Thursday, April 10, 2014

Panel explains their opposition to FDA rule that would allow generic drug manufacturers to update the safety warnings for their products

Here is a link to a video of a panel presentation where the Generic Pharmaceutical Association and a couple of organizations that support tort reform discuss the FDA new regulations that would allow (and presumably encourage) generic drug manufacturers to add or update the safety warnings on their products.  (For the background on the issue go here and follow the links.)

Comments on the $9 billion verdict

Yesterday I reported that a jury in Louisiana had awarded what someone called "maybe largest monetary award ever" against a pharmaceutical company for injuries caused by the drug Actos.  

Whatever its place in history, the verdict has generated some debate.  The defendant quickly responded by announcing it would appeal the verdict.  Others have provided additional commentary.  The TortsProf blog opined that "[b]ecause of the presumptive single-digit Due Process ratio, there is a strong possibility the punies will at least be reduced."  An article in Reuters agrees.

On the other hand, although agreeing that the amount of the verdict is likely to be reduced, Eric Turkewitz of the NY Personal Injury Law Blog, thinks an award of much more than a "single-digit ratio" can be justified.  His conclusion:  "So what will happen in the Actos litigation? I think that a punitive damage award of 100x or greater is in the cards if the plaintiffs satisfy the court that the conduct was reprehensible ... And I also think that, given the significant document destruction that led to that whopper of an award, that satisfying that element won’t be too difficult. Assuming that the $1.5M in compensatory damages aren’t touched, I think that ultimately a punitive award of $150M+ is sustainable under current law."

Kansas legislature adopts bill to increase cap for non-economic damages

A couple of weeks ago, I wrote that the Kansas Senate and House passed similar bills to gradually raise the non-economic damages cap in personal injury cases from $250,000 to $350,000.  The Senate and House versions were different in that the Senate version would eliminate the collateral source rule and allow jurors to hear testimony about whether a plaintiff's damages were covered by insurance.  For that reason, I wrote that "[h]opefully, the House version will prevail. One important goal of tort law is to shift the cost of accidents onto the persons who are responsible for the harm. The collateral source rule helps preserve this goal because, without it, it’s likely that costs would be shifted away from the wrongdoer to the injured party and his or her insurance provider. Exonerating the tortfeasor because the plaintiff can "afford" the cost of the accident also does nothing to advance another goal of tort law: deterrence."

Fortunately, the House version did prevail.  The bill (available here) gradually raises the cap and rejected the Senate's attempt to eliminate the collateral source rule.  The gradual change in the cap is described as follows:  $250,000 for causes of action accruing from July 1, 1988, to July 1, 2014; $300,000 for causes of action accruing on or after July 1, 2014, to July 1, 2018; $325,000 for causes of action accruing on or after July 1, 2018, to July 1, 2022; and $350,000 for causes of action accruing on or after July 1, 2022.

Thanks to the TortsProf blog for the update and some links to the bill and other important documents.

More problems in the auto industry; more recalls; GM fined

As the PopTort wonders if the auto industry has broken the world record for total number of cars recalled in one year, Volkswagen has announced that it has initiated a recall for over 150,000 Passat vehicles that may have headlights with loose electrical connections and that it has also stopped selling several popular models that could pose a fire risk.

Meanwhile, Toyota Motor Corp has initiated five separate recalls, impacting an estimated 6.39 million vehicles sold worldwide, due to a number of different problems, including faulty steering controls, windshield wiper motors, engine starters, and seat rails.

Finally, General Motors is being fined $7,000 per day for its continuing failure to answer questions about the recent ignition switch recall, which has affected 2.4 million vehicles in the U.S.

Wednesday, April 9, 2014

Jury awards $9 billion in punitive damages for side effects of Actos diabetes drug

In what may be the largest award ever against a pharmaceutical company, after more than 12 weeks of trial, it took a Louisiana jury only a few hours to return a verdict in the first federal case involving the development of bladder cancer from side effects of Actos. The jurors found for the plaintiff and awarded $1.5 million in compensatory damages and an additional $9 billion in punitive damages against Takeda Pharmaceuticals and Eli Lilly. The case was based on the allegation that the makers of the diabetes drug Actos withheld information from consumers and the medical community about the risk of users developing bladder cancer. There are still aBout 3,000 other complaints pending involving nearly identical allegations. AboutLawsuits has many more details on the story here.

