The Legal Intelligencer Blog

Fresh Ink: Inside Today's Legal

Welcome to your Thursday morning round-up of stories in today’s edition of The Legal Intelligencer. All of the links below will take you directly to today’s stories, or you can head straight over to The Legal’s homepage. (Some stories may require registration or a paid subscription.)

The top story this morning is an attorney for Wyeth arguing that a $10 million verdict against the company in a hormone-replacement therapy case stemmed from a trial that was “permeated with irrelevant and inflammatory evidence.” Reporter Gina Passarella writes that Dechert’s Robert Heim told a three-judge Superior Court panel on Tuesday that, “No defendant could have won this trial.”

Also above the fold on Page 1, reporter Saranac Hale Spencer writes that a federal judge has rejected three Harrisburg residents’ challenge to Act 47, the Financially Distressed Municipalities Act. The judge said the challengers lacked standing to seek the injunction.

Below the fold on Page 1, Gina Passarella writes that the state Supreme Court has denied the appeal of a Luzerne County prothonotary who sued when the county decided to dissolve the elected office and create an appointed system for overseeing judicial records.

In more Regional News on Page 3, reporter Jeff Mordock writes that insurance liabilities may be transferred to trusts in asbestos claims.

As always, our People in the News section is on Page 2, and the top stories from our sister publications across the country make up the Page 4 National News section.

In a Securities Law column on Page 5, Katayun I. Jaffari and Jill M. Stadelman write about the JOBS Act and wonder whether it will be able to kick start employment growth.

This week’s Young Lawyer column is on Page 7, as Lisa Myers write about a year spent as an assistant district attorney and the lessons she learned.

If you have questions or comments about any of today's stories, or our coverage as a whole, we invite you to e-mail any of the reporters directly. We hope you'll enjoy today's Legal.

Fresh Ink: Inside Today's Legal

By Jaime Bochet 
Of the Legal Staff

Welcome to your daily round-up of stories in today's edition of The Legal Intelligencer. Click the links below to access stories directly, or head to The Legal homepage.  (Some stories may require registration or a paid subscription.)

Topping today's front page, reporters Zack Needles and Ben Present write that the state Superior Court has dismissed a claim of double jeopardy made by state Sen. Jane C. Orie, R-Allegheny, as frivolous, saying an Allegheny County trial court properly granted a mistrial based on allegedly forged defense documents.

Sharing the top of the page, senior reporter Gina Passarella writes that former City Councilman Rick Mariano, who spent years in jail for fraud convictions, is allowed to keep more than $65,000 in pension contributions, the Commonwealth Court ruled. The case involves what the city had to pay Saul Ewing for representing Mariano during the investigation of the criminal charges prior to the indictment. 

Below the fold, Gina has another big story from Commonwealth Court, where a judge who presided over trials in Pennsylvania's suits against pharmaceutical companies for overcharging the state for prescription drug reimbursements has denied post-trial motions from both the state and two drug companies.

Our Page 3 Regional News story today is from one of The Legal's affiliate publications, the New Jersey Law Journal. Reporter David Gialanella writes that the 3rd Circuit has ruled that a clause in Verizon cellphone service contracts that makes arbitration of disputes mandatory but prohibits arbitration as a class is enforceable under federal law, despite New Jersey Supreme Court precedent to the contrary.

As always, our People in the News section is on Page 2, and the top stories from our sister publications across the country make up the Page 4 National News section.

The Legal's contributed columns begin on Page 5, with a "Law Firm Management" by consultant Joel Rose, who shares his proven strategies to help differentiate a firm from competitors

Page 7 features our weekly YL  or "Young Lawyer" page, which today has a column by solo practitioner David Koller. Koller shares his story of recently suffering from a brain hemorrhage and reveals what he took away from the experience.

Have questions or comments about any of today's stories, or our coverage as a whole? E-mail me or any of the reporters directly. We hope you'll enjoy today's Legal!

Jaime Bochet is the Magazines & Supplements Editor for The Legal. Follow her on Twitter at @JaimeBochetTLI or e-mail JBochet@alm.com.

Fresh Ink - Inside Today's Legal

By Jaime Bochet
Of the Legal Staff

Can't find a paper, but want a sneek peak at the stories inside The Legal this morning? Simply read on! Click the links below to access stories directly, or head to The Legal homepage. (Some stories may require registration or a paid subscription.)

Just as Tuesdays always include our Pennsylvania Law Weekly section, Wednesday is the unofficial "Day of Delaware," when we roll out the fresh ink from our First State to the south. That includes the Delaware Law Weekly, available online at www.delawarelawweekly.com, as well as our newest product, the Delaware Business Court Insider, an online newsletter that definitely warrants a look. 

