©2009 Angel Reyes
www.ReyesLaw.com

©2009 Angel Reyes
www.ReyesLaw.com

Shoulder Pain Pump Lawsuits: Motion to Consolidate Due to High Volume
original article here
Lawsuit.com

Due to the high number of lawsuits involving shoulder pain pumps across the U.S., motions have been filed to bring all cases forward in one court. Personal injury attorneys are still accepting legal cases relating to shoulder pain pumps that may cause Post arthroscopic Glenohumeral Chondrolysis or PAGCL.

©2009 Angel Reyes
www.ReyesLaw.com

No Legal Shield in Drug Labeling, Justices Rule
The New York times
By ADAM LIPTAK
Published: March 4, 2009

WASHINGTON — In a major setback for business groups that had hoped to build a barrier against injury lawsuits seeking billions of dollars, the Supreme Court on Wednesday said state juries may award damages for harm from unsafe drugs even though their manufacturers had satisfied federal regulators.

The ruling could have significant implications beyond drug manufacturing. Many companies have sought tighter federal regulation in recent years in part to shield themselves from litigation.

The court, by a 6-to-3 vote, upheld a jury verdict of $6.7 million in favor of a musician from Vermont whose arm had to be amputated after she was injected with an anti-nausea drug. The drug’s manufacturer, Wyeth, had argued that its compliance with the Food and Drug Administration’s labeling requirements should immunize it from lawsuits.

Pharmaceutical companies were especially disappointed by Wednesday’s decision.

Ronald Rogers, a spokesman for Merck, said, “We believe state courts should not be second-guessing the doctors and scientists at the F.D.A.”

Merck was hit with several huge damage awards over its painkiller Vioxx before agreeing to a $4.85 billion settlement in 2007. Allowing juries to make determinations about drug risks, Mr. Rogers said, would cause “mass confusion.”

The Supreme Court has been sympathetic in recent years to arguments that federal law should pre-empt state injury suits. Last year, in Riegel v. Medtronic, an eight-justice majority of the court ruled that many state suits concerning injuries caused by medical devices were barred by the express language in a federal law. Wednesday’s decision addressed implied pre-emption, a different legal standard.

Drug companies and other businesses, supported by the Bush administration, had hoped the Vermont case would establish broader protections. They relied not on express language in a statute enacted by Congress, as in Riegel, but on what might be implied from federal regulatory standards and policies — in this case, from the drug agency’s authority to approve drug labels.

Producers of goods as different as antifreeze, fireworks, popcorn, cigarettes and light bulbs have sought to take refuge behind federal oversight in recent years to fend off litigation. After Wednesday’s decision, those efforts are most likely to succeed if they are based on express language in a Congressional statute or a specific regulatory action that makes compliance with state requirements impossible.

“This narrows the playing field,” for implied pre-emption arguments, Mark Herrmann, a corporate defense lawyer in Chicago, said of the decision. “This does not eliminate the playing field.”

Most drug company stocks, including Wyeth’s, closed up on Wednesday, as did the Dow Jones industrial average, which rose 150 points, breaking a long losing streak.

Catherine M. Sharkey, a law professor at New York University, said the decision does mean that “there is certainly a thumb on the scale against the more aggressive arguments for implied pre-emption.”

Justice John Paul Stevens, writing for the majority in Wednesday’s decision, Wyeth v. Levine, No. 06-1249, said Congress could have required pre-emption in the case but had not. “Evidently,” he said, “it determined that widely available state rights of action provided appropriate relief for injured consumers.”

Justice Stevens noted that Congress did adopt just such an express pre-emption provision for medical devices in the law at issue in the Riegel case.

Until a recent change in policy under the Bush administration, Justice Stevens wrote, the drug agency had welcomed state injury suits as a useful complement to federal regulation. But in “a dramatic change in position” in 2006, Justice Stevens said, the agency reversed that longstanding policy not withstanding its “limited resources to monitor the 11,000 drugs on the market.”

The agency’s new position, Justice Stevens wrote, “is entitled to no weight.” He was similarly dismissive of a brief supporting Wyeth filed by the Justice Department under former President George W. Bush, saying it was “undeserving of deference.”

