Mass Tort Litigation Blog

Dueling papers on tobacco litigation

For those interested in tobacco litigation, two new papers have been posted on SSRN from opposite ends of the political-litigation spectrum.  Although they speak to different issues and do not cite each other, they present wildly divergent perspectives on tobacco litigation and even criticize each other's institutional affiliations.

Bootleggers, Baptists and Televangelists: Regulating Tobacco by Litigation, by Bruce Yandle, Joseph Rotondi, Andrew Morriss, and Andrew Dorchak (three of whom are associated with the Mercatus Center at George Mason University), argues that in the tobacco litigation, plaintiffs' attorneys and state attorneys general established alliances with other players that had a pernicious effect and, according to the Mercatus Center summary of the paper, "creat[ed] an unaccountable group whose activities undermine core principles of the Anglo-American legal system."  Here's the abstract from SSRN:

The "bootleggers and Baptists" public choice theory of regulation explains how durable regulatory bargains can arise from the tacit collaboration of a public-interest-minded interest group (the "Baptists") with an economic interest (the "bootleggers"). Using the history of tobacco regulation, this Article extends the bootleggers and Baptists theory of regulation to incorporate the role of policy entrepreneurs like the state attorneys general and private trial lawyers who joined forces to regulate tobacco by litigation. We denominate these actors "televangelists" and demonstrate that they play a pernicious role in regulation.

The Article begins by showing how tobacco regulation through the 1980s fit the traditional bootleggers and Baptists public choice model. It then explores the circumstances that made it possible for the emergence of the televangelists as a regulatory partner that the bootleggers would prefer. The Article then criticizes televangelist-bootlegger bargains as likely to result in substantial wealth transfers from large, unorganized groups to the coalition partners. It also shows how televangelist-bootlegger coalitions are more pernicious than bootlegger-Baptist coalitions. Finally, it concludes with suggestions for how to make televangelist-bootlegger coalitions less durable.

Tobacco Industry Use of Judicial Seminars to Influence Rulings in Products Liability Litigation, Tobacco Control (2006), by Lissy Friedman of the Tobacco Control Resource Center at Northeastern Law School, charges judges with participation in biased seminars funded by the tobacco industry.  In the paper, Friedman criticizes George Mason as "one of the main purveyors of judicial seminars with a pro-business slant." (Turnabout:  the Bootleggers paper by Yandle et al., in passing, criticizes the role of Northeastern and Prof. Richard Daynard as "televangelists" for tobacco litigation and regulation). Here's Friedman's abstract:

Objectives: This paper examines the tobacco industry's efforts to influence litigation by sponsoring judicial seminars.

Methods: Thousands of internal tobacco documents were examined, including memos, reports, presentations, and newsletters. Connections to outside organisations were corroborated by examining tobacco industry financial records, budgets, and letters pledging funds. Facts about outside organisations were triangulated through examining their websites and publicly-filed financial records, and verifying facts through their representatives' statements in newspaper and law review articles.

Results: There are direct financial ties between the tobacco industry and groups that organise judicial seminars in an effort to influence jurisprudence, and judges who attend these seminars may be breaching judicial ethics either by not inquiring about the source of funding or by ignoring funding by potential litigants.

Conclusions: The tobacco industry's attempts to clandestinely influence judges' decisions in cases to which they are a party endangers the integrity of the judiciary.

HME

FDA Letter to Eli Lilly to Stop Misleading Cymbalta Promotion

Article on cnnmoney.com -- FDA tells Lilly to halt Cymbalta campaign.  Here's an excerpt:

Eli Lilly has been asked to stop a Cymbalta promotion that makes misleading claims and understates risk, according to a letter sent to the drug maker by the U.S. Food and Drug Administration.

The letter said a mailer for the fast-selling drug overstates effectiveness and "omits some of the most serious and important risk information associated with its use." The letter was posted on the federal regulator's Web site.

It asked Lilly (Charts, Fortune 500) to "immediately cease" disseminating the material.

