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LITIGATIONLITIGATION20052005 A Supplement to The American Lawyer & Corporate Counsel A Line in the Sand ▲ PPA, an ingredient in cold medicine alleged to cause strokes, looked like a mass tort bonanza for plaintiffs lawyers. But the defendant drug companies decided to stand their ground. BY ALISON FRANKEL ALL OF THE NECESSARY ELEMENTS OF A litigation filings. Newspapers picked up the story: The New York blockbuster seemed to be in place. Times and later the Los Angeles Times ran accusatory The science was good. The defendants—a handful of investigative pieces about PPA and the drug industry. Early enormous pharmaceutical companies—still deny it, but two jury research showed panels angry at perceived corporate long-term studies have shown that a tiny percentage of the cover-ups. Plaintiffs lawyers talked about PPA as the next people who took over-the-counter drugs containing a fen-phen, the next gold mine of a litigation. chemical called phenylpropanolamine (PPA) were victims It wasn’t. And though there are still a few plaintiffs firms of PPA–associated hemorrhagic stroke. According to the with significant PPA caseloads, many others are closing epidemiological studies, thousands of people who used down their PPA dockets, settling the cases for which they Anonprescription diet pills or cold remedies suffered sudden can wrest something from defendants and dismissing the bleeding into their brains as a result. rest. “PPA was not a successful litigation for us,” concedes The liability case appeared just as promising. Industry Christopher Seeger of New York’s Seeger Weiss, who has files were full of damning evidence that pharmaceutical transferred his attention to the Vioxx litigation. Adds Relkin companies had questioned PPA’s side effects long before of Weitz & Luxenberg: “It hasn’t been as profitable as we November 2000, when the Food and Drug Administration would have liked.” demanded that drugs containing the chemical be with- In some ways the course of the PPA litigation was deter- drawn from the market. Even after an industry-designed mined by factors no lawyer could control. It was difficult to and -sponsored study demonstrated the link to stroke prove that victims had taken over-the-counter medicines in 2000, drugmakers considered so safe stalled the FDA “For the Remaining Parlodel that they were rarely for almost a noted in medical ▲ year, continuing to Cases, She [Watson] Retained a charts. Moreover, ju- sell PPA–containing rors didn’t like to products until the Defense Firm She Trusted, think that everyday government called Washington, D.C.’s Spriggs & drugs they and their for their withdrawal. families had taken “We had a good Hollingsworth” without incident liability story,” says might have caused Ellen Relkin of New devastating strokes, York’s Weitz & Luxenberg, one of the plaintiffs firms that particularly when a victim’s stroke could be attributed to poured millions of dollars into PPA cases. “We were some other cause. very optimistic.” But there was another important reason for the relative The PPA litigation launched with the fanfare that always failure of the PPA mass tort, one with implications for big accompanies an incipient mass tort: the blare of lawyers product liability litigations that will begin long after the last advertising for clients and the bass line of thousands of case PPA case is over. Call it defense intransigence. Instead of LITIGATION | STRATEGY attempting to resolve the litigation lingsworth, and instructed its lawyers quickly through a class action or mass- FOR NOVARTIS, THE STORY OF to challenge plaintiffs lawyers at every es of settlements, defendants dug in, the PPA litigation actually begins with turn. “We said, ‘Let’s make them defying conventional wisdom about a Fdrug called Parlodel. In 1996, when work.’ Why should we make it easy for the dangerous corporate implications Ciba-Geigy merged with Sandoz them?” says Watson, now vice of litigation uncertainty. Fighting, for to form Switzerland-based Novartis, president and general counsel of some of the defendants in the PPA liti- Ciba Pharmaceutical counsel Dorothy Novartis Pharmaceuticals Corpora- gation, was preferable to settling, even Watson inherited a troublesome tion. “I knew I was going to have to when fighting might be more expen- pay more up front to have a case sive, in the short term, than writing a prepared, to go through the tactical, check to make a case go away. PPA de- strategic moves, but that was ultimate- fendants Novartis Consumer Health ly going to give me more power.” and Bayer Corporation insisted on Novartis confronted plaintiffs on their bringing PPA cases before juries—and science—often persuading judges to then won them. Of nine PPA verdicts exclude plaintiffs’ experts—and on since 2000, only one was a plaintiffs individual causation. Watson did settle win, and even that