comes to court.” Id.

This decision helps ensure that experts and other witnesses are free to participate openly in litigation without the threat of facing a future lawsuit based upon their opinions or testimony.

The Appellate Court’s opinion may be found at:

 http://www.illinoiscourts.gov/Opinions/AppellateCourt/2017/1stDistrict/1163313.pdf

Caselaw Update: Sandoz v. Amgen: Biosimilars arrive at the Supreme Court

By Steven L. Baron and Michael J. Weil

I: Introduction

This spring, the United States Supreme Court is set to hear a landmark case that could trigger a seismic shift in the drug market for both pharmaceutical companies and consumers. Sandoz Inc., the biologics division of drug-maker Novartis, is challenging a provision in the Affordable Care Act (“ACA”) requiring that companies wait 180 days before commercializing FDA approved biosimilars. This is the first time that the Supreme Court will decide a case relating to biosimilars.

II: What is a Biosimilar?

To understand why the Novartis challenge is such big news, it is important to t a sense of today’s pharmaceutical landscape. A doctor generally prescribes medication from two main drug classes: small-molecule drugs and biologics. Small-molecule drugs like Ibuprofin are made from chemicals in a duplicate process. Because each small-molecule drug is manufactured in an easily replicated system, every pill is identical and the drug’s effects stay consistent. When patents expire on these small-molecule drugs, competing manufacturers may produce generic versions—commonly called “generics.”

The second class of medicines are called biologics. Unlike small molecule drugs, biologics are made from organic material—living cells. These cells are typically an engineered bacterium or yeast. Because each biologic is created from a unique cell there is no way to guarantee that each dose will be identical. However, because biologics are made from living material they are dynamic, and extremely effective in treating a myriad of conditions from cancers to arthritis. Leading biologics include Humira®, Neulasta®, and Rituxin®. Doctors and patients have taken notice; by 2014 six of the ten best-selling medicines globally were biologics, with about $49 billion in combined sales. After the patent on a biologic expires, other manufacturers are allowed to produce their own “generic” version—known as a biosimilar.

III: The BPCIA and the American Biosimilars Frontier

In 2010, Congress paved the way for American receipt of biosimilars with the Biologics Price Competition and Innovation Act (“BPCIA”). Biosimilars have been available in Europe and Asia for 10 years, and the BPCIA has catalyzed their entry into the United States. The main thrust of the BPCIA permits drug manufacturers to produce biosimilars that are: “highly similar” to a reference product in their active ingredients. The reference product refers to the biologic being copied, and the company that makes the product is known as a “reference sponsor.” In addition the FDA must deem each biosimilar safe for use, pure and sufficiently potent. Finally, a biosimilar must use the same mechanism for action and route of administration as its reference product.

The BPCIA has triggered a race to the American market, and has opened the floodgates for litigation. Companies are battling each other to develop biosimilars of expensive, popular products while also launching patent disputes with other firms, which are creating copycats of their own drugs. This contest to both copy, and protect, has set the stage for the Supreme Court’s first ruling on the emerging field.

IV: Sandoz v. Amgen

The Sandoz appeal to the Supreme Court challenges a controversial section of the BPCIA. The case began in 2014 when Amgen, maker of the billion dollar biologic Neupogen®, sued Sandoz in San Francisco federal court. Amgen alleged that Sandoz infringed on its patents and violated the law governing biosimilars. Specifically, Amgen argued that Sandoz violated the 180-day wait time mandated by the BPCIA because it did not wait until 180 days after FDA approval to market its biosimilar. Sandoz countered that it gave notice to Amgen 180 days before first commercial marketing and consequently did not have to wait for FDA approval. The San Francisco court ruled that Sandoz did not violate the BPCIA provision, granted judgment to Sandoz on its counterclaims and denied Amgen’s motion for a preliminary injunction. In response, Amgen filed an appeal with the U.S. Court of Appeals for the Federal Circuit in Washington. The Court of Appeals ruled that notice before commercial marketing did not satisfy the BPCIA’s requirement; instead the court opined that 180 days notice may only be given after FDA approval. Dissatisfied with the ruling, Sandoz petitioned the Supreme Court to hear the case in February 2016. Subsequently, the Supreme Court granted certiorari in January 2017.

In its petition to the Supreme Court, Sandoz argued, “If not reversed, the (Court of Appeals) decision will delay access by patients to all biosimilars for six months longer than Congress intended.” Sandoz also contended that waiting 180 days after FDA approval improperly gave Amgen an extra six months of exclusivity on top of the 12 years already provided for under the BPCIA. Furthermore, consumer advocates have voiced concern that the 180-day waiting period impacts critically ill people, like cancer patients, who cannot afford expensive biologics but cannot wait for biosimilars to hit the market. Most patients who need biologics have few options that work as well as these treatments, which can range from approximately $23,000 to over $45,000 per year.

