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Recently in Products Liability Category

James Beck and Mark Herrmann

[Originally published in the Drug and Device Law Blog, 7-9-09.]

The two of us have been practicing law now for a little over 25 years. Bexis graduated law school in 1982 and Herrmann a year later. At big firms it takes a few years -- five at least -- before we could start to have any real strategic impact on the cases we were working on. And it took a few years for us to get around to being product liability defense lawyers in the first place.

But now we're here, there, whatever.

We've been doing product liability defense for the better part of a couple of decades, and we've got maybe a couple of decades more to go. So how are we -- not just us, but this generation of the defense bar generally -- doing at this midpoint of our careers?

Bottom line: Are our clients better off now than when we started?

We decided today was as good a time as any to take stock.

Class Actions

Grade: A. Back in the late 1980s, we had to take class actions in product liability litigation very seriously. While there were never a lot of certifications, there were enough of them that – during the Bone Screw litigation, for example – plaintiffs would argue that there was some sort of “modern trend” favoring certification of personal injury class actions. Some courts said so, too. See In re A.H. Robins Co., 880 F.2d 709, 738 (4th Cir. 1989) (later abrogated). We remember how relieved we were to beat the class certification motion in Bone Screw, which kept that litigation from posing an even more existential threat to our clients than it already did.

Then our side prevailed in Amchem Products, Inc. v. Windsor, 521 U.S. 591 (1997), and Ortiz v. Fibreboard Corp., 527 U.S. 815 (1999). After that – with a lot of blood, sweat, and good legal argument from our side – class actions (at least successful ones) largely disappeared from mass torts, as we’ve discussed before. The few courts willing to certify class actions in drug and medical device cases have so far gotten shot down on appeal, most recently in the St. Jude litigation. Zyprexa may follow. And with the enactment of CAFA, most class action decisions going forward, and essentially everything in mass torts, will be made by federal courts applying post Amchem/Ortiz law.

Medical monitoring, a non-personal-injury derivative of personal injury causes of action that the plaintiffs’ bar dreamt up with class actions in mind, has largely failed in recent years to produce very many successful certifications – despite lots of attempts. We collected those cases here.

Likewise, class actions involving purely economic losses, usually brought as adventurous applications of consumer fraud, RICO, or warranty claims, have had rough going. The first round of appeals in St. Jude recognized the key argument: Even if a given consumer fraud statute does not require the individualized element of reliance, defendants may disprove causation with individualized evidence of non-reliance.

As a measure of how far out of the mainstream tort class actions have become over the last couple of decades, the ALI’s Aggregate Litigation principles project, for all its pro-plaintiff leanings in other areas of the law, states quite clearly that personal injury class actions are disfavored for a variety of reasons.

There’s also a distinct trend afoot, not limited to tort cases, to tighten consideration of class action allegations. The old rule of no "merits" consideration during class certification is out the window.

To top it all off, our side has also had a good deal of success arguing against cross-jurisdictional class action tolling - that failed class actions filed in one court should not toll the statute of limitations on claims filed in a different court. That deprives failed class actions of the one substantive benefit that they could confer upon plaintiffs (as opposed to their lawyers).

We’re still litigating a few issues, such as whether punitive damages can ever be assessed on a classwide basis – discussed here – but overall our clients are a lot better off on the class action front now than they were when we got into this business.

Expert Witnesses

Grade: A. Back when we got started, the courts waved through just about any garbage that a plaintiff’s expert wanted to say. See Wells v. Ortho Pharmaceutical Corp., 788 F.2d 741, 744-45 (11th Cir. 1986) (allowing testimony with no epidemiologic or other statistically significant support that spermicide, of all things, caused birth defects).

Then along came Daubert v. Merrrell Dow Pharmaceuticals, Inc., 509 U .S. 579 (1993). For a while there, it was touch and go. Daubert could have been interpreted as loosening the already capacious federal standard for expert certification even further. But the good guys, again through a lot of hard work and inspired argument, were able to gain the upper hand in this area. The most important thing wasn’t really the standard itself, but the concept of the judge – not the jury – as “gatekeeper.” Given the amount of junk science that plaintiffs’ experts were spewing, if we could just get courts believing that they had an obligation to review things critically, we would win.

