A once-gigantic investor class action over Pfizer Inc.’s marketing of the painkillers Celebrex and Bextra finally met its demise on Tuesday, just two months before the decade-old case was scheduled for trial. In a victory for Beth Wilkinson of Paul, Weiss, Rifkind, Wharton & Garrison and cocounsel at Simpson Thacher & Bartlett and DLA Piper, a federal judge in Manhattan refused to give plaintiffs a new chance to explain how Pfizer caused their losses.
U.S. District Judge Laura Taylor Swain granted summary judgment to Pfizer, extinguishing claims that the company misled shareholders about cardiovascular risks associated with its painkillers. Swain had already disqualified a key expert witness retained by plaintiffs counsel at Grant & Eisenhofer. In Tuesday’s ruling she made clear that the disqualification was fatal to the case.
Pfizer acquired the rights to Celebrex and Bextra from Pharmacia Corp. in 2003. Two years later, Pfizer pulled Bextra from the market after studies linked it to heart attacks. Pfizer continued marketing Celebrex, however, and it remained a blockbuster seller.
Grant & Eisenhofer sued in 2004, alleging that Pfizer and Pharmacia had duped shareholders about the rinks associated with both drugs. The firm sought to represent all individuals who purchased Pfizer stock between October 2000 and October 2005. Pfizer’s market capitalization dropped by $64 billion during that period, so the potential damages were huge.
The plaintiffs had reason for optimism as the litigation progressed. In 2012, Swain certified the case as a class action, ruling that the massive group of shareholders proposed by Grant & Eisenhofer had enough in common to sue as a group. And in March 2013 the judge ruled that the plaintiffs’ case was strong enough to survive summary judgment.
Pfizer has long been represented by Simpson Thacher and DLA Piper in the case. After its litigation setbacks in early 2013, Pfizer also brought on a Paul Weiss team led by Wilkinson, a top trial lawyer.
In September 2013, Wilkinson moved to bar testimony from the plaintiffs’ expert witness, Daniel Fischel. Wilkinson argued that Fischel used a flawed methodology for determining the damages caused by Pfizer’s alleged misstatements. The disqualification bid seemed like a long shot, because Fischel is a famed law professor and arguably the single most respected expert witness in the securities litigation world.
Nevertheless, the gambit worked. As we reported here, Swain ruled on May 21 that Fischel’s causation theory was inadmissible. James Sabella of Grant & Eisenhofer acknowledged at a hearing that the disqualification doomed the case, but he sought the judge’s permission to alter Fischel’s expert report.
In Tuesday’s ruling, Swain held that it would be unfair to let Fischel change his testimony so soon before the Sept. 9 trial date. “Considerations of judicial economy warrant preclusion of the proposed amended supplemental expert report, as do concerns regarding the prejudicial effects on defendants were the court to admit into evidence the new report,” she wrote.
Swain’s ruling also seals victory for former Pfizer executives named as defendants in the case. Michele Roberts of Skadden, Arps, Slate, Meagher & Flom represents former Pfizer CEO Henry “Hank” McKinnell. Michael Calhoon of Baker Botts is advising former Pfizer vice chairman Karen Katen. Pamela Chepiga of Allen & Overy represents former Pfizer chief medical officer Joseph Feczko. And George Stamboulidis of Baker & Hostetler is defending Gail Cawkwell, the leader of Pfizer’s medical team for Celebrex.
Grant & Eisenhofer’s Sabella didn’t return a call seeking comment.