Under the Federal Food Drug and Cosmetics Act (FDCA), drugs sold in the United States require an FDA-approved label—the elaborate, incomprehensible (to laymen) sheets you find inside every package. Every sentence is dictated by FDA requirements, down to the font and letter size. Violations of these requirements, and the sale of drugs without the label or a different label, are subject to very severe penalties. The statutory scheme operates to the explicit exclusion of any state regulatory (administrative) scheme. What Wyeth asks us to believe is that state juries may nonetheless hold drug manufacturers liable, for accidents caused by use in direct contravention of the federal label, on the grounds that the federally required label was inadequate. Meticulous compliance with federal requirements doesn’t preempt “failure to warn” liability under state common law.
James Beck explains and Orac has some strong views as well (“I’m afraid Justice Sotomayor borders on the delusional when she blithely proclaims that courts are so good at efficiently disposing of meritless product liability claims.”) More: Kathleen Seidel and footnotes.
P.S. But preemption does not carry the day in an automotive case, Williamson v. Mazda.
Now that its settled that every jury should be a new regulator deciding in hindsight whether label warnings should have been stronger, some who worry about the future of the drug business are inclined to feel nauseous. Resist that feeling, points out emergency room blogger White Coat: should your condition grow so severe as to call for medical attention, the arsenal of antiemetic treatments available to doctors keeps dwindling under the legal pressure.
After the Wyeth v. Levine argument, I worried that the Supreme Court might decide the case on such narrow grounds that it would do little good to confront the problem of trial-lawyer abuse. I now see I wasn’t nearly pessimistic enough.
We can put the nail in the coffin in the idea that this is a pro-business Supreme Court: the 6-3 Wyeth v. Levine decision is the worst anti-business decision since United States v. Von’s Grocery, 384 U.S. 270 (1966). Justice Thomas’s confused concurring opinion is especially disappointing, as it declares an abdication of the Supreme Court’s appropriate structural role to prevent individual states from expropriating the gains from interstate commerce.
Sell your pharmaceutical stocks now, because the Supreme Court just declared it open season on productive business. One should now fear the coming decision in the as-yet-to-be-briefed Clearinghouse v. Cuomo, and the effect that is going to have on an already battered banking economy, as well.
Beck and Herrmann have first thoughts, but are likely to be relatively quiet thereafter.
Update, as Walter points out in the comments, see also Andrew Grossman’s post at Point of Law, and the earlier coverage at that site by numerous authors, dating back to when the case first began making headlines.
Contrary to the suggestion of Justice Thomas, Dan Fisher, this is not a “victory for federalism” by any stretch of the imagination: federalism is a two-way street, and permitting states to impair interstate commerce through a litigation tax upsets the federalist structure of the Constitution. See, e.g., Epstein and Greve.
The 5th U.S. Circuit Court of Appeals on Monday upheld the conviction of Vicksburg lawyer Robert Arledge, convicted of bilking the drug company Wyeth of more than $6.7 million over the diet drug Fen-Phen….
U.S. District Judge David Bramlette sentenced Arledge to six years in prison for knowingly allowing clients to make claims of about $250,000 each for health complications although they had no legitimate reason.
Seems it was a clergy scandal as well as a lawyer scandal:
Regina Reed Green of Fayette, who pleaded guilty to tax evasion involving false Fen-Phen claims, testified Arledge knew about the scheme to defraud the drug company. She said he told her every resident of 9,740-population Jefferson County would get $1 million.
“The evidence showed that when Green became concerned that she might be caught fabricating the prescriptions and expressed a desire to stop her illegal activity, she contacted (the Rev. Gregory) Warren,” the appeals court wrote. “Warren tried to convince Green to continue fabricating the prescriptions, but Green was not assuaged.”
Green testified Arledge persuaded her to continue: “And he said … I wasn’t going to get in any trouble because like (Warren) said, they were going to box all those files up, put them away, and never be seen again.”
The Chicago lawprof discusses the pending Supreme Court case on implied pre-emption:
…it is folly to act as if the private lawsuits attacking FDA warnings just backstop a porous and lax FDA. Often those lawsuits add an unwanted deterrent against the sale of desperately needed drugs. That risk is multiplied by hyperventilated state tort law that, in many instances, is lopsidedly pro-plaintiff.
- Easterbrook: “One who misuses litigation to obtain money to which he is not entitled is hardly in a position to insist that the court now proceed to address his legitimate claims, if any there are…. Plaintiffs have behaved like a pack of weasels and can’t expect any part of their tale be believed.” [Ridge Chrysler v. Daimler Chrysler via Decision of the Day]
- Retail stores and their lawyers find sending scare letters with implausible threats of litigation against accused shoplifters mildly profitable. [WSJ]
- Kentucky exploring ways to reform mass-tort litigation in wake of fen-phen scandal. [Mass Tort Prof; Torts Prof; AP/Herald-Dispatch; earlier: Frank @ American]
- After Posner opinion, expert should be looking for other lines of work. [Kirkendall; Emerald Investments v. Allmerica Financial Life Insurance & Annuity]
- Judge reduces jury verdict in Premarin & Prempro case to “only” $58 million. And I still haven’t seen anyone explain why it makes sense for a judge to decide damages awards were “the result of passion and prejudice,” but uphold a liability finding from the same impassioned and prejudiced jury. Wyeth will appeal. [W$J via Burch; AP/Business Week]
- Judge lets lawyers get to private MySpace and Facebook postings. [OnPoint; also Feb. 19]
- Nanny staters’ implausible case for regulating salt. [Sara Wexler @ American; earlier: Nov. 2002]
- Doctor: usually it’s cheaper to pay than to go to court. [GNIF BrainBlogger]
- Trial lawyers in Colorado move to eviscerate non-economic damages cap in malpractice cases [Rocky Mountain News]
- Bonin: don’t regulate free speech on the Internet in the name of “campaign finance” [Philadelphia Inquirer]
- “Executives face greater risks—but investors are no safer.” [City Journal]
- Professors discuss adverse ripple effects from law school affirmative action without mentioning affirmative action. Paging Richard Sander. Note also the absence of “disparate impact” from the discussion. [PrawfsBlawg; Blackprof]
- ATL commenters debate my American piece on Edwards. [Above the Law]
(Updating and bumping Feb. 4 post about to roll off bottom of page because of new comment activity)
- Judge Fallon denied the motion of Florida plaintiffs to expedite a hearing on their inclusion into a settlement when they did not even bring suit (Jan. 30). Merck and the PSC are required to respond Feb. 15, and the hearing will be Feb. 21, where one can expect the motion to be denied.
