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Product Liability Cases To Watch In 2008

By Brendan Pierson,

Tuesday, Jan 01, 2008 --- Dozens of cases in state and federal courts could have a significant impact on the world of product liability law. Here are five to look out for this year.

The first three cases all grapple with the issue that looms largest in product liability lawyers' minds: regulatory preemption. Is the maker of a drug or medical device immune from state law product liability claims if its product has been approved by the U.S. Food and Drug Administration?

While there are many pending preemption cases to choose from in federal appeals courts, these three are among those likely to be decided soonest and to have the broadest effect.

1. Riegel et ux. v. Medtronic Inc.

Background

Charles Riegel first sued Medtronic in 1999 over a catheter that burst during a 1996 coronary angioplasty when a doctor overinflated it. According to Riegel, the catheter's labeling was responsible because one of its precautions listed one pressure measurement as the limit, while a chart listed a different limit.

Riegel contended in his suit that the fact that Medtronic received FDA premarket approval for the catheter in no way shielded it from liability under state product liability claims. Medtronic, on the other hand, said that was exactly what the Food and Drug Administration was designed to do.

First a district judge, and then the Second Circuit, agreed with Medtronic. The parties argued the case in front of the Supreme Court in December.

What's at stake?

Preemption for medical devices depends on a specific federal statute: Section 360k(a) of the Food, Drug and Cosmetic Act's 1976 medical device amendments, which says that states cannot institute "any requirement" "which is different from, or in addition to" the FDCA's own requirements and restrictions.

Medtronic claims that the statute expressly creates preemption for devices, while Riegel’s lawyers have argued that the statute lays down only a set ofminimum requirements, and that the premarket approval process is designed to work in tandem with parallel state laws.

The High Court could decide this case on the basis of that statute alone, meaning that whatever conclusion it reaches about preemption would apply only to medical devices, not drugs. But it could also seize the opportunity to advance a comprehensive theory of preemption, settling the issue once and for all.

“The Riegel decision could really inform how all other preemption cases are decided,” said Jim Beck, a partner at Dechert LLP.

2. Colacicco v. Apotex Inc. and McNellis v. Pfizer Inc.

Background

The Third Circuit heard these two cases together in December. In the Colacicco v. Apotex Inc. case, the U.S. District Court for the Eastern District of Pennsylvania dismissed a plaintiff’s failure to warn allegations over a generic Paxil for treating depression due to implied preemption.

In McNellis v. Pfizer Inc., the U.S. District Court for the District of New Jersey found no preemption in a failure to warn case over the antidepressant, Zoloft, even though the FDA reviewed and rejected the claims raised by the plaintiff.

The plaintiffs in both cases alleged that the antidepressants caused suicidal thoughts.

What's at stake?

Drug preemption could prove trickier legally than device preemption, since there’s no statute saying that the FDA’s regulations preempt state laws.

“You're talking about different statutory regimes,” said Jim O’Neal, a partner at Faegre & Benson LLP.

The Third Circuit will have to decide whether state law claims against drug makers are precluded by implied, rather than explicit, preemption. Different circuit courts have issued conflicting rulings, but so far the Third Circuit had consistently upheld a doctrine of implied preemption.

The Supreme Court hasn’t agreed to hear any case on preemption for drugs yet – though a petition for cert is pending in another case, Wyeth v. Levine, that may give it the chance. If the High Court doesn’t take that case, or a similar one, first, many lawyers predict that the Colacicco and McNellis cases will make their way to the top.

3. Warner-Lambert v. Kent

Background

This suit was originally filed against Warner-Lambert & Co. by several Michigan residents shortly after the company pulled its diabetes drug Rezulin from the market. Pfizer acquired Warner-Lambert that same year. The plaintiffs alleged that the drug company failed to warn them about Rezulin’s toxic effects, and that it had defrauded the FDA to get the drug approved.

A Michigan statute says that federal law preempts state tort claims – except for fraud on the FDA. A Michigan district judge found that federal law preempted that statute, but the Second Circuit reversed on appeal. The Supreme Court agreed in September to hear the case.

What's at stake?

Like the Riegel, Colacicco and McNellis cases, Warner-Lambert is about preemption – but with a twist. The court will have to decide whether approval from the FDA makes a manufacturer immune from claims by consumers that it defrauded the FDA.

It isn’t clear what it would mean for fraud on the FDA claims if the Supreme Court ruled that FDA approval implied preemption. Some attorneys believe that fraud on the FDA is an entirely separate claim from other liability claims, and wouldn’t be affected at all.

“I don't think [preemption] would preclude a fraud on the FDA claim,” said Steven Archer, a partner at Robbins Kaplan Miller & Ciresi LLP.

Kurt Stitcher, a partner at Levenfeld Pearlstein LLC, speculated that plaintiffs’ lawyers might try to use fraud on the FDA claims as a way around preemption, but said that he didn’t think the approach would hold water. Fraud on the FDA, he said, would properly be an issue for a manufacturer and the government, to be punished with a civil fine – not a theory of liability for consumers.

Who should be watching these cases?

Everyone.

If the Supreme Court finds that federal law implies regulatory preemption for all medical devices and drugs, without exception, it will, at the very least, end all state law claims against device and pharmaceutical companies.

“If it goes in the direction of manufacturers, I can't imagine it's not going to have an effect on litigation,” Stitcher said.