Sunday, April 6, 2014

NY Times article on Senate investigation of NHTSA regarding its role in the GM defects scandal

Yesterday's New York Times has an article discussing the Senate hearing during which a National Highway Traffic Safety Administration official testified regarding the agency's knowledge of, and failure to take action on, GM cars' defects. The story is a good illustration of the limitations of the policy argument in favor the defense based on preemption in products liability cases.
It is now known that the NHTSA knew of the defeats in GM cars for some time but did not take action. As a result, the cars continued to be on the market and caused the deaths of a number of people. It wasn't until a plaintiff's lawyer brought a lawsuit that the defect was exposed and GM felt the need to recall millions of vehicles.
This controversy is important for tort law in general because tort reformers and those who favor the defense of preemption typically argue that we should leave regulation of products to the government agencies that are charged with overseeing the particular industry. According to this view, it is inefficient and unfair to allow courts to consider arguments related to product safety when there are governmental agencies with more expertise to handle those issues.
The argument makes sense, but only in the abstract. When you consider reality, it is the argument that proves to be inadequate and inefficient. The NHTSA budget, including the budget to investigate defects, has fallen since 2002, and it is currently less than GM's CEO's compensation. Also, deregulation efforts by the Bush administration allow companies to withhold more information from government regulators.

When those government agencies that are supposed to be regulating the industry, or watching out for our safety, are under staffed, under funded, ill equipped to do their job, or are simply not doing their job, it is the tort law system itself that has to come in to do the job. It is unfortunate that some people had to die and that someone had to file a lawsuit to get GM to take action, but if it hadn't been for that, it is likely more deaths would have occurred.
One of the most important goals of the tort law system is to provide incentives for deterrence of dangerous conduct and to encourage more safety. When it comes to products, hopefully this would mean that products will be safer and that consumers will face fewer risks when using them. Tort reformers' efforts to rely on those who create the risks or those who have proven incapable of providing adequate regulation or control only leads to a system that provides less safety while protecting the wrongdoers' profits.
An adequate safety system must be based on a combination of things that includes a tort law system that can help expose problems when other agencies can't or won't.
This was the third time in recent years that an NHTSA official testified alongside an auto Iindustry executive to answer for Americans’ deaths. Given the current system, unfortunately, it is not likely it will be the last.

Saturday, April 5, 2014

Summers v Tice, 2014 edition: anti gun control state representative accidentally shoots another in hunting party

If you took Torts, you probably remember reading Summers v. Tice, the case about the two hunters who simultaneously shot in the direction of the plaintiff.  Only one of them hit the plaintiff, but the plaintiff could not prove which one (although maybe the evidence had been available).

Apparently, this sort of accident happens with certain frequency.  A few years ago, then vice president Cheney was involved in a similar incident and last year a plaintiff was awarded several million dollars in a similar case in Pennsylvania.

This year's edition of the case was reported just a few days ago in Oklahoma.  The case is gathering some press because one of  the shooters is a Republican state representative who does not support gun control laws.  The Oklahoman has more here.  For more go here and for some commentary go here.

New study concludes direct to consumer ads result in unneeded prescriptions; is anyone surprised by this?

AboutLawsuits is reporting that a new study has concluded that direct to consumer advertising of prescription drugs results in unneeded prescriptions.  And my reaction, just as with that other study that concluded that many direct to consumer ads are misleading, is "Duh! You needed a study for that?"  I could have told you that.  Why do you think pharmaceutical companies spend so much on direct to consumer advertising?

This is why, years ago, some jurisdictions held that manufacturers should not be allowed to rely on doctors to provide warnings to the consumers.  If the product was one that was offered to the public through direct to consumer advertising, there should be a duty to warn the consumer the same way.  Not many jurisdictions have followed the lead of those few cases, though.  Maybe these new reports could some day persuade more courts to adopt this view.

Thursday, April 3, 2014

New York Times on the Senate hearings about GM

Yesterday, The New York Times published three separate stories (and videos) on the Senate hearings about GM defective cars.  Here are the links:

GM Chief Faces Ire of Senators in Hearing

Highlights from Senate Hearings on GM Defects

GM Secrecy on Crashes Adds to Families Pain

Wednesday, April 2, 2014

More problems for GM and other news

As its CEO went before Congress to testify about problems with defective ignition switches that have already led to the recall of 2.6 million cars worldwide, General Motors announced that another 1.3 million vehicles are being recalled due to power steering problems.  Go here for the full story.

Meanwhile, as part of the investigation into the deaths allegedly caused by defects in General Motors cars, the House committee on energy and commerce found that the company was aware of the dangerous defects as early as 2001 (see here) and that federal safety regulators were suspicious about potential problems as far back as 2007. That story is here.

And then, there is the news that GM CEO Mary Barra announced that the company has hired and would soon be meeting with “special master of disaster” Ken Feinberg, to help them evaluate the situation.   As explained by The PopTort, "[s]ince 9/11, Mr. Feinberg has been the “go to” guy to divvy up money to victims in two situations: 1. victims harmed by large events, who have no recourse in the courts (as for the 9/11 victims); and, 2. victims harmed by extremely negligent companies, who are facing large numbers of claims and who want to stop or weaken lawsuits (as in BP’s Gulf Coast disaster.) GM now finds itself in both camps. So watch closely what GM and Mr. Feinberg do next."  The PopTort's comment on this can be found here.