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Third Circuit Rejects Pacira Biosciences' Trade Libel Claim Over Article in Leading Medical Journal About EXPAREL


From Friday's Third Circuit decision in Pacira Biosciences, Inc. v. American Society of Anesthesiologists, Inc., written by Judge Patty Shwartz, joined by Judges Stephanos Bibas and Thomas Ambro:

Pacira BioSciences, Inc. … sued the American Society of Anesthesiologists, Inc. …, the editor-in-chief of its medical journal, and the authors of three articles for statements made about one of Pacira's drug products…. Because the District Court correctly concluded that the statements that form the basis of Pacira's trade libel claim are nonactionable opinions, Pacira has failed to state a basis for relief….

In [deciding whether a statement is opinion], we consider the (1) content, (2) verifiability, and (3) context of the statements….

Pacira seeks relief based on two statements: (1) that EXPAREL is "not superior" to local anesthesia; and (2) that it is an "inferior analgesic." Stating that something is "not superior" or "inferior" is the type of "loose" or "figurative" language that the New Jersey Supreme Court has said is "more likely to be deemed non-actionable as rhetorical hyperbole." …

The verifiability prong also supports the conclusion that the statements are nonactionable opinions…. First, the statements are tentative scientific conclusions and were expressly disclosed as such …:

Most conclusions contained in a scientific journal article are, in principle, capable of verification or refutation by means of objective proof. Indeed, it is the very premise of the scientific enterprise that it engages with empirically verifiable facts about the universe. At the same time, however, it is the essence of the scientific method that the conclusions of empirical research are tentative and subject to revision, because they represent inferences about the nature of reality based on the results of experimentation and observation.

… "Scientific conclusions are subject to perpetual revision." …); {One court has recently observed that if there is consensus on a scientific issue, then a statement about the issue may be deemed verifiable.}

The statements here expressly claim they are tentative scientific conclusions. For example, immediately before concluding that EXPAREL is not superior to standard analgesics, the Hussain Article enumerates five "notable limitations" of its study, including "variabilities" that "may have played a confounding effect," "publication bias" in selecting studies, and statistical limitations due "to scarcity of data." …

Second, Pacira fails to appreciate the difference between "verifiability" and "reliability." Verifiability turns on whether a statement is "capable of … truth or falsity," while reliability turns on whether the basis for the statement is capable of being trusted. Pacira's allegations boil down to disagreements about the reliability of the methodology and data underlying the statements. For example, Pacira alleges that the Articles disregarded studies favorable to EXPAREL and that the Ilfeld Review failed to consider a relevant procedure, but allegations that "competent scientists would have included variables that were available to the defendant authors but … were not taken into account in their analysis" cannot create an actionable falsehood because they do not bear on whether the statements are verifiable. Pacira also alleges that the Hussain Article employed a "flawed method," but mere disputes about the reliability of a scientific study's disclosed methodology cannot create an actionable falsehood for trade libel, as such disputes do not address whether the statements themselves are verifiable…. "[T]he reliability of the data in [scientific] articles is not fit for resolution in the form of a defamation lawsuit." …

{To be sure, a conclusion drawn from falsified or fraudulent data may be actionable because "there is no constitutional value in false statements of fact." Pacira, however, does not allege that any of the data were falsified.}

{There are, of course, circumstances in which courts may need to assess the reliability of a scientific study. Liability under the Lanham Act arises, for example, if the commercial statement is "literally false." For certain claims, literal falsity may be established by showing that "the underlying studies upon which the representations are based are not sufficiently reliable to permit one to conclude with reasonable certainty that they established the claim made."

Our inquiry here is different. We must determine the threshold question of whether the statements are nonactionable pure opinions protected from a trade libel suit. As part of that inquiry, we consider whether the statements can be proven true or false. It is only after establishing the statements can be proven true or false that reliability of the underlying data and methodology may become relevant. Pacira's attacks on Defendants' studies do not answer the question of whether the statements about whether its product is inferior or not superior are verifiable.}

Pacira's critiques about the Articles' data and methodology may be the basis of future scholarly debate, but they do not form the basis for trade libel under New Jersey law. To conclude otherwise would risk "chilling" the natural development of scientific research and discourse. Thus, the verifiability factor supports our conclusion that the statements are nonactionable opinions….

Finally, the context of the statements further demonstrates that they are nonactionable opinions…. The statements here were made in a peer-reviewed journal for anesthesiology specialists. While statements are not protected solely because they appear in a peer-reviewed journal, such journals are often "directed to the relevant scientific community." Their readers are specialists in their fields and are best positioned to identify opinions and "choose to accept or reject [them] on the basis of an independent evaluation of the facts."

Such is the case here. First, Anesthesiology is a leading journal in the field and is offered as a free benefit to the ASA's members, who are "physicians practicing in anesthesiology as well as anesthesiologist assistants and scientists interested in anesthesiology." Second, the readers were provided with the data and methodology on which the statements were based. The Hussain Article stated that it was based on nine randomized studies, gave the reasons for selecting those studies, and disclosed the possible shortcomings of its methodology. The Ilfeld Review disclosed the seventy-six randomized controlled trials involving EXPAREL it reviewed, what those trials concluded, and the methods the authors used to analyze the data. The CME's statement that EXPAREL is "inferior" to local anesthetics is based directly on the Ilfeld Review's finding that "[n]inety-two percent of trials (11 of 12) suggested [standard local anesthesia] provides superior analgesia to [EXPAREL]." Similarly, the CME's statement allegedly suggesting that industry-sponsored studies favoring EXPAREL were biased is drawn directly from the Articles, which state that industry-sponsored studies were "considered a potential source of bias." Therefore, the journal's readers were provided the basis for the statements, have the expertise to assess their merits based on the disclosed data and methodology, and thus are equipped to evaluate the opinions the authors reached.

{To the extent that [a Second Circuit precedent] embraced a categorical rule that scientific statements contained in academic journals are always immune from a trade libel claim, we decline to hold that New Jersey law mandates such a rule.}

Congratulations to Kathleen Sullivan (Quinn Emanuel Urquhart & Sullivan), who argued the case for defendants. Note that my students Pareesa Darafshi, Gerardo Gorospe, and Katelyn Taira and I filed an amicus brief on behalf of the Foundation for Individual Rights and Expression in support of defendants.