award, $400,000 some Parlodel cases—most for about against Bayer in a Texas state court, $10,000—but Novartis won others at was hardly a bonanza. Novartis, Bayer, trial, even in jurisdictions that usually and the other PPA defendants have make defendants shudder. After settled, in the aggregate, hundreds of Watson initiated her aggressive the plaintiffs’ best PPA cases—without defense strategy, the corporation spent the Damoclean sword of a huge jury less than $4 million to resolve more verdict hanging over their heads. Randolph Sherman of Kaye than 100 Parlodel cases—a fraction of Settlement offers, as a result, have Scholer spearheaded the what it cost to settle that one case been low. Novartis, for example, has Novartis defense. against Joe Jamail. settled 134 of approximately 900 cas- The success of Watson’s Parlodel es. Of those 134, 60 percent settled for docket involving Sandoz’s drug defense ultimately informed Novartis’s less than $50,000. Only three Novartis Parlodel. Widely prescribed to post- approach to the PPA litigation, but not PPA cases have settled for more than partum women who wanted their milk right away. Mass torts have a sort of $1 million—and scores have been to dry up, it was alleged to cause predetermined orchestration in their dismissed by plaintiffs lawyers who strokes. Sandoz had been settling cas- early phases, and PPA followed it decided the PPA litigation simply es as they came up for trial, including faithfully. The litigation began at the wasn’t worth the risk. one for $8 million. That was not a end of 2000, after the FDA’s call for a Of course, not every burgeoning strategy to the liking of Watson, who withdrawal of PPA products. The mass tort can accommodate the PPA grew up at Ciba in what she describes agency was acting on the basis of a approach. Not every case can be as a culture of aggressive product lia- five-year study conducted by a team of defended as successfully. (Just ask bility defense. Nevertheless, Watson scientists from Yale University—under Merck & Co., Inc., in the wake of its was forced to settle her first Parlodel protocols approved by Ciba-Geigy and $253 million Vioxx loss in Texas.) But case; she did not think the firm hired another pharmaceutical company— every defendant can learn an impor- by her Sandoz predecessor, a 50- that found an increased risk of tant lesson from PPA. Mass torts are lawyer Colorado firm, was prepared to hemorrhagic strokes in women who merely agglomerations of individual go to trial in Texas against famed liti- used drugs containing PPA. (The study cases. Some plaintiffs are deserving, gator Joseph Jamail. Watson agreed to was initially designed to look only at and some are not. Some have strong pay Jamail’s client $20 million. diet drugs, but when researchers cases, and some don’t. What keeps a But after that settlement, Watson expanded it to include decongestants, mass tort from becoming a defense says, “we completely reversed course.” they found an association between debacle is proving that reality to For the remaining Parlodel cases, she stroke and the use of any PPA-contain- plaintiffs lawyers, even if doing so retained a defense firm she trusted, ing product.) The study was published seems risky and expensive. Washington, D.C.’s Spriggs & Hol- in the New England Journal of Medicine in December 2000. By the that a mass tort was coming. Kaye cided the defense’s challenge to the end of the month, Novartis and other Scholer lawyers made rough guesses science underlying claims that PPA drug companies had begun receiving of how expensive the PPA litigation caused strokes. (The U.S. Supreme notice of PPA suits. might be. Their worst-case scenarios Court set a standard to prevent so- They came as no surprise. Both of ran to about a billion dollars. called junk science claims in a 1993 Novartis’s predecessor companies had Over on the plaintiffs side, mean- case called Daubert v. Merrell Dow made products that contained PPA; while, the mass tort was playing Pharms., Inc.; defense motions to ex- Ciba-Geigy used it in an appetite allegro. Firms ran Internet and print clude plaintiffs’ experts are now called suppressant and Sandoz in the Tavist ads, and referral networks funneled “Daubert” challenges.) In the unlikely and Triaminic brands of cough and potential cases to trial firms. They, in event that the defense prevailed at cold medicine. And PPA had been turn, set up screening operations to Judge Rothstein’s Daubert hearings, controversial for more than 20 years. sift out viable clients. the PPA litigation would essentially be Then-congressman Ron Wyden of “We looked at thousands of cases,” wiped out. For a year and a half after Oregon held hearings on PPA and diet says Relkin of Weitz & Luxenberg, the MDL was established, both sides drugs in 1990, and in 1991 an FDA which ended up filing about 150 PPA immersed themselves in science, researcher undertook a review of suits.