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					                              Reprinted with permission from Michigan Lawyers Weekly
                              Cite 26 Mich.L.W. 631                                                                April 23, 2012                                                                Michigan Lawyers Weekly • 3


                              Product Liability



                              Drug immunity bill
                              surfaces again
                              But if it can’t pass, some lawmakers want to know: At what cost?
                              By Carol Lundberg                                     be harmful to business at a time when Michigan       Michigan law prohibits product liability cases
                                                                                    needs to send a business-friendly message to the     against makers of FDA-approved drugs.
                                 If lawmakers choose not to rescind the law         corporate world.                                        So Michigan could not recover the $20 million
                              that keeps Michigan residents from suing drug            So far, the statute — MCL 600.2946(5) — re-       spent on Vioxx prescriptions dispensed to Med-
                              companies, a few representatives in the Legis-        mains in place.                                      icaid patients. That caused members of both
                              lature say that they should at least know what           Last October, the Michigan Supreme Court          parties to rethink the state’s FDA defense for
                              it’s costing the state.                               upheld the Michigan Court of Appeals’ pub-           drug manufacturers.
                                 For years, Democrats have fought to repeal a       lished opinion in Attorney General State of             A look around the country at what other states
                              law that prohibits people from suing drug manu-       Michigan, et al. v. Merck Sharp & Dohme Corp.        are able to recover has some lawmakers wondering
                              facturers if the drug was compliant with federal      It said that the Michigan Attorney General           if Michigan should be able to do the same.
                              food and drug administration standards.               could not join the other 49 states in their suit        Earlier this month, an Arkansas judge fined
                                 But it has been met with strong Republican         against the manufacturer of Vioxx because            Johnson & Johnson and its Janssen subsidiary
                              opposition by lawmakers who say that it would                                                              more than $1 billion after a jury found the compa-
                                                                                                                                         nies had engaged in “false or deceptive acts” in
LW photo by Carol Lundberg




                                                                                                                                         2003 by claiming its drug Risperdal was safer than
                                                                                                                                         other antipsychotic drugs. And earlier this year, the
                                                                                                                                         company settled with the Texas Attorney General
                                                                                                                                         to pay $158 million in a similar suit.
                                                                                                                                            Last month, state representatives Ellen Cogen
                                                                                                                                         Lipton, D-Huntington Woods, and Fred Durhal, D-
                                                                                                                                         Detroit, proposed a budget amendment to the
                                                                                                                                         House Appropriations Subcommittee on General
                                                                                                                                         Government. The amendment would require
                                                                                                                                         Michigan’s Attorney General to report
                                                                                                                                         the money lost by Michigan residents
                                                                                                                                         from not participating in the federal
                                                                                                                                         class-action lawsuits brought by
                                                                                                                                         states against drug companies whose
                                                                                                                                         products were found to be harmful.
                                                                                                                                            And it received bipartisan
                                                                                                                                         support, passing out of sub-
                                                                                                                                         committee unanimously.
                                                                                                                                            “It does nothing to repeal
                                                                                                                                         or change the underlying
                                                                                                                                         drug immunity statute,”
                                  “We are arguing that Michigan’s drug immunity defense is an                                            Lipton said.

                                   affirmative defense. Our allegation was that they were not in                                         ‘A problem that
                                                                                                                                         doesn’t exist’?
                                   compliance with the FDA when the drug left the manufacturer.”                                           Lipton said that she thinks
                                                                                                                                         Michigan is missing out on being
                                                                                             — Alyson Oliver, Oliver Law Group
                                                                                                                                         able to recover millions of dollars
                                                                                                                                                      See “Drug immunity,” page 23
LW photo by Douglas J. Levy




