Levaquin Compensatory Verdict Affirmed By 8th Circuit; Punitive Verdict Reversed

ST. LOUIS — (Mealey’s) The Eighth Circuit U.S. Court of Appeals on Nov. 30 unanimously affirmed denial of judgment as a matter of law or new trial for compensatory damages in the first Levaquin multidistrict litigation bellwether trial but in a 2-1 split said the trial court erred in denying the same relief for the punitive damage verdict (In Re: Levaquin Products Liability Litigation, John Schedin v. Ortho-McNeil-Janssen Pharmaceuticals, Inc., No. 11-3117, 8th Cir.; 2012 U.S. App. LEXIS 24640).

(Opinion available. Document #28-121205-014Z.)

The ruling by the Eighth Circuit preserves plaintiff John Schedin’s $630,000 compensatory damage award but reverses his $1,115,000 punitive damage award.

In 2005, John Schedin, then 76, was prescribed Levaquin brand levofloxacin antibiotic and corticosteroids. Schedin subsequently suffered a rupture of his left Achilles tendon and a partial tear of his right Achilles tendon.

Schedin sued Levaquin manufacturer Ortho-McNeil-Janssen Pharmaceuticals Inc. (OMJP) in the U.S. District Court for the District of Minnesota, where the Levaquin MDL is located, alleging that the defendant failed to adequately warn about the risk of tendon rupture in elderly patients taking corticosteroids.

Failure To Warn, Conduct

The case became the first Levaquin bellwether trial. In December 2010, the jury found that OMJP failed to warn Schedin’s doctor of the risk of tendon rupture and found the drug company partially liable. It also found that OMJP’s conduct warranted the awarding of punitive damages.

OMJP moved for judgment as a matter of law (JMOL) or a new trial. The court denied the motion, and OMJP appealed.

The panel found that Schedin presented adequate evidence that OMJP was negligent for failing to use adequate means to inform Schedin’s doctor about a 2001 warning against prescribing Levaquin to elderly patients taking corticosteroids. It said it didn’t need to address whether the trial court erred in denying OMJP’s motion based on Schedin’s “comparative toxicity theory” because any such error was harmless.

Physicians Unaware Of Warning

Considering evidence about a sentence added to the Levaquin label in 2001 and that the Food and Drug Administration received a large number of reports about tendon injuries with Levaquin’s use, the panel said “a reasonable jury could infer OMJP should have realized that adverse event reports indicated physicians were unaware of the 2001 warning. The district court did not abuse its discretion in deciding it was not against the preponderance of the evidence or a miscarriage of justice under Minnesota law for the jury to find OMJP had reason to know it needed to do more to inform physicians of the 2001 warning, such as sending ‘Dear Doctor’ letters or directing sales representatives to warn physicians directly.”

The panel said the 2008 FDA letter “provides some corroboration of the probability OMJP has some knowledge of the adverse event reports before Schedin’s injury in February 2005. . . . The jury reasonably could have found some reports were made before Schedin’s 2005 injury. The district court could have found the letter inadmissible, but did not abuse its considerable discretion in admitting the FDA’s 2008 letter.”

As to causation, the panel said, “The district court found sufficient evidence of causation, reasoning ‘the jury could infer from the fact that [prescribing physician Dr. John] Beecher no longer prescribes Levaquin that some piece of information would have altered his prescribing decision since, in fact, he has changed his prescribing patterns as a result of his increased awareness of the risks of the drug.’”

“Dr. Beecher testified he no longer prescribes Levaquin unless a patient requests it,” the panel continued. “Even more to the point, Dr. Beecher declared he would not have prescribed Levaquin for Schedin had Dr. Beecher been aware of the 2001 warning and known what he knows now.”

Would Warning Be Ignored?

The panel rejected OMJP’s argument that warnings from its sales representatives or from a Dear Doctor letter would have made a difference. It said that although the doctor testified he did no rely heavily on sales representatives, that did not mean he would have ignored a warning.

In addition, the panel said “general study evidence” indicated that “properly worded and highly publicized” Dear Doctor letters may reduce risky prescribing practices. “Although a stretch, the jury reasonably could infer Dr. Beecher would have learned about the changed warning if OMJP warned Dr. Beecher or his colleagues using sales representatives or publicized ‘Dear Doctor’ letters,” the panel said.

