TortsProf Blog

Sebok on Second Circuit's Decertification of "Lights" Class Action

In this week's Writ column, Tony Sebok discusses the Second Circuit's recent decision in McLaughlin v. American Tobacco, which reversed Judge Weinstein's certification of the "light cigarettes" class action.    The plaintiff class were individuals who had smoked "light" cigarettes.   Plaintiffs alleged that the tobacco industry has known for years that "light" cigarettes are not safer than regular cigarettes.  Thus, plaintiffs brought (essentially) a consumer fraud claim against the tobacco companies because "the seller promised one thing (a safer cigarette) and intentionally delivered something else (a cigarette that was not, in fact, safer)."   Judge Weinstein originally had certified the class action back in 2006.   Unsurprisingly, the Second Circuit has now reversed.   

In his column, Sebok analyzes the Second Circuit's decision, and offers his predictions as to the decision's effect on consumer fraud class actions generally. I previously have written on the issue of reliance in consumer fraud class actions: The Consumer Fraud Class Action:  Reining in Abuse by Requiring Plaintiffs to Allege Reliance As An Essential Element, 43 HARV. J. LEGIS. 1 (2006).  In this article, I argue that requiring reliance for the resolution of private suits creates the correct balance of individual justice and deterrence. 

- SBS

Neurontin Class Action Against Pfizer Includes Generic Purchasers

As the Philadelphia Legal Intelligencer (via law.com) reports, Philadelphia Common Pleas Judge Mark I. Bernstein has held that Pfizer can be held liable for off-label marketing of the generic version of its epilepsy drug, Neurontin:

The plaintiffs in the class action allege that the drug company defendants conducted a campaign to promote the prescription of its Neurontin drug and its generic equivalent, gabapentin, for a number of medical uses not approved by the FDA, according to court papers.   

Philadelphia Common Pleas Judge Mark I. Bernstein let stand the claims of negligent misrepresentation, negligence and intentional misrepresentation in Clark v. Pfizer Inc. regarding the generic gabapentin made by third-party drug manufacturers.

Bernstein said that the legal question presented in Pfizer's and Warner-Lambert's motion for partial summary judgment was whether a drug company, which "negligently or intentionally perpetrates a fraud upon the medical community" by the off-label marketing of its name-brand drug, can be held responsible for money paid to other drug companies that make the generic equivalent of the name-brand drug.   Assuming that the plaintiffs can prove their allegations at trial, "under Pennsylvania law, a defendant may be liable for misrepresentation to foreseeable plaintiffs even without any direct relations between the parties," Bernstein said in his March 14 opinion.    It was foreseeable that the marketing of Neurontin for off-label use would increase the demand for the generic version of the drug, Bernstein said.

Under the judge's order, the class action against Pfizer will proceed with purchasers of both the brand-name Neurontin as well as purchasers of the generic gabapentin.

- SBS

Katrina Victims Sue FEMA

Hurricane Katrina victims have added the Federal Emergency Management Agency to their suit against the manufacturers of trailers provided to the victims for emergency housing following the hurricane.   The suit alleges that the trailers contained hazardous fumes that caused the nearly 100 plaintiffs to become ill.  As the Houston Chronicle (via AP) reports,

Many trailer occupants have blamed their illnesses on formaldehyde, a common preservative found in building materials. Formaldehyde can cause respiratory problems and has been classified as a carcinogen by the International Agency for Research on Cancer.

The plaintiffs accuse trailer makers of using shoddy materials and construction methods in a rush to fill FEMA's unprecedented demand for emergency housing after Katrina laid waste to tens of Gulf Coast homes in August 2005.

Recent government tests on hundreds of FEMA trailers and mobile homes in Louisiana and Mississippi found formaldehyde levels that were, on average, about five times higher than what people are exposed to in most modern homes.

Plaintiffs seek certification as a class action. 

- SBS

Important News During Cold Season: Airborne Settles False Advertising Class Action

CNN reports that Airborne, the herbal supplement company, has settled a false advertising class action suit for $23.3 million. 

The Center for Science in the Public Interest, a non-profit advocacy group, said the company will refund money to consumers who bought Airborne's product. It will pay for advertisements in major publications instructing consumers on how to get their money refunded.

"There's no credible evidence that what's in Airborne can prevent colds or protect you from a germy environment," said CSPI Senior nutritionist David Schardt. "Airborne is basically on overpriced, run-of-the-mill vitamin pill that's been cleverly, but deceptively, marketed."

- SBS

44,000 Sign Up for Vioxx Settlement

MSNBC (via AP) reports that 44,000 people have submitted all of the necessary paperwork to participate in the $4.85 billion Vioxx settlement.  85% of eligible claimants had to participate to keep the deal alive.