                                                                                                                             ON THE STAND
                                                                                                           When the workday ends, real         Is there a place in St.                gone to costume parties, I’ve
                                                                                                        estate attorney C. Kim Shierk          Joseph you cherish?                    dressed up like her. She’s an
                                                                                                        likes to retreat to the easel.         The lake and the beaches. It’s a       easy one to dress up as.
                                                                                                           “You turn your mind off from        great place to walk and relax.
                                                                                                        work, and totally get absorbed,”       When I grew up, there was an           Considering you deal in real
                                                                                                        she said of her passion for oil        amusement area there called            estate, what was the worst
                                                                                                        painting, mostly landscapes and        Silver Beach, with a roller            place you ever lived?
                                                                                                        flowers. “I do it as often as I can,   coaster and a funhouse. It’s           In undergrad at MSU, one
                                                                                                        but never often enough.”               been long torn down, but in the        summer I lived in student
                                                                                                           She’s grown up literally on         recent past they built a carousel      housing. We were sitting at the
                                                                                                        canvas: her late father, Ted           and made replicas of the horses        kitchen table eating dinner one
                                                                                                        Shierk, was a portrait artist in       that were part of the original         night, and the ceiling fell in on
                                                                                                        her hometown of St. Joseph, and        amusement park’s carousel.             us. I think it was a bad roof that
                                                                                                        she and her siblings would be                                                 was leaking.
                                                                                                        frequent subjects.                     What’s something in your
                                                                                                           Today, Shierk, who is chair of      house that you should really           Your pet peeve?
                                                                                                        the Real Property Law Section of       throw out, but probably                Overuse of the word “largely.”
                                                                                                        the State Bar of Michigan, is in       never will?
                                                                                                        the process of cataloging his
                                                                                                                                               My husband has a pair of               You deal with condominiums
                                                                                                        works, and it’s offered her some
                                                                                                                                               humongous stereo speakers. They        as part of your practice. What
                                                                                                        introspection.
                                                                                                                                               take up so much space. But I’m         was the most unusual bylaw
                                                                                                           “What’s interesting is, you
                                                                                                                                               afraid that if I throw them out,       you ever came across?
                                                                                                        look at the paintings and
                                                                                                                                               he’d follow them out the door.         The one that comes to mind was
                                                                                                        see how times have changed,”
                                                                                                        she said. “We were involved in                                                a commercial project in Florida.
                                                                                                        scouts, and there are several          If a sandwich was named                It expressly prohibited the
                                                                                                        paintings of my brother, my            after you, what would be               owners from maintaining
                                                                                                        sister and I in our scout uni-         in it?                                 alligators on the premises.
                                                                                                        forms, and they were the old           It’d be filled with veggies on
                                                                                                        uniforms.”                             whole-wheat bread — and                Is there something you keep
                                                                                                                                               topped with hot fudge. There’s         in your office as a
                                                                                                        What are your other                    always that conflict I have to         motivator?
                              C. Kim Shierk                                                             means of decompression?                eat healthy, and then I spoil it.      Pictures of my children, because
                                                                                                        I’ve been doing Zumba for a                                                   so long as I have college tuition to
                              Myers Nelson Dillon & Shierk PLLC, Bloomfield Hills                                                              What famous person can you
                                                                                                        couple of years. It’s high                                                    pay for, they’re my motivation to
                              Education: University of Detroit School of Law                            energy, and you sure feel              best impersonate?                      come into the office every day.
                              Specialties: Residential and commercial real estate development           great afterward.                       Sandra Bullock. When we’ve                          — DOUGLAS J. LEVY
Cite 26 Mich.L.W. 651                                                                   April 23, 2012                                                               Michigan Lawyers Weekly • 23