And we did, although it took several return trips to the Supreme Court to nail it down. See General Electric Co. v. Joiner, 522 U.S. 136 (1997); Kumho Tire Co. v. Carmichael, 526 U.S. 137 (1999); Weisgram v. Marley Co., 528 U.S.440 (2000).

Daubert was a drug case. It was the Bendectin litigation’s lasting gift to the legal profession.

After a while, the Daubert divide’s gotten to be like night and day. We don’t win every case, but we win a lot more of them than before. Nineteen years after Wells, the same court decided McClain v. Metabolife International, Inc., 401 F.3d 1233 (11th Cir. 2005), reversing and requiring judgment n.o.v. where an expert relied on little more than temporal association. That's monumental change for the better.

And the most important part of Daubert – stringent substantive review of expert opinions, by whatever name – is increasingly finding its way into state court decisions as well, in places like New York, Texas, and Pennsylvania.

So this is another area where we think that, after twenty-plus years of our laboring in the litigation vineyards, our clients are a lot better off.

Pleading

Grade: A- (due to incompleteness). We’ve been all over Ashcroft v. Iqbal, 129 S. Ct. 1937 (U.S. 2009), and Bell Atlantic Corp. v. Twombly, 550 U.S. 544 (2007), on this blog.

For good reason.

Before these decisions, the federal pleading standard was a joke. Plaintiffs could survive a motion to dismiss without pleading a single actual fact, only the same boilerplate they could repeat over and over again in thousands of identical complaints, with only the names changed to encourage the greedy.

Under the new plausibility standard, so far it looks like things will get better. We haven’t done a complete survey by any means, but we do analyze post-Riegel device preemption cases, and a lot of those are being decided on motion to dismiss lately. Under the new pleading standards, the courts aren’t buying boilerplate allegations of “FDA violations” any longer – and cases are getting dismissed (or not refiled). That's immediate, concrete improvement.

We’re hoping that carries over to other allegations having nothing to do with preemption, such as feasible alternative design, warning causation, and reliance.

If our side can continue to build on Iqbal and Twombly the way we have with the Supreme Court’s favorable class certification and expert admission decisions, maybe we can force the other side to abandon their word processors and actually have to evaluate the facts relevant to each of their clients before filing suit.

So with respect to pleading, our clients are already better off – and could be a lot better off – than they were when we first got our seats at the table.

Learned Intermediary Rule

Grade: A-. The minus is due to the wrongheaded decisions of one state supreme court and a federal district court ignoring state precedent, undermining the learned intermediary rule in a couple of smaller states.

The A is due to the number of states that have adopted the learned intermediary rule since the mid-1980s. Take a look at the chart we did a while ago on who’s adopted the learned intermediary rule. In 1987 sixteen state supreme courts had adopted the rule. We’re up to 33 now, with the addition of Wyoming after that post was written. Three more states, including Texas, have had their supreme courts adopt the rule in cases not involving drugs or devices. Federal courts have predicted adoption in three more states.

Personally, we’ve been involved in state supreme court decisions either adopting or reaffirming the learned intermediary rule in Pennsylvania, Ohio, New Jersey, Connecticut, Kentucky, and Georgia.

Beyond simply the number of states adopting the learned intermediary rule, we’ve also seen a strong trend towards its expansion in various directions. It’s expanded from drugs to medical devices. The rule has grown from adequacy of warnings to whether an allegedly defective warning had any causal effect. It’s expanded from failure to warn claims to other claims such as consumer fraud. The rule has been increasingly adopted to protect entities like pharmacists, in addition to product manufacturers.

And because the learned intermediary rule requires that warnings be viewed from the perspective of medical professionals, courts have increasingly been requiring expert testimony as to warning adequacy.