"We are very pleased with the large number of enrollments we are seeing and are confident that when the enrollments are verified, all 85 percent thresholds will be met and exceeded within the timeframes in the agreement," Ted Mayer, a lawyer for Merck, said in a statement.

- SBS

   

Kentucky Supreme Court Forms Mass Tort & Class Action Committee

Kentucky Supreme Court Chief Justice Joseph E. Lambert has appointed 12 Kentucky attorneys to a "Mass Tort and Class Action Litigation Committee."  According to a press release, this committee  "will determine whether current court rules for attorneys and judges provide adequate safeguards against unethical conduct and whether rule changes may provide guidance to attorneys and courts dealing with complex litigation."   The Herald-Dispatch (via AP) reports that the Committee plans to forward recommendations for reform to the state Supreme Court within the next year.    According to the Herald-Dispatch story, Florida is also reviewing its procedures for mass torts. 

- SBS

DOJ Declines To Intervene In Scruggs Suit Against State Farm

As Lloyds (via Dow Jones Newswire) reports, the Department of Justice has declined to intervene in the Katrina qui tam suit filed by Dickie Scruggs against State Farm: 

"The Government's investigation has not been completed, as certain potentially relevant information has not become available," U.S. Attorney Dunn Lampton and Acting Assistant Attorney General Jeffrey Bucholtz wrote in court papers.  Lampton and Bucholtz didn't elaborate on the nature of that information, but said they couldn't decide by Thursday's deadline whether to proceed. They asked Walker to seek the government's written consent before approving a dismissal or settlement of the case.   

(Prior posts on this suit available here).

- SBS

Nagareda on Mass Tort Litigation

In a new featured column at PointofLaw, Richard Nagareda (Vanderbilt) argues that resolution of mass torts requires a reconception of the attorney-client relationship and the role of the civil tort system:

What is needed for mass torts is a corresponding legal response that would turn this leveraging into its own source of constraint—that would bestow the coercive authority needed to make peace, but only coupled with measures to link the interests of the peacemakers to the long-term viability of the arrangements they create. Such measures might include the overriding of existing lawyer-client retention agreements so as to link the fees to be obtained from clients by plaintiffs' lawyers to the peace terms that they fashion for non-clients who are otherwise similarly situated.

- SBS

Minnesota Bridge Victims Take Steps To Sue

WCCO in Minneapolis (via AP) reports that at least 73 victims from last summer's bridge collapse have filed notices of potential legal claims with the State.  As Bill noted in October, the State is considering a victims' compensation fund:

Bridge victims don't stand to get much from the state because of a law limiting the government's liability to $1 million per incident. But lawmakers are considering a compensation fund that would offer more to those who gave up the right to sue the state. A joint House-Senate panel takes up the proposal [today].

- SBS

Who Do You Sue for Global Warming?

Toby Shute (Motley Fool over at MSNBC.com) predicts that the new wave of lawsuits will be climate change suits:

Known to its detractors as Trial Lawyers, Inc., the plaintiffs' bar makes serious bucks by launching mass tort and class action suits. The bigger the damages, the bigger the contingency fees, so high-profile harm is how these litigation firms make hay -- and it doesn't get much more high-profile than climate change. 

Companies are potentially vulnerable to shareholder lawsuits if they either fail to properly disclose the risk of potential climate change regulations, or to demonstrate efforts to mitigate those risks. The Corporate Library, a governance watchdog, analyzed two dozen "carbon-intensive" companies in a recent study, and the results varied widely.

- SBS

Sebok & Zipursky on Vioxx Settlement

In this week's Findlaw Writ column, Tony Sebok joined by Benjamin Zipursky address the recent Vioxx settlement.  Sebok and Zipursky do not comment on the end result (a $4.85 billion settlement), but rather analyze various structural issues such as "the process by which the agreement was reached, the process by which the payment-and-release program will come into effect (if it does), and the process by which the settlement agreement and the program will be "enforced.""   

- SBS

 

Big Win for Pfizer in Celebrex Litigation

Pharmalot has the details and the order (in Word form, with metadata indicating it originated from plaintiffs' firm Lieff Cabraser) finding no Daubert-worthy evidence of causation at the most common dose of 200 mg.  You can also get the order in PDF form here: Download CelebrexDaubert.pdf.

See also the Reuters story.

--BC

(I have done some work in the Cox-2 litigation, but none in the Celebrex case and none of any sort for Pfizer.)