V: Amgen v. Sandoz

In addition to Sandoz suit against Amgen, the Court will hear Amgen’s cross petition against Sandoz. Amgen has asked the Court to decide whether an Applicant (Sandoz) is required by law to provide the Sponsor (Amgen) with a copy of its biologics license application and related manufacturing information. If the Applicant does not meet the terms, Amgen asks whether a Sponsor’s only remedy is to commence a declaratory judgment action, and/or a patent infringement action.

VI: Looking Ahead

Because this is a case of first impression, the Court’s ruling could define the future timeline for biosimilars distribution in the United States. Former Acting Solicitor General of the United States, Ian Gershengorn, wrote that a decision would have a “significant impact on the biotech companies that hope to “promptly bring their biosimilars to the public.” Predictably, biosimilars manufacturers hope that the Court sides with Sandoz because it will increase profitability of biosimilars and lessen the wait time for production and distribution. Many are lining up behind Sandoz; notably pharmaceutical giant Pfizer’s subsidiary, Hospira, along with biologics manufacturer Celltrion, submitted a friend-of-the-court filing in support of Sandoz.

In contrast, Amgen and other producers of FDA exclusive biologics want the Court to recognize the expense and extensive research required to make biologics. As such, these companies contend that they are entitled to compensation or a broader period of protection for their biologics–before competitors cut into their hard-earned sales.

Ultimately, the Supreme Court’s opinion in the Amgen-Sandoz dispute will be a seminal decision in biotechnology law. The ruling will help shape the future of the biotech market and is a case to watch in the coming months.
__________
Michael Weil is a licensed patent attorney at Lowis & Gellen LLP in Chicago.
Steven Baron is a partner at Mandell Menkes LLC in Chicago

Caselaw Update: Appellate Court Holds Quality Control Reports Not Privileged

On June 23, 2017, the Second District Appellate Court affirmed a trial court decision that quality control reports prepared pursuant to a standing policy to report incidents and serving both quality-improvement and risk-management purposes were not privileged under the Medical Studies Act.

In Nielson v. SwedishAmerican Hospital et al., 2017 IL App (2d) 160743, the plaintiffs alleged the defendant gynecologist and her employer Hospital (on a theory of agency) were negligent in performing an outpatient surgery. Hospital nurses prepared three quality control reports pertaining to the surgery. During discovery, plaintiffs moved to compel production of the reports. The Hospital claimed privilege over the reports pursuant to the Medical Studies Act. In support of its claim, it submitted an affidavit from the director of risk management, stating that the Hospital’s quality-assurance committee had established a standing request that information regarding “medical occurrences” be collected and reported to the committee via a quality control report form. The affidavits of the nurses who prepared the reports were also submitted. The nurses each stated that they prepared the reports at the request of the committee and forwarded the reports to the director of risk management, understanding that the information therein would be kept confidential.

After an in camera review, the trial court granted the motion to compel. When the Hospital refused to produce the reports, the trial court held it in civil contempt and subjected it to a fine of one dollar per day until the reports were produced.

On appeal, the Appellate Court affirmed the trial court’s ruling that the reports were not privileged. First, the Court emphasized that the reports were generated before the committee was even aware of the incident. The standing policy that declared in advance that the reports were peer-review materials was insufficient to support a claim of privilege. Pursuant to the recent First District decision Eid v. Loyola, a quality committee can authorize a designee of the committee to investigate a potential quality issue on the committee’s behalf, thus cloaking any documents generated thereafter in privilege. However, the Nielson Court makes clear that the designee may not be declared (and thus cannot generate privileged documents) until after the committee becomes aware of the incident and authorizes the investigation. In other words, the committee must already be investigating the incident at issue in order for the privilege to apply.

The Court also emphasized that the reports were not prepared exclusively for peer-review purposes. Contrary to the trial court’s findings, the Appellate Court found the reports were also prepared in anticipation of litigation, as they were sent to the risk management department, and potential legal implications of the incident could be flagged on the form.

The protection offered health care institutions for the improvement of the quality of patient care under the Medical Study Act continues to erode. This decision warns that hospitals and other protected care providers should not rely on incident or occurrence reports as privileged data regardless of language in policies, bylaws, or protocols establishing the report as part of the ad hoc information gathering process or delegated committee action on a standing basis. This case further illustrates the need for quality committees to expeditiously document the decision to investigate an incident in order to capture all subsequent data under the Medical Studies Act. While the standing policy in Nielson served to quickly apprise the committee of an incident, and the intent behind the policy was for the information generated to be privileged, the Court found the report to be a mere trigger for committee action. We have counseled our clients that incident and occurrence reporting should be viewed with the likelihood that production will be ordered, should contain information that is also or that should otherwise be contained in the medical record, and should be a minimalist notification of an event with no further information or action tied to it. The necessary committee and its members or delegates can then respond to that information in a privileged and protected manner. Lowis & Gellen has several attorneys with the experience and skill set to guide health care providers through the construction and operation of a protected reporting and investigation system under the Medical Studies Act.