Justice Stevens was joined by Justices Anthony M. Kennedy, David H. Souter, Ruth Bader Ginsburg and Stephen G. Breyer. Justice Clarence Thomas voted with the majority but did not adopt Justice Stevens’s reasoning, saying instead that he objected generally to “far-reaching implied pre-emption doctrines” that “wander far from the statutory text.”

Justice Samuel A. Alito Jr., writing for the three dissenters, said the court had done an about-face, “turning yesterday’s dissent into today’s majority opinion” and turning ordinary injury suits into a “frontal assault on the F.D.A.’s regulatory regime for drug labeling.”

“This case illustrates,” Justice Alito said, “that tragic facts make bad law.”

The case began in 2000, when Diana Levine, suffering from migraine headaches, visited a clinic. She was given injections of Demerol for the pain and Wyeth’s drug Phenergan for nausea.

If Phenergan is exposed to arterial blood, it can cause swift and irreversible gangrene. For that reason, it is usually administered by intramuscular injection or intravenous drip. This time, a physician’s assistant used a third method, injecting the drug into what she thought was a vein, a method known as “IV push.”

In the following weeks, Ms. Levine’s hand and forearm turned black, and they were amputated in two stages. She settled a lawsuit against the clinic and went to trial against Wyeth, claiming its warnings against IV-push administration were not strong enough.

She greeted Wednesday’s decision with elation. “Next to getting my hand back,” she said of the Supreme Court, “it’s the least they could have done and the best they could have done.”

Bert Rein, a lawyer for Wyeth, said the company had “fully complied with federal law in its labeling of Phenergan,” adding that the F.D.A. is “in the best position to weigh the risks and benefits of a medicine.”

Justice Alito said Wyeth had provided ample notice about the risk of gangrene in “six separate warnings,” some of them “in boldfaced font and all-capital letters,” on the drug label the F.D.A. had approved.

Justice Alito, writing for himself, Chief Justice John G. Roberts and Justice Antonin Scalia, added that juries see only the “tragic accident” before them and “are ill-equipped to perform the F.D.A.’s cost-benefit-balancing function.” The agency, by contrast, he wrote, “has the benefit of the long view” and “conveys its warnings with one voice.”

“After today’s ruling,” he said, “parochialism may prevail.”

Click here to download a PDF of the actual Supreme Court Opinion in its entirety.

©2009 Angel Reyes
www.ReyesLaw.com

©2008 Angel Reyes
www.ReyesLaw.com

My firm was the first to win a federal case against the makers of any fentanyl pain patch.  The jury awarded the family of 28-year-old Adam Hendelson $5.5 million last year in a West Palm Beach federal court.

Please see the Bloomberg.com article below:

J&J Pain Patch Gave Woman Fatal Dose, Lawyer Tells Chicago Jury
Bloomberg.com
Trials/Appeals
October 30, 2008

A Johnson & Johnson unit's defective pain-killing patch delivered a fatal overdose to a 38-year-old woman, her family's attorney told a Chicago jury at the start of a wrongful-death trial.

Janice DiCosolo, a mother of three from Cicero, Illinois, died in February 2004 from toxic effects of the drug fentanyl, the active ingredient in the Duragesic trans-dermal patch made by Alza Corp. and distributed by Janssen Pharmaceutica Products, according to a complaint filed by her husband, John.

"Each patch has enough fentanyl in it to kill 10 300-pound men," John DiCosolo's attorney, Jim Orr, told a Chicago state court jury of seven men and seven women in his opening statement yesterday. Orr asked the jury to award $25 million to the DiCosolo family.

The patches generated $1.16 billion in sales last year for Johnson & Johnson, the world's largest maker of medical devices. The DiCosolo trial began a day after a Florida jury awarded more than $13 million to the family of Susan Hodgemire, a 34-year-old mother of five who died after using a Duragesic patch in 2002.

Fentanyl is a pain killer that is 100 times more powerful than morphine, according to Orr, an attorney in the Dallas firm of Heygood, Orr, Reyes & Bartolomei. Janice DiCosolo was found wearing one of the patches when she died. Her husband's lawyers said the product was defectively made and that Alza and Janssen should be held strictly liable for her death.

