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Medical Device Ruling Redraws Lines on Lawsuits
Lawyer Blog News | 2008/02/22 12:56

The Supreme Court’s decision Wednesday protecting many types of medical device makers from personal injury lawsuits began rippling through the courts and law offices almost immediately.

Hours after the decision in the case, Riegel v. Medtronic, was announced, lawyers involved in a group of Florida state court cases related to Johnson & Johnson’s drug-coated Cypher heart stent received an e-mail message from Judge Mary Barzee Flores asking for briefs on whether the lawsuits should be allowed to continue.

And lawyers for patients with injuries they attribute to other devices like heart valves, artificial hips and defibrillators said they were girding for a flood of court filings from device makers like Medtronic asking judges to dismiss such lawsuits.

“Medtronic probably already has summary judgment motions ready to go, and I expect to see them filed in the next few days,” said Hunter J. Shkolnik, a New York lawyer.

“The next six months will be consumed fighting about such motions,” Mr. Shkolnik predicted.

He represents more than 600 plaintiffs with lawsuits in state court in Minneapolis stemming from potentially faulty electrical leads Medtronic made for heart defibrillators.

Lasr fall, Medtronic recalled the product, known as the Sprint Fidelis, after reports that the leads — wires that connected the device to the heart — were more prone to developing potentially deadly fractures than an older lead called the Quattro.

In addition to the Sprint Fidelis and the heart stent cases — some in Massachusetts have named Boston Scientific rather than Johnson & Johnson as the defendant — lawyers said Wednesday’s Supreme Court ruling could also affect the course of personal injury lawsuits filed against St. Jude Medical over a silver-coated heart valve recalled in 2000.

There were 19 state and federal cases pending involving the St. Jude valve as of last October, according to filings with the Securities and Exchange Commission by the company, which is based in St. Paul.

Other lawsuits that could be affected are ones against Johnson & Johnson and Synthes over spinal disks, and Stryker over artificial hip components. Soundtec, an Oklahoma City-based producer of an implantable hearing aid, had been told just two weeks ago by the Arkansas State Supreme Court that the federal approval of its device did not protect it from a claim in state court that its design was defective. Lawyers say the Arkansas decision is now likely to be reversed.

Recent settlements of large groups of lawsuits on terms relatively favorable to device makers are a sign that lawyers had been anticipating the Supreme Court outcome, according to Mark Herrmann, a Chicago lawyer who defends drug and device companies.

In December, for example, Medtronic announced an agreement to pay $114.1 million to settle 2,682 injury lawsuits related to its 2005 recall of defibrillators with a defective battery. In November, Boston Scientific agreed to pay up to $240 million to settle 8,550 claims stemming from recalls of defibrillators made by a subsidiary, Guidant.

Plaintiffs in those cases are free to stay out of the settlements and try to continue suing the companies. But the odds against their success are much steeper now, according to both plaintiffs and defense lawyers.



Supreme Court rules workers can sue over 401(k) losses
Lawyer Blog News | 2008/02/21 16:44
The Supreme Court ruled Wednesday that individual participants in the most common type of retirement plan can sue under a pension protection law to recover their losses. The unanimous decision has implications for 50 million workers with $2.7 trillion invested in 401(k) retirement plans. James LaRue of Southlake, Texas, said the value of his stock market holdings plunged $150,000 when administrators at his retirement plan failed to follow his instructions to switch to safer investments.

The issue in the LaRue case was whether the Employee Retirement Income Security Act permits an individual account holder to sue plan administrators for breaching their fiduciary duties.

The language of the law refers to recovering money for the "plan" rather than for an individual, raising the question of whether a participant can sue solely for himself.

Justice John Paul Stevens, in his opinion for the court, said that such lawsuits are allowed. "Fiduciary misconduct need not threaten the solvency of the entire plan to reduce benefits below the amount that participants would otherwise receive," Stevens said.

The decision overturned a ruling by the 4th U.S. Circuit Court of Appeals in Richmond, Va.

Unlike people enrolled in traditional pension plans, employees in 401(k) plans, which have exploded in number in the past two decades, choose from a menu of options on where to invest their money. That puts workers squarely in the middle of decision-making about their pensions and inevitably leads to the kind of disputes LaRue has with his plan's administrators.

"Defined contribution plans dominate the retirement plan scene today," unlike when ERISA was enacted in the mid-1970s, Stevens said.