BGS

The Problem of Multi-District Litigation: Symposium at Tulane

Tulane Law Review is putting together a symposium entitled The Problem of Multi-District Litigation.  Here is the blurb from the Tulane Law Review's website:

The Tulane Law Review is holding the first national symposium on multidistrict litigation this upcoming February 15th and 16th, 2008. We are pleased that a number of speakers have agreed to join us, specifically Judge John Heyburn, the Chairman of the United States Judicial Panel on Multidistrict Litigation, and Judge Kathryn Vratil, also a member of the Panel.  The symposium will feature several other distinguished federal and state judges who have handled MDL litigation, such as Judges Eldon Fallon (E.D. La.), Stanwood Duval (E.D. La.), Lee Rosenthal (S.D. Tex.), Sarah Vance (E.D. La.), Mark Davidson (Texas), and Carol Higbee (New Jersey); a number of highly respected academics, such as Profs. Francis McGovern, Richard Marcus, Edward Sherman, Alexandra Lahav, and Robin Effron; and distinguished attorneys from both plaintiffs' and defendants' sides, including Richard Arsenault, Dawn Barrios, Judy Barrasso, Mark Herrmann, Russ Herman, Phillip Whitman, and Richard Scruggs.  The symposium will cover a wide range of issues across the national landscape of multidistrict litigation, from the actual workings of the United States Judicial Panel and the selection of the transferee court, to the questions of coordination between simultaneous MDLs in both state and federal courts, the formation of ad hoc districtwide MDLs, the use of bellwether trials and other settlement devices, attorney strategies in multidistrict litigation, and the role of MDL in the solution to the problems of complex litigation.

ADL 
 

The Next Big Thing in Tobacco?

Mark Landler and Andrew Martin of the New York Times report that a Swedish smokeless tobacco product called "snus" is about to enter the U.S. market.   Unlike chewing tobacco, snus does not require spitting, making it a way to get a nicotine high without breaching etiquette.  The medical establishment in Sweden seems mixed on the question of snus' healthfulness as compared to other forms of tobacco (the article indicates snus carries less risk of oral and lung cancer than chewing tobacco and cigarettes, but carries an increased risk of pancreatic cancer), but mostly they seem to agree using snus is not a good idea.  Is snus a gateway chew to cigarette smoking?  Will it, along with other purportedly safer tobacco products that seem particularly appealing to younger users, play a role in Congress' debates about whether to allow the FDA to regulate tobacco?   If they state tort lawsuits aren't preempted by federal legislation, it is possible these alternative products will bring the next wave of tobacco litigation.  And if such suits are preempted, can we rely on the FDA to really regulate these products?

From the article:

Still, with the number of American smokers declining every year — there are now about 45 million smokers, or 21 percent of the adult population — American tobacco companies are expanding aggressively into reduced-risk products, notably dip and snus.

R. J. Reynolds is selling snus under the Camel label in eight test markets across the country. Last year, Reynolds American bought Conwood Sales, maker of Grizzly and Kodiak smokeless tobacco, for $3.5 billion.

Philip Morris USA recently introduced Marlboro snus in the Dallas-Fort Worth area, and it continues to test another snus product, Toboka, in Indianapolis. It is set to open a $350 million plant, near its headquarters in Richmond, Va., that will focus partly on developing reduced-risk products. Analysts said the Toboka test has been disappointing, and some are skeptical of the prospects for other snus products.

ADL

Blog Roundup

Civil Procedure Law Prof has a post on Jennifer Wolsing's article, Daubert's Erie Problem.

Food Law Prof Blog has a post on meat recalls increasing (with link to Marlerblog).

Health Law Prof Blog has a post on the FDA and Clinical Trials.

Products Liability Prof Blog has several interesting posts: Senators Brown and Casey Introduce the Food and Product Responsibility Act of 2007; CPSC Announces Massive Crib Recall with Simplicity, Inc.;  Mattel Issues Apology to China Over Recalls;  and Rhode Island Wants $2.4 Billion for Lead Paint Cleanup.

Torst Prof Blog has interesting posts on NEJM Clears (Mostly) Thimerosol; Goldberg & Zipursky on "Tort Law and Moral Luck"; and Sebok on NJ Supreme Court's Vioxx Ruling.

BGS

New Issue of Federalist Society Class Action Watch

The Federalist Society has posted the September 2007 issue of Class Action Watch.  Here's the list of articles:

    * Omission in FACTA Might Be Windfall for Plaintiff's Bar by Ted Frank
    * New Jersey and Missouri Supreme Courts Reject Lead Paint Public Nuisance Claims by   Mark Behrens & Christopher Appel
    * ALI Principles and Litigation Trends by James Beck
    * More Searching Fact-Based Scrutiny of Proposed Class Actions Reaches Securities and Antitrust Actions by Brian D. Boyle & Julia A. Berman
    * Fluid Recovery: Manufacturing "Common" Proof in Class Actions? by Jessica D. Miller & Nina Ramos
    * Has the Eleventh Circuit Set a New Standard for Federal Diversity Jurisdiction? by Kenneth J. Reilly & Frank Cruz-Alvarez

BGS

Study Suggests Link Between DDT and Breast Cancer

Article in the L.A. Times -- Study suggests DDT, breast cancer link, by Marla Cone.  Here's an excerpt:

Women heavily exposed to the pesticide DDT during childhood are five times as likely to develop breast cancer, a new scientific study suggests.

