products liability law

I'm writing several times a day about products liability for Law.com/The National Law Journal. Occasionally I cross-post a blog I find particularly interesting.

One plaintiff's lawsuit in Louisiana federal court over allegations that diabetes drug Actos increases the risk of bladder cancer resulted in a $9 billion verdict. What might a jury do in a case consolidating claims by two plaintiffs?

Takeda Pharmaceuticals America Inc. is at trial over combined claims by Delores Cipriano and Bertha Triana, who allege they received inadequate warnings about Actos. Cipriano's attorney, Robert Eglet, said he plans to seek a multibillion-dollar verdict, the Las Vegas Review Journal reported.

Before the trial started, attorneys Kelly Evans, Chad Fears and Justin Hepworth, of Snell & Wilmer in Las Vegas, with other defense lawyers, asked the Nevada Supreme Court to bar consolidation of the two cases.

“Consolidation causes prejudice on the issue of causation by creating false cancer clusters which, in turn, magnifies juror sympathy for each individual plaintiff,” Takeda's counsel wrote. “Magnification of such juror sympathy should be a real concern in mass tort litigation in light of the colossal verdicts entered recently in consolidated trials in Nevada.”

The state high court rejected the defense petition for extraordinary writ relief. The consolidated case is expected to run until May.

Actos plaintiffs haven’t always met with success in Nevada. One such trial resulted in a defense verdict. But in Louisiana federal court, last week’s the verdict in Allen v. Takeda Pharmaceuticals USA Inc. was the first of nearly 3,000 lawsuits coordinated for pretrial purposes in federal multidistrict litigation.

In that case, the jury awarded $1.475 million in compensatory damages. Takeda was found 75 percent liable and Eli Lilly & Co., which co-promoted Actos, was found 25 percent liable. The jury awarded $9 billion in punitive damages, with $6 billion against Takeda and $3 billion against Lilly.

I'm writing several times a day about products liability for Law.com/The National Law Journal. Occasionally I cross-post a blog I find particularly interesting.

The U.S. Supreme Court disfavored setting individual damages through statistical sampling in Wal-Mart Stores Inc. v. Dukes. But Alexandra Lahav, a University of Connecticut School of Law professor, argues there remains a role for sample trials in mass torts.

"Right now, the way the law is, you couldn't have a mandatory sampling regime" of cases picked by the plaintiffs and cases picked by the defendants and award damages based on the average of verdicts in those cases, Lahav said in an interview.

But academics have argued that the use of sample trials could comport with due process if used to establish a rebuttable presumption of what damages awards should be, said Lahav, who focuses on due process concerns in class actions and mass actions.

"One of the biggest issues facing courts today in civil procedure is the massive influx of cases," Lahav said—whether in the Deepwater Horizon case or litigation over products that have been mass-distributed.

There are problems with winding up mass-torts through accords in which plaintiffs' law firms settle their inventory of cases separately, Lahav said. Some lawyers are better at negotiating than others and can reach better results for their clients.

Then too, defendants sometimes offer more to plaintiffs with lower-value claims to persuade them to settle at the expense of plaintiffs with higher-value claims and greater injuries, Lahav said. Legal ethicists have “expressed the concern that some plaintiffs will be sold out in favor of other plaintiffs," she said.

If there were more transparency to settlements, Lahav said, she would worry less about whether plaintiffs are getting fairly compensated. Inventory settlements "may be perfectly fair,” she said. “They may be fabulous."

And sample trials would allow for plaintiffs to feel they have been heard, she said.

“Everybody else can look at those [sample] cases and see what happens,” Lahav said. “It's almost like a representative or surrogate. [While] they won't get their catharsis of having their very own trial, they'll get to feel that, at least, the defendant was called to account.”

I'm blogging several times a day about products liability for Law.com. Occasionally I cross-post an excerpt of a blog I find interesting:

Plaintiff's lawyers in a bellwether trial over whether Eli Lilly and Company's Actos drug causes bladder cancer allege that a witness for defendant Eli Lilly has committed perjury and have asked for the court to issue a default judgment as a consequence.

The plaintiff's counsel also allege that the witness committed “contumacious” conduct, or conduct that is willfully disobedient to the court's authority.