                            [ Verdicts & Settlements ]
71-year-old male driver seeks underinsured motorist benefits
Hematoma’s origin argued                           Type of action:                               Case evaluation: $400,000
                                                                                                                                                   cause there was no evidence of head trau-
                                                                                                                                                   ma in the ER. Rather, it was asserted, it
by defense as pre-existing                         Underinsured motorist benefits
                                                                                                 Most helpful experts:                             could have been caused by plaintiff’s pre-
                                                   Type of injuries:                             Dr. Martin Belkin, neurology, West                existing combination of diabetes, hyper-
condition; jury disagrees                          Traumatic brain injury                        Bloomfield; Dr. Renee Applebaum,                  tension, and blood thinners. Defense coun-
                                                   Name of case: Lucas v. Grange                 neuropsychology, Bingham Farms; Dr.               sel relied on his cross-examination of the
$500,000                                           Insurance Co. of Michigan                     Rick Olson, neurosurgery, Royal Oak               treating doctors, who conceded that plain-
   Plaintiffs Leon and Mildred Lucas were                                                                                                          tiff ’s pre-existing conditions could have
                                                   Court/Case no./Date:                          Insurance carrier: Grange
awarded $500,000 by an Oakland County                                                                                                              coincidentally caused a brain bleed.
                                                   Oakland County Circuit Court;                 Attorney for plaintiff:                              Plaintiff argued that he did hit his head
jury in their lawsuit seeking underin-             10-114496-NI; Jan. 19, 2012
sured motorist benefits from defendant                                                           Brian Gijsbers                                    in the accident, and his family and a fel-
Grange Insurance Co. of Michigan.                  Tried before: Jury                            Attorney for defendant:                           low employee testified that his speech be-
   On Dec. 19, 2009, Leon Lucas, 71, was           Name of judge: Colleen O’Brien                Robert Huebner                                    gan to change the week after the acci-
involved in an auto accident. The at-fault                                                                                                         dent, leading him to the MRI that
                                                   Demand: $350,000                              Key to winning: Blowing up and                    revealed an acute hematoma. The treat-
driver had $20,000 limits, which were                                                            effectively utilizing certain views of the
paid pre-suit with the consent of Grange,          Highest offer: $150,000                                                                         ing neurologists admitted that the trauma
                                                                                                 brain MRI during the treating physicians’
the Lucases’ UIM carrier.                                                                                                                          from the accident more likely than not
                                                   Verdict amount: $500,000                      testimony, clearly revealing a hematoma
   The ER records from the day of the ac-                                                                                                          caused the brain bleed.
cident did not evidence any head trauma                                                                                                               Defendant’s pretrial motion in limine to
or injury, but Leon Lucas returned to              Lucas returned to work full time as a         not start to receive cognitive therapy            preclude revealing the UIM policy limits
the ER a week later complaining of in-           security guard at a local college. Six          until nine months after the diagnosis.            of $500,000 was denied. The judge ruled,
creasing headache and speech difficul-           months after the accident, he had a             Both neurologists testified that a portion        in essence, that the action was for breach
ties. An MRI revealed a left frontal lobe        seizure at home, and was put on lifelong        of Lucas’ brain tissue had died (en-              of the UIM contract, and the contract pro-
hematoma, which was treated conserva-            anti-seizure medication, but he did not         cephalomalacia), and the neuropsych-              visions, including limits, were relevant
tively. Lucas was discharged after three         miss any work.                                  ologist testified that Lucas had various          and admissible.
days and had conservative therapy for              Lucas had a neuropsych exam a                 cognitive deficits.                                  Post-trial, the $500,000 verdict was re-
three months, during which time he did           year after the accident, and although             Defendant contended that the brain              duced by the at-fault driver’s $20,000.
not work or drive.                               cognitive deficits were diagnosed, he did       bleed was not caused by the accident be-          Grange has paid the judgment.




                                                                                                                                                   tion, he added, they could get it with an in-
Drug immunity                                                                                              Senate Bill 936                         quiry conducted by a legislative committee.
                                                                                                                                                      Haron calculated that Michigan makes
Continued from page 3                                                                                                                              1.6 percent of the total Medicaid drug ex-
every year, money that should be put back                                                                  This would amend 1961 PA 236            penditures in the country.
into Medicaid. And she said that if the state                                                              by amending section 2946 (MCL              When states recover money from a drug
is going to continue to provide drug makers                                                                600.2946) by removing the FDA           maker, the federal government receives
that level of immunity, lawmakers should at                                                                defense language: “In a product         about half of that because it pays approx-
least have a full understanding of the con-                                                                liability action against a              imately half of Medicaid, he added.
sequences of the law.                                                                                      manufacturer or seller, a                  “Based on that, Michigan would be able
   Lipton supports a repeal of the immu-                                                                   product that is a drug is not           to recover about $25 million per year,”
nity law.                                                                                                  defective or unreasonably               Haron said.
   Senate Bill 936, a bill that would elimi-                                                               dangerous, and the                         But Bob Dorigo Jones, president of Novi-
nate the FDA defense, was introduced in                                                                    manufacturer or seller is not           based M-LAW (Michigan Lawsuit Abuse
February (see box at right). Sen. Roger                                                                    liable, if the drug was approved        Watch), said he’s uneasy with the idea of
Kahn, R-Saginaw Twp., would like that                                                                      for safety and efficacy by the          weakening the FDA defense in any way.
bill to do what other similar bills have                                                                   United States food and drug                “If companies have to continuously look
done before it: die in committee.                                                                          administration, and the drug            over their shoulders at the threat of litiga-
   Kahn is a cardiologist who said he’s                                                                    and its labeling were in                tion, it hurts everybody else,” Jones said.
seen firsthand how beneficial new drugs                                                                    compliance with the United                 His problem with the reporting re-
                                                                                                           States food and drug                    quirement is that it would put public at-
have been in his patients’ lives. He wants
                                                                                                           administration’s approval at the        tention on “a small part of the greater
Michigan to be a beacon to other states
                                                                                                           time the drug left the control of       story, which isn’t being told. It doesn’t tell
who want to pass immunity laws.
                                                                                                           the manufacturer or seller. …”          anything about the number of people who
   And some have done just that. A dozen
other states have weaker versions of Michi-                                                                                                        are suffering because of litigation, who

                                                   “[Shay Blair v. Genetech Inc., XOMA
gan’s law. They either bar punitive dam-                                                                                                           aren’t involved in any way in litigation. A

