By Brendan Pierson,

Wednesday, Jan 02, 2008 --- The number of product liability lawsuits filed last year dropped 45% from 2006, coming down from a sharp spike in 2006 of lawsuits over asbestos, drugs and medical devices.

The drop did not necessarily point to a long-term trend — 2007 saw 38% more product liability suits filed than 2005 and 9% more than 2004.

Growth In Product Liabilities Litigation, 2007

1 Year: -45%

2 Years: +38%

3 Years: +9%

Source: federal court dockets, Law360

Note: Figures represent annual growth in number of cases filed in U.S. district courts.

The biggest drop came in the area of personal injury suits — a catch-all category that includes, most significantly, suits alleging injury from drugs and medical devices. Just under 15,000 personal injury suits were filed last year, down 61% from 2006.

Kurt Stitcher, a partner at Levenfeld Pearlstein LLC, attributed the drop to the tapering of a sharp spike in 2006. That year saw mass torts launched over Wyeth's hormone-replacement-therapy drug Prempro, G.D. Searle & Co.'s pain reliever Bextra and Pfizer Inc.'s similar Celebrex, Merck & Co.'s painkiller Vioxx, and Medtronic Inc.'s and Boston Scientific Corp.'s implantable defibrillators, among others.

Those mass torts resulted in initial waves of thousands of individual lawsuits, which dried up relatively quickly.

“Once the trial lawyers have picked the low hanging fruit, it gets more difficult to sustain the number of case filings,” Stitcher said. “In 2006, we had the 'perfect storm' of a number of pharmaceuticals and medical devices being targeted for litigation, including, of course, Vioxx.”

The Vioxx multidistrict litigation, perhaps the most celebrated of the group, ballooned to include thousands of plaintiffs in 2006. Late last year, Merck unexpectedly announced that it intended to settle most of the claims for $4.85 billion.

“The drop-off in 2007 reflects (a) the absence of low-hanging fruit, and (b) the resolution of large numbers of pharma/med device lawsuits, based either on global settlements (e.g., Vioxx) or the results of early, bellwether trials that went in favor of the manufacturers,” Stitcher said.

“All litigation is cyclical, and pharma is certainly no exception,” Stitcher added.

% Share of Federal Caseload

2007: 12.86%

2006: 20.57%

Source: federal court dockets, Law360

The 2006 spate of mass torts does not account for all of the drop. Significantly fewer personal injury lawsuits were filed last year than in 2004, which saw about 26,000 such suits, or 2005, which saw nearly 20,000 — possibly because some of the mass torts that made headlines in 2006 got started in those years.

More remarkably, personal injury suits accounted for only 47% of all product liability suits in 2007, whereas in the three previous years they had been a clear majority. In 2004, personal injury suits accounted for over 90% of all product liability suits.

The difference is explained by a spectacular increase in lawsuits of another category: asbestos claims, which exploded in 2006. In 2005, there were 1,686 lawsuits filed over asbestos; in 2006, there were over 18,000.

“Abestos lawsuits skyrocketed in 2006 after Congress failed to establish a trust for the payment of asbestos-related medical claims in 2005,” Stitcher said.

In 2005, Sen. Arlen Specter (R-Pa.) introduced a bill to establish a $140 million trust fund for asbestos victims, and a plan for distributing it. The bill drew widespread opposition from both corporations facing asbestos claims and alleged asbestos victims, and it stalled.

“In 2006, in typical trial lawyer fashion, plaintiff's lawyers went after the 'low-hanging fruit' and filed 18,000 lawsuits,” Stitcher said. “After the initial rush, however, there is always a drop-off, as the copycats can dig up only so many potential lawsuits worth pursuing.”

While asbestos claims also fell off from 2006 to 2007, they did so much less sharply than drug and device claims — so that, remarkably, they made up the single biggest chunk of product liability suits last year, with about 15,000 suits comprising fully 48% of the total.

All other categories of product liability suits combined made up less than 7% of the total, and no single category included more than 600 total suits. With the numbers so small, it's impossible to deduce broader trends from year-to-year fluctuations.

Airplane-related suits more than doubled, but injuries from air travel depend largely on chance.

“2007 was considered a reasonably safe year for air travel, so I would have to assume that the increase over 2006 is happenstance,” Stitcher said.

Other categories — property damage, marine product and motor vehicle suits — saw less significant fluctuations.

--Additional reporting by Melissa Lipman