But more about Delaware in a bit … let’s get to today's Legal.

U.S. Courthouse Correspondent Shannon P. Duffy leads this morning's front page with a pharma decision from the Eastern District: A jury must decide whether pharmaceuticals giant GlaxoSmithKline used a series of illegal tactics to delay the approval of generic versions of Flonase, a popular allergy drug, Judge Anita B. Brody has ruled. 

Below the fold, reporter Amaris Elliott-Engel has the latest on a developing business of law story involving some well-known names.  A Philadelphia judge ruled Tuesday that plaintiffs law firm Kline & Specter is entitled to a preliminary injunction barring a former attorney from practicing law anywhere else but at the firm until September. 

One Page 3, reporter Jennifer Zimmerman tells the success story of a case with local ties heading for the U.S. Supreme Court. The court has granted a petition for writ of certiorari filed by the Civil Rights Appellate Clinic of Penn State's Dickinson School of Law.

As always, our People in the News section is on Page 2, and the top stories from our sister publications across the country are on our Page 4 National News page.

On Page 5, we have our weekly "GC Mid-Atlantic" page, which appears every Wednesday. Today's column by Shannon Green is a summary of the findings from the GC Compensation survey conducted by our sister publication, Corporate Counsel magazine. If last year’s survey showed the after-effects -- the hangover, if you will -- of the deepest trough of the recession, this year's results show that chief legal officers made steady gains and recovered some momentum.

Our Page 7 contributed piece is our Securities Law column by Brian M. Rostocki of Reed Smith, who writes: On July 7, the Delaware Court of Chancery issued an opinion in Sagarra Inversiones v. Cementos Portland Valderrivas, in which the court denied a plaintiff's motion for a status quo order that would prohibit the defendant from transferring funds under a stock purchase agreement during the pendency of the litigation. 

As we move south in our weekly coverage to Delaware, we'll stop first at the Delaware Law Weekly, where reporter Jeff Mordock has the top stories. Please note: all of our Delaware coverage is for paid subscribers, but you can register for a free 30-day trial by clicking here.

First up is a story on the Delaware Office of the Public Defender, which is poised to assume control of the judiciary's conflict attorneys later this year. While the office touts the change as a way to reduce the unit's bureaucracy and eliminate possible conflicts of interest, lawyers have expressed some concerns about the move.

Next up, the Delaware Supreme Court, reversing a previous Superior Court decision, has ordered a new trial for a man accused of robbing a bank customer. In issuing the opinion, the high court ruled that the trial judge overstepped his authority by prohibiting a witness from testifying on the accused's behalf.

Finally, we'd like you to meet (if you haven't already) the Delaware Business Court Insider. As the name suggests, this is a national product covering the latest news, analysis and cases from the Delaware Chancery Court, Bankruptcy Court and Supreme Court. The accompanying website is www.delbizcourt.com, where you can go to subscribe to this newsletter weekly. You can also follow us on Twitter at: http://twitter.com/delbizcourt.

Top stories there include:
- A group of institutional investors has amended a derivative suit it filed in the Court of Chancery in March against Rupert Murdoch and other directors of the media conglomerate News Corp.
- The Chancery Court began accepting applications last week for the master in chancery position that was vacated upon Sam Glasscock's promotion to vice chancellor; and
- Vice Chancellor Donald E. Parsons Jr. has cleared the way for a possible trial in a two-year dispute between two pipe manufacturers by ruling that there was a valid and enforceable contract between the companies, but that the form and content of the contract remain to be determined.

We hope you'll take a look!

Have questions or comments about today's issue? E-mail me or any of the reporters directly. Have a great day, andl enjoy today's Legal!

Jaime Bochet is the Magazines & Supplements Editor for The Legal. Follow her on Twitter at @JaimeBochetTLI or e-mail JBochet@alm.com.

Generic v. Brand Drugs -- Will There Be Different Federal Standards?

By Adrianne Walvoord
Special to the Legal

In an attempt to dispel misconceptions about generic drugs, the FDA posted Facts and Myths about Generic Drugs on its website.  Fact: approximately 70 percent of all prescriptions are for generic drugs. Fact: research shows that generics work just as well as brand name drugs. Fact: on average, the cost of a generic drug is significantly lower than the brand name product. One reason generic prescriptions are likely on the rise is due to the increase in patent expirations, which has opened the prescription drug market to generic counterparts. 