The specific patch blamed for DiCosolo's death wasn't defective, attorneys for the units said in a July 30 court filing. The elevated levels of fentanyl found in her bloodstream in a post-mortem examination flowed from her organs after she died and weren't from the patch, they said.

Janssen recalled one Duragesic lot in February 2004, one day after DiCosolo died, because of improper sealing, defense lawyer David Sudzus wrote in that filing. The patch worn by DiCosolo was from that lot, he said.

The case is DiCosolo v. Janssen Pharmaceutica, 04L5351, Cook County, Illinois Circuit Court, Law Division (Chicago).

©2008 Angel Reyes
www.ReyesLaw.com

The manufacturer of the Duragesic Transdermal Pain Patch and other brands are being sued due to a leak in the patch that allows too much of the opioid painkiller to enter the system directly through the skin, causing fatal overdose.  Fentanyl is 100 times stronger than morphine, and this lethal drug has now killed several victims.

Jury awards $13.3M to family in pain-patch death
Orlando Sentinel
Rene Stutzman | Sentinel Staff Writer
October 30, 2008

A Sanford jury has awarded $13.3 million to the family of a woman who died when her pain patch failed, flooding her system with too much medicine.

Dozens of other suits have been filed nationally against drug giant Johnson & Johnson, alleging that its patches leaked and killed patients. But this week's judgment in Seminole Circuit Court was the biggest to date.

Susan Diane Hodgemire, 34, who lived near Apopka with her husband and five children, died June 8, 2002, a few days after she underwent back surgery.

She had placed two patches containing fentanyl, a powerful pain reliever, on her right arm as directed, attorney Joseph Taraska said. But the gel pack inside one or both patches began to leak, Taraska said, allowing the medicine to come into direct contact with her skin, where it was absorbed too quickly.

The patches, he said, are designed to release medicine over a 72-hour period.

In the middle of the night, Hodgemire began to vomit violently, lapsed into a coma, stopped breathing and died.

Jurors deliberated six hours before returning their verdict about 10:30 p.m. Tuesday. They blamed the woman's death on two Johnson & Johnson companies: patch manufacturer ALZA Corp. of Vacaville, Calif., and distributor Janssen LP of Titusville, N.J. They were ordered to pay 80 percent of the judgment.

The remainder is to be paid by Kurt Wood, a former physician assistant at Jewett Orthopaedic Clinic. The jury found him guilty of malpractice. When Hodgemire phoned for help in the middle of the night, Wood told her to take anti-nausea medicine and go back to bed, Taraska said.

Wood's lawyer, Aram Megerian, said Hodgemire failed to tell the physician assistant how ill she was when she called.

Jewett was originally named in the suit, but Taraska said the case had been "resolved."

The patient's husband, Scott Hodgemire, said Wednesday that he was wowed by the judgment but is prepared to fight an appeal.

"The only real point here is there's a bunch of children who lost their mother. One doesn't even know his mother," Hodgemire said. That's a reference to the couple's youngest son, who was 2 at the time of her death. "No amount of money, no amount of litigation is ever going to bring her back."

Taraska said ALZA knew it was producing defective patches but kept doing so.

The brand of patch Hodgemire was wearing -- Duragesic -- has been recalled four times, said Greg Panico, a Janssen spokesman. The most recent recall, in February, was because of cuts found in the patch's drug reservoir, he said.

"We sympathize with the Hodgemire family over their loss," he said, "however, we disagree with the jury's verdict and are considering our options for an appeal."

Hours after the Sanford jury returned its verdict, attorneys for a Chicago-area woman who died in 2004 began presenting their case against ALZA and Janssen to an Illinois jury.

Janice Dicosolo, a mother of three, died of a fentanyl overdose after wearing a Duragesic patch, said Eric Pearson, a Dallas lawyer whose firm represents her family.

It's the same firm that won a $5.5 million judgment against ALZA and Janssen in a West Palm Beach federal court last year in the death of Adam Hendelson, 28. He died in 2003 from a fentanyl overdose.

In 2006, a Houston jury awarded the family of another overdose victim more than $700,000.

Johnson & Johnson is fighting dozens of other pain-patch cases in courts across the country.