So far, even when the other side tries their own version of “tort reform,” they haven’t really gotten anywhere trying to repeal the learned intermediary rule legislatively - at least not yet. "Constant vigilance."

So with the learned intermediary rule as well, we’d have to say that our clients are quite a bit better off now than when we started in this business.

Preemption

Grade: B. What? Didn’t you guys just get hammered in Wyeth v. Levine, 129 S. Ct. 1187 (2009)?

Yeah, and our ears are still ringing.

But back 20+ years ago, who’d ever heard of preemption in a product liability case to begin with? When we got started, preemption was nowhere.

We were on the barricades in the first wave of preemption litigation, in vaccine cases. We got clobbered.

We were back on the barricades in the second wave of preemption litigation. We had just gotten most of the Bone Screw litigation thrown out on preemption grounds, see In re Orthopedic Bone Screw Products Liability Litigation, 1996 WL 221784 (E.D. Pa. April 8, 1996), when we got clobbered again in Medtronic, Inc. v. Lohr, 518 U.S. 470 (1996). So we’re sort of used to it.

But we’ve got some degree of prescription drug preemption after Levine, with the boundaries still to be fleshed out. In Riegel v. Medtronic, Inc., 128 S. Ct. 999 (2008), we won extensive preemption with respect to pre-market approved medical devices – a minority of all devices, but a category including a lot of the most important devices that would be most adversely affected by litigation as usual. Maybe best of all, preemption precludes the other side from standing up in front of juries and alleging that our client lied to the FDA in its regulatory submissions. Buckman Co. v. Plaintiffs’ Legal Committee, 531 U.S. 341 (2001).

So we haven’t gotten the home run with preemption that we hoped, but considering that back in the late 1980s preemption wasn’t even an affirmative defense worth pleading, our cohort has made significant gains for a significant number of clients.

Prevention of Innovative Liability Theories

Grade: B-. When we started market share liability was a major threat to burst its DES bounds and become generally accepted. That hasn’t happened. No state has adopted it since Hawaii in 1991, and some of the states that did so earlier, like New York, have tightly confined it to the original DES set of facts. Score one for the good guys.

Public nuisance is also appearing more and more like a bad idea whose time has passed. It got a little traction with some pro-plaintiff courts in gun litigation, but not that much. Lately the theory – when asserted in product liability litigation – has taken its lumps in lead paint litigation. Public nuisance has gotten nowhere in drug and device litigation. Two-zip to the good.

The third Restatement of Torts, adopted in 1997 and published the following year, cut back on some of the loopier aspects of strict liability, including liability for unknowable risks, and failure to recall/retrofit claims.

We’ve largely kept an independent duty to test out of the law, too.

And fraud on the FDA is preempted (see above).

But on the other side of the ledger, consumer fraud claims have become staples of our opponent’s litigation strategy, and thus banes of our existence. Twenty years ago practically nobody ever encountered them. So that’s not so good. Still, since consumer fraud claims are limited to economic damages, they’re not worth very much unless the plaintiffs can find some way of aggregating them. See our earlier discussion of class actions. So the jury’s still out on how useful those claims will be for the other side in the long run.

New Jersey, a drug tort hotbed, recently put the kibosh on consumer fraud claims in product liability actions – that’s good.

Even better, our side's been able to convince most courts that such statutes can’t be enforced extraterritorially, outside of the state that enacted a particular statute. That cuts down on the size of any attempt to aggregate claims.

The learned intermediary rule helps, too, since physicians make individualized risk/benefit decisions in deciding to prescribe drugs and devices. That fact tends to preclude litigating these cases as class actions. So does the additional fact that most drugs and devices – how shocking! – actually help people. People who took a drug or used a device, got the benefit, and didn’t suffer an adverse side effect haven’t been injured. Fact of injury thus becomes another individualized determination that has prevented class actions.

