1st Circuit: $21 Million Design Defect Verdict For Generic Drug Injury Not Preempted

1st Circuit: $21 Million Design Defect Verdict For Generic Drug Injury Not Preempted

BOSTON - (Mealey's) A panel of the First Circuit U.S. Court of Appeals on May 2 affirmed a $21 million generic drug injury verdict, finding that a 2011 Supreme Court ruling about generic drug injury claims does not preempt design defect claims (Karen L. Bartlett v. Mutual Pharmaceutical Company, Inc., et al., No. 10-2277, 1st Cir.). 

(Opinion. Document #28-120518-001Z.) 

Karen Bartlett was prescribed Clinoril, a prescription nonsteroidal anti-inflammatory drug (NSAID) to treat shoulder pain.  The pharmacy dispensed sulindac, the generic version of Clinoril. 

Bartlett subsequently developed Stevens-Johnson syndrome (SJS) and toxic epidermal necrolysis (TEN), reactions that resulted in burn-like damage to 60 to 65 percent of her body.  She spent 70 days in a hospital, including a burn unit, and suffered permanent tissue damage and near-blindness. 

Bartlett sued three defendants in New Hampshire state court.  Defendant Mutual Pharmaceutical Co. Inc. removed the case to the U.S. District Court for the District of New Hampshire. 

Warning Claim Out, Design Remains 

Eventually, all of Bartlett's claims were dismissed by the court or by the plaintiff and only the design defect claim remained against Mutual, the sole defendant at trial.  Bartlett's failure-to-warn claim was dismissed because Bartlett's prescribing doctor testified that he had not read the warning label. 

At trial, the sole theory of design defect was whether sulindac's risks outweighed its benefits, making it unreasonably dangerous to consumers, despite the fact that the Food and Drug Administration had never withdrawn Clinoril's designation as "safe and effective." 

After a 14-day trial in 2009, a jury awarded Bartlett $21.06 million in compensatory damages.  The court denied Mutual's motion for judgment as a matter of law or a new trial.  

Mutual appealed, arguing that the trial court misunderstood New Hampshire's law on design defect, that claims about generic drugs are preempted by federal law, that causation was not shown, that Bartlett's expert testimony was inadmissible, that instructions on label warnings were inaccurate, that conduct by Bartlett's counsel warranted a new trial and that damages were excessive and warranted a new trial. 

Abandoned Defense 

The First Circuit panel said New Hampshire case law does not require that a plaintiff prove that there was a safer alternative to prove a design defect claim. 

An "ordinary consumer," the panel said, would hardly know without further warning that sulindac carried a risk of the injuries Bartlett suffered.  "Accordingly, the district court properly allowed Bartlett to show that sulindac was in a 'defective condition' by showing that it was 'unreasonably dangerous' due to its propensity to cause SJS/TEN.  . . .  Although Mutual could still have avoided liability by proving that sulindac was unavoidably unsafe but was highly useful and had an adequate safety warning . . . , Mutual abandoned that defense on the eve of trial." 

In a footnote, the panel said Mutual did not explain why it chose to present no affirmative defense but said it "may have hoped to exclude entirely any evidence about SJS/TEN warnings" or "may have thought that Bartlett's expert testimony could be undermined without risking cross-examination of its own expert who might have had to concede some of the dangers posited by Bartlett." 

The panel said Mutual argued that its "no-defect" argument supports a lack of causation.  The panel said that "given the overwhelming evidence that sulindac triggered Bartlett's reaction, 'but for' cause is plainly established." 

No Design Defect Preemption 

Mutual argued that Bartlett's design defect claim is preempted by the Food, Drug and Cosmetic Act (FDCA) and the Drug Price Competition and Patent Term Restoration Act (known as the Hatch-Waxman amendments).    But the panel said, "Whether and to what extent the FDCA preempts design defect claims against generic drug manufacturers is a question of exceptional importance that the Supreme Court has yet to decide." 

The panel said Congress has not explicitly preempted design defect claims, and the U.S. Supreme Court has not done so by implication. 

The panel said that while the Supreme Court's drug preemption ruling in Wyeth v. Levine (555 U.S. 555 [2009]) is limited to failure-to-warn claims, "its logic applies to design defect claims as well." 

The panel noted that in the subsequent generic drug preemption ruling in Pliva, Inc. v. Mensing (131 S. Ct. 2567 [2011]), the Supreme Court said the FDCA preempted failure-to-warn claims involving generic drugs.   Mutual argued that Pliva means that generic drug makers cannot alter their drugs and that design defect claims are also preempted. 

Just Don't Make Drug 

"But although Mutual cannot legally make sulindac in another composition (nor is it apparent how it could alter a one-molecule drug anyway), it certainly can choose not to make the drug at all; and the FDACA might permit states to tell Mutual it ought not to be doing so if risk-benefit analysis weights against the drug, despite what the Supreme Court made of similar arguments in the labeling context," the panel said. 