©2008 Angel Reyes
www.ReyesLaw.com

Our clients were driving down the road, minding their own business, when their lives were changed forever by this horrific accident.  The jury’s decision will help these victims recover from their damages, and regain a sense of normality in their lives.  Let this verdict serve as a warning to other trucking companies that if they hire unqualified bullies as drivers of these monster trucks, tragedies such as this one will happen.  When they do, they’ll pay the price, just as Celadon did.

For more information on HORP&B's other recent verdicts and settlements, visit www.ReyesLaw.com  or email me at Angel@ReyesLaw.com.

According to Eric Pearson, “Hitachi has been more than willing to take people’s money for these TV sets and they should be more than willing to fix them. In some cases, people paid $3,500 or more for these TVs.  You can’t take that kind of money and deliver a defective product.”

If you have purchased a Hitachi Model #50V500A LCD television with any visual defects, please email Angel@ReyesLaw.com regarding your eligibility for participation as a plaintiff in the following lawsuit:

NORTHERN DISTRICT OF TEXAS  

DALLAS DIVISION 

CASE #8-008011513-ND

ORIGINAL CLASS ACTION COMPLAINT

ANTHONY PARTIDA, on behalf of himself and all others similarly situated,

VS.    

HITACHI AMERICA, LTD., 

HITACHI ELECTRONIC DEVICES (USA), INC., 

and HITACHI HOME ELECTRONICS 

(AMERICA), INC. 

Defendants.

Anthony Partida, on behalf of himself and all others similarly situated, by and through his attorneys, makes the following allegations and claims for his complaint against Hitachi America, Ltd, Hitachi Electronic Devices (USA), Inc. and Hitachi Home Electronics (America), Inc. The following allegations are made upon information and belief, except as to allegations specifically pertaining to plaintiff, which are made upon knowledge.

JURISDICTION AND VENUE

1.       This Court has jurisdiction over all causes of action asserted herein pursuant to 28 U.S.C. § 1332(d), because the aggregate claims of the Class exceeds the sum or value of $5,000,000.00, and there is diversity of citizenship between proposed class members and defendants.

2.       Venue is proper in this district under 28 U.S.C. § 1391(a)(2). All defendants conduct substantial business in this District, including conduct directed at members of the Class, including the promotion, sale, and marketing of their products, sufficient to render all of them within the jurisdiction of this Court. The events and conduct giving rise to the violations of law in this action constitute interstate commerce, and a significant portion thereof occurred in this District.

PRELIMINARY STATEMENT

3.       This class action is brought by plaintiff seeking damages and equitable relief on his own behalf and on behalf of all others similarly situated in the United States who have purchased Hitachi LCD Rear Projection Televisions (the "Televisions"), with Hitachi model number 50V500A. Plaintiff alleges that the Televisions possess a characteristic and inherent defect (the "Defect"). The Defect causes green blobs, red "bloom," green haze, blue dots, yellow lines and other color anomalies to be displayed across the screens of the Televisions, severely interfering with the program display, and rendering the Televisions unsuitable for their principal purpose.

4.       As such, Hitachi has perpetuated a massive consumer fraud upon no fewer than tens of thousands of unsuspecting consumers. Hitachi marketed these Televisions as high-end videophile devices, with a high definition picture far superior to that provided by a standard television, and these claims allowed Hitachi to command suggested retail prices for these units of $3500.00 or more. In fact however, the Defect contained in the Televisions, and the blobs, haze, lines and other color anomalies that it causes to appear across the screens, render them essentially useless.

PARTIES

5.       Plaintiff Anthony Partida purchased a Television containing the Defect and is a citizen and resident of Dallas, Texas.

6.       Defendant Hitachi America, Ltd. ("Hitachi America") is a New York corporation with its principal place of business at 50 Prospect Ave., Tarrytown, New York. During the time period covered by this Complaint, Hitachi America sold and distributed Televisions throughout the

United States. This Defendant may be served with process by serving its registered agent, Prentice Hall Corporation System, 14 Centre Street, Concord, New Hampshire 03301-6302.