“That is such a huge issue that the national pharmaceutical industry and the plaintiffs bar are both extremely interested in it,” O’Neal said. He said that if the court adopts an implied preemption doctrine, it could reach far beyond the healthcare industry.

Since implied preemption “does not depend on the wording of individual statutes,” O’Neal said, “[the ruling] could affect products that have nothing to do with the FDA.”

However, Marshall Shapo, a professor at the Northwestern University School of Law, said that the preemption question will probably have to be settled for one class of products at a time.

"The whole preemption question is obviously very specific to the kind of legislation and regulation involved," he said.

Beck said that if the courts do establish any kind of preemption doctrine, the affected manufacturers will likely scramble to get immunity for their products.

“You're going to see a lot of people asking for approval,” he said.

It’s impossible to say which case will result in the decisive ruling, so manufacturers and plaintiffs’ lawyers need to keep their eyes on all of them. The Supreme Court could decide the question in one stroke early in the year, in the Riegel case, or it could issue a separate ruling on drugs later in the year.

“It's almost a race to the courthouse,” Stitcher said.

4. Shoukry v. Fisher-Price Inc. et al.

Background

There isn’t a single standout case in the wave of product liability suits filed last year over toxic toys from abroad, but this proposed class action, filed by Florida resident Farrah Shoukry in August, is pretty typical.

Shoukry accused toy maker Mattel Inc. of being reckless and negligent by letting possibly harmful toys go on store shelves, claiming the company’s voluntary recall was not enough to compensate those who bought the potentially lead-tainted products. She alleged that Mattel distributed Sesame Street, Dora the Explorer, Go Diego Go and other children’s toys covered in surface paint that may contain lead, which is poisonous to children.

Shoukry is seeking to recover the actual and compensatory damages for herself and the purported class, as well as to recover the costs of diagnostic testing necessary to detect lead poisoning for their children. Several additional suits were filed, and the U.S. Judicial Panel on Multidistrict Litigation is considering consolidating them.

What’s at stake?

Attorneys are watching to see if the cases against Mattel will turn into an MDL—and if they do, how big it will get. Mattel has recalled millions of individual products.

If the suits against Mattel are any indication, other companies that import products from overseas will have reason to worry. For example, Bumbo Ltd., which sells a baby seat, already faces lawsuits over possible lead contamination.

Ballooning litigation against toy companies could also increase pressure on legislators, already facing rising public concern, to tighten standards on imports.

Stitcher said that, whatever the effect on Mattel and other toy companies, these lawsuits will likely not lead to very large settlements or awards of damages, since most plaintiffs are simply buyers who have had their product recalled and are suing for consumer fraud.

“The class members will probably get a $5 certificate for their next purchase of a Thomas the Tank Engine toy,” he said.

Who should be watching this case?

Companies that import toys from overseas and plaintiffs lawyers who represent consumers in toxic tort and fraud claims will be interested in this and similar cases, which could become increasingly prevalent over the next year.

5. In Re: Prempro Products et al.

Background

Wyeth Pharmaceuticals, which makes the hormone replacement drug Prempro, is currently defending thousands of individual suits in this multidistrict litigation. Plaintiffs allege that Prempro caused them to develop breast cancer.

So far, Wyeth has refused to settle any cases, and a few have gone to trial. Wyeth has won most of them, but plaintiffs have scored some notable victories, including a $1.5 million award given to an an Arkansas woman last January and a $135 million award for three Nevada women, which a judge later reduced drastically.

What's at stake?

The Prempro MDL is notable mainly because it involves a lot of people, and potentially a lot of money — though lawyers say that, like all mass tort cases, it could give plaintiffs lawyers a chance to test new theories of liability. So far, the results have been mixed.

"The defendants have probably won more trials than they've lost, but the ones they've lost have been big losses,” Archer said. “When they lose, they lose big."

Alan Cotler, a partner at Reed Smith LLP, said that the case represents a challenge not only to lawyers, but to doctors, who must grapple with the implications of potential harmful side effects of a therapy that often proves invaluable.

“Prempro is to me at the top of the list,” Cotler said. “It's so controversial right now, the use of hormone replacement therapy, and it puts the medical community in a conundrum.”

“How often do you find, in the product liability sphere, that kind of dilemma, when you have plaintiffs, and the medical profession producing evidence of the role estrogen plays in the development of breast cancer?” Cotler said. “What do you do if you're a doctor? What do you do if you're a woman? The science is not there.”

Cotler said that, so far, the plaintiffs’ lawyers hadn’t convincingly managed to show liability. He said that to do so, they would likely have to abandon arguments about direct causation and rely instead on arguments about probability.

“I haven't seen a cogently made argument yet to change the law. Basically what you'd have to say is, Look, I'm a plaintiff and I can't prove this product caused my malady,” Cotler said. Instead, he said, a plaintiff would have to ask the court “extrapolate inferences” based on the likelihood that a drug contributed to a disease.

But, Cotler said, “I haven't seen that kind of concept generally accepted by the courts.” Ken Kliebard, a partner at Howrey LLP, said that the Prempro case illustrates a broader trend of plaintiffs relying on consumer fraud claims, instead of just strict liability claims.

"There's been a shift in product liability law theory," he said. "A lot of cases are shifting away from product liability and damages…toward consumer fraud."

Who should be watching this case?

Plaintiffs lawyers and pharmaceutical companies will be looking at this case for the theories of liability that work and those that don’t.

--Additional reporting by Erin Coe, Amanda Ernst and Sam Schulz