And the Winner By A Nose...Race Horse Curlin And The Fen-Phen Plaintiffs

As reported on FindLaw (via AP), 418 former Fen-Phen plaintiffs can now claim a 20% ownership stake in Curlin, the 2007 winner of both the Breeder's Cup Classic and the Preakness.   As noted previously, the former Fen-Phen plaintiffs won a $62 million judgment in their fraud suit against their former lawyers.  Two of those lawyers - Shirley Cunningham Jr. and William Gallion - owned a 20% stake in Curlin.    Curlin is presently for sale, which is what prompted plaintiffs' attorney Angela Ford to file the assets claim.  The judge's order also permits the plaintiffs to collect any racing purses (such as the $2.7 million Breeder's Cup) that have not yet been paid out.    No word on when Curlin will be sold. 

- SBS

New Mexico AG Supports Consumer Fraud Case Against Dell

The Houston Chronicle reports that the New Mexico Attorney General has filed a brief with the New Mexico Supreme Court in support of a class action against Dell.  The case alleges that Dell's computers do not have as much storage as promised, and brings claims under New Mexico's consumer fraud statute.

- SBS

Litigation Networks Instead of Class Certification

In a piece that explores the alternatives to class certification in mass products cases (where such certifications are almost never appropriate), Byron Steir (Southwestern) suggests in a recent SSRN posting of a 2005 Utah Law Review article the rise of informal and formal litigation networks as a potential means for resolution:

In the last few decades, mass tort litigation has wrestled with widespread, multijurisdictional problems that have greatly stressed the caseloads of courts. Certifying for trial multiple-incident, product-liability class actions for personal injuries has promised the resolution of expansive problems. But as appellate courts have increasingly held, these actions are not appropriate for class treatment because they involve numerous individualized issues that require unmanageable individualized adjudication. Without a perceived workable alternative, many trial courts have continued to try radical class action trial plans that violate state substantive law and federal constitutional law, but which bring tremendous pressure to settle upon defendants who fear they may not be able to obtain appellate review. Attempting to defuse this crisis, Congress recently passed the Class Action Fairness Act of 2005, greatly expanding federal jurisdiction for class actions. Once class actions are removed to federal court, however, the Act still provides no alternative for federal courts to the Hobson's choice framed by plaintiffs' counsel: certify a class, or be inundated with thousands of unmanageable, wasteful, and repetitive individual cases.

But that is a false dichotomy. This article argues that the alternative to mass tort class actions is not such isolated repetitive litigation, but instead an expansive set of litigation networks of counsel, judges, and clients, using recent advances in information technology, that provide much of the efficiency promised by class actions without violating state substantive or federal constitutional law. As an example, the article discusses the functioning of litigation networks in the ongoing litigation concerning phenylpropanolamine (PPA), an ingredient in cough and cold remedies and appetite suppressants that has been alleged to cause stroke. By sharing information, pooling resources, developing specialized expertise, and coordinating strategy, these networks not only reduce the costs and improve the representation of individual litigation, but also develop accurate claim values for settlement of numerous cases and allow for improved case management over time through pragmatic experimentation. The article concludes that mass tort litigation networks provide a fruitful alternative to impermissible product-liability class actions for personal injuries, and that judges should deny requests to certify such class actions and instead encourage and assist in the creation and functioning of litigation networks.

--BC

Sebok's Part II on NJ Supreme Court's Vioxx Ruling

Tony Sebok's latest Findlaw column continues his analysis of the New Jersey Supreme Court's decertification of the Vioxx class action brought on behalf of unions and health plans against Merck. In this latest column, Sebok addresses the court's finding that the plaintiffs failed the "superiority" standard for class certification.  That is, the court concluded that plaintiffs failed to show that the class action was a superior method for resolving the claims because the high-dollar value of their claims made individual suits feasible.  Sebok, however, challenges the court's underlying view of the class action as a resolution mechanism for low-value torts, and instead, "see[s] class actions . . . as capable of solving complex problems of settlement and compensation involving large, high-stakes claims."

- SBS

"King of Torts" Pleads Guilty To Fraud

The South Florida Sun-Sentinel reports that Louis Robles, once known as the "King of Torts" for his plaintiff's personal injury work, plead guilty last week to federal mail fraud charges.  U.S. District Judge Alan Gold set sentencing for Dec. 4th.  Robles faces a possible 15 year sentence.  (Judge Gold had earlier rejected a plea that set a maximum 10 year sentence).   

Between 1989 and 2002, Robles collected more than $164 million on behalf of roughly 7,000 asbestos clients, according to court records. Some were World War II veterans. Some were retirees living on Social Security checks. Some died of asbestos-related diseases, leaving spouses and children to recover settlement funds.

Initially, the settlement checks were promptly dispersed — with Robles' firm deducting up to 40 percent in attorneys' fees. But around 1994, Robles began dipping directly into settlement proceeds without his clients' knowledge to fund his extravagant lifestyle, prosecutors said.

. . .   

By September 2002, Robles had embezzled $13,522,160 from his clients and had only $25,000 remaining in trust accounts.