For decades, scientists have tried to determine whether there is a connection between breast cancer and DDT, the most widely used insecticide in history. The UC Berkeley research, based on a small number of Bay Area women, tested a theory that the person's age during exposure was critical, and provided the first evidence of a substantial effect on breast cancer.

"There was very broad exposure to this pesticide, and with this study, we have evidence that women exposed when young were the most affected," said Barbara A. Cohn, director of UC Berkeley's Child Health and Development Studies, who led the study of 129 women. "If this finding holds up, those who were young and more highly exposed could be the women at greatest risk."

Women born between 1945 and 1965 were most likely to have been heavily exposed as children to DDT, which was sprayed throughout the United States to kill mosquitoes and other insects. DDT use began in 1945, peaked in 1959 and was banned nationwide in 1972 because it was building up in the environment.

BGS

Bristol-Myers Squibb Agrees to $515 Million Settlement With Government

Article from WCVB TV/DT Boston -- Company To Pay $515M To Settle Drug Marketing Probes: Bristol-Myers Squibb Agrees To Settlement.  Here's an excerpt:

Bristol-Myers Squibb Co. and a subsidiary have agreed to pay more than $515 million to settle federal and state investigations into their drug marketing and pricing practices, U.S. Attorney Michael Sullivan announced Friday.

Government investigators alleged that Bristol-Myers Squibb paid illegal remuneration from 2000 to 2003 in the form of consulting fees to induce doctors and other health care providers to buy the company's drugs.

Investigators also claimed that from 2002 to 2005, the New York-based drugmaker promoted the sale of Abilify, an anti-psychotic drug, for pediatric use and to treat dementia-related psychoses. Neither use is approved by the Food and Drug Administration

BGS

Another Development in the Preemption Wars

The Supreme Court granted cert in Warner-Lambert v. Kent, No. 06-1498.  The question presented is whether the Food, Drug and Cosmetic Act preempt product liability claims under Michigan law against drug manufacturers that allegedly defrauded the Food and Drug Administration.  The case is about Rezulin, the diabetes drug.  Point of Law predicts that this will have implications for other pharmaceutical litigation and that the Supreme Court will reverse the Second Circuit.  I think this is more likely to have implications for the Light Cigarette Litigation.  As I pointed out in an earlier post on the topic, the result will be based on theories of statutory interpretation and federalism principles. This case may give Scalia the opportunity he lost in Cipollone; we shall see.

ADL

More on Melvyn Weiss Indictment

Article on cnn.money.com -- Mel Weiss is Sinking HIs Firm, by Peter Elkind.  Here's an excerpt:

As the government describes it, Weiss was personally involved in dirty dealings with all three of Milberg’s showcase paid plaintiffs—Steven Cooperman, Seymour Lazar, and Howard Vogel—each of whom secretly received millions for serving as name plaintiff in dozens of Milberg class actions. (Lazar, also a defendant in the case, has pled not guilty. Cooperman and Vogel have pled guilty and are cooperating with the government.) The indictment also ties Weiss to an unnamed trio of Florida residents who were paid to serve as plaintiffs in about 60 more lawsuits.

And the allegations are ugly. Weiss is no longer thinly masked, as he was in earlier government filings, as “Partner A.” The new indictment places him at the scene of the alleged crimes from the beginning.  It has Weiss, in August 1979, informing his number-two man, senior partner David Bershad (one of the now-cooperating former Milberg lawyers) that he had struck a deal with California investor Lazar to serve as a plaintiff in Milberg lawsuits in exchange for 10% of the firm’s attorney fees in those cases.  It has Weiss, in the early 1980s, informing Bershad not to worry about violating the law by paying a Florida plaintiff because they would be making the payments in cash, and thus there would be no paper trail and little risk of getting caught. Indeed, in the mid-1980s, the indictment says, Weiss personally carried “thousands of dollars in cash” from New York to Florida to make payments to two plaintiffs.  The indictment details how Weiss—along with Lerach and Bershad—in January 1986 included a provision in the firm’s partnership agreement that would allow the “conspiring partners” to tap the firm’s coffers to reimburse themselves for cash they’d each kicked in to a slush fund for paying plaintiffs. (Some of this cash was stashed in a safe in Bershad’s office at the law firm.) In December 1987, 1988, and 1999, according to the indictment, Weiss then “caused” the firm to reimburse him a total of about $380,000 in cash for such payments.

