Judge sides with Eli Lilly in Zyprexa case

John O'Brien Dec. 1, 2009, 5:38pm


NEW YORK (Legal Newsline) - Calling Mississippi Attorney General Jim Hood's lawsuit against Eli Lilly & Co. a "slash-and-burn style of litigation," the federal judge overseeing Zyprexa lawsuits has granted Lilly summary judgment.

U.S. District Judge Jack Weinstein issued a 117-page order Tuesday that noted the benefits of Zyprexa in treating antipsychotics despite allegations of off-label marketing and weight gain-related side effects like diabetes while writing that lawyers for Mississippi failed to make a case for penalties.

Out of more than 40 states that filed claims against Lilly, Mississippi is one of the few that hasn't settled and the first to suffer such a setback. Hood's office did not respond to a message seeking comment.

Lilly spokesperson Marni Lemons said the company is "very pleased at Judge Weinstein's ruling for several reasons."

First among those reasons is Weinstein's rejection of the statistical analysis relied upon by Hood's attorneys, led by Houston firm Bailey Perrin Bailey, to show that the company harmed the state's Medicaid program.

"The ruling points out what Lilly has always believed: The law requires proof of wrongdoing in individual cases - not simple statistical evidence," Lemons said.

Weinstein wrote that a ruling in favor of Mississippi could have been dangerous.

"If allowed to proceed in their entirety, the State's claims could result in serious harm or bankruptcy for this defendant and the pharmaceutical industry generally," he wrote.

"For the legal system to be used for this slash-and-burn style of litigation would arguably constitute an abuse of the legal process. Constitutional, statutory and common law rights of those injured to seek relief from the courts must be recognized. But courts cannot be used as an engine of an industry's destruction."

Of the 12 states that did not settle their claims against Eli Lilly in a 33-state, $62-million agreement five have already made their settlements official and others have tentative agreements. The states that have settled are:

-Connecticut settled for $25.1 million;

-West Virginia settled for more than $22 million ($6.75 went to outside counsel hired by state Attorney General Darrell McGraw);

-Idaho settled its case for $13 million ($2.5 went to outside counsel hired by state Attorney General Lawrence Wasden);

-Utah settled for $24 million (more than $4 million went to outside counsel hired by state Attorney General Mark Shurtleff); and

-South Carolina settled for $45 million (more than $6.5 million went to outside counsel hired by state Attorney General Henry McMaster).

Eli Lilly has paid $1.4 billion to settle federal civil and criminal claims stemming from alleged off-label marketing.

The payment also benefited the Medicaid programs of more than 30 states that collectively received approximately $362 million.

Bailey Perrin, which donated $75,000 to Hood, is also representing the states of Arkansas, Pennsylvania and Louisiana. None of those three states have finalized settlements, but Louisiana appears to have reached a tentative one. The other two cases are in state court and have not reached tentative settlements yet.

Montana, Minnesota New Mexico and Louisiana have but they have not been finalized. Their cases are before Weinstein.

Weinstein also dismissed Mississippi's motion for summary judgment while keeping alive what Lemons called "a small portion" of its claims against Lilly.

Action on those remaining claims will be stayed until a decision is reached in Lilly's appeal of Weinstein certifying a group of third-party payers, like insurance companies, as a class.

In 2008, the U.S. Court of Appeals for the 2nd Circuit overturned Weinstein's certifying a group of smokers as a class in their suit against the makers of "light" cigarettes.

From Legal Newsline: Reach John O'Brien by e-mail at jobrienwv@gmail.com.

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