His victims stand to collect roughly 8 cents for every dollar they are owed.

(Thanks to Overlawyered for the tip.)

- SBS
   

Sebok on NJ Supreme Court's Vioxx Ruling

Tony Sebok's latest FindLaw column addresses the New Jersey Supreme Court's decertification of the Vioxx class action brought on behalf of unions and health plans against Merck.  As Sebok explains, this particular suit sought economic damages under a consumer fraud statute, not personal injury damages.    Sebok examines the trend of using such "financial damages suits" as an easier means of achieving class certification.

- SBS

Lawyers Gone Wild

The Examiner.com is running a five-part series on "Lawyers Gone Wild," a "continuing series of special reports on class action lawsuit abuse in America. The series will examine the costs, the leading personalities and their tactics, and the consequences of the litigation explosion that many experts contend is crippling American enterprise."

- SBS

Egilman Speaks

David Egilman has posted a comment at Pharmalot.  He says he released all of the documents "he had" (which does not state whether he previously had more documents or requested other documents), that he did not admit to anything illegal (see my earlier post), and that, while he recognizes that Lilly has a different story, he does not believe that story.

--BC

"It depends on what the meaning of the word 'illegal' is"

Just to tie up a loose thread from yesterday's news about David Egilman settling with Lilly...

In Pharmalot's first story breaking the news, this comment was reported:

However, Egilman’s attorney, Alex Reinert says that Egilman didn’t admit to anything illegal. A quick read indicates he appears to be correct (although we recognize that other interpretations are possible).

(Update: I hadn't realized until just now that Reinert is evidently a lawprof, though he's also still listed on a firm website.  He's also a graduate of Brown, where Egilman is a professor.)

And in the WSJ Health Blog post, there's a similar comment, plus a discussion of what else Egilman admitted to in his affidavit:

Alexander Reinert, a lawyer representing David Egilman, the expert who settled with Lilly, tells the Health Blog that the company mischaracterized his client’s signed statement. Egilman never admitted doing anything illegal and didn’t cherry-pick documents to send the Times. “Lilly has an interpretation we don’t believe is accurate,” Reinert says. While Egilman admitted to violating a protective order, “that’s not saying he did something illegal,” Reinert says.

First, on the question of whether he admitted to doing something illegal, I suppose it depends on what counts as illegal.  I generally think of federal court orders as having the force of law, being, you know, oh, what's that phrase?  Oh, right -- the basis for the rule of law.  Here, Egilman unambiguously admitted [PDF] under oath to violating the protective order duly issued by a federal judge ("I violated Case Management Order No. 3 ('CMO-3'), which is in force in the Zyprexa MDL.").

The CMO (2004 WL 3520247; also available in a big PDF here: Download CMO3.pdf) provides in the endorsement certain acknowledgments about the force of signing.  You can see Egilman's signed endorsement here: Download cmo_endorsement_egilman.pdf.  In that document, Egilman agreed:

I further agree and attest to my understanding that, if I fail to abide by the terms of the Order, I may be subject to sanctions, including contempt of court, for such failure.  I agree to be subject to the jurisdiction of the United States District Court, Eastern District of New York, for the purposes of any proceedings relating to enforcement of the Order.

So he's acknowledged (again under oath) that violation of the Order can result in sanctions, including contempt.  This is, of course, not surprising, but bolsters the idea that violation of the order is illegal.

Black's defines "illegal" in a pretty straightforward way: "illegal, adj. Forbidden by law; unlawful."  By that or any ordinary meaning of the term "illegal," it seems to me that admitting violation of a court order (remember: court orders = force of law) constitutes admitting an illegal action.  (Added: This is consistent with Judge Weinstein's repeated use of the terms "illegal," "stolen," and "conspiracy" in his order, incidentally.)

And even if one were to limit the term to only include acts that are clearly criminal, recall that Egilman was at least concerned enough about potential criminal liability to invoke the Fifth Amendment right against self-incrimination, something he expressly acknowledges again in the affidavit. (See also this post.)  That said, if "illegal" is in fact defined in such a constrained way as to only include clearly criminal conduct, it would be at least semi-credible to say that he didn't admit to acting illegally.

As for the second argument -- that he didn't admit to cherry-picking documents -- that seems plainly contradicted by the affidavit itself, which is worth excerpting at some length:

That seems to be at odds with his attorney's statement: "Reinert says that’s not the same as cherry-picking: 'He knew there were other documents but he didn’t have them.'"  Note that Egilman says  in his affidavit that he reviewed documents and released a set of documents -- i.e., not all of what he had reviewed.  Even if he no longer had them at hand, he undoubtedly could have obtained them; to call what he did anything other than cherrypicking would seem to give cherrypickers an unusual definition, to say the least.

