Bailey asks to postpone Mississippi's Zyprexa hearing

By John O'Brien | Sep 15, 2009


NEW YORK (Legal Newsline) - Because the State of Louisiana has "resolved the need for proceedings" in its Zyprexa case against Eli Lilly & Co., attorneys for Mississippi Attorney General Jim Hood wouldn't mind pushing a hearing back a month.

Kenneth Bailey of Houston's Bailey Perrin Bailey wrote U.S. District Judge Jack Weinstein Tuesday to ask that the expedited proceedings in Mississippi's case be slowed. Lilly had filed for summary judgment in the Louisiana case, and a pre-summary judgment conference was to be held in the Mississippi and Idaho cases Monday.

That date should be moved to at least Oct. 19, said Bailey, who contributed $75,000 to Hood. His firm is also representing Louisiana and says more time should be allowed to complete briefing.

"Should Your Honor grant this request but also desire to discuss the State of Mississippi's case and its resolution through trial on the merits or settlement, it would be my privilege to appear before Your Honor on Sept. 21 or at another date and time of the court's choosing," Bailey added.

An Eli Lilly spokesperson could not confirm or deny a settlement in the Louisiana case. The company's attorneys moved to have the testimonies of two expert witnesses struck on Friday, as well as their reply in support of the motion for summary judgment, which was filed under seal.

The states argued Eli Lilly promoted off-label uses for Zyprexa and also claimed the drug's side effects (weight gain-related issues like diabetes and hypertension) put a strain on their Medicaid programs.

In a 10-Q filing with the Securities and Exchange Commission, Lilly revealed that it incurred special charges of $105 million in the second quarter and noted that it is close to reaching settlements with the 11 state attorneys general who still have suits against the company.

"We are in advanced discussions with the attorneys general for several states that were not part of the Eastern District of Pennsylvania settlement, seeking to resolve their Zyprexa-related claims, and we have reached settlement with the State of West Virginia," the filing says.

"The charge represents the currently probable and estimable exposures in connection with the states' claims."

West Virginia recently settled its case for $22.5 million, with more than $6 million going to private attorneys hired by state Attorney General Darrell McGraw to pursue the case. Weinstein gave Special Settlement Master Michael Rozen a copy of the settlement, which was originally filed under seal, to coordinate future settlements with state attorneys general.

In an Aug. 17 memorandum, Weinstein wrote that he is only presiding over the cases of Louisiana, Mississippi and Idaho.

When asked if that meant Montana, Minnesota, New Mexico and Connecticut had settled theirs, Lilly spokesperson Marni Lemons said no settlements have yet been reached.

States with actions in state courts are Utah, Pennsylvania, South Carolina and Arkansas.

Eli Lilly has already settled consumer protection claims with 33 other states for $62 million, and also agreed to pay $1.4 billion to settle federal civil and criminal claims stemming from the alleged off-label marketing.

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

In October, Weinstein told the parties to take 30 days off from the case to try to work out a settlement.

"While most states have settled their cases against Lilly for a few million dollars each, the states with cases now pending in this court -- Connecticut, Louisiana, Mississippi, Montana, New Mexico and West Virginia -- are seeking, on essentially the same theories and evidence, many billions of dollars in damages in fines," Weinstein wrote.

Eli Lilly has also paid $1.2 billion to settle more than 30,000 individual lawsuits.

The State of South Carolina is currently in extended jury selection for its trial, which will begin later this month. It, as well as the Monday hearing before Weinstein (if it is still held) can be viewed online through Courtroom View Network.

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

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