Pennsylvania federal court dismisses Wallace case based on plaintiff’s counsel’s willful violations of law in Aredia®/Zometa® case.



M.D. Pa. -- United States District Court for the Middle District of Pennsylvania

Complex Litigation


On November 27, 2013, the United States District Court for the Middle District of Pennsylvania granted Novartis Pharmaceuticals Corporation’s (“NPC”) motion to dismiss plaintiff’s complaint pursuant to Federal Rule of Civil Procedure 25 in Wallace v. Novartis Pharm. Corp., 3:12-cv-01905-RDM (M.D. Pa. Nov. 27, 2013) (see Memorandum Opinion).  The court determined that plaintiff’s counsel’s willful failures, which involved the violation of Federal Rules of Procedure, MDL court orders, and Pennsylvania law, and the misrepresentation of facts concerning the proper substitute plaintiff, justified dismissal of plaintiff’s claims against NPC. 

This case was originally part of the ongoing Aredia® and Zometa® multidistrict litigation, In re: Aredia® and Zometa® Prods. Liab. Litig., No. 3:06-MD- 01760 (TJC) (M.D. Tenn.) (“MDL”), and was later remanded from the MDL to the Middle District of Pennsylvania for further pretrial proceedings and trial.  Plaintiff Linda Wallace, a Pennsylvania resident, died in February 2007.  In October 2007 and January 2008, one of plaintiff’s then-counsel, Russell Beatie of Beatie and Osborn LLP, moved for substitution of Mrs. Wallace’s husband, John Wallace, as the plaintiff and represented in court documents that he was the “the executor” and “the personal representative” of her estate under Pennsylvania law.  Based on those statements, the MDL court granted motion to substitute Mr. Wallace as plaintiff.  In spring 2009, after Beatie and Osborn LLP dissolved, Mr. Beatie’s former law partner, Daniel Osborn became the attorney of record.  NPC later learned that, contrary to the representations of plaintiff’s counsel and Mr. Wallace at the time of substitution and thereafter, Mr. Wallace had never initiated probate proceedings related to Mrs. Wallace’s estate and had not received Letters Testamentary or appointment as “the Executor” or “the personal representative” of Mrs. Wallace’s estate from the Commonwealth of Pennsylvania.  In August 2013, NPC moved for dismissal of the lawsuit with prejudice. 

While part of the MDL, this case was governed by the MDL’s Case Management Order (“CMO”), which required all deceased plaintiffs to be substituted pursuant to Federal Rule 25(a) and applicable state probate and survival law, and for substitution to happen within ninety days of the filing of the Suggestion of Death.  Under Pennsylvania law, there is a mandatory one-year period after the death of a plaintiff in which to appoint a personal representative, after which a defendant may move for abatement.  See 20 Pa. C.S.A. § 3375.  After the Wallace case was remanded, NPC learned that more than five years had passed since the Suggestion of Death was filed on October 26, 2007 without an estate being opened for Mrs. Wallace and moved to abate the case pursuant to the Pennsylvania statute.  NPC also moved to vacate Mr. Wallace’s substitution – which had been granted pursuant to the false premise that Mr. Wallace actually was the executor and personal representative of his wife’s estate – and moved to dismiss the case with prejudice because there was no proper plaintiff and any other party was time-barred from being substituted into the action as plaintiff under Rule 25(a) and Pennsylvania law.  