--BC (who, as noted repeatedly before, does some consulting work for companies who are or have been adverse to parties for whom Egilman has served as an expert witness, but not including Lilly)

Updated: Egilman "Accepts Responsibility," Settles with Lilly for $100K

Pharmalot broke the story of David Egilman settling his part of the document leak with Lilly to the tune of $100,000 (to be donated to charity).  The stipulation is available here: Download EgilmanSettlement.pdf, and his affidavit is here: Download EgilmanAffidavit.pdf.  (You will note that it indicates that it is page 1 of 80; I am not posting pages 2 through 80, as they are simply Judge Weinstein's order.)

The affidavit is short; in it, Egilman explicitly acknowledges that he released documents that would help the plaintiffs and that there was an alternative perspective he intentionally avoided providing:

Given number 5, this comment from Egilman's attorney (to Pharmalot) is intriguing at least:

However, Egilman’s attorney, Alex Reinert says that Egilman didn’t admit to anything illegal.

Violation of a federal case management order is not necessarily criminal, and in that (narrow) sense, I suppose it's not the admission to "anything illegal," but he explicitly acknowledges violating a court order.

It appears that James Gottstein (the Alaska lawyer who subpoenaed the documents from Egilman and provided them to media) is still in the mix, though I'm still digging through the filings.

Update: Gottstein has changed counsel, dropping Bracewell & Giuliani and adding in Berkman, Henoch, Peterson & Peddy.  Filing here: Download GottsteinSub.pdf

Updated again: I've now looked through the dockets of both the district and circuit courts and see nothing that indicates definitively that any of the other parties have settled.  That leaves not just Mr. Gottstein but many of the enjoined entities.

Yet another (minor) update: In case you're new to the site and want some background, I've done a number of posts about Zyprexa, most about the document dispute; they're here.  Also, I forgot to mention initially that I perform a small amount of consulting for pharmaceutical clients.  Lilly is not one of my clients (nor has it been in the past), but I am involved in litigation in which Egilman is or was an expert for plaintiffs.

And another one: Welcome, WSJ Health Blog readers.  If others haven't seen the post there, do so; it's a good one.  I'm hoping to get a bit more up about the case this weekend.

--BC

Katrina Insurance Disputes Two Years Later

The New York Times reports on the Katrina-insurance mess:

Insurance companies may have paid out $11 billion to Louisianians in the two years since Hurricane Katrina, but they have also become a new villain in the tales people tell about the slow recovery here. Every neighborhood is full of horror stories about companies that reneged on their promises, offered only pennies on the dollar in settlements, dribbled out payments, deliberately underestimated the costs of repairs, dropped longtime customers and sharply increased the price of coverage.

And it is not just talk. Though, traditionally, relatively few customers sue their insurance companies, about 6,600 insurance-related lawsuits have landed in Federal District Court here; 3,700 of them are pending. Few have gone to trial. Some homeowners have settled; other cases have been dismissed or sent to state courts, which are also handling thousands of disputes.

Thousands of formal complaints have been filed with the Louisiana Department of Insurance, 4,700 of them in 2006 alone. That is just a tiny fraction of the number of people who feel aggrieved, regulators say: for half a year after the storm, calls to the department reached 20,000 a month.

- SBS   

Third Circuit on FDA Preemption - Dismissal of Nexium Class Action Affirmed

On Friday, the United States Court of Appeals for the Third Circuit affirmed the dismissal with prejudice of a putative class action against Zeneca alleging that the company's advertising of the drug Nexium was deceptive:  Pennsylvania Employees Benefit Trust Fund v. Zeneca, Inc.  The Third Circuit ruled that the Food Drug & Cosmetic Act and the FDA's accompanying regulations on drug labeling preempted state law consumer fraud claims: 

By specifically excluding advertisements covered by 21 U.S.C. Sec. 352(n)and the regulations promulgated thereunder from the scope of 15 U.S.C. sec. 52, Congress signaled its intent to give the FDA exclusive authority to regulate prescription drug advertising.  The FDA has established specific regulations regarding such advertising.  To allow generalized consumer fraud laws to dictate the parameters of false and misleading advertising in the prescription drug context would pose an undue obstacle to both Congress's and the FDA's objectives in protecting the nation's prescription drug users.  Accordingly, the state consumer fraud laws are preempted by the extensive federal legislative and regulatory framework.

- SBS

Merck Loses Privilege Challenge In Vioxx Litigation

Last week, Judge Eldon Fallon (the Louisiana district judge overseeing the Vioxx MDL) rejected Merck's assertion of attorney-client privilege, and ordered Merck to start producing documents.  A copy of the comprehensive opinion is available here.   