                                                 LLC, et al.] got dismissed at District
ages in suits against manufacturers of                                                           repeal the FDA defense. But if the Legisla-       lot of drugs never make it to market in the
drugs that are FDA-approved, or they have                                                        ture can’t do that, the very least it should do   U.S. because of the threat of litigation.”
a rebuttable presumption that FDA warn-          Court, which we expected because of             is to clarify the difference between Medicaid        For example, he said he knew the father
ings are adequate to protect consumers.          Michigan’s immunity law,” she said. “It’s       fraud and product liability, he said.             of a 10-year-old girl with encephalitis. The
   Repealing Michigan’s law, which Kahn          fully briefed and ready for appeal. We are         “About $4 billion was recovered from drug      girl needed a brain shunt to survive.
said is a leader in the country, would be an     arguing that Michigan’s drug immunity           companies last year for fraud. That means            “There were at one time 14 manufactur-
“attempt to solve a problem that doesn’t ex-     defense is an affirmative defense.              Michigan is not sharing in that,” Haron           ers in the U.S. But that had whittled down to
ist. There is no immunity for drug makers in        “Our allegation was that they were not       said. “This isn’t about individuals or even       two because the product was made with sil-
this state. You can sue for failure to produce   in compliance with the FDA when the             the state getting money from a company.           icone, and all the litigation, or threat of liti-
the drugs to an appropriate standard, if you     drug left the manufacturer.”
concealed data [from the FDA], or if there is       But the drug did get approved by the
new data and you didn’t report it.”              FDA, though it was later withdrawn from
   Despite the argument that the case            the market, and Kahn said that “[t]here’s a
                                                                                                    “About $4 billion was recovered from drug companies last year
against Vioxx was based on alleged fraud,        basic argument that the FDA is exhaustive           for fraud. That means Michigan is not sharing in that. This isn’t
the Court of Appeals determined that the         and that should be recognized by the courts.”
case was barred by MCL 600.2946 be-                 All the same, there’s simply no reason           about individuals or even the state getting money from a
cause it “exempts drug companies from            to keep the state from joining lawsuits to
product liability suits regarding FDA-ap-        recover money that was lost to fraud.               company. … Michigan paid these companies this money that
                                                    Even though Kahn is a staunch propo-
proved drugs. … If the plain language of
the statute results in an outcome that the       nent of the FDA defense, he said that he
                                                                                                     was taken fraudulently. We should get it back.”
Legislature now deems improper, it is for        also disagreed with the Court of Appeals’                                                             — David Haron, Frank Haron Weiner PLC
the Legislature, not this Court, to narrow       Vioxx decision.
the application of the statute by amending          “The spirit of the exceptions to the FDA
or redrafting its terms.”                        defense should include fraud,” he said.         There is no windfall or lottery. Michigan         gation, was driving them out of business,”
                                                 “There’s a difference between the letter of     paid these companies this money that was          Jones said. “The father said, ‘I know if some-
‘The FDA is exhaustive’                          the law and the spirit of the law. This         taken fraudulently. We should get it back.”       thing doesn’t happen, my daughter will lose
   Alyson , of Rochester-based Oliver Law        seems to be one of those differences.”                                                            this brain shunt that she needs to live.’”
Group, disagrees with Kahn’s assessment             Kahn said he would like to hear a full       Threat of litigation                                Even if the reporting requirement has
of how Michigan’s law is applied in the          debate of Lipton’s budget requirement,             But still, Haron thinks that the Lipton        support, he adds that the Senate bill
real world of product liability litigation.      and that he would “keep an open mind.”          amendment to require the attorney general         would have little chance of survival.
   She is working on several cases in               David Haron, of Frank Haron Weiner           to report to the Legislature is “meaning-           “If you look at it from a cynical point of
which she argues that the manufacturer           PLC in Troy, also disagreed with the Court      less. That’s why it’s got bipartisan support.”    view, it’s an easy issue to win votes,” Jones
of Raptiva concealed risks associated with       of Appeals’ decision in the Vioxx case.            Haron said the only purpose of such a          said. “We see this every couple of years.
the drug, failed to warn of risks, and              “It was not a products liability case,”      requirement would be to “embarrass some           And this year is no exception.”
breached the implied and express war-            Haron said. “It was about Medicaid fraud        people and point out that our laws protect        If you would like to comment on this story, please
ranty when they made and sold the drug           under the Medical False Claims Act.”            fraud? We already know that.”                     contact Carol Lundberg at (248) 865-3105 or
from 2003 until 2009.                               Haron supports the Senate bill that would       If legislators really wanted that informa-     carol.lundberg@mi.lawyersweekly.com.

				
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