“The district court did not abuse its discretion in holding such a jury finding was not against the preponderance of the evidence,” the panel said.

Punitive Evidence Speculative

On the issue of punitive damages, however, a two-judge majority said the District Court’s finding that OMJP knew of higher tendon toxicity for Levaquin, hid that potential and failed to adequately warn is “mere speculation.”

“As a matter of law, the record evidence failed to establish OMJP deliberately disregarded the risk of tendon injuries in elderly patients taking corticosteroids, as required for punitive damages under Minnesota law,” the majority wrote. “By warning of that risk in its package insert, OMJP ‘actively sought ways to prevent the dangers associated with its product.’”

The majority also noted that the 2001 warning was published in the Physician's Desk Reference, a widely used reference source.

‘Hiding Information’

As to OMJP’s action regarding the so-called Ingenix study of Levaquin and tendon rupture, the majority said that “we cannot characterize OMJP as hiding information it openly published. The 2001 warning was in Dr. Beecher’s physical possession and was specific and clear if read.”

“The evidence is neither clear nor convincing, as a matter of law, that OMJP deliberately disregarded the safety of the users of Levaquin,” the majority concluded.

Chief Circuit Judge William Jay Riley wrote the majority opinion. He was joined by Circuit Judge Michael J. Melloy.

Punitives Dissent

Circuit Judge Kermit E. Bye concurred with the panel on the motions regarding compensatory damages but dissented regarding its majority ruling on punitive damages. “I believe, however, there was sufficient evidence from which a reasonable jury could conclude OMJP deliberately disregarded the risk of tendon injuries in elderly patients who were prescribed Levaquin in association with corticosteroids,” Judge Bye wrote.

“The punitive damage award should not, however, rise or fall on whether the jury reasonably found OMJP manipulated the Ingenix study,” Judge Bye said. “Even assuming the jury rejected Schedin's allegations regarding the Ingenix study, the evidence was more than sufficient to allow a reasonable jury to infer that OMJP deliberately acted with indifference to a high degree of probability of injury . . . based on (1) OMJP's knowledge of the serious risks associated with Levaquin's potential for higher tendon toxicity when prescribed to elderly patients in conjunction with corticosteroids, and (2) OMJP deliberately choosing a course of action whereby physicians would not be adequately apprised of the increased risk.”

“Schedin presented evidence from which a jury could reasonably infer OMJP was more concerned about its profits, and how those profits would be affected by effective warnings, than it was about the possibility Levaquin could injure elderly patients who were prescribed the drug in association with corticosteroids,” the judge continued.

Judge Bye said that when OMJP revised Levaquin’s label in 2003, “it deliberately chose not to issue Dear Doctor letters or even to instruct its pharmaceutical representatives to advise physicians of the label change. Instead, OMJP deliberately chose to bury the updated warning — a single twenty-word sentence — inside thirty pages of fine print in the revised package insert, and then took no further action to ensure physicians would be aware of the label's revised warnings.”

Inferred Profit Motive

“The jury could reasonably infer OMJP chose this course of action because issuing Dear Doctor letters, or instructing pharmaceutical representatives to spread the word about the increased risk, would have a direct and adverse affect on OMJP's profits,” Judge Bye continued.

“Thus, contrary to the majority's conclusion that OMJP's conduct showed the company ‘actively sought ways to prevent the dangers associated with its product,’” he wrote, citing case law. “OMJP's deliberate choices virtually guaranteed that physicians would remain unaware of the increased risk of prescribing Levaquin to elderly patients in conjunction with corticosteroids.”

“By reversing the punitive damage award we encourage other pharmaceutical companies to make the same devious choices OMJP made, instead of affirming the jury's decision to deter such conduct,” Judge Bye concluded.

Counsel

OMJP is represented by John Dames and William V. Essig of Drinker & Biddle in Chicago, Dana M. Lenahan and Tracey J. Van Steenburgh of Nilan & Johnson in Minneapolis and Charles Lifland and Cynthia Ann Merrill of O’Melveny & Myers in Los Angeles.

Schedin is represented by David M. Cialkowski and Ronald S. Goldser of Zimmerman Reed in Minneapolis and Lewis J. Saul and Charles M. Wolfson of Lewis Saul & Associates in New York.

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