NEW YORK – In February, for the first time in her 22 years as an attorney, Ellen Relkin, of New York-based Weitz & Luxenberg, went to Washington, D.C., to watch oral arguments at the U.S. Supreme Court. Upon arriving, she was disheartened to see a visitors line snaking down the stairs and around the corner. Luckily, Relkin remembered that she had once been admitted to practice at the court, and she was allowed entrance through a side door.
Cases involving hot-button issues like abortion and affirmative action are usually the ones that draw such crowds. But the argument Relkin attended – Warner-Lambert Co. v. Kent – produces strong feelings in lawyers, particularly those who practice product liability law. Kent was the second of three appeals that could rewrite wide swaths of tort law. It could also leave a lot of firms that rely on product liability work scrambling for a new business model.
All three cases turn on the court’s developing view of federal preemption of state torts. Specifically, whether or not approval by the Food and Drug Administration immunizes the makers of pharmaceuticals and medical devices from state court damages claims.
The first preemption case, Riegel v. Medtronic, was brought in New York by Charles Riegel, who was injured when a balloon catheter burst in his artery. He later died. In a decision written by Justice Antonin Scalia and issued in February, the justices ruled 8 to 1 that the manufacturer of the device was immune from suit because the FDA had approved the catheter. The decision is widely expected to gut major pending medical device mass torts and to keep others from ever being filed. “Every case with any relation to Riegel will be challenged [by the defense],” predicted Elizabeth Cabraser of Lieff, Cabraser, Heimann & Bernstein.
Cabraser was quickly proved correct. Two days after the decision, Johnson & Johnson, represented by Susan Sharko of Drinker Biddle & Reath, filed a preemption challenge in a multidistrict litigation related to its Ortho Evra birth control patch in which some 4,000 federal and state claims have been filed. Preemption motions are also expected in cases against Medtronic Inc., related to its Sprint Fidelis defibrillator (a defense led by Bartlit Beck Herman Palenchar & Scott) and against Boston Scientific Corp. in cases related to its drug-coated heart stents (defended by Kaye Scholer).
Kent, the argument attended by Relkin, was the next to be heard by the court. The plaintiffs were 27 Michigan residents who suffered liver damage while taking Rezulin. The plaintiffs, all diabetes patients, sued the manufacturer, claiming that the company had misrepresented the safety of a product during the FDA approval process. Michigan allows such claims; federal law gives manufacturers immunity from them. Pfizer Inc.’s lawyer, Carter Phillips of Sidley Austin, argued that the federal law preempted the state law.
At the Kent hearing, lawyers were parsing each justice’s questions for clues. Much attention was focused on Justice Stephen Breyer, who “appeared almost incredulous that these types of suits are even permitted,” says Pepper Hamilton litigation partner Anthony Vale. At one point Breyer said that the fundamental question to be decided was who should make decisions about the safety and effectiveness of a drug, “an expert agency or 12 people pulled randomly for a jury role?” Congress left the role of policing the market to the FDA, he added, answering his own question.
So it was something of a surprise when, just a week later, the court deadlocked 4 to 4 and issued a one-sentence decision allowing the lower court’s ruling to stand. (Chief Justice John Roberts recused himself, presumably because he owns about $15,000 of stock in Pfizer.) The individual justices’ votes were not disclosed. Although the decision didn’t set a precedent, it was encouraging to plaintiff lawyers. “It shows that the court is not viewing every preemption motion identically,” says Relkin of Weitz & Luxenberg.
Looming over both cases is Wyeth v. Levine, where Wyeth Pharmaceuticals Inc. is trying to overturn a $6.8 million jury verdict on behalf of a Vermont woman who lost part of her arm after being injected with the antinausea drug Phenergan. The woman alleged that the drug’s warning label was inadequate. The point being debated in the case is whether the FDA has the last word on safety, i.e., whether by enacting the drug approval process, Congress intended that the FDA’s decisions trump state claims. A sweeping decision for preemption would take away the failure-to-warn claim that is at the heart of litigation involving prescription drugs from Ambien to Zyprexa.
FDA preemption of tort law is a theory dear to the Bush administration, which has been pushing the court to embrace a broad view of federal authority since 2004. If the court adopts that position, observers expect that far fewer suits would be filed and that as a result, both the plaintiff and defense bar would take a profit hit.
Plaintiff firms would feel the most pain. Some of them – Weitz & Luxenberg; Seeger Weiss of New York; and Levin, Papantonio of Pensacola, Fla., to name a few – have sunk millions of dollars in pending drug and device litigation. That investment could prove worthless.
But defense firms also rely on pharmaceutical torts, with their massive document discovery and big-stakes trials, for a major chunk of business. At Kansas City, Mo.-based Shook, Hardy & Bacon, for example, nearly 30 percent of revenues came from pharmaceutical and device work, according to Managing Partner John Murphy. At New York’s Kaye Scholer, the number is 7.5 percent, according to partner Randolph Sherman.
When asked about the implications of the preemption decisions, defense lawyers talk tough. “That’s what you do,” says Jones Day partner Mark Herrmann. “You always try to win suits, and if you win them, you are putting yourself out of business.” Murphy of Shook Hardy insists he’s had no sleepless nights. “Am I concerned? Not really,” he says.
Are they just whistling past the graveyard? Maybe not. Most have been around long enough to see caseloads evaporate and new litigation battlefields emerge. And one of the product liability litigators interviewed for this story touted his firm’s new prowess with IP cases.
Some defense lawyers aren’t waiting for a decision in Levine to act. Philadelphia’s White and Williams has already filed a motion to stay federal litigation involving a Novartis Pharmaceuticals Corp. painkiller called nabumetone. At press time a hearing was set for the end of March. And in Alaska, Pepper Hamilton tried to use the issue as part of its defense of Eli Lilly and Co. in a case about the dangers of weight gain and diabetes from the antipsychotic drug Zyprexa. The Alaska Supreme Court didn’t buy the argument, and the trial got under way in February.
For the moment, plaintiffs plan to keep pushing ahead. “Right now we’re pretty busy,” says Relkin. “But if they come back with a broad-brush preemption decision, all bets are off.”
Julie Triedman is a reporter with The American Lawyer , a Recorder affiliate based in New York City.