Event Recap – Pour Decisions: Lessons in Healthcare Fraud and Liability Cases

Medical device and pharmaceutical companies face intensifying legal scrutiny from both public regulators and private litigants. In Pour Decisions: Lessons in Health Care Fraud and Liability Cases, David Graham—a seasoned regulatory attorney with decades of courtroom and in-house experience—walked through recent cases that underscore this shifting risk environment. His presentation, delivered during Gardner Law’s “Saison-al Session” event, offered a cautionary roadmap for how companies can avoid common legal pitfalls that lead to costly litigation or enforcement actions.

Trends Impacting Industry Risk

Graham opened by spotlighting “no-injury” consumer protection class actions, where plaintiffs sue over economic harm rather than physical injury—claiming that a product’s value was diminished due to the presence of an unwanted substance. In one antifungal medication case, the presence of benzene—though not proven to cause harm in any user—led to a recall and class action payout. These cases require minimal proof, making them attractive for plaintiff attorneys and costly for companies, even in the absence of actual harm.

He then explored the doctrine of federal preemption, noting a favorable ruling for industry in a chemotherapy drug case. The court sided with the manufacturer, holding that FDA approval processes preempted conflicting state law requirements. However, Graham warned that if federal regulation recedes, states may fill the gap with inconsistent or burdensome rules—an outcome that could increase compliance complexity for manufacturers.

Evolving Doctrines and Legal Standards

The learned intermediary doctrine, which traditionally shielded companies by assigning informational responsibility to physicians, is now under pressure. A recent California ruling reaffirmed the doctrine but adopted a lower evidentiary threshold: plaintiffs only need to show that a physician would have communicated a stronger warning had it been received. Graham noted this subtle erosion could increase litigation exposure—especially as direct-to-consumer (DTC) advertising gains prominence and juries grow more willing to second-guess physician-patient communication.

Additionally, Graham highlighted how Federal Rule of Evidence 702—updated in 2023—strengthens the gatekeeping role of courts in evaluating expert testimony. In one product liability case, a plaintiff expert was excluded for ignoring contradictory studies and relying on irrelevant data. The revised rule, which demands that methodologies be reliably applied, can provide crucial leverage in challenging unqualified or biased expert witnesses.

Free Speech and the Future of Product Labeling

Graham wrapped with a notable First Amendment case concerning California’s Proposition 65 warning requirements. A federal court struck down a compelled warning about acrylamide in coffee, finding the science inconclusive and the warning misleading. This ruling has national implications, as it reinforces that government-mandated speech must be factually accurate and supported by sound science, particularly amid growing public scrutiny of ingredients and additives.

Why This Matters

Throughout the presentation, Graham emphasized that litigation and enforcement are no longer limited to traditional product defect cases. Today’s claims may stem from labeling language, advertising practices, ingredient disclosures, or even alleged omissions—each with unique evidentiary demands and risk profiles.

“Litigation strategy now starts long before a lawsuit—at the labeling table, in the ad copy, and in how you prepare for the scrutiny you hope never comes.”

Companies navigating this environment must proactively align their regulatory, legal, and marketing functions to avoid the kinds of costly missteps that Graham illustrated.

Need Help Navigating These Risks?

David has helped clients across the FDA-regulated spectrum—from startups to multinationals—respond to regulatory inquiries, defend against litigation, and design risk-mitigating compliance systems. If your company is facing enforcement or wants to avoid the mistakes of others, contact David for counsel that’s informed, strategic, and grounded in experience.