Despite these facts, Consumer Report surveys in 2009 and 2010 showed that more than 40 percent of people said they had concerns about generic drugs, fearing that they weren’t as safe or as effective as brand-name medications, had different side effects, or came under different federal standards. 

I find the final point -- “different federal standards” -- to be most interesting. As I discussed in my blog last month, the 9th U.S. Circuit Court of Appeals issued an opinion finding that a generic drug manufacturer’s duty to warn under state law was not pre-empted by federal law.  This opinion was in keeping with the 8th Circuit in Mensing v. Wyeth and the 5th Circuit in Demahy v. Actavis. 

So now we have three circuits applying the same federal standard to generic drugs as the U.S. Supreme Court did to a brand drug in Wyeth v. Levine. The Supreme Court, however, has granted appeals in Mensing and Demahy, which could put the rulings of the three circuits in jeopardy. On March 30, 2011, the high court will consider whether the state law failure-to-warn claims are pre-empted by the Drug Price Competition and Patent Term Restoration Act, fondly referred to as the Hatch-Waxman Act in honor of the act’s two sponsors. 

The Hatch-Waxman amendments facilitated the availability of generics by greatly reducing the burden on manufacturers to get a generic drug approved for sale. A generic manufacturer can file an Abbreviated New Drug Application (ANDA) to get approval for an existing licensed medication or approved drug. A generic drug is comparable to a brand drug in dosage form, strength, route of administration, quality, performance characteristics and intended use; however, a manufacturer of a generic drug is generally not required to include preclinical and clinical data to establish safety and effectiveness. In essence, a generic manufacturer can ride the coattails of the brand. 

Although it’s unlikely for the everyday citizen to contemplate the federal standards of pre-emption when deciding between a generic and brand prescription drug, the Supreme Court’s decisions in the Mensing and Demahy appeals may give rise to real concern. Will the Supreme Court find that a generic drug manufacturer may have a duty to warn above a brand manufacturer?  Or will the Hatch-Waxman Act pre-empt a state failure to warn claim against a generic manufacturer that uses the same label as its brand equivalent?  Stay tuned. 

Adrianne E. Walvoord is an associate at Anapol Schwartz Weiss Cohan Feldman & Smalley handling pharmaceutical and medical device litigation involving complex medical, scientific, and legal issues.  She practices in federal court, as well Pennsylvania and New Jersey state courts. She also currently represents juveniles affected by the Luzerne County Juvenile Detention Center scandal. Contact her at awalvoord@anapolschwartz.com.

Update: Avandia Settlements Average $46K

By Amaris Elliott-Engel
Of the Legal Staff
 
Last week, The Legal reported that the first bellwether trial in the Avandia Multidistrict Litigation, based in the U.S. District Court for the Eastern District of Pennsylvania, did not go off because two plaintiffs' attorneys settled their inventories.

Now, AmLaw Litigation Daily, an affiliate of The Legal, with a hat tip to Bloomberg for breaking the news, is reporting that the inventory settled 5,500 cases for $250 million, or an average of $46,000 each.

The settling attorneys were plaintiffs attorneys Joseph J. Zonies of Reilly Pozner in Denver, and Thomas Cartmell of Wagstaff & Cartmell in Kansas City, Mo..

The plaintiffs suing drugmaker GlaxoSmithKline over alleged injuries from their use of Avandia argue that it causes heart attacks, or myocardial infarctions, in diabetic patients taking the drug.

9th Circuit: FDA Regulations Do Not Pre-empt State Failure to Warn Claims

By Adrianne E. Walvoord
Special to the Legal

The 9th U.S. Circuit Court of Appeals issued an opinion yesterday in Gaeta v. Perrigo Pharmaceuticals Company finding that a generic drug manufacturer’s duty to warn under state law was not pre-empted by federal law.

The Gaetas filed suit against Perrigo and several other manufacturers of generic ibuprofen after their son developed liver failure and other serious complications resulting in a liver transplant and extremity amputations, after taking generic ibuprofen for 10 days following a surgical procedure to remove benign moles.  During the procedure, the plaintiffs’ son received an anesthetic known to be hepatotoxic or harmful to the liver.

The plaintiffs alleged defective design, defective marketing, breach of express and implied warranty, negligence and gross negligence, and deceit by concealment. They consistently argued that the manufacturers failed to warn prescribing physicians and consumers of the increased risk of acute liver injury failure when ibuprofen is taken concurrently with other drugs known to be hepatotoxic.

Perrigo moved for summary judgment on pre-emption grounds, arguing that the Gaetas’ state law failure-to-warn claims conflicted with FDA regulations relating to the labeling and marketing of generic drugs.