We’ve also had a see-saw battle with negligence per se claims based upon alleged FDCA violations. Most of the older cases that were around when we were getting started allowed those claims without a lot of discussion, because after all the FDCA was enacted to make products safer, wasn’t it? However, the principle that the FDCA prohibits plaintiffs from privately enforcing the statute against violators, enunciated by the Supreme Court in Buckman, has helped our clients defeat those claims more often in recent years. But negligence per se hasn't yet gone the way of the dinosaurs, and some courts have allowed such claims.

Something else we didn’t see much of twenty years ago was the so-called post-sale duty to warn. That’s proliferated quite a bit, as even the Third Restatement included it. Fortunately, we don’t see all that much of post-sale claims in our neck of the woods.

Another negative we have to admit is that on our watch medical monitoring went from a legal peculiarity to, if not a majority rule, at least being allowed by a fair number of states, as our 50-state survey shows. So we haven’t been able to stop that one either.

All this adds up to a mixed record in beating back the various novel theories of liability that plaintiffs have invented over the years. We’ve gotten rid of some altogether, and limited others. But some geniis have escaped from the bottle despite the best efforts of our generation of defense lawyers.

Discovery

Grade: D. Two words: “electronic discovery.” Twenty years ago, when we were starting to move into responsible positions, nobody had ever heard of it.

Now electronic discovery has gotten entirely out of hand. It’s hideously expensive, ridiculously intrusive, and almost entirely a one way street. Tort plaintiffs don’t often have large, frequently upgraded computer systems.

Everything else that our side’s been able to accomplish in limiting or streamlining discovery – routinized plaintiff questionnaires, federal-state coordination, restrictions on apex depositions, the inadvertent production doctrine, etc. – pales by contrast to the constantly metastasizing disaster that is electronic discovery.

Reducing Overall Litigation

Grade: F. It hasn’t happened. The other side has been more efficient in soliciting large numbers of plaintiffs to populate the ever growing number of pharmaceutical and medical device mass torts than our side has been in stopping them. The racket that mass torts have become is so downright predictable that we parodied it a while back.

But beneath that parody is lies the simple fact that, since the Supreme Court’s first benighted decision in Bates v. State Bar of Arizona, 433 U.S. 350 (1977), extending First Amendment protection to lawyer advertising, the other side’s solicitation machines have become more and more effective, and there’s not a constitutional thing we can do about it. Even when our side gets a crumb from the Supreme Court, such as Florida Bar v. Went For It, Inc., 515 U.S. 618 (1995), upholding a trivial 30-day cooling off period from personalized solicitations, the vote was only 5-4.

As long as society tolerates virtually unlimited lawyer solicitation as a constitutional right, there’s not a lot of ways for our side to close the litigation floodgates.

Not that we haven’t tried; it’s just our side’s efforts to stop the onslaught of boilerplate, virtually uninvestigated filings hasn’t accomplished very much. Lone Pine orders are a handy invention, but they have yet to become routine, as, say, the litigation hold memos our side has to put up with. Rule 11 once had possibilities, but too many lawyers on both sides played games with it, so in 1993 the Advisory Committee defanged it. That rule hasn't been a significant factor since.

Maybe we’ll have better luck requiring individualized showings of “plausibility under Iqbal/Twombly, but that’s still in the future.

For the present, and over the past twenty years, the number of mass torts, and the number of plaintiffs involved in mass torts, has grown steadily. The list of federal court product liability MDLs maintained by the Judicial Panel on Multi-District litigation is one way to measure it. There was never more than one new drug/device MDL created per year (and in a lot of years, none) until 2001, when Baycol, PPA, Silzone, and ProteGen were all created. Then: 2002-0; 2003-1, 2004-2, 2005-4, 2006-8; 2007-3; 2008-10. Not a trend to be proud of.

If everything that we do is ultimately supposed to deter future litigation against our clients, then it hasn't worked at all.

So we flunk ourselves on that one. Maybe the next generation of defense lawyers can do better.


James Beck and Mark Herrmann are respectively lawyers in the Philadelphia office of Dechert, and the Chicago office of Jones Day, and defend drug and medical device litigation for a variety of clients. They publish the widely known Drug and Device Law Blog, where this essay first appeared.

