Nation Federal appeals court ruling may resuscitate lawsuits against drug makers

By Sylvia Hsieh

The Daily Record Newswire

BOSTON -- Since last year, when generic drug makers won a victory on the issue of federal preemption before the U.S. Supreme Court, lower courts have been dismissing cases against generic drug makers left and right.

But last week a federal appeals court issued a ruling that gives plaintiffs a long-awaited opening in those suits.

In Bartlett v. Mutual Pharmaceutical Co., the 1st Circuit held that preemption did not block a claim against a generic drug maker for designing a defective product and upheld a $21.1 million jury award.

This is the first time a federal circuit has addressed the issue since June 2011, when the Supreme Court decided PLIVA v. Mensing. That case said that generic drug makers could not be sued under state law for failing to warn about a drug's risks, because federal law requires that warning labels on generic drugs mirror those on brand-name counterparts.

After Mensing, defense lawyers started keeping score of all the dismissals.

The defense-oriented Drug and Device Blog counts 10 cases that said state-law claims against generic drug makers were preempted in light of Mensing.

"The majority of cases post-Mensing were all getting dismissed," even when plaintiffs alleged a design defect, said the blog's author James Beck, an attorney at Dechert in Philadelphia, who has cheerily tracked dismissals since Mensing came down.

According to a list compiled and provided by the plaintiffs' trial lawyers group American Association for Justice, more than 50 cases in state and federal courts have been thrown out on preemption grounds, including thousands of cases in multidistrict litigation against the makers of Darvon/Darvocet.

But the 1st Circuit's recent decision, if followed in other jurisdictions, would limit Mensing to failure-to-warn claims and allow plaintiffs to pursue design defect claims against generic makers.

Keith Jensen, who represented the plaintiff in the case, called the ruling "potentially huge."

"It establishes that Mensing only affects failure-to-warn claims. ... 'Impossibility preemption' -- where a generic company cannot simultaneously be held liable for failure to change a label when it has no ability to change a label - has no relation to a product defect case," said Jensen of Jensen, Belew & Gonzalez in Fort Worth, Texas.

Lawyers said the ruling will spur more design defect claims; defense lawyers predict a flood, while plaintiffs' attorneys expect a trickle.

The lawsuit in the 1st Circuit case was brought by Karen Bartlett, a New Hampshire woman who developed the hypersensitivity disease Steven Johnson Syndrome/Toxic Epidermal Necrolysis (SJS/TEN) after she was prescribed a pain reliever for shoulder pain.

SJS burns off the outer skin layer and attacks mucosal areas of the body, including the eyes, lungs, esophagus and genital areas. A patient is diagnosed with TEN when more than 30 percent of his or her total body surface area has been burned off or turned into an open wound.

In Bartlett's case, 60-65 percent of her body's surface area deteriorated and she suffered permanent near-blindness.

The drug Bartlett's doctor prescribed was the brand name Clinoril, but her pharmacy dispensed the generic Sulindac.

A U.S. District Court dismissed her failure-to-warn claim because her prescribing doctor admitted he had not read the box label or insert.

In a two-week trial, Bartlett put on evidence that Sulindac was defectively designed because its risks outweighed its benefits, making it unreasonably dangerous to consumers.

The generic manufacturer, Mutual Pharmaceutical Co., chose not to put on an affirmative case despite having lined up experts and witnesses.

A jury awarded Bartlett $21.1 million.

On appeal, Mutual argued that Bartlett's design defect claim was preempted by the Federal Food Drug and Cosmetic Act, 21 U.S.C. 301 et. seq.

The 1st Circuit said that while the Supreme Court held in Wyeth v. Levine that the Act does not preempt state-law tort suits against drug makers, it carved out an exception in PLIVA v. Mensing for failure-to-warn claims against generic drug makers.

But the court rejected Mutual's argument that generic makers cannot alter the design defect of a drug.

"[A]lthough Mutual cannot legally make Sulindac in another composition ... it certainly can choose not to make the drug at all; and the FDCA might permit states to tell Mutual it ought not be doing so if risk-benefit analysis weights against the drug, despite what the Supreme Court made of similar arguments in the labeling context," the court said.

"[T]he Supreme Court not yet said it would extend PLIVA's exception to design defect claims, but -- while the generic maker has no choice as to label -- the decision to make the drug and market it in New Hampshire is wholly its own. ...

"On balance, we conclude that the Court adopted a general no-preemption rule in Wyeth and that it is up to the Supreme Court to decide whether PLIVA's exception is to be enlarged to include design defect claims."

Defense lawyers predict the ruling will be the catalyst for many more claims that generic drug makers put a defective product on the market.

David R. Geiger, who authored an amicus brief on behalf of the Product Liability Advisory Council, called the ruling a "potentially pernicious and litigation-expanding decision."

He said it would leave every drug open to a design defect claim because the 1st Circuit allowed the plaintiff to prove the drug was dangerous without having to prove a specific defect in addition to the danger.

"Every drug can be attacked on a similar theory. If you don't have to prove a specific defect, such as that an inactive ingredient causes a fatal reaction, and you only have to show the drug itself causes some side effects, then -- violà! -- you can go to a jury, because all drugs have side effects," said Geiger, a partner at Foley Hoag in Boston.

But Louis Bograd, who argued the Mensing case on behalf of the plaintiff before the Supreme Court, said design defect claims carry their own obstacles.

"You can't just say, 'Well, we can't bring a failure-to-warn claim; we'll just bring a design defect claim instead.' What you have to prove is different," said Bograd, an attorney with the Center for Constitutional Litigation in Washington.

The most viable design defect claim would exist where a drug was pulled from the market because of risks, but it will be harder to make out a design defect claim in cases where a drug is still widely prescribed and has real benefits to certain patients, Bograd said.

He added that the ability to bring a design defect claim will also depend on how state law treats the claim, and whether a state recognizes comment K of the Restatement of Torts §402A, which suggests that some products have inherent risks that can't be designed away and a seller should not be strictly liable for unfortunate consequences.

Lawyers on all sides of the issue are already speculating how soon the Supreme Court could decide whether design defect claims against generic makers are preempted.

"I fully expect Mutual Pharmaceutical to file a cert petition," said Bograd.

Geiger agreed.

"Mutual has taken it up this far, and if the Supreme Court doesn't grant cert or Mutual loses, they are no worse off," he said.

Beck said even the 1st Circuit seemed to want the Supreme Court to weigh in.

"The court in Bartlett is basically asking the Supreme Court to take it and reverse it. It's saying, 'We don't like Mensing, so we're going to follow Levine even though that wasn't a design defect case.' This court thumbed its nose at the Supreme Court and said, 'We dare you,'" he said.

Published: Fri, May 11, 2012