The Middle District of Pennsylvania held that the action was subject to abatement under Pennsylvania law since Mr. Wallace’s failed to open an estate and obtain appointment as the personal representative of Mrs. Wallace’s estate within one year after her death and “simply being named as the executor of his wife’s estate in her will did not make John Wallace a ‘personal representative’ under Pennsylvania law.”  11/27/13 Mem. Op., at 10-11.  In addition, District Judge Robert Mariani found that the motion to substitute was defective because it contained “binding” misrepresentations by counsel about Mr. Wallace’s status as the personal representative of Mrs. Wallace’s estate, which rendered the MDL court’s 2008 order granting substitution “improper,” and, accordingly, vacated the substitution order.  Id., at 8-9.  The court rejected Mr. Osborn’s claim that the motion to substitute contained no misrepresentations, finding instead that it “was meant to induce the Court to believe . . . and . . . to produce the conclusion that John Wallace was the ‘personal representative,’ in the legal sense, of Linda Wallace’s estate.  To argue otherwise is disingenuous.”  Id., at 13, n.12.  In granting NPC’s motion, the court determined that Mr. Wallace’s failure to comply with the MDL court’s CMO and Federal Rule 25(a) and substitute the proper party was attributable to both Mr. Osborn and his client, holding that, although Mr. Osborn may not be “a wills and estates lawyer . . . it was his responsibility to ensure that his clients became proper legal representatives in their cases.  The law is well-established that clients must be held accountable for the acts and omissions of their attorneys.”  Id., at 9 (internal quotations omitted).  In addition, the court determined that dismissal with prejudice based on abatement alone to be justified, concluding that Pennsylvania law required abatement of the action after Mr. Wallace failed to “reasonably explain” the years of delay in his appointment as the personal representative of his wife’s estate.  Id., at 13-14.  Further, the court determined that NPC had been prejudiced and was entitled to dismissal in light of plaintiff’s long history of dilatory conduct.  Id., at 15 (noting that “a client cannot always avoid the consequences of the acts or omissions of counsel”).  In finding that Mr. Osborn’s “neglect” of his obligations under the MDL court’s CMO and Rule 25(a) was willful, the court held that “[t]he time that Novartis has expended on the merits of this case has been substantial, when in fact, a proper party was never substituted for Linda Wallace.  Novartis has been prejudiced by being exposed to prolonged and unnecessary litigation.”  Id., at 16. 

Despite its observance that dismissal for repeated failures to meet deadlines or to comply with court orders is disfavored, the court concluded that the facts of this case justified dismissal: “[B]oth this Court and the MDL Court provided several warnings to [Mr.] Osborn about his lack of compliance with the CMO, Rule 25(a), and the Local Rules . . . [and] less drastic sanctions are inadequate.”  Id., at 21.  Quoting a similar ruling by the MDL court in the Spiese v. Novartis Pharm. Corp. case,  the court observed that “Attorney Osborn’s neglect ‘in this case has burdened the Court, strained scarce court resources, delayed disposition of this case, and prejudiced [NPC].’”  Id. (citation omitted).

The November 27 Opinion dismissing the Wallace action is the latest in a string of similar decisions in the Zometa®/Aredia® litigation based on the failure to comply with the MDL CMO, Rule 25, applicable state law, and/or plaintiffs’ counsel’s misrepresentations, in substituting a proper party under Rule 25 in both the federal MDL and other federal courts around the country.  E.g., Blumenshine v. Novartis Pharm. Corp., No. 08-0567-CV-W-SOW (W.D. Mo. July 23, 2013); Spiese v. Novartis Pharm. Corp., No. 3:06-cv-00858, MDL ECF No. 6739 (M.D. Tenn. June 14, 2013); Cole v. Novartis Pharm. Corp., 3:06-cv-00506, MDL ECF No. 6630 (M.D. Tenn. June 10, 2013); Carter v. Novartis Pharm. Corp., No. 4:12-cv-605-DPM, ECF No. 54 (E.D. Ark. June 4, 2013); Kathleen Wilson v. Novartis Pharm. Corp., 3:06-cv-0966, MDL ECF No. 6664 (M.D. Tenn. May 13, 2013); J. Wilson v. Novartis Pharm. Corp., No. 4:12-cv-684-A, 2013 WL 593895 (N.D. Tex. Feb. 15, 2013); McDaniel v. Novartis Pharm. Corp., No. 2:08–CV–02088, 2012 WL 32608 (W.D. Ark. Jan. 6, 2012).

Novartis was represented in this matter by Firm partner Joe G. Hollingsworth.