Food and Drug Cases to Watch in 2020 

William E. Janssen, Lynn C. Tyler*

The year 2020 has turned out to be a year to remember, even if unwillingly. Usually published in April, this volume’s publication was delayed to early October 2020 to coincide with FDLI’s delayed Annual Meeting. That didn’t leave much of 2020 to watch for cases. Accordingly, we cover fewer cases to watch than in a typical year, and the next expected action on some of the cases we cover may well occur in 2021. Even so, we polled our Top Cases chapter authors for their prognostications on which litigations currently in process have the potential to change the food and drug landscape, and they did a great job in coming up with cases to watch.

Ford Motor Co. v. Bandemer

Ford Motor Co. v. Montana Eighth Judicial District Court[1]

These two consolidated cases—one from Minnesota and one from Montana—explore a constitutional personal jurisdiction question the U.S. Supreme Court raised in 1984 and then avoided ever since. They involve two car crashes, one in each State, and the lawsuits that ensued. Both lawsuits proposed to exercise “specific” personal jurisdiction over the cars’ manufacturer (Ford Motor Company) in the States where the crashes occurred. The claimants reason that Ford “deliberately cultivated a market” for its products in Minnesota and Montana (which it did), and that local State residents were injured in-State by Ford products (which they were). But Ford argues that those facts are not enough to confer “specific” personal jurisdiction. Instead, quoting a flurry of Supreme Court personal jurisdiction opinions over the years, Ford posits that “specific” personal jurisdiction can exist only when a defendant’s behavior of purposefully availing itself of the privilege of doing business in a State is what actually causes the claimed injury in that State. Then, and only then, insists Ford, can “specific” personal jurisdiction be possible. (Under that test, “specific” personal jurisdiction would fail here: the two cars that crashed were sold by Ford to their original owners in States other than Minnesota and Montana, and had been later re-sold to others.) In 1984, the Supreme Court handed down Helicopteros Nacionales de Columbia, S.A. v. Hall,[2] where it explained that “specific jurisdiction” will exist when the lawsuit’s cause of action “arise[s] out of or relate[s] to” a foreign entity’s activities in that forum State. The Court then went on to decide that case on other grounds. But the majority opinion dropped a cagey footnote (No. 10) to expressly “assert no ‘view’” on whether a distinction exists between the phrase “arises-out-of” and the phrase “relates-to,” or the “validity or consequences of such a distinction,” or even whether “relates-to” could, alone, be enough to establish “specific” personal jurisdiction. It seems that question, left hauntingly unanswered for thirty-six years, will finally be tackled this Court Term. The ramifications for product liability litigation of all types—including drug and device disputes—are significant far-reaching. Oral argument before the U.S. Supreme Court in this case has been scheduled for October 7, 2020.

Polansky v. Executive Health Resources, Inc.[3]

The plaintiff/relator, Jesse Polansky, M.D. (“Relator”), brought a False Claims Act (FCA) qui tam action in the Eastern District of Pennsylvania on behalf of the United States. Relator alleged that Executive Health Resources, Inc. (“EHR”) caused its hospital clients to fraudulently bill Medicare and Medicaid by falsely designating patient admissions as inpatient when they should have been designated as outpatient. The claims at issue included reimbursement claims certified by EHR from January 1, 2009 to October 1, 2013. During that period, the definition of an inpatient admission was set forth in Centers for Medicare & Medicaid Services (CMS) guidance, specifically § 210 of the 1989 edition of the Medicare Hospital Manual.

Relator’s theory was that the claims were “legally false” under the FCA because the hospitals had (allegedly) falsely certified that they had complied with a statute or regulation which was a condition for Government payment. Applying Azar v. Allina Health Services[4] and the D.C. Circuit’s definition of “substantive legal standard” in Allina Health Servs. v. Price,[5] the district court decided that the 24-hour policy in the 1989 Manual and its predecessors was a “substantive legal standard” within the scope of Section 1395hh(a)(2) of the Medicare Act. Thus, it could only be adopted by a notice-and-comment rulemaking. Relator’s theory failed as a matter of law because it was undisputed that the 24-hour policy did not go through the notice-and-comment process. Given that the policy was not properly adopted, it was not a condition for Government payment with which the hospitals could have falsely certified compliance. In other words, FCA liability could not be predicated on agency guidance.

An appeal was taken to the Third Circuit and briefing was completed August 27, 2020. As of the date of this publication, oral argument has not been scheduled.


* We extend extra thanks to these contributing authors to other chapters of this volume who also suggested and summarized cases to watch for this chapter.

[1]    No. 19-369 (U.S.), on appeal from Bandemer v. Ford Motor Co., 931 N.W.2d 744 (Minn. July 31, 2019).

[2]    466 U.S. 408, 414 (1984).

[3]    No. 19-3810 (3d Cir.), on appeal from 422 F. Supp. 3d 916 (E.D. Pa. Nov. 5, 2019).

[4]    139 S. Ct. 1804 (2019).

[5]    863 F.3d 937, 943 (D.C. Cir. 2017).