Wednesday, February 06, 2013

Some Antacid for Old Cajun Home Cooking?

            We are not sure why we have heard so much cheesy music from the 1970s recently.  (It is a musical mystery, like why Genius determined that Billy Joel’s “Lullabye” belongs in its NΓΌ-Metal Mix.)  We do not think that Foreigner was talking about writing a blog post in “Feels Like The First Time,” but we were reminded of our first post the other day, a little ditty called “Cajun Home Cooking?”  That post ended with “We also hope that the next court to take a look at Caldwell will pay better attention to the law and evidence used to punish the defendant here – although none of the $330 million tally was for ‘punitive damages’ if you believe the labels.”  Well, we will get to see how the Louisiana Supreme Court does now that it has granted a writ.  Caldwell ex rel. State v. Janssen Pharm., 2013 La. LEXIS 205 & 207 (La. Jan. 18, 2013).  We are sure that the Appellants will identify many reasons to reverse the decision of the Court of Appeals, which upheld $330 million in penalties, attorney fees, and costs for “35,542 violations for misrepresentations about the safety of a drug without ever having to prove ­any actual damages were sustained by the state’s medical assistance programs.”  (Yes, we did just quote ourselves.)  We are sure they will point out how dicey it was for the Court of Appeals to apply an abuse of discretion standard to uphold the trial court’s reliance (for its interpretation of the Louisiana Medical Assistance Programs Integrity Law) on a consumer fraud decision by a West Virginia trial court that had not been good law in West Virginia since 2010.  Without repeating the sordid details of decisions by the first two Louisiana courts on this case,, we will say that we hope the fundamental flaw of permitting huge recoveries without proof of injury will be reexamined, much like it was by appellate courts that reversed the unfortunate trend of permitting medical monitoring for classes of people without present compensable injuries.

            There certainly are other states pursuing dubious quasi-criminal actions against drug manufacturers, often through the same group of Texas plaintiff lawyers as in Caldwell.  We saw the recent decision of the judge in Pulaski County, Arkansas, allowing $177 million in fees for outside lawyers who secured a $1.2 billion verdict over violations of the Arkansas Medicaid fraud law and consumer fraud law in connection with marketing of Risperdal.  (To show we were not just dumping on Louisiana, we note that Arkansas has seen its own debt balloon since this case was filed—up to $25 billion per the Arkansas budget office.)  If you visit the site of the Arkansas attorney general’s office, which initiated and outsourced the prosecution of this case, you can see various press releases of settlements with other pharmaceutical companies over various “marketing” issues, with each release specifying the amount that will go to the state coffers.  In one such notice, the Arkansas AG was quoted as saying “Any time drug companies mislead the public, our office will work to ensure the companies are held responsible for their wrongdoing . . .  It is my hope that this result sends a strong message to any company about the importance of providing Arkansas physicians and consumers with accurate information about its products.”  In none did we see a reference to outsourcing the work of the office to private plaintiff lawyers in exchange for the hope of huge attorney fee awards.
            Now, we are not saying that the AGs of Arkansas, Louisiana, South Carolina, West Virginia, et al., should not fulfill their duties to enforce their respective state laws and protect their respective citizens through all available means.  (They could climb mountains and sail across stormy seas to do so, if inspired by the cheesy songs of our youth we decried above.)  We also are not saying that marketing by pharmaceutical companies is always as pure as laboratory snow and could never produce harm to consumers or medical assistance programs. We just think that the courts considering such cases better be sure they are on sound legal footing when they attempt to levy sizable, multiplied fines and to impose immense attorney fees that go to private firms.  AGs are induced to bring suits by the possibility of such awards or the large settlements the threat of them can generate.  It is easy for an outsider, even a DDL blogger, to regard all of this as a giant shake down.  A few good decisions up the appellate chain would do something to combat such a perception.  The shame is that a typical defendant in these cases, whose corporate mission is typically something like improving public health through better drugs, does rack up huge fees to get to the second layer of appeals, to say nothing of the bonds it may have to put up.  They do need to keep the lights on, unlike the Superdome.

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