Many traditional pension plans guaranteeing a fixed monthly benefit have either been frozen or terminated, and 401(k) plans are the main source of retirement income, said the Air Line Pilots Association, which represents 60,000 pilots at 41 air carriers.

The Bush administration argued in support of workers. The government said the appeals court ruling barring LaRue's lawsuit would leave 401(k) participants without a meaningful remedy from any federal, state or local court when plan administrators fail to live up to their duties.

Business groups supported LaRue's employer. They argued that ERISA is aimed at encouraging employers to set up pension plans, while guarding against administrative abuses involving the plan as a whole. The law doesn't permit individual lawsuits like LaRue's, the business groups said.

Congress enacted ERISA after some widely publicized failures by companies and labor unions to pay promised pensions. Workers in class-action lawsuits have long relied on the law, most recently in the scandal-ridden collapses of companies like Enron and its 401(k) plan for workers.

The term 401(k) refers to a section of the Internal Revenue Code.

Participants in 401(k) plans do not know how much money they will receive in retirement. Employees invest a certain amount each month and how much they get back depends on how well their chosen investments have performed.



Court Rejects Maine Restrictions On Tobacco Shipping
Lawyer Blog News | 2008/02/20 09:37

The U.S. Supreme Court Wednesday unanimously rejected provisions of a Maine law that restricts the shipment of tobacco products in the state.

"Despite the importance of the public health objective, we cannot agree with Maine that the federal law creates an exemption," Justice Stephen Breyer wrote in the court's majority opinion. "The act says nothing about a public health exception."

The ruling determines that federal trucking laws bar state regulation of tobacco shipments, despite Maine's concern that tobacco products might be shipped to minors.

The state law, passed by Maine in 2003, required shippers such as United Parcel Service Inc. (UPS) to follow special handling procedures when delivering cigarettes or other tobacco products with the aim of keeping tobacco from being shipped illegally to minors. The industry challenged the provisions, arguing they were onerous, increased costs and ran afoul of the federal limit on state shipping regulations.

Major shipping companies, including UPS and FedEx Corp. (FDX), already have voluntarily agreed not to ship cigarettes in a settlement with New York over tobacco restrictions enacted in that state.

In previous legal action, the Maine law was struck down by a federal trial court. The 1st U.S. Circuit Court of Appeals in Boston affirmed lower-court rulings that held federal shipping laws pre-empted the Maine law. The Supreme Court's opinion affirms the appeals court holding.



High Court to Consider Suppression Case
Lawyer Blog News | 2008/02/19 17:09
The Supreme Court agreed Tuesday to consider whether evidence must be suppressed when authorities base an arrest on incorrect information from police files. The Coffee County, Ala., sheriff's department took Bennie Dean Herring into custody after being told by another county he was wanted for failing to appear in court on a felony charge.

In a subsequent search, the sheriff's department found methamphetamine in Herring's pockets and an unloaded gun under the front seat of his truck.

It turned out that the warrant for Herring's arrest had been recalled five months earlier.

Herring was sentenced to 27 months in prison after a jury convicted him on federal drug and gun charges.

Courts have ruled that as a deterrent to police misconduct, the fruits of an unlawful search and seizure may be excluded from evidence.

The 11th U.S. Circuit Court of Appeals in Atlanta said that suppressing evidence in Herring's case would be unlikely to deter sloppy record keeping.

The cost of suppressing the evidence, the appeals court said, would fall on the county that arrested Herring, not on the county that was negligent in its record keeping.



USDA issues largest beef recall in US history
Lawyer Blog News | 2008/02/18 10:42
An undercover video showed workers using forklifts to get sick cows to the slaughterhouse. It's that video that caused the largest beef recall in United States' history. The 143-million pounds of meat was mainly used in school cafeterias and fast food restaurants.

As disturbing as the video is, what may be more disturbing is that the animals, too sick to walk, could have ended up in the food chain.

The undercover footage was shot by the humane society, and it has lead to the largest recall of meat in United States history. The USDA has ordered more than 140 million pounds of fresh and frozen beef off store shelves. The meat was processed by the Westland/Hallmark Meat company in Chino, Calif. The Humane Society claims, this video shows cows being shocked and even pushed with a forklift to get them to walk into the slaughterhouse, so they can pass inspection. When animals are too sick too walk, it's against the law to use them for human food.