- At Point of Law, I comment on the recent grand jury investigation into Merck marketing of Vioxx.
Update, Feb. 8: separately, Merck yesterday settles for $650 million different Medicaid fraud allegations over the marketing of Vioxx and other drugs. The qui tam relator will get a jackpot award of $68 million. [WaPo; DOJ; Merck] The pricing theories at the center of these lawsuits—which hold Merck liable for purportedly charging too little—definitely deserve longer discussion another time.
Please register for this event online at http://www.aei.org/event1626.
The Vioxx Settlement
Monday, January 7, 2008, 12:00 p.m.–2:00 p.m.
Wohlstetter Conference Center, Twelfth Floor, AEI
1150 Seventeenth Street, N.W., Washington, D.C. 20036
In 2004, Merck withdrew its pain reliever Vioxx from the market because of new studies showing increased cardiovascular risk. Merck announced that it would not settle any of the tens of thousands of Vioxx lawsuits filed, and set aside over a billion dollars to litigate cases without reserving a penny for damages. After a $254 million verdict in the first Vioxx trial in 2005, some observers predicted over $25 billion in liability for the company. Fifteen trials later, Merck and the plaintiffs’ attorneys announced a settlement of the outstanding personal injury litigation—for under $5 billion. Merck stock rose after the announcement, and is now higher than before it withdrew Vioxx from the market. But some law professors are arguing that a new and unusual provision in the settlement raises ethical concerns.
Why did Merck settle? And why was the settlement for so much less than originally anticipated? Is the Merck settlement different from the Wyeth fen-phen settlement, which was originally announced as a $3.75 billion settlement, but has so far cost more than $20 billion? Will the settlement stand up under legal challenge, and what will remain of the Vioxx litigation if it does?
At this event cosponsored by AEI and the Federalist Society, a panel of experts will explore these and other questions. Speakers include Vanderbilt law professor Richard Nagareda, author of Mass Torts in a World of Settlement; Virginia legal ethics professor George Cohen; author and leading pharmaceutical mass torts defense attorney Mark Herrmann; Andy Birchfield, a member of the Vioxx Plaintiffs’ Steering Committee; and Ted Frank, director of the AEI Legal Center for the Public Interest. AEI resident scholar John E. Calfee will moderate.
Registration and Lunch
Andy Birchfield, Beasley Allen
George Cohen, University of Virginia School of Law
Ted Frank, AEI
Mark Herrmann, Jones Day
Richard Nagareda, Vanderbilt University Law School
John E. Calfee, AEI
- In Scotland, car repair shop faces music royalty suit because its employees listen to radios on the job [BBC]
- Pediatricians grill kids about their parents’ drinking, gun ownership and antisocial habits — what, weren’t the hairdressers reporting back enough dirt for the authorities to work with? [Malkin, Szwarc]
- Watch out for the new ADA Restoration Act of 2007, which would reverse several Supreme Court precedents with the aim of making it easier to file and win suits [Bader]
- Don’t confuse Hollywood’s idea of lawyering, as in Clooney’s “Michael Clayton”, with the real kind [Lundegaard, MSNBC]
- “It costs millions of dollars in litigation fees to show that a patent should not have been granted, and most big corporations have learned that the hard way.” [Chachkes @ CNet]
- Banning all uses of lead from metal assemblies can result in “tin whiskers” leading to catastrophic failures in electronic devices — lucky those aren’t dangerous or anything [AP]
- Armenian-American writer Garin Hovannisian isn’t an admirer of the Congressional genocide resolution [Boaz @ Cato-at-Liberty; see also Jul. 27]
- Lynchburg, Va. woman: hey, I invented those pre-moistened cleaning wipes [News Advance via VLW]
- Don’t listen to trolls like this Olson fellow [Mark Thoma comments]
- Another round of coverage on libel tourism, SLAPPs and terror-support research [Broyde & Lipstadt @ NYT; Miller @ City Journal, Levitt @ The New Republic]
- New at Point of Law: Ted on yet another iPhone suit, this time demanding a billion plus; further coverage of the Hofstra/Lynne Stewart affair; after many failures, lawyers score a $143 million verdict against Wyeth over hormone replacement drug Prempro/Premarin; more on the U.S. Navy, WWII and asbestos disease; new Irvine law school’s in the money; and much more.