LAW ALERT: U.S. H.R. 1215 – “Protecting Access to Care Act of 2017”

The United States House of Representatives is scheduled to vote on the Protecting Access to Care Act (PACA) on June 14, 2017. As written, the bill would preempt existing state laws on a range of topics relevant to personal injury lawsuits. If ultimately passed by the Senate and enacted into law, the PACA would likely have a significant and wide ranging impact on future medical malpractice cases in the State of Illinois

Although the official bill summary states that it would only apply to cases where the care at issue was “federally subsidized” in some respect, there appears to be no language in the most recent bill to this effect. The Congressional Budget Office conducted a review of the bill and does not comment on the limitation, suggesting it may have broader applicability. See https://goo.gl/v0axT1.

As a practical matter, the bill would place significant limitations on all medical malpractice lawsuits. For example, the bill would supersede the Illinois statute of limitations so that lawsuits would have to be filed within one (1) year of a claimant’s discovery of the injury at issue, or within three (3) years, whichever is sooner. A lawsuit could not be filed more than three years after the injury.

From the bill, the new statutes of limitations and repose are tolled only upon proof of fraud, intentional concealment or when a foreign body “which has no therapeutic or diagnostic purpose or effect” is found in the injured person. The current version of the bill does not preempt state statutes of limitations with respect to minors.

PACA also has important prospective effects on damage claims in medical malpractice cases. The bill seeks to cap non-economic damages, including but not limited to pain and suffering, disability, and disfigurement, at $250,000. This would supersede court rulings in various states, including Illinois, finding damage caps unconstitutional.

Further, the bill eliminates joint and several liability, making liability several only. This would mean that defendants would only be obligated to pay the portion of a judgment or settlement proportional to that defendant’s fault. There is also language in the bill to alter or eliminate state collateral source rules.

PACA further places significant limits on attorney’s fees, substantially diminishing the incentive for plaintiff’s attorneys to prosecute medical malpractice actions.

The PACA bill also prohibits naming health care providers as defendants in products liability and class action lawsuits involving products that are approved, licensed, or cleared by the Food and Drug Administration.

With respect to the applicability of the bill, the text states that only lawsuits filed after the date PACA became law would be subject to its terms. For existing claims and injuries occurring prior to PACA becoming law, the statute of limitations in effect at the time of the injury would apply.

Although this bill does not have broad ranging support, political experts expect that it will pass the House of Representatives when called for a vote. Standing alone, it is unlikely that the PACA bill would pass through the Senate, but Republican leaders have signaled their intention to include PACA in a larger budget reconciliation bill together with the American Healthcare Act (ACHA).

Over the past several weeks it has looked increasingly likely that there are fifty Republican votes for the ACHA. By using the budget reconciliation process, the Senate would be able to pass both PACA and the ACHA with only 50 votes plus the vote of Vice President Michael Pence.

Given the ongoing press coverage of the multiple scandals surrounding the Trump administration, it is quite likely that PACA will be able to pass through Congress with little public scrutiny or attention from the media. Therefore, if the combined AHCA / PACA bill becomes likely to pass the United States Senate, we expect there may a significant increase in medical malpractice claim filings in the days and weeks prior to its passage as plaintiff’s firms attempt to avoid the cap on non-economic damages and limits on attorney’s fees. If PACA becomes law, it is entirely possible that filings will decrease given the diminished incentives for plaintiff’s attorneys to prosecute medical malpractice cases, particularly those with uncertain liability.

Although PACA will inevitably be challenged in the courts if it becomes law, it is unclear how Federal courts would rule on challenges. The recent national trend has been against damage caps – the Florida Supreme Court, for example, ruled last week that that state’s damages caps were unconstitutional. See North Broward Hospital District v. Kalitan, Florida Supreme Court, June 9, 2017.

As always, we will update you as developments occur.

JURY TRIAL VICTORIES – THREE IN A ROW

Vito Masciopinto

In the span of three months, Vito Masciopinto tried three cases to verdict resulting in a not guilty verdict for his clients each time.