The district court granted summary judgment, holding that the plaintiffs’ claims were pre-empted because a generic manufacturer could not comply with the heightened state law warning requirements without running afoul of the FDA regulations requiring generic drug labels to conform to the approved labeling for brand name drugs.

After the district court’s decisions in Gaeta, the Supreme Court in Wyeth v. Levine determined that federal regulations did not pre-empt state law claims in name-brand drug cases. The district court denied reconsideration of the Gaetas’ claim despite Levine, and the 9th Circuit accepted the appeal, which was an issue of first impression, to determine “what effect, if any, the Supreme Court’s decision in Levine has on the question whether applicable FDA regulations pre-empt state tort law claims for inadequate labeling against generic -- as opposed to brand name-- manufacturers.”

In reaffirming Levine, the Gaeta court did not give generic drug manufacturers a reprieve from their duty and stated that “drug manufacturers bear primary responsibility for maintaining their labels consistent with safe and effective use of their products.”

There are currently two cases in the Supreme Court involving the question whether federal regulations pre-empt state law failure to warn claims against generic manufacturers.

The 9th Circuit’s sound reasoning in Gaeta provides a good litmus test on a generic manufacturer’s ability and duty to provide warning for its drugs. I believe the Supreme Court will be hard-pressed to find against its decision in Levine; for it to hold otherwise would mean that consumers injured by generic drugs would be left without a remedy while a remedy remained available to those harmed by name-brand drugs. Because estimates show as many as 70 percent of prescriptions are filled with generic drugs, the stakes are high.

Adrianne E. Walvoord is an associate at Anapol Schwartz Weiss Cohan Feldman & Smalley handling pharmaceutical and medical device litigation involving complex medical, scientific, and legal issues.  She practices in federal court, as well Pennsylvania and New Jersey state courts. She also currently represents juveniles affected by the Luzerne County Juvenile Detention Center scandal. Contact her at awalvoord@anapolschwartz.com.

The Tale of Two Drug Trials: Paxil and Fosamax

By Adrianne E. Walvoord
Special to the Legal

In November, two trials involving claims again pharmaceutical drug giants created the perfect backdrop for our state versus federal court dichotomy.  The outcomes, unfortunately, didn’t help to bolster our cause…

Blyth v. GlaxoSmithKline  – a case claiming that GSK did not properly warn the public that its anti-depressant prescription drug, Paxil, caused serious birth defects in infants exposed to the drug prior to birth – began on Nov. 9 in the Philadelphia Court of Common Pleas . 

Less than a hundred miles north of Philadelphia, the trial of Graves v. Merck –  a case claiming that Merck did not properly warn the public that its osteoporosis prescription drug, Fosamax, caused osteonecrosis of the jaw – was underway in the U.S. District Court for the Southern District of New York.  For 10 days, the failure to warn trials raged on in different jurisdictions … 

The plaintiffs in both courts were equally sympathetic and undeniably experienced serious injuries:  Graves took Fosamax from 2001 to 2004 and thereafter developed a debilitating jaw condition known as osteonecrosis of the jaw (ONJ), which caused portions of her jaw to decay and die.  Graves’ condition ultimately required her to undergo surgery to have her jaw amputated in 2006.

Blyth, on the other hand, took Paxil from 2004 through 2005 and had a baby girl, Anna, in January 2006. At just five weeks old, Anna turned blue, was rushed to the hospital and diagnosed with heart defects. Anna underwent surgery at only five weeks old to fix a narrowing in her aorta and underwent an additional surgery at nine months.

Evidentiary rulings by both the state and federal judge greatly restricted the plaintiffs' ability to get in critical evidence:  In Philadelphia, Judge Gary Glazer decidedly ruled out any evidence dated after the time Blyth stopped taking Paxil despite references in these records to knowledge GSK obtained pre-2005.  In Manhattan, Judge John F. Keenan kept out one of plaintiff’s key expert witnesses. 

On Nov. 19, after several hours of deliberation, the jury in Graves found for Merck.  On Nov. 23, Glazer entered judgment in favor of GSK and dismissed the Blyth case halfway through the trial. 

Graves was the third Fosamax bellwether lawsuit to go to trial, and the second trial victory for Merck.  Estimates show that there are currently about 1,000 Fosamax jaw lawsuits pending against Merck.  In addition, there are hundreds of Fosamax femur fracture cases involving similar allegations against Merck pending in New Jersey. 