Merck had argued that "because the drug industry is so heavily regulated by the FDA, virtually everything a member of the industry does carries potential legal problems vis-a-vis  government regulators."  (Op. at 18).  The district court, adopting the Special Master's Report (prepared by Paul Rice (American)), rejected this argument: 

Without question, the pervasive nature of governmental regulation is a factor that must be taken into account when assessing whether the work of the in-house attorneys in the drug industry constitutes legal advice, but those drug companies cannot reasonably conclude from the fact of pervasive regulation that virtually everything sent to the legal department, or in which the legal department is involved, will automatically be protected by the attorney-client privilege.  While such an argument is intriguing because it would minimize the time and expense involved in both corporations asserting and documenting privilege and judges ruling upon those claims, the theory is unrealistic.

Accepting such a theory would effectively immunize most of the industry's internal communications because most drug companies are probably structured like Merck where virtually every communication leaving the company has to go through the legal department for review, comment, and approval.  The fact that the industry is so pervasively regulated does not justify dispensing with each company's burden of persuasion on the elements of attorney-client privilege. . .

- SBS

Peanut Butter

I have to think the person registering PeanutButterClassAction.com must have felt a little silly, but it is, no doubt, effective.  For more on suits relating to the massive Peter Pan recall and lawsuits, check out Daily Report coverage.

--BC

Judge Unseals Katrina Qui Tam Suit

As Forbes (via AP) reports, on Monday, a federal magistrate judge unsealed the Katrina qui tam suit filed against State Farm.  The suit was filed by Dickie Scruggs on behalf of Cori and Keri Rigsby - two sisters who worked for a company that helped State Farm handle claims following Katrina.  The sisters quit the company after providing Scruggs with "reams of internal State Farm claims records."   (As posted here, Scruggs, meanwhile, faces criminal contempt charges for his handling of those documents). 

The suit, which represents only one side of a legal argument, accuses insurance companies of pressuring engineers to falsify reports so storm damage could be blamed on flood water instead of wind, which would shift the financial burden to the National Flood Insurance Program.

The suit was under seal pending a decision by the U.S. Attorney on whether to intervene.  Back in May, the U.S. Attorney decided not to intervene in a similar lawsuit filed by a group of former insurance adjusters.

- SBS

Fen-Phen Plaintiffs Win $62 Million -- From Their Former Lawyers

In a suit filed in 2004, 400 Fen-Phen plaintiffs allege that their own lawyers defrauded them by failing to disclose information about the settlement and by failing to properly distribute client funds.  The Washington Post (via AP) reports that, last week, the judge ordered three of the former lawyers to repay $42 million taken from the settlement and $20.1 million in interest.   As noted in a prior post, two of these lawyers own a 20% stake in a horse named Curlin - the winner of the Preakness and its $1million purse.  No word on whether Curlin is part of the judgment. 

- SBS

No U.S. Forum for British Vioxx Plaintiffs

The New Jersey Law Journal (via Law.com) reports that the New Jersey appeals court has held that a group of British Vioxx plaintiffs cannot sue in New Jersey state courts. 

"The financial challenges of bringing mass tort litigation in the U.K. are not so insurmountable as to render that forum either inadequate or unavailable," said Appellate Division Judges Edith Payne, Harvey Weissbard and Howard Kestin.

The decision accords with a ruling by Judge Eldon Fallon, who is handling the pre-trial of all the federal Vioxx cases; nearly a year ago, he dismissed claims by foreign plainiffs on the same grounds.   

- SBS

Judge Holds Ruling On Merck's Request To Appeal Vioxx Preemption Ruling

Newsday reports that U.S. District Judge Eldon E. Fallon - the federal judge assigned to handle pretrial in all federal Vioxx lawsuits - held a hearing on Friday.  Merck, the manufacturer of Vioxx, has asked permission to immediately appeal the judge's ruling that FDA approval of drug labels does not preempt state law claims for failure-to-warn. (Prior post on the judge's ruling here).  Judge Fallon said his ruling on Merck's request "may wait on testimony from the governors of Mississippi and Indiana about their consultations with the U.S. Food and Drug Administration as new drug label rules took effect."  The governors' testimony could be available by September. 

- SBS

Glaxo Threatens Lawyers Over Avandia Ads

Glaxo Smith Kline is threatening some lawyers who are advertising for Avandia clients with cease-and-desist letters.  I've previously written about Avandia spam (here, here, and here), and about the potential risks of lawyer advertising for clients relating to drugs that are still on the market (here).  And Sheila's post yesterday about the increase in spontaneous adverse event reports no doubt reflects some of the publicity confounder, where adverse event reporting increases disproportionately to the actual incidence due to publicity for a medicine.

Worry not, though, there are still plenty of lawyers who would like to talk to you if you Google "Avandia."