By Virginia Postrel

This piece was originally published at the Dynamist blog, 2-11-09.

Regulation is having a glamorous moment. Unlike the messy marketplace, with its alleged propensity for producing financial catastrophe, regulation promises to make life orderly and comfortable. Not since the early 1970s, has "regulation"--the general idea, not a specific proposal--seemed so alluring. Like carrying last year's It bag or wearing too much bling, it is currently declasse to say anything bad about a regulation.


That probably explains why, the TV news video above notwithstanding, it is so hard to get conventional reporters to give a damn about the devastating effects of the Consumer Product Safety Improvement Act, signed into law last August amid hysteria about lead in kids' toys. Who, after all, could be against improving safety? Who doesn't want to keep lead out of the mouths of babes? (The CPSIA passed the House with a single dissenting vote, from Ron Paul.)


Under the law it is now illegal, as of yesterday, to sell or distribute any product--toy, book, clothes, electronic gadget, you name it--aimed primarily at children 12 and under without first having every accessible element in that product--fabric, appliques, ink, zippers, buttons, switches, doll hair, you name it--certified by a third-party lab (not, for instance, the zipper maker) as having less than 600 parts per million of lead. The law includes substantial criminal penalties and allows state attorneys general, as well as the Consumer Product Safety Commission, to enforce its provisions.


Third-party testing and certification is the sort of thing that sounds wonderful to good-government types. It's information! It's "transparency"!


It's completely nuts. To take one minor problem, existing third-party labs don't have the capacity to suddenly start testing every component of every kid's product. Reputable manufacturers like YKK Group, which sells most of the world's zippers, already do their own testing. But those tests don't qualify under the law. The CPSIA assumes a huge independent testing industry that doesn't yet exist. (I see spin-off opportunities.) And, of course, it assumes that non-existent industry will offer testing at prices operations smaller than Mattel can afford.


The law completely ignores the complex and fragmented nature of the retailers and manufacturers it regulates. It is putting one-person craft operations out of business, forcing thrift shops to sweep children's clothes and toys into the trash, and panicking apparel makers. Even in the best economic circumstances, the cost of compliance would drive small, low-margin operations out of business. And these aren't the best economic circumstances.


Yesterday's date is in the statute, but the CPSC has promised not to enforce the testing provisions for another year. Instead, it has told businesses just not to sell anything with illegal levels of lead.

The stay of enforcement provides some temporary, limited relief to the crafters, children's garment manufacturers and toy makers who had been subject to the testing and certification required under the CPSIA. These businesses will not need to issue certificates based on testing of their products until additional decisions are issued by the Commission. However, all businesses, including, but not limited to, handmade toy and apparel makers, crafters and home-based small businesses, must still be sure that their products conform to all safety standards and similar requirements, including the lead and phthalates provisions of the CPSIA.

Handmade garment makers are cautioned to know whether the zippers, buttons and other fasteners they are using contain lead. Likewise, handmade toy manufacturers need to know whether their products, if using plastic or soft flexible vinyl, contain phthalates.

The stay of enforcement on testing and certification does not address thrift and second hand stores and small retailers because they are not required to test and certify products under the CPSIA. The products they sell, including those in inventory on February 10, 2009, must not contain more than 600 ppm lead in any accessible part. The Commission is aware that it is difficult to know whether a product meets the lead standard without testing and has issued guidance for these companies that can be found on our web site.

The Commission trusts that State Attorneys General will respect the Commission's judgment that it is necessary to stay certain testing and certification requirements and will focus their own enforcement efforts on other provisions of the law, e.g. the sale of recalled products.

In a press release issued last Friday, the CPSC elaborated that it will:

  • Not impose penalties against anyone for making, importing, distributing, or selling

    • a children's product to the extent that it is made of certain natural materials (pdf), such as wood, cotton, wool, or certain metals and alloys which the Commission has recognized rarely, if ever, contain lead;
    • an ordinary children's book printed after 1985; or
    • dyed or undyed textiles (not including leather, vinyl or PVC) and non-metallic thread and trim used in children's apparel and other fabric products, such as baby blankets.