Plaintiff's counsel allege that Ronald Hoven, former senior director for global marketing at Eli Lilly, committed perjury and disobedience to the court's authority because he “expressed a stunning lack of knowledge throughout his adverse witness examination by plaintiffs.” In contrast, Hoven submitted a declaration in a state-court lawsuit about Actos that he had personal knowledge about issues involving the drug, plaintiff's counsel said.

For example, the plaintiff's lawyers said in court papers that Hoven said he had no knowledge that there was a change to the Actos label to include a bladder-cancer warning even though it is a drug “for which he was previously a brand leader, about which thousands of lawsuits across the country have been filed, and for which he received a litigation hold.”

In another example, the plaintiff's lawyers said “Hoven denied having any knowledge of Upjohn backing out of the approval process of Actos due to safety, even though Upjohn's withdrawal was a direct windfall for Eli Lilly to step in and control the United States marketing aspect for Takeda from 1999 to 2006 in addition to being a long-term global partner that continues to reap the benefits from the sales of Actos.”

Takeda Pharmaceuticals North America, Inc., is a codefendant in the case of Allen v. Takeda Pharmaceuticals going through a trial in the U.S. District Court of the Western District of Louisiana.

In a third example, the plaintiff's counsel allege that Hoven committed perjury by denying involvement in Zyprexa, a drug on which Eli Lilly entered a corporate integrity agreement with the Department of Health and Human Services' Office of Inspect General for illegal marketing.

I'm blogging several times a day about products liability for Law.com. Each day I cross-post an excerpt of the day's blog I found most interesting.

A notice in a Chapter 11 reorganization bankruptcy, that tort claims would be barred after a date certain, applies to plaintiffs who did not know they would develop illnesses induced from a chemical producer's product, a federal judge has ruled.

Nine plaintiffs who worked for Chemtura Corporation's Firmenich plant filed lawsuits alleging they had been injured by exposure to diacetyl, a butter-flavor ingredient used in food products. Exposure to diacetyl can lead to lung disease.

The plaintiffs argued to U.S. District Jesse M. Furman of the Southern District of New York that they did not receive constitutionally adequate notice of the “bar date” for creditors because they did not know they had diacetyl-induced illnesses until after then. “The appellants argue that, while the notice may have been adequate as to people with reason to know they might have diacetyl-related claims, it was inadequate as to appellants because they 'had not yet been diagnosed with diacetyl-induced disease' and thus had no reason to know that they might have claims,” the opinion said.

Furman thought otherwise. “It cannot be said that, had the Firmenich claimants read the notice, they 'would have remain completely unaware that their substantive rights were affected' by the bar date,” the judge opined. “The notice, which was disseminated in a local newspaper circulated in the area of the Firmenich plant, advised that Chemtura had sold diacetyl to flood-favoring companies throughout the United States from 1998 to 2005, and specifically referenced Firmenich as one of those companies.”

The bankruptcy judge had barred from the plaintiffs from bringing tort actions.

The Oct. 31, 2009, bar date requires all creditors, including diacetyl claimants to file their proofs of claim. Notice included a publication in the Homes News Tribune, a newspaper circulated in Middlesex County, N.J. — the same county in which the plaintiffs filed their lawsuits. The notice alerted tort plaintiffs that they would have their claims barred for an injury that “becomes apparent either now or in the future,” the judge said.

The plaintiffs were on notice that they might have been exposed to diacetyl, that they might have been injured and that they would lose their rights to recover for injuries that had not yet manifested if they did not file a proof of claim form by the bar date, Furman said.

A long-pending and widely anticipated opinion of first impression from the Pennsylvania Supreme Court last week is going to provide more causes of action for plaintiffs lawyers to pursue in the arena of brand-name drug litigation.

The Supreme Court---28 months after it heard oral argument--recognized causes of action for negligent marketing of brand-name drugs, negligent failure to remove prescription drugs from the market and negligence in the design of prescription drugs. Drugmakers now can face liability for “a lack of due care resulting in an untenably dangerous product being put into the marketplace,” the court said in a 4-2 decision. The decedent in Lance v. Wyeth, Catherine Lance, is alleged to have taken diet drug Redux, leading to her death from primary pulmonary hypertension.

Appellate counsel for the plaintiffs, Howard Bashman, said in an interview the case could provide more clarity on the debate over whether negligence principles can be imported into strict liability through the adoption of the Restatement (Third) of Law.