In the Paxil birth defect litigation, Blyth was the first case to go to trial since Oct. 13, 2009, when a jury awarded $2.5 million to the family of Lyam Kilker, a child born with a congenital heart defect caused by Paxil use during pregnancy.  Nearly 75 percent of the 600 Paxil birth defect cases filed in Philadelphia have settled since the Kilker case in 2009, and estimates reveal that GSK has spent over $1 billion to settle these suits.

Despite the parallel result in the most recent trials, one could (unscientifically) conclude that state court has provided greater to plaintiffs.  This supposition, of course, fails to take into account the merits of the cases and empirical data on the number of cases and settlement values but poses interesting food for thought … does the forum affect the outcome?

Adrianne E. Walvoord is an associate at Anapol Schwartz Weiss Cohan Feldman & Smalley handling pharmaceutical and medical device litigation involving complex medical, scientific, and legal issues.  She practices in federal court, as well Pennsylvania and New Jersey state courts. She also currently represents juveniles affected by the Luzerne County Juvenile Detention Center scandal. Contact her at awalvoord@anapolschwartz.com.

Phila. Judge Upholds Two Defense HRT Verdicts

By Amaris Elliott-Engel
Of the Legal Staff

A Philadelphia judge has denied the efforts of two plaintiffs to overturn defense verdicts issued in favor of drugmaker Wyeth.

In each of the cases, plaintiffs alleged that cases of invasive breast cancer were caused by taking Wyeth's hormone replacement therapy drug Prempro. The plaintiffs' theory was that for postmenopausal women with damaged breast cells and estrogen deficiency, taking HRT drugs resulted in their damaged cells becoming malignant cancerous cells.

Judge James Murray Lynn denied the motions of plaintiffs Sharon Buxton and Joy Henry for post-trial relief last week in Henry v. Wyeth and Buxton v. Wyeth.

The first Philadelphia hormone replacement therapy trial to group cases of multiple plaintiffs together for one trial was reverse bifurcated, and the plaintiffs' attorneys first had to prove to the jury the causation of the plaintiffs' breast cancer from their use of Prempro.

The jurors asked in one question for an explanation of a factual cause, and Lynn repeated his charge that Prempro would be a factual cause of harm when the harm would not have occurred in the absence of Prempro.

The plaintiffs argued that the first question posed to the jury should not have been: "Was Wyeth's drug Prempro a factual cause in the development of plaintiff Mrs. Henry's breast cancer?" The plaintiffs wanted the first question to the jury to be: "Was Wyeth's drug Prempro a factual cause in bringing about harm to Mrs. Henry/Buxton?"

The plaintiffs said they would have won the case if their jury question had been given to the panel because "the incorrect question mis-informed the jury that plaintiffs would have to prove more than mere promotion effect by Prempro in bringing about the harm, a burden that exceeds the plaintiffs' actual burden under Pennsylvania law," according to the plaintiffs motion for post-trial relief.

The trial was held this summer over three-and-a-half weeks.

Merck, Schering-Plough Settle Vytorin Suits

By Gina Passarella
Of the Legal Staff

Pharmaceutical companies Merck and Schering-Plough said Wednesday the two companies agreed to pay $41.5 million to settle suits that the companies’ marketing of cholesterol-lowering drugs Vytorin and Zetia was misleading.

The cases involved 140 suits seeking class action status in the U.S. District Court for the District of New Jersey.

The agreements were reached with plaintiffs seeking to represent proposed classes of consumers, insurers and other entities and with a separate group of independently represented health plans that purchased, used or paid money toward the purchase of Vytorin or Zetia from the time of the products' introduction to the market, the companies said in a statement.

"These agreements will allow the companies to avoid continuing defense costs and remain focused on discovering, developing and delivering novel medicines and vaccines," Bruce N. Kuhlik, executive vice president and general counsel of Merck, said in the statement.

Dechert represented Merck and Schering-Plough in the settlement. The team was led by Princeton, N.J., partner Ezra Rosenberg and included partners Kathleen O’Connor, Diane Sullivan, Benjamin Barnett, Hope Freiwald, Christopher Michie, Ronni Fuchs, Will Sachse and Richard Berkman.

Questions about the drugs’ efficacy arose after they companies released the ENHANCE study which released safety and efficacy concerns about the drugs.

The companies, which are set to merge by the end of the year, had a pre-existing joint venture to market the drugs. They both said the settlement is not an admission of any wrongdoing.

According to reports by The Wall Street Journal, this is the second settlement over the drugs in as many months. The companies paid a $5.4 million settlement to 35 states and the District of Columbia after the states looked into how the companies handled the release of the ENHANCE study and whether they delayed making the results public. More settlements could be in the works for the companies, WSJ reported, because there is an ongoing Department of Justice investigation into the marketing of the drugs.