      (The Commission generally will not prosecute someone for making, selling or distributing items in these categories even if it turns out that such an item actually contains more than 600 ppm lead.)



Essentially, government policy is to encourage small businesses to ignore the law and take their chances. (But it is clear that you'd better shred any books published before 1985.)

As one of its members, I'm not a big basher of the "mainstream media," but on this story the failure to pay attention--or to dismiss concerns as too boring and uncool to cover--is egregious. If nothing else, the CPSIA makes the recession even worse.


I'm guilty myself for not blogging about a story I've followed for months. The sad truth is that I found it so depressing I couldn't muster the energy.


For more information, check out Walter Olson's exemplary coverage. I first heard about the CPSIA from Kathleen Fasanella's Fashion-Incubator blog, which has covered the law in detail, with an emphasis on what apparel makers need to do to comply.


Don't miss Kathleen's response to the pro-regulation interest groups. Opposition to the law has come almost entirely from panicked small-scale operations with little political clout. But the Naderite ideologues behind the law blame the "big toy companies" for any suggestions that its sweeping provisions might be a bit too much.


Senator Jim DeMint (R-S.C.) has a bill to revise the law. But he's a Republican, and I'm a pessimist. Nobody cares what happens to people no one has ever heard of. And my indifferent colleagues in the media will make sure no one ever hears about these regulatory casualties.

UPDATE: An alert reader notes that the MSM isn't the only problem: "Most conservative bloggers can't be bothered with the story because it has no dirt on Obama or any other top ten hate. Even Reason has done nothing at all."

UPDATE II: From Semicolon Blog:

My daughter works in a used bookstore. TODAY they pulled all the books from the children's section that had any kind of metal or plastic or toy-like attachment, spiral bindings, balls or things attached, board books, anything that might be targeted under this law, and they very quietly trashed them all. I say "very quietly" because the bookstore had a meeting with employees and told them to be careful not to start a panic. If anyone asked what they were doing they were told to say that they were "rearranging their inventory." No one was allowed to tell anyone about the new law, and no one was allowed to take any of the doomed-for-destruction books home or give them away.

UPDATE III: Welcome Instapundit and Andrew Sullivan readers. Check out the main blog page for more on this topic.

By Richard Epstein

CHICAGO—The most memorable observation in Errol Morris's film, "The Thin Blue Line," runs like this: "It takes a good Texas prosecutor to convict the guilty . . . and a great Texas prosecutor to convict the innocent." Today, this wry remark applies to plaintiffs lawyers, now that Mark Lanier, down in Angleton, Texas, has drawn blood from Merck for its former blockbuster drug, Vioxx.

Forget the jury's whopping quarter-billion-dollar verdict in Ernst v. Merck, because it's cut 90% by the caps that Texas law places on punitive damages. Still, where do $25 million in actual damages come from? Robert Ernst died in his sleep, without pain and without medical bills. His lost income as a Wal-Mart employee was small. But the $24 million price tag for anguish and loss of companionship to his widow Carol is off the charts. And for what?

Not the death of her husband, whose arteries were 70% clogged and who died, so Dr. Maria Araneta's death certificate states, of arrhythmia, or irregular heart beat. No mention of any heart attack. But in his dramatic eleventh-hour maneuver, Mr. Lanier whisked Dr. Araneta back from the Arabian peninsula to testify conveniently that she really thought that an undetected blood clot had caused the death, but had been dislodged in the last-ditch efforts at resuscitation.

Pretend that this new account is true, and it still doesn't show that Vioxx caused the blood clot. Long before Vioxx, people died of heart failure from all sorts of causes, including physical exertion and dehydration. That second causal link to Vioxx was not made even if the first one to a blood clot is generously presumed. Carol Ernst's lawsuit should be DOA right here, but a clever set of jury instructions allowed the jury to say that Vioxx may have been a contributory cause of death.