"The Supreme Court has rejected strict liability claims against drug manufacturers brought by people injured by ingesting dangerous medications,” Bashman said in an interview with me. “The court has … recognized as valid various sorts of negligence claims. The bright line seems to be strict liability no, negligence claims yes. It does bring clarity to that area. What Wyeth was arguing essentially was recognizing this type of design defect claim was absolute liability. What we said was” the claim sounds in negligence.

Robert C. Heim, appellate counsel for Wyeth (which is now wholly owned by Pfizer), said in an e-mail: “This is a very narrow ruling confined to facts not generally found in most pharmaceutical cases and, even then, there is a noticeable split in the court. The cause of action the majority espouses here has no applicability to the overwhelming number of cases where the FDA [federal Food and Drug Administration] has approved a drug and the medicine continues to be available to patients. Also, the ruling turns on large measure on the majority crediting plaintiffs’ allegations that Wyeth should have known that the drug was dangerous. This allegation has never been tested by any finder of fact. As the Court recognized, this is a case of first impression and the majority relies heavily on the Third Restatement which has yet to be adopted by the Pennsylvania Supreme Court.”

More Changes To Come in Products Law?

Lance is likely not to be the last change in Pennsylvania's products law. The court granted allocatur in the case of Tincher v. Omega Flex, Inc. on the question of: “Whether this Court should replace the strict liability analysis of Section 402A of the Second Restatement with the analysis of the Third Restatement.”

In a footnote, Justice Thomas G. Saylor, the majority opinion author, mentioned that there are “difficulties with some of the concepts and conventions which have been employed to buttress the theoretical divide between strict products liability and negligence theory.” The justices took up Tincher with the hopes of providing “needed reconciliation, clarification, or modification,” Saylor said.

There also is interesting dicta in the opinion that plaintiffs' lawyers could use to attack the learned intermediary doctrine in failure-to-warn cases. First, Saylor said the learned intermediary doctrine does not apply in cases in which plaintiffs are advancing theories like the one Lance is advancing.

A learned intermediary is beside the point if the product is so dangerous that “it should not have been ingested by anyone” because no warning would have ever been sufficient, the justice said.

But Saylor notes that “some of the underpinning of the [learned intermediary] principle have come into question in light of changed practices in the prescription drug industry. These include the emergence of direct-to-consumer advertising and the evolution of the health-care delivery system encompassing new forms of managed care.”

Plaintiffs lawyer Shanin Specter has said in interviews with me that the learned intermediary doctrine should be set aside in this era of direct marketing. The doctrine may have less value if prescribers are more like notaries putting the official seal on consumers' drug choices.

The defense-oriented Drug and Device Law Blog also notes another interesting ruling in Lance: that an alternative design may not have to be shown in design-defect cases involving prescription drugs.

Saylor Joins the Democrats

One of the most interesting things about the opinion is who authored it: Saylor. Saylor,“ordinarily the court’s most conservative member on product liability matters (and thus our favorite)” aligned “with justices with whom he frequently disagrees with on tort issues,” Drug and Device Law noted. Saylor was joined by Justice Max Baer, Seamus P. McCaffery and Debra Todd.

Saylor was unsparing to Wyeth at times in his opinion: “To the degree that Wyeth is uncomfortable with our jury-based civil-justice system, its complaint is with the Pennsylvania Constitution,” wrote Saylor, citing the state constitutional provision guaranteeing the right of trial by jury.

“We find that Wyeth is asking, in substance, that we should invoke policy justifications to scale back the existing duty of pharmaceutical companies to independently and vigilantly protect against unreasonable health risks which may be posed by products made for human consumption,” Saylor opined at another point.

Dissenting justice Justice J. Michael Eakin, joined by Chief Justice Ronald D. Castille, said the majority recognized a new cause of action for negligent design defect. “As I see it, Wyeth sought to preclude the creation of new claims, not extinguish ones already in existence,” Eakin wrote.

While Eakin said he expressed no opinion on the wisdom of adopting negligent design defect as a cause of action, the issue was not before the Superior Court and the intermediate appellate court raised it on its own. Eakin also reasoned that the plaintiffs had not preserved their negligent design defect claim, only the negligent marketing claim.

Saylor rejected the notion that the majority was creating new claims because there was no “source of authority establishing an already existing, special rule immunizing pharmaceutical companies in the negligence arena.” Drug and Device Law argued that was just not so: the majority in Lance did not “cite a single decision by that or any other court allowing such a claim. Certainly, no prior decision has recognized a cause of action for 'lack of due case resulting in an untenably dangerous product being put into the market place.'”