BGS

Louis Robles Guilty Plea

Asbestos plaintiffs' lawyer Louis Robles pleaded guilty last week to three counts of mail fraud for stealing settlement money from his clients, according to this AP story on Forbes.com.  He will be sentenced on December 4 in federal court in Miami.  Robles faces up to fifteen years in prison, because each count carries a five-year term.  He is being held without bail.  Robles agreed to a plea deal in April that would have included a ten-year prison term, but Judge Alan Gold rejected it because he considered the sentence too light considering Robles' inability to pay full restitution.  Trial was set to begin last week, producing the new plea.

HME

Increased FDA Scrutiny of Legacy Drugs

Editorial in the Wall Street Journal -- The FDA vs. Small Pharma.  Here's an excerpt:

Western Europeans began using quinine as a medicine in the 17th century. Then again, they didn't have to comply with the modern FDA.

In a little-noticed program announced last June, the Food and Drug Administration is cracking down on remedies like quinine. These belong to a class known colloquially as legacy drugs: That is, they are generally recognized as safe and effective, and have been prescribed by physicians for decades, in some cases before the modern FDA regime was created in 1962. But since they lack a formal FDA stamp of approval, they're being yanked from the market.

In a more rational political world, legacy drugs might be "grandfathered in," since the risks they pose are so few. The FDA, however, remains under intense scrutiny for handling of pharmaceutical safety in the aftermath of the Vioxx furor. So the agency is pulling out all the bureaucratic stops to mollify its Capitol Hill critics like Pete Stark and Chuck Grassley.

***

... [T]he FDA is requiring them to be put through the same regulatory wringer. Some must complete a New Drug Application, which requires clinical trials and can cost between $5 million and $10 million per legacy drug. The alternative, an Abbreviated New Drug Application, still costs over $1 million. That's a lot of money to reinvent the wheel.

BGS

The FDA Bill and Pharmaceutical Advertising

Article in the Wall Street Journal -- Media Industry Helped Drug Firms Fight Ad Restraints, by Anna Wilde Mathews and Stephanie Kang.  Here's an excerpt:

When the Democratic-led Congress started debating a big Food and Drug Administration bill earlier this year, pharmaceutical companies worried that it would sharply restrict one of their most powerful sales-boosting tools -- drug ads.

But in the final bill, which passed the House overwhelmingly on Wednesday and the Senate last night, such marketing is largely spared. One major reason: the drug industry found powerful allies among media and advertising firms who were determined to protect one of their biggest and fastest-growing advertising categories.

The toughest drug-ad restriction in early drafts of the bill gave the FDA authority to block a drug company from advertising a medication that carried serious safety concerns. That was left on the cutting-room floor. The FDA will get new power to require drug companies to submit TV ads for review before they run, but it can only recommend changes, not require them. The bill lets the agency levy fines for false and misleading ads.

BGS

Congress Passes Bill Expanding FDA Powers

Article on cnn.com -- Drug safety bill heads to Bush's desk.  Here's an excerpt:

The bill would give the FDA the power both to require drug companies to further study the safety of medicines if needed and to mandate new label warnings, when problems do appear. The FDA would be able to fine companies to ensure compliance with those two new authorities.

The legislation also would require companies to publicly release results of all clinical trials that show how well their drugs performed, although the level of disclosure remains to be determined.

The FDA also would gain the ability to fine drug companies for not completing follow-up studies on their drugs after they've won government approval. Those studies now often remain undone, often leaving important safety questions unanswered.

***

The legislation also would force the FDA to further step up its active surveillance for new safety issues with drugs. That system traditionally has been largely passive.

The manufacturers of certain new drugs would have to draft for each product a so-called "Risk Evaluation and Mitigation Strategy" that can include medication guides distributed with each prescription to ensure the medicine's safe use.

BGS

Melvyn Weiss Formally Indicted and Steven Schulman Agrees to Plead Guilty

Article on cnn.com -- Top class-action lawyer indicted.  Here's an excerpt:

A federal grand jury in Los Angeles has indicted prominent class-action lawyer and Milberg Weiss co-founder Melvyn Weiss for conspiring to make illegal payments to plaintiffs in more than 250 lawsuits that generated $250 million in attorneys' fees for the firm, the government said Thursday.