--BC

Lawyers Sue Lawyer Rankings For Consumer Fraud - As A Class Action, Of Course

Two Seattle lawyers have filed a class action complaint (available via WSJ law blog) against Avvo, a lawyer rating website founded by a lawyer.  The suit brings claims under Washington's Consumer Protection statutes, alleging that the website constitutes "unfair and deceptive conduct."

Justices Ginsburg and Alito apparently are part of the proposed class, defined as "All persons licensed to practice law in the United States and who are listed on the Avvo site and given a numerical rating." 

(Thanks to WSJ Law Blog for the tip).

- SBS

The JPML Has Been Listening to the Hold Steady a Lot or Maybe They Just Want to Visit the Mall of America

...because they'll be next sitting [PDF] in the very fancy ceremonial courtroom in which I clerked in the District of Minnesota.  Minnesota is lovely in the summer if you can avoid being carried off by mosquitoes. 

The only tort-related item of interest on their agenda:

MDL-1856 -- In re Depo-Provera Products Liability Litigation

And that's it in terms of clearly tort-related items.  There are some marketing items that might be related to tort cases - not sure - but overall, it seems like they're really trying to get out early. 

What might they be heading to?  Some thoughts:

• First Avenue has "Ritmo Caliente" night in the main room with Latin dancing and two-for-one drink specials.  The night before, Steel Pulse is playing the main room, so maybe the panel is just expecting to be tired for the day of hearings.
• The Mounds View Community Theatre will be finishing up its run of Oklahoma! at the Irondale Theater.  (By coincidence, one of my favorite Twin Cities bands, Arcwelder, created a font called Irondale.  Arcwelder, however, is not playing, either during the panel's visit or in the pit orchestra for Oklahoma!)
• The St. Paul Saints, which provides just about the most fun you can have watching minor league baseball, will be playing the Sioux City Explorers.

I hope the panel enjoys all that the Cities have to offer.

--BC

Ethics Violations In Pet Food MDL

The New Jersey Law Journal (via Law.com) reports about an alleged ethics violation in the pet foods contamination cases.  U.S. District Judge Noel Hillman was incensed that Menu Foods' insurance adjuster had direct discussions with plaintiffs even though they were represented by counsel - a violation of Model Rule 4.2.   On May 24th, the judge ordered Menu Foods to stop the contacts, and further to identify the lawyers involved: 

"I want to know the names and bar admissions of all the lawyers who advised Menu Foods on its communications with the putative class," he said at a hearing in Camden, N.J. "I want to know the content of the telephone messages. I want to know what scripts are given to the people who are calling people live on the phone and what they're being told to say, and in particular anything that they're being told to say in response to any questions by the parties they're contacting."

On the company website, Menu Foods now states:

On May 24, 2007, a United States federal court issued an order that, for the time being, prevents Menu Foods from having direct contact with individual pet owners.  In light of the order, we regret that we cannot communicate with potential claimants at this time.  As soon as the court permits, we intend to resume efforts to resolve claims directly with pet owners.  We will post additional information when we are able.

As reported in the New Jersey Law Journal, over 120 federal lawsuits have been filed against Menu Foods and consolidated in an MDL, though no venue has been selected. 

- SBS

Horse Cents - Fen-Phen Plaintiffs Battle Over Horse

In an amusing twist to the diet-drug litigation, plaintiffs in Kentucky claim ownership in a winning race horse (via WSJ Law blog).  Seriously.   In a suit filed in 2004, 400 Fen-Phen plaintiffs allege that their own lawyers defrauded them by failing to disclose information about the settlement and by failing to properly distribute client funds.   Representing the plaintiffs in their fraud suit is Angela Ford; she has a great website with the court pleadings available for download. 

Oh, the horse?  Yes, well, two of the former Fen-Phen lawyers own a 20% stake in a horse named Curlin - the winner of the Preakness and its $1million purse.  And, plaintiffs now seek ownership of the horse.  The NY Times quotes one of the plaintiffs:

“We own part of that horse — there’s about 400 of us,” Mr. Carter said. “We may not have our names on the papers, but it’s our horse. He was bought with our blood money.”

And Angela Ford intends to seek full ownership of the horse - not just the 20% currently retained by the lawyers.  From the Times article:

“If the court determines that Curlin was originally purchased with money that belonged to my clients, then the entire horse belongs to my clients and clear title could not have been conveyed,” Ms. Ford said.

What's next?   Well, for Curlin, the Belmont Stakes are this Saturday, June 9th.

- SBS

"Anatomy of a Mass Tort"

James Beck & Mark Herrmann over at Drug & Device Law Blog have a fascinating post, "Anatomy of a Mass Tort." (Thanks to Ted Frank at Overlawyered for the tip).   

