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Jun 27

SCOTUS Ruling Hurts Consumers

Written on behalf of Brian S. Kabateck

June 27, 2017

A recent US Supreme Court decision dealt a serious blow to consumers seeking legal recourse in product liability lawsuits. The court sided with the giant drug manufacturer Bristol-Myers Squibb which sought to limit where plaintiffs can seek compensation for death or injuries caused by drugs. This ruling will likely have a ripple effect beyond just the pharmaceutical industry, impacting a wide-range of product defects lawsuits including automotive defects, faulty machinery, tobacco products and financial fraud.

The high court’s 8-1 ruling involved a class action suit that claimed the blood-thinning drug Plavix caused bleeding and strokes. The ruling found that California courts don’t have jurisdiction over claims made by out-of-state plaintiffs who are suing the drug maker. The company does research, sells and markets Plavix in California but is incorporated in Delaware and headquartered in New York. The California Supreme Court ruled that the non-resident claims were similar to plaintiffs in California and therefore were sufficient to sue. But SCOTUS reversed that call, claiming the non-residents’ claims could violate the due process clause.

Most concerning is the court’s findings on Bristol-Myers’ connection to the San Francisco-based drug distribution company McKesson Corp., which supplies drugs such as Plavix to pharmacies across the nation. The court ruled that the contract between Bristol-Myers and McKesson Corp. is not strong enough to establish a personal jurisdiction. Plaintiffs in mass tort actions involving pharmaceutical companies often use the link between McKesson and the manufacturer to establish a relationship to the venue. Without this tool in the arsenal, establishing personal jurisdiction will be nearly impossible for future cases.

The fallout from this decision is already in full swing. On the same day as the high court’s decision, a Missouri judge declared a mistrial in a case against Johnson & Johnson that involved women who died of ovarian cancer, which was allegedly caused by talcum baby powder.

J&J is now hoping to turn the tide against similar cases around the nation after recent plaintiff verdicts have cost the pharmaceutical giant $300 million in judgments.

The SCOTUS ruling has essentially curtailed nationwide mass actions in any state besides the one in which either the company is located or the plaintiff lives. Consumer advocacy groups are speaking out, calling this ruling an unfair burden on injured people who want to sue corporations who engage in wrongdoing. Business groups have been pushing cases like this towards the Supreme Court and this decision is part of a disturbing trend of restricting consumers’ access to justice.

The decision is worse for consumers who don’t live in California because our state has much stronger consumer liability laws. Consumer advocates will continue to wage just fights against corporations that put profits over people in the hopes that justice will prevail.

A consumer class action is a lawsuit in state or federal court that is brought by one individual, or a few individuals, on behalf of a larger class of people similarly situated.

Typically, it seeks damages on behalf of the named persons bringing the suit as well as the members of the “class.” Class action claims can involve mass disasters, consumer product defects and failure, or even violations of state consumer protection laws.

A mass tort is a civil action that involves a large group of plaintiffs who’ve suffered injuries, who consolidate their cases to sue one or a few corporations in state or federal court.

In U.S. federal courts, mass tort claims are frequently consolidated as multidistrict litigation. While the plaintiffs may live in different geographical locations, they share a common injury or damage.

Mass disaster torts, mass toxic torts and consumer product liability torts are the main categories associated with this cause of action. A mass tort action is different from a class action. In a mass tort action, each plaintiff has an individual claim resulting from unique damages. Each plaintiff receives his or her own separate trial, unlike in a class action, in which the many plaintiffs typically are not considered individually and there is only one trial.

KBK has many years of experience handling class actions, mass tort cases and multi-district litigation. If you or a loved one has experienced injuries due to a disaster, a dangerous drug or a defective product, contact one of our experienced attorneys at Kabateck Brown Kellner, LLP to learn more about recovering damages and to explore your options.

 

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