The first, tried in March, was a victory for an emergency department physician at a south side hospital. Partner Lee Williams assisted at trial. The plaintiffs alleged a failure to inform the family of a lesion on the plaintiffs’ decedent’s liver which was detected on a routine abdominal CT scan. The plaintiffs claimed this resulted in a failure to have her liver cancer diagnosed resulting in her death two years later. Plaintiffs asked the jury for over 16 million dollars, but the jury ruled in favor of the defendants.

In April, Mr. Masciopinto tried a case with associate Kelly Pachis involving a Polish national who presented at a suburban hospital with complaints of abdominal pain. Mr. Masciopinto and Ms. Pachis successfully defended the internist who cared for the patient during the hospitalization. The plaintiffs alleged a failure to diagnose possible surgical abdomen, as well as discharging the patient prematurely resulting in her developing multiple abdominal abscesses and peritoneal infection requiring surgery upon her return to Poland. Plaintiff requested $350,000 in damages. The jury deliberated for less than two hours before finding a not guilty for the physician.

The third trial took place in May. Mr. Masciopinto and associate Caitlin Ewing successfully defended a north side hospital on a wrongful death claim. The allegations against the hospital’s nurses were for failing to properly provide VTE prophylaxis. The plaintiffs claimed this resulted in plaintiff’s decedent developing a pulmonary embolism resulting in his in-hospital arrest and death. The plaintiff’s requested $3.3 million from the jury, which returned a verdict in favor of the hospital in one hour.

CJ Gibbs has been invited to join the CLM

CJ Gibbs
Lowis & Gellen LLP is pleased to announce that CJ Gibbs has been invited to join the prestigious CLM. The CLM is a nonpartisan alliance comprised of thousands of insurance companies, corporations, Corporate Counsel, Litigation and Risk Managers, claims professionals and attorneys. Through education and collaboration, the organization’s goals are to create a common interest in the representation by firms of companies, and to promote and further the highest standards of litigation management in pursuit of client defense. Selected attorneys and law firms are extended membership by invitation only based on nominations from CLM Fellows.

CJ Gibbs dedicates his practice solely to civil litigation. His primary focus is coordinating the defense of general liability matters for self-insured private and public retailers on a national and regional basis. His experience ranges from coordinating with in-house clients concerning claims and risk management to all stages of litigation, including mediation, arbitration, and trial. Furthermore, Mr. Gibbs has experience defending tire defect claims nationwide ranging from minor injury claims to catastrophic injury and wrongful death claims.

Cahill Edits Leading Treatise on Commercial Bankruptcy Litigation

Comercial Bankruptcy Litigation 2d Edition

Comercial Bankruptcy Litigation 2d Edition

Thomson Reuters has published its comprehensive and annually-updated treatise, Commercial Bankruptcy Litigation, 2d Edition (Jonathan P. Friedland, Elizabeth Vandesteeg & Christopher M. Cahill eds., 2017). Our Christopher Cahill co-authored Chapter One and has served as Executive Editor of the treatise since 2014.

One of West Publishing’s best-selling titles since 2009 and weighing in at more than 1,600 pages, Commercial Bankruptcy Litigation is the result of an effort by approximately 50 leading restructuring professionals, from more than 20 distinguished firms.

2017 Super Lawyer Announcement

Lowis & Gellen is proud to announce that four of our attorneys were named to the 2017 Super Lawyers list by Illinois Super Lawyer Magazine.

The Super Lawyers designation is based upon peer recognition and professional achievement, and no more than five percent of lawyers in each state are selected by the research team to receive this honor.

We congratulate the following attorneys:
Pamela Gellen—Top Rated Medical Malpractice Attorney, 10th consecutive year
Gerald Haberkorn—Top Rated Business Litigation Attorney, 10th consecutive year
Andrea Kott—Top Rated Medical Malpractice Attorney, 4th consecutive year
Robert Smeltzer—Top Rated Business Litigation Attorney, 4th consecutive year

Kristin Ahmadian and Caitlin Ewing Speak to the Illinois Association of Defense Trial Counsel, Young Lawyers Division regarding HIPAA; Seminar Moderated by Kelly Pachis

Kristin Ahmadian and Caitlin Ewing, both Chicago-based attorneys at Lowis & Gellen, recently spoke to the Illinois Association of Defense Trial Counsel, Young Lawyers Division at a seminar on “Medical Litigation Fundamentals: A Young Lawyers Guide to Successfully Defending a Medical Malpractice, Personal Injury, Workers’ Compensation or Tort Case.” Their presentation was titled “HIPAA Basics for Civil Litigation.” Ms. Ewing discussed the history of HIPAA and its requirements. Ms. Ahmadian discussed the enforcement of HIPAA and recent settlements for HIPAA violations. The seminar was moderated by Kelly Pachis, an attorney in Lowis & Gellen’s Chicago office.