DOJ Investigates Dangers of Zantac?
Your monthly legal news update from Legalcalls.com by Attorney Jeff Keiser
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- Settlement Approaches – Last November, a settlement was close at hand, only to be snubbed by Judge Chhabria because it failed to adequately consider future lawsuits. Now, settlement discussions are heating up again, and it appears as if Bayer is willing to work these details out with plaintiffs and the Court. The fund for future lawsuits will now be close to $2b (rather than the initial $1.25b).
- Individual Claims Settling – As of November, 88,500 out of 125,000 cases have been settled. Settlement Administrator Ken Feinberg noted that it is “just a question of when and how quickly they’ll get resolved.” But the company said the total number is not finalized “given uncertainties about eligibility and participation,” suggesting resistance from some plaintiffs.
- Expert Witnesses Allowed – Bayer attempted to prevent several of plaintiffs’ expert witnesses related to specific causation. Judge Chhabria denied their motion, paving the way for broad causation testimony in bellwether trials later in 2021.
- German Derivative Suit Filed – Investors in the German based Bayer recently filed a suit against the company, accusing Bayer of failing to inform the investors of risks associated with Round-Up. The company’s share value has decreased by more than 50% since the acquisition of Monsanto in 2018.
- Settlement Continues – Last year, Johnson & Johnson agreed to pay $100M to just over 1,000 plaintiffs for cancer diagnoses following the use of talcum powder. These cases were the most serious cases on the docket, most of which stem from a diagnosis of mesothelioma. However, more than 20,000 plaintiffs remain, though most of these are for more minor damages.
- Future Prospects – In July 2020, Bloomberg Intelligence estimated that settling all unresolved cases could cost as much as $10B. It remains unknown whether the company will be willing to continue settlement discussions for these cases. As University of Richmond law professor Carl Tobias recently told Bloomberg “Johnson & Johnson is generally loath to settle lawsuits.”
- Generics Cut – On December 31, 2020, Judge Rosenberg dismissed a large number of claims in the MDL. The ruling found that manufacturers of generic Zantac, along with retailer, wholesaler, pharmacy, and repackager defendants cannot be liable for state law claims due to federal law preemption. This ruling has NO EFFECT on any claims related to brand name Zantac use.
- No Innovator Liability – That same day, Judge Rosenberg dismissed all cases under the theory of innovator liability. This theory puts liability on brand name manufacturers, even if the plaintiff used generic versions, based on the idea that they invented the product and should be required to safely research and develop the drug. This type of liability has only been found in California and Massachusetts state courts.
- DOJ Investigations Begin – The Department of Justice is currently investigating Sanofi and GlaxoSmithKline for their role in misleading the public about the dangers of Zantac. While these manufacturers did pull the products following the 2019 recall, the investigations seek information as to whether they knowingly failed to disclose information about the contamination.
- Bellwether Trials on the Horizon – Legal commentators expect Judge Rosenberg to establish a bellwether trial program to help estimate global settlement values. It’s unlikely that any trials will be held in 2021, though scheduling should begin in the first half of the year. Having these trials on the docket for 2022 may foster global settlement negotiations.
- Late Pleadings and Amendments Allowed – Despite the dismissal for preemption grounds, the Order allows plaintiffs to replead other claims raised during the initial phases of the MDL. These claims may relate to issues surrounding expiration dates, as well as the storage, testing and transportation of the contaminated drug.
- Settlement Value – Some lawyers have started to speculate about the value of these cases. A nationwide mass tort attorney recently estimated a top tier case in this litigation may be worth $500,000. Lower-tier cases drop to as low as $100,000, but these cases have extremely high value.
Ron Mill, another attorney involved, had this to say:Speculating at this point is not a very useful exercise. But let’s do it, anyway. If the litigation goes very well, the number I would pull out of thin air is between $150,000 and $750,000 with an average of $200,000. The estimated trial value would be higher if you took your case to trial. Much higher. I mean, look at the Roundup verdicts where we saw a $1 billion award. Of course, if the case goes to trial, there is also the risk of getting a zero verdict.
- Bellwether Trials Scheduled (Part 1) – In the Bard Hernia Mesh litigation, bellwether trials have been slated to begin on April 19, 2021 in Ohio Federal Courts. This indicates a delay from the previous date in January. However, with the Court’s issuance of a formal case management order, things look like this could actually happen this Spring.
- Bellwether Trials Scheduled (Part 2) – More delays in the bellwether trial program established by the Court. While January was supposed to be the first real trial in this case, it has been postponed until mid-February. Don’t hold your breath though, as delays seem to be the norm.
- Bellwether Trials Scheduled (Part 3) – Atrium’s bellwether trial scheduled for January 20, 2021 has also been delayed until later in 2021. No reasons were given for the delay, and no new dates have been scheduled, but these cases are expected to go to trial this year.
- All Signs Point to Settlement – These signs point towards a global settlement, or at least a settlement by MDLs individually, in 2021. These trials tend to trigger settlement discussions and resolutions, and the fact that all three MDLs have scheduled trials for Spring indicate that this will be one of the more active periods in the litigation.
If you have any questions please do not hesitate to reach out to me. Have a great week!
Craig H. Alinder, Vice President