Ala. SC to hear oral arguments in case over 'innovator liability' next week

By Jessica M. Karmasek | Aug 30, 2013

MONTGOMERY, Ala. (Legal Newsline) -- The Alabama Supreme Court will hear arguments in a case questioning whether a brand-name drug maker can be held liable for injuries from a generic version next week.

In June, the state's high court agreed to reconsider a ruling it made in Wyeth Inc. v. Weeks in January.

Oral arguments in the case are set for Tuesday.

"This is the company's first opportunity to present oral argument before the Supreme Court of Alabama and reinforce the well-established legal principle that a business should not be held liable for a product it did not make or sell," Michael J. Parini, senior vice president, associate general counsel and chief litigation counsel for brand-name manufacturer Pfizer, said in a statement Wednesday.

"The Court's initial decision is at odds with the overwhelming weight of authority from across the country, including all five federal appeals courts to address this same issue, and could unreasonably expose pharmaceutical companies, as well as manufacturers in other industries, to unprecedented and perpetual liability."

In February, Pfizer, along with Wyeth LLC and Schwarz Pharma Inc., asked the court to reconsider its earlier decision and reject "innovator liability" and, at a minimum, to hear oral argument.

In their 13-page application, the manufacturers admitted that rehearing is "reserved for extraordinary cases." However, "the decision here is extraordinary by any measure," they wrote.

"In adopting the novel 'innovator liability' theory, the opinion... makes Alabama a magnet for personal injury lawsuits that other states' courts would refuse," they wrote in the motion.

In January, the court answered in the affirmative the question of whether a brand-name drug manufacturer, based on statements made in connection with the manufacture or distribution of the brand-name drug, may be liable to a plaintiff who has claimed injury from a generic version of the brand-name drug.

The U.S. District Court for the Middle District of Alabama certified the following question to the court:

"Under Alabama law, may a drug company be held liable for fraud or misrepresentation (by misstatement or omission), based on statements it made in connection with the manufacture or distribution of a brand-name drug, by a plaintiff claiming physical injury from a generic drug manufactured and distributed by a different company?"

By an 8-1 margin, the court answered affirmatively.

Justice Michael F. Bolin wrote the majority opinion, released Jan. 11. Justice Glenn Murdock filed a dissent, which wasn't released until Feb. 4.

The question arose out of a federal court case in which plaintiffs Danny and Vicki Weeks filed an action against five current and former drug manufacturers for injuries that Danny Weeks allegedly suffered as a result of his long term use of prescription drug Reglan.

Reglan is most often used to treat gastric esophageal reflux disease, or GERD.

The Weekses claimed that only two companies, Teva Pharmaceuticals USA and Actavis Elizabeth LLC, manufactured and sold the generic of Reglan that Danny Weeks ingested.

The plaintiffs also conceded Danny Weeks did not take Reglan manufactured by the three brand-name defendants Wyeth, Pfizer and Schwarz.

"The brand-name defendants moved to dismiss the claims against them, arguing, among other things, (1) that the Weekses' claims, however pled, are in fact product liability claims that are barred for failure of 'product identification' and (2) that they had no duty to warn about the risks associated with ingestion of their competitors' generic products," according to the 52-page majority opinion.

In March 2011, the district court granted in part and denied in part the brand-name defendants' motion, holding that the Weekses might be able to state a claim for relief under Alabama law if they could prove that the brand-name manufacturers had a duty to warn Weeks's physician about the risks associated with long-term use of brand-name Reglan and, further, that the Weekses, as third parties, had a right to enforce an alleged breach of that duty.

The court then certified the question to the state Supreme Court.

The manufacturers argued in their motion for rehearing that the court should have, at least, held oral arguments in the case.

They contend the full court also did not have the "benefit" of reviewing Murdock's dissent before issuing its majority opinion.

Murdock, in his 45-page dissent, said there is "no good outcome" in the case.

"In fairness to the main opinion, this Court has been put in a position from which we cannot give an answer that yields a just result for both plaintiffs and defendants in cases such as this," he wrote.

But it was the "economic realities" and "certain bedrock principles of tort law" that compelled him to dissent, he said.

Six separate entities filed amicus briefs in support of the manufacturers' request, fearing the ramifications of the Alabama court's decision may be felt in other industries in the state and across the country.

They include: the U.S. Chamber of Commerce, the Business Council of Alabama, the Alabama Policy Institute, the Pharmaceutical Research and Manufacturers of America, the Product Liability Advisory Council, and the Alabama Defense Lawyers Association.

"The Court's [opinion] threatens to unleash the plaintiff bar's most creative and damaging suits on all businesses in Alabama -- particularly those in Alabama's burgeoning automotive, aerospace and health care industries," the Chamber wrote in its 16-page brief in February.

The Chamber's Institute for Legal Reform owns Legal Newsline.

The oral arguments coincide with recently proposed Food and Drug Administration rulemaking that would allow generic drug makers to change a product's safety warning, thereby potentially opening generic drug manufacturers to future liability claims.

In July 2013, the FDA notified the Office of Management and Budget of its plan to propose such a rule in September.

The FDA rulemaking responds to concerns raised by the U.S. Supreme Court's decision in PLIVA Inc. v. Mensing, which held that failure to warn claims against generic drug makers are preempted by federal law.

Generic-ingesting plaintiffs have complained that Mensing could leave them without a remedy for harm allegedly caused by generic drug products.

From Legal Newsline: Reach Jessica Karmasek by email at jessica@legalnewsline.com.

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