By what odds? Merck's clinical trials showed an elevated risk of heart attacks but only in persons that took Vioxx in heavy doses for intestinal polyps for 18 months or more. Ernst took Vioxx only for eight months. In post-trial interviews, the jury members revealed their anger that the company didn't show "respect" for its customers by telling the truth about Vioxx's risks. And they clearly were moved by Mr. Lanier's expert bashing of Merck's medical employee, Dr. Nancy Santanello, who struggled to explain how Merck tried to show the efficacy of the drug in response to criticisms of it.

All this goes to show that physicians under the gun make lousy witnesses, which we already knew. To understand the Angleton verdict, one would think that Vioxx were the moral equivalent of mustard gas. But in truth, we should be grateful to any firm that speeds its product to market when its anticipated use promises many more benefits than adverse side-effects. Merck should not apologize for pushing hard to win quick market acceptance; before Vioxx was withdrawn, countless people with chronic pain were able to get on with their lives. Now these folks are left far worse off because of a double whammy: a Food and Drug Administration that yanks too many drugs off the market because it has no idea how to evaluate risk, and individual jurors who think it is their solemn duty to "send a message" to the drug companies on whose products we so desperately depend.

So, in return, I would like to send my message to Mr. Lanier and those indignant jurors. It's not from an irate tort professor, but from a scared citizen who is steamed that those "good people" have imperiled his own health and that of his family and friends. None of you have ever done a single blessed thing to help relieve anybody's pain and suffering. Just do the math to grasp the harm that you've done.

Right now there are over 4,000 law suits against Merck for Vioxx. If each clocks in at $25 million, then your verdict is that the social harm from Vioxx exceeds $100 billion, before thousands more join in the treasure hunt. Pfizer's Celebrex and Bextra could easily be next. Understand that no future drug will be free of adverse side effects, nor reach market, without the tough calls that Merck had to make with Vioxx. Your implicit verdict is to shut down the entire quest for new medical therapies. Your verdict says you think that the American public is really better off with just hot-water bottles and leftover aspirin tablets.

Ah, you will say, but we're only after Vioxx, and not those good drugs. Sorry, the investment community won't take you at your word. It realizes that any new drug which treats common chronic conditions can generate the same ruinous financial losses as Vioxx, because the flimsy evidence on causation and malice you cobbled together in the Ernst case can be ginned up in any other. Clever lawyers like Mr. Lanier will be able to ambush enough large corporations in small, dusty towns where they will stand the same chance of survival that Custer had at Little Big Horn. Investors can multiply: They won't bet hundreds of millions of dollars in new therapies on the off-chance of being proved wrong. They know they'll go broke if they win 90% of the time.

Your appalling carnage cries out for prompt action. Much as I disapprove of how the FDA does business, we must enact this hard-edged no-nonsense legal rule: no drug that makes it through the FDA gauntlet can be attacked for bad warnings or deficient design. In plain English, Mr. Lanier, you're out of court before you make your opening statement. You've already proved beyond a reasonable doubt that the fancy diagrams that university economists use to explain why the negligence system maximizes social welfare is an academic delusion that clever lawyers use to prop up a broken tort system.

So where does that leave Merck? Perhaps in Chapter 11, where this madness may be brought to a halt.

Mr. Epstein, the James Parker Hall Distinguished Service Professor of Law at the University of Chicago and the Peter and Kirsten Bedford Senior Fellow at the Hoover Institution, has consulted extensively for the pharmaceutical industry. His book on the industry will be published next year by Yale University Press.

Reprinted from The Wall Street Journal � 2005 Dow Jones & Company. All rights reserved.

 

 


Isaac Gorodetski
Project Manager,
Center for Legal Policy at the
Manhattan Institute
igorodetski@manhattan-institute.org

Katherine Lazarski
Press Officer,
Manhattan Institute
klazarski@manhattan-institute.org

Published by the Manhattan Institute

The Manhattan Insitute's Center for Legal Policy.