A Job For Legislators?

Saylor argued that legislators, not the court, are best positioned to consider the drugmaker's policy arguments in favor of a “contraction of existing tort law.” One example of how legislators can balance the benefits of pharmaceutical products against the harms they can sometimes cause, Saylor said, is the no-fault compensation program Congress established for people who suffer side effects from some vaccines.

Bashman told me that Saylor's reasoning echoes an argument his co-counsel and he made in another case on punitive damages that the Supreme Court said it had improvidently granted: “The judiciary and the legislative bodies have different roles and responsibilities and, if certain types of claims are specifically to be ruled out of bounds, that should be a legislative-type of decision because the type of the record that you get through litigation is not aimed at that ordinarily, unless you truly have a test case. This was not brought as a test case where the record established whether negligent design-defect claims should be allowed or not."

The Superior Court panel had recognized negligent design defect as a viable cause of action, but rejected the claim of negligent marketing and negligence in failing to withdraw Redux from the market. Wyeth appealed the ruling that claims of negligent design defect are viable in Pennsylvania, while Lance appealed the rulings that claims of negligent marketing, testing and failure to withdraw drugs from the market are inviable in Pennsylvania.

Saylor also criticized the Superior Court panel of Cheryl Lynn Allen, Correale F. Stevens (who now is sitting as an interim Supreme court justice)and Susan Peikes Gantman. The panel “reconceptualized” the marketing claim as one sounding in strict liability, not negligence, Saylor wrote. In a footnote, Saylor expounded that, “given the material differences between strict liability and negligence theory … the panel's approach of analyzing appellee's main claim—which was expressly stated in negligence–as if it were grounds upon strict liability, is deeply flawed.”

Wyeth argued that Pennsylvania should only recognize negligence causes of action for manufacturing defects and inadequately warning of a drug's risks to prescribers. Saylor rejected Wyeth's exhortation to “adopt a potent, bright-line rule, applicable across the commonwealth, closely restricting claims against pharmaceutical companies.”

Yet all is not lost for drugmakers in Pennsylvania. Yes, the majority approved of the argument that a drugmaker could be liable for design defects if “a prescription drug carr[ies] risks which outweigh its benefits as to all possible classes of patients.” But I think plaintiffs will have a harder time prevailing on design-defect claims for drugs that have more demonstrable benefits. If defendants can show that some classes of patients benefit from their products, then Pennsylvania courts might have grounds to reject a design-defect theory under Saylor's reasoning.

It seems the design defect claim is going to be very context-specific. In fact, Saylor noted that judge-made law depends upon the facts of the case: “In seeking a bright-line, substantive rule of prohibition across a broad class of cases, Wyeth's advocacy is in tension with the nature of common-lawmaking. Initially, it is axiomatic that the holding of a judicial decision is to be read against its facts,” Saylor said.

Trip to U.S. Supreme Court?

Bashman said in my interview with him that he does not think that Wyeth has preserved its arguments that federal law pre-empts the case, and the U.S. Supreme Court would not care about Pennsylvania's decision to recognize certain types of pharmaceutical liability claims unless they are “somehow … contrary to federal law.”

Drug and Device Law argues design-defect claims are preempted by federal law because it would be impossible to both change the design of Redux or remove it from the market and comply with the FDA's requirement that drugmakers not change the formulations of drugs once they have been approved.

The U.S. Supreme Court rejected the First Circuit’s rationale in Mutual Pharmaceutical Co., Inc. v. Bartlett that the drugmaker “could escape the impossibility of complying with both its federal- and state-law duties by choosing to stop selling sulindac.” The majority said that the First Circuit's rationale “is incompatible with this Court’s pre-emption cases, which have presumed that an actor seeking to satisfy both federal- and state-law obligations is not required to cease acting altogether.”

In in Wyeth v. Levine, the U.S. Supreme Court said federal regulation was a floor, not a ceiling, for protecting consumers regarding the risks of brand-name drugs through failure-to-warn claims (generic drugs are another matter). It'll be interesting to see if impossibility preemption and Pennsylvania's decision to recognize design-defect and negligent marketing claims for brand-name drugs gets a ride to Washington, D.C.