In Grissom v. Liberty Mutual, the trial court awarded $212,000 in damages for negligent misrepresentation, based on the difference between the coverage a homeowner actually had at the time of Hurricane Katrina, and the coverage he could have had under a “preferred risk policy.” No. 11-60260 (April 23, 2012). The Fifth Circuit reversed on preemption issues unique to flood insurance as well as the viability of the claim itself, stating: “Because Liberty Mutual was not offering insurance advice, was not a fiduciary of Grissom, and did not offer any statement to Grissom to imply the lack of alternative insurance options, Mississippi law would not recognize negligent misrepresentation as a cause of action against Liberty Mutual . . . .” Op. at 9-10.
In a detailed opinion that surveyed differing Circuit opinions on several topics, the Court found that “the purchase or sale of securities (or representations about the purchase or sale of securities) is only tangentially related to the fraudulent scheme alleged” in state class actions about the Allen Stanford scandal. Roland v. Green (March 19, 2012). Therefore, the Securities Litigation Uniform Standards Act (SLUSA) did not preclude those actions. The opinion will likely have a significant influence on future cases about the scope of SLUSA in the Fifth Circuit.
Lofton v. McNeil Consumer & Specialty Pharmaceuticals presented a failure-to-warn claim based on a severe reaction to a common pain medicine. No. 10-10956 (Feb. 22, 2012). The Court concluded that the specific claim at issue, based on Tex. Civ. Prac. & Rem. Code § 82.007, required litigation about whether “fraud on the FDA” had occurred and was thus preempted. Op. at 13-14. The Court acknowledged a circuit split on this preemption issue, and also noted that it was not addressing an issue about the severability of the Texas statute because that issue was raised for the first time on appeal.
Bass v. Stryker Corp. presents a highly technical analysis of whether state law claims about a hip implant are preempted by the federal Medical Device Amendments to the Food, Drug, and Cosmetics Act. No. 11-10076 (Jan. 31, 2012) The Court found that the manufacturing claims could proceed as “parallel claims that do not impose different or additional requirements than the FDA regulations,” and that certain implied warranty claims survived because they were based on violations of federal requirements. Op. at 19, 23. The Court affirmed the dismissal on preemption grounds of other claims, including an alleged failure to warn. The opinion provides a thorough example of how Twombly applies to a Rule 12 motion based on preemption.