"[N]ot only has the Supreme Court not yet said it would extend PLIVA's exception to design defect claims, but - while the generic maker has no choice as to label - the decision to make the drug and market it in New Hampshire is wholly its own," the panel continued.  "Thus, Bartlett having lost her warning claim by the mere chance of her drug store's selection of a generic, the Supreme Court might be less ready to deprive Bartlett of her remaining avenue of relief. 

"On balance, we conclude that the Court adopted a general no-preemption rule in Wyeth and that it is up to the Supreme Court to decide whether PLIVA's exception is to be enlarged to include design defect claims," the panel said.  "Given the widespread use of generic drugs and the developing split in the lower courts  . . . this issue needs a decisive answer from the only court that can supply it." 

Labeling Evidence OK 

The panel rejected Mutual's argument that the trial court erred in telling the jury it could consider the FDA's labeling requirements for drugs.  The panel said that the sulindac label was relevant to the design defect claim and that the judge instructed the jury on the relevance of the label. 

The panel rejected Mutual's arguments that Bartlett's two expert witnesses, burn surgeon Roger Salisbury and pharmacologist/toxicologist Randall Tackett, were not qualified or that their opinions lacked scientific basis. 

Mutual argued that the experts improperly relied on adverse event reports filed with the FDA.  The panel said "proof that a significant number of adverse reports exists is part of the calculus and surely relevant input for a witness who is prepared to opine on the risk-benefit ratio based on a range of considerations."  It said Mutual's own pharmacologist/toxicologist expert, Robert Stern, whom Mutual ultimately did not call, relied on adverse event data and comparative reporting rates from peer-reviewed journals to quantify the risk of SJS/TEN associated with NSAIDs. 

The panel said that while some courts have found adverse event reports insufficient proof of causation, "sulindac is a recognized cause of SJS/TEN and the evidence is that it caused Bartlett's SJS/TEN." 

No Expert 'Ambush' 

In addition, the panel said the District Court excluded opinions that Tackett admitted were unreliable, such as a direct comparison of sulindac to Bextra, another NSAID. 

The panel said Mutual was able to cross-examine Bartlett's experts about the other appeal issues and was not "ambushed" by the expert testimony. 

Mutual also argued that misconduct during the trial by Bartlett's counsel warranted a new trial.  The panel disagreed. 

"Given the comparative strength of Bartlett's expert evidence, the prior instances of sulindac-SJS/TEN events, and the enormous harm wrought in this instance, a judgment that misconduct did not cause the verdict for Bartlett is not unreasonable," the panel said.

Verdict Not Excessive 

Finally, the panel rejected Mutual's argument that the verdict was excessive.  The panel said Mutual complains in particular of the $16.5 million award for pain, suffering and loss of enjoyment of life. 

Mutual cited a New Hampshire car crash verdict in which a child was awarded just under $4 million for pain and suffering, a quarter of what Bartlett got.  The panel said Bartlett's injuries "were truly horrific":  two months in a burn unit, months in a medically induced coma, burns over nearly two-thirds of her body, a year being tube-fed, two major septic shock infections and 12 eye surgeries with more to come.   

In addition, the panel said Bartlett cannot eat normally due to burns of her esophagus, cannot have sexual relations due to vaginal injuries, cannot engage in aerobic activities due to lung injuries, is almost blind and faces the likelihood of permanent blindness.  She also cannot read, drive or work. 

"In sum, the jury's award is not so clearly disproportionate to the harm suffered that a court must set it aside," the panel said. 

Trial Judge Commended 

In closing, the panel said "the district judge handled a very difficult case with skill and insight and he deserves this court's special thanks for his thoughtful and very helpful opinions." 

Circuit Judge Michael Boudin wrote the opinion.  The other panel members were Senior Circuit Judge Norman H. Stahl and Circuit Judge O. Rogeriee Thompson. 

Mutual is represented by Joseph P. Thomas, Linda E. Maichl and Paul J. Cosgrove of Ulmer & Berne in Cincinnati and Stephen J. Judge and Pierre A. Chabot of Wadleigh, Starr & Peters in Manchester, N.H. 

Bartlett is represented by Keith M. Jensen and Eric N. Roberson of Jensen & Associates in Fort Worth, Texas, and Stephen M. Gordon and Christine M. Craig of Shaheen & Gordon in Dover, N.H. 

Amicus Counsel 

Amicus curiae Product Liability Advisory Council is represented by Joseph P. Lucia, David R. Geiger and Nabeel Ahmad of Foley Hoag in Boston and Hugh F. Young Jr. of the Product Liability Advisory Council in Reston, Va.  

Amici American Association for Justice and the New Hampshire Association for Justice are represented by Louis M. Bograd of the Center for Constitutional Litigation in Washington, D.C., and Andru H. Volinsky of Burnstein Shur in Manchester. 

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