Additionally, Steven Schulman, a former partner in the firm, has agreed to plead guilty to a racketeering charge and acknowledge that he and others, including Weiss, conspired to conceal the secret payments from judges presiding over suits filed by Milberg Weiss.

The racketeering conspiracy against Schulman carries a maximum sentence of 20 years in prison. A plea agreement released Thursday by federal prosecutors "contemplates" a sentence of 27 months to 33 months. Schulman had previously pleaded not guilty to the charges.

In a statement, Ben Brafman, Weiss' lawyer, said his client will fight the charges. "We are confident that when the evidence is carefully reviewed at a trial of these charges, Mr. Weiss will be fully exonerated," Brafman said.

Here's an excerpt from the related Wall Street Journal article, In Role Reversal, Melvyn Weiss is Indicted, by Nathan Koppel:

Mr. Weiss's share of firm profits during the years 1983 to 2005 was about $209.9 million, it says. The indictment also alleges Mr. Weiss profited greatly from the kickback scheme. The government alleges that Milberg Weiss earned more than $250 million in fees from cases involving kickbacks and that Mr. Weiss received more than about $41 million of those "tainted" fees.

***

Yesterday's indictment raises new allegations of kickbacks to certain "Florida plaintiffs" who served as name plaintiffs in 60 or more lawsuits for the firm. Prosecutors allege that around the early 1980s, David Bershad, a Milberg lawyer who has pleaded guilty in the case, told Mr. Weiss and another partner that paying a Florida plaintiff would violate laws prohibiting a lawyer from paying someone to induce the filing of a lawsuit. According to the indictment, Mr. Weiss and the other lawyer replied that because they would be paying in cash, there would be no paper trail and therefore there was little risk they would ever be caught.

Mr. Weiss "carried thousands of dollars in cash from New York to Florida" to compensate plaintiffs for taking the lead in class actions, the indictment alleges. Prosecutors allege Milberg paid kickbacks so it would have a ready stable of plaintiffs willing to file suits quickly, giving the firm an edge in the race to win the lucrative and powerful "lead counsel" status in class actions.

BGS

Milberg Weiss Statement on Melvyn Weiss Indictment

In the latest blow to Milberg Weiss, the once-powerful class action law firm now facing criminal charges for undisclosed payments the firm allegedly made to class representatives, an indictment against lead partner Mel Weiss is anticipated today.  The firm released the following statement yesterday:

Milberg Weiss understands that a second superseding indictment will be
issued tomorrow that will include new charges against the Firm and also
Melvyn Weiss. Mr. Weiss has decided to discontinue his participation in
Firm management in order to focus on the defense of the charges against
him. The Firm's other partners, none of whom is alleged to have been
involved in any wrongdoing, will be responsible for its management and
litigation activities. Mr. Weiss will remain available to counsel clients
and Firm attorneys. The Firm remains proud of Mr. Weiss' and the Firm's
accomplishments over the years and will continue to fight for its clients
and class members and to produce the excellent results for which it is
known. We do not anticipate any interruption in our work and we look
forward to putting this difficult period behind us.

An article in today's Wall Street Journal -- Milberg's Weiss May Face Indictment in Kickback Case -- reports on the development, emphasizing the importance of Weiss as a target of the investigation:

Having secured a plea agreement this week with one of its biggest targets in the criminal prosecution of the Milberg Weiss law firm, the government is moving forward against another.

Melvyn Weiss, co-founder of the plaintiffs firm and a pioneer in the field of securities class-action cases, is expected to be indicted today in Los Angeles, according to people familiar with the situation. An indictment would come more than a year after Milberg and two then-name partners were charged with fraud for allegedly paying kickbacks to clients to induce them to serve as lead plaintiffs in lucrative securities class actions and shareholder suits. ...

It is expected that the indictment will charge Mr. Weiss with helping to steer secret payments to clients who served as lead plaintiffs in class actions; it will also raise a charge new to the case -- that Mr. Weiss allegedly obstructed justice by failing to turn over a document subpoenaed by prosecutors, according to people familiar with the case.

Although the firm is best known for its work in securities class actions, Milberg Weiss has represented plaintiffs in significant mass tort litigation in the past decade, including Rezulin, Zyprexa, Vioxx, fen-phen, and Exxon Valdez litigation.

HME