- SBS

California's UCL - "Inference of Common Reliance" Standard

The California Court of Appeals (Third District) recently held that plaintiffs could base a class action under California's Unfair Competition Law on an "inference of common reliance" (as opposed to actual reliance): McAdams v. Monier. 

Plaintiffs alleged that the defendant - a manufacturer of roof tiles - failed to disclose that the color of the tiles would fade away leaving bare concrete.   The UCL count required plaintiffs to have "suffered injury in fact...and have lost money ...as a result of" defendant's failure to disclose.  (California's UCL was amended by Proposition 64 in 2004; prior to these amendments, no reliance was required under the UCL). 

The trial court denied plaintiff's motion to certify the class, finding the amended UCL required a showing of actual reliance, which defeated commonality.  The Court of Appeals, however, reversed imposing "an inference of common reliance" standard.

-SBS

New Jersey Judge Rejects "Prepackaged" Asbestos Bankruptcy

Law.com reports that New Jersey Judge Nicholas J. Stroumtsos has ruled that insurers do not have to pay asbestos claims against Congoleum, a manufacturer of flooring tiles.  Congoleum has been in bankruptcy court since late 2003 as part of a "prepackaged bankruptcy" settlement with asbestos victims. Judge Stroumtsos used strong words condemning the "bad faith" deal:  "GHR [Gilbert Heintz & Randolph]  colluded with [Joseph] Rice [of Motley Rice] and [Perry] Weitz [of Weitz & Luxenberg] to create a framework that would provide Congoleum with both the insurance money and also protect against the asbestos liability, while leaving the insurance companies to bear the costs."

The Wall Street Journal has a link to the decision.

-SBS

Aggregate Litigation

The Drug & Device Blog has a thorough look at the newest draft of the ALI's principles of aggregate litigation.  Certainly defense-oriented, but very useful reading for anyone interested in the issue.

SSRI Labels to be Updated

In a move that will be at least of interest to litigation over suicidality and anti-depressants, the FDA has directed (FDA press release) makers of SSRIs to modify the black box warning about suicidality among young users of the drugs.  The FDA has a page about anti-depressants, including the proposed new labeling.

FDA Investigating Zyprexa Data

The NYT story has more. 

The story is written by Alex Berenson, described by Judge Weinstein as "conspiring" to improperly release documents in the litigation.  Berenson describes the document leak as such:

The document from 2000 and others were provided to The Times by James Gottstein, a lawyer who represents mentally ill people he says are forced to take psychiatric medications against their will.

What Happens in Vegas Stays in Vegas, Except that the JPML Presumably Keeps a Written Record

Yes, that's right, the JPML's May 31 session announcement [PDF] is out, and it's in Vegas.  I regret to inform the good folks on the JPML that Prince's run at the Rio is likely to have ended by then.

In any event, let's see what they have on tap...

• MDL-1836 -- In re Mirapex Products Liability Litigation (several dozen cases; I've posted about this drug before).
• MDL-1842 -- In re Kugel Mesh Hernia Patch Products Liabitity Litigation (I never heard of this one before, but, sure enough, it's been withdrawn and has all sorts of Google AdWords from client-recruiting lawyers).
• MDL-1844 -- In re Air Crash Near Peixoto de Azeveda, Brazil, on September 29, 2006.
• MDL-1845 -- In re ConAgra Peanut Butter Products Liability Litigation.
• MDL-1850 -- In re Pet Food Products Liability Litigation (wow, I didn't realize there were that many suits already - looks like over a dozen).

That's it for torts-related cases with oral argument.

Hilden on Zyprexa

Julie Hilden has posted a Writ column on the Zyprexa document leak.  She comes out essentially where I do on the propriety of the conduct of the parties involved -- suggesting that they should have tried the legal methods first.  I think without making that effort, any attempt to argue that the leakers were engaging in civil disobedience is silly.

She raises reasonable questions about the value of the protective order in mass torts in the first place, which, as I've noted before (and will address in an in-progress law review article) really depends on how much you consider the litigation system to be a mechanism for public information distribution as opposed to the resolution of private disputes.  I think people can reasonably come down on either side on that issue; I would prefer that the information-forcing take place through regulatory means rather than litigation, which is an extremely imprecise tool for such things, but then again, there's plenty of reasons to doubt the FDA's ability to do information forcing well, at least today's FDA.

And she also assumes something that I still haven't seen to be clearly true -- that the documents in fact provide reliable information that was not available before.  (I still have not reviewed the actual documents.)  Most of the coverage suggests that the documents have all sorts of unpleasant behavior by employees (including most likely improper off-label marketing), but I haven't seen the sort of thing that actual physicians would want to rely upon in making prescribing decisions.  Nor have I seen anything that indicates that the leaked documents contained, for instance, data that should have been given to the FDA but was not.  I'm ope