Westland/Hallmark Meat is a supplier beef to two major West Coast fast food restaurants, and the company is a major supplier for the federal school lunch program. The USDA released a statement that said in part: "We don't know how much product is out there right now, we don't think there's a health hazard, but we do have to take this action." Critics said the Feds dropped the ball.

"It's clear the USDA system failed and it allowed this company to engage in long term inhumane practices," said Paul Shapiro.

The recall covers every beef product Westland/Hallmark Meat has produced in the last two years. No charges have been brought against the company for safety issues, but two employees have been charged with animal cruelty.


Supreme Court Weighs 5 Age Bias Cases
Lawyer Blog News | 2008/02/17 20:58
There is only one anti-bias law — the one against discrimination based on age — that would cover all nine Supreme Court justices, if such laws applied to them.

The justices, ranging in age from 53 to 87, are the last people to worry about such things in their own lives. They have life tenure and no mandatory retirement age.

Yet the justices are confronted by allegations of age discrimination in five cases this term. While the sheer number of cases probably can be explained away as coincidence, the topic is one of growing importance as more people work longer because of economic necessity or by choice.

"The importance of protecting older workers as the work force ages is enormous," said Stu Cohen, AARP's director of legal advocacy. "More older workers remain in the workforce and projections are that the percentage will continue to expand."

The percentage of people 65 and over who continue to work has grown from 10.8 percent in 1985 to 16 percent last year, AARP said. For people 55 to 64, the numbers also are up, from 54.2 percent in 1985 to 63.8 percent in 2007.

The Age Discrimination in Employment Act applies to workers who are at least 40. It prohibits discrimination based on age in hiring and firing, promotions and pay.

"Literally every employee at some point is going to be protected by it because all of us get older. It's true whether you are a male, female, minority or not. It's not true for any other statute. It's a very broad class of protected people," said Steven R. Wall, a partner at the Morgan, Lewis & Bockius law firm in Philadelphia.

The cases at the court this year include what kind of evidence an employee may present to bolster an age discrimination claim; whether retirement-age workers are entitled to disability payments; and whether federal workers who complain about age discrimination are protected from retaliation.

The last issue is the subject of oral arguments Tuesday in a case involving a postal worker in Puerto Rico who complained of both discrimination and retaliation. Federal courts dismissed the retaliation claim, saying there is nothing in the age discrimination law that allows such claims by federal employees.

Other anti-discrimination laws do provide protection from retaliation for government workers, said Eric Dreiband, former general counsel to the Equal Employment Opportunity Commission. The language in the laws are different "and it would appear deliberately different," Dreiband said.

The AARP and the National Treasury Employees Union are backing the employee.

The most important case from employers' perspective involves "me-too" evidence in a lawsuit filed by a woman who was 51 when she was laid off by a subsidiary of Sprint Nextel Corp.

The fight at the Supreme Court is over whether she should be able to introduce testimony from other employees who also say they were victims of age discrimination, even though they worked for other supervisors.

The employee, Ellen Mendelsohn, argued that such evidence is critical to establishing a culture of discrimination.

"Is it fair to an employer that somebody can call co-workers to testify, even though they had nothing to do with the plaintiff or her boss?" said Wall. "To sum it up from a management attorney's perspective, it's a very dangerous case because you can see how that applies no matter the form of discrimination."

A third case tests whether a retirement plan can treat disabled employees of different ages but similar tenures differently.

Kentucky's public retirement system prohibits employees who become disabled and are eligible for retirement from collecting disability retirement benefits, which can be more generous than regular pensions. The state says those employees are entitled only to their regular pensions.

By contrast, an employee who becomes disabled before he is eligible for retirement will receive a disability pension.

A former employee, backed by the EEOC, says the older worker often will receive lower benefits, sometimes dramatically so, in violation of the age discrimination law.

Decisions in all the cases are expected by late June.

As baby boomers get older, an increase in age discrimination suits seems likely, said David B. Ritter, a partner at the Neal Gerber & Eisenberg law firm in Chicago.

"Telling these folks they're too old or having them thinking that their younger boss thinks they're too old, they're not going to go quietly into the night," Ritter said.

Cohen, the AARP executive, said his group's research suggests that some people wish to continue working because they believe it will help them stay healthy.

Some workers also cling to their jobs because they need the health insurance, if not the paycheck. "They are mostly there out of necessity," Cohen said.



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