7.       Defendant Hitachi Electronic Devices (USA), Inc. ("Hitachi Electronic Devices") is a Delaware corporation with its headquarters at 2000 Sierra Point Parkway, Brisbane, CA 94005. During the time period covered by this complaint, Hitachi Electronic Devices (USA), Inc. manufactured, sold and distributed Televisions throughout the United States. This Defendant may be served with process through its registered agent for service of process, Corporation Service Company, 701 Brazos Street, Suite 1050, Austin, Texas 78701.

8.       Defendant Hitachi Home Electronics (America), Inc. ("Hitachi Home Electronics") is a California corporation with its principal place of business at 900 Hitachi Way, Chula Vista, California. During the time period covered by this complaint, Hitachi Home Electronics manufactured, sold and distributed Televisions throughout the United States. This Defendant may be served with process through its registered agent for service of process, CT Corporation System, 818 W. 7th Street, Los Angeles, CA 90017-3407.

9.       Defendants Hitachi America, Hitachi Electronic Devices and Hitachi Home Electronics are referred to collectively in this. Complaint as "Hitachi" or the "Hitachi Defendants."

10.     Plaintiff is informed and believes and thereon alleges that at all relevant times, each of the defendants was the agent, servant, representative successor, successor in interests and employee of the remaining co-defendants, and in doing the things hereinafter alleged, each was acting within the course and scope of said agency and employment and with the ratification and authorization of its respective principals.

STATEMENT OF FACTS

11.     HDTV refers to high definition television, a method of portraying television images in high resolution, with a high degree of picture detail and accuracy. As such, HDTV televisions command prices several times higher than those for common standard definition television sets. Consumers purchasing HDTV televisions therefore pay a significant premium for the ability to enjoy the high quality picture such television sets offer.

12.     Hitachi offers its Televisions to capitalize on this market, offering high definition resolution and large screens to consumers desiring the best video experience available. Hitachi's marketing materials represent that 50V500A brings LCD TV to "remarkable levels of picture quality" designed to deliver an "incredible LCD viewing experience." These claims have allowed Hitachi to command premium prices for these Televisions, which it has successfully marketed as suitable for the most discerning videophiles seeking accurate color reproduction at the highest resolutions and fidelity possible.

13.     Consumer's experiences with these Televisions, however, have been completely contrary to what was explicitly represented by Hitachi. Consumers have been dismayed to find that the Televisions display not the clear, color accurate picture which they have paid so dearly for, but rather display green blobs, red "bloom", green haze, blue dots, yellow lines and other color anomalies in various parts of the viewing screen over the displayed program. These color defects greatly interfere with the viewing of the video program, and render the Televisions unsuitable for their intended purpose.

14.     The green blobs, red "bloom," green haze, blue dots, yellow lines and other color anomalies are believed to be caused by a condition in the Televisions' "light engine" and related componentry which causes the unwanted coloration to be produced on the screen. The light engine is the video component that causes the video signal to be displayed as a picture on the viewing screen. The defect in the light engine and related components in the Televisions generate the offending green blobs, red "bloom", green haze, yellow lines and other color anomalies.

15.     To date, despite persistent consumer demands, Hitachi has been unable or unwilling to develop or offer consumers any permanent fix for the Defect. Instead, Hitachi has refused to repair the Defect or, (in some cases) offered to replace the light engine with identical units containing – but not yet manifesting – the Defect, but has done nothing to correct the underlying cause of the Defect. As a result, although the new light engines serve as a temporary "band-aid" solution, the underlying Defect remains, and will cause the green blobs, red "bloom," green haze, blue dots, yellow lines and other color anomalies to reappear anywhere from several weeks to several months after installation, depending on usage.

16.     Hitachi has known about the Defect contained in the Televisions since no later than early 2005, and likely earlier. Despite this fact, Hitachi has continued to misrepresent to consumers that the Televisions provide excellent video quality and has omitted to disclose to consumers the existence of the Defect – none of whom would have purchased the Televisions had they known of this material fact.

17.     As a result of Hitachi's actions, all consumers who have purchased the Televisions have been damaged.

CLASS ACTION ALLEGATIONS

18.     Plaintiff brings this action on behalf of himself and all other members of the class consisting of all purchasers of the Televisions in the United States (the "Class"). Excluded from the Class are defendants herein, and any person, firm, trust, corporation, or other entity related to or affiliated with defendants, including, without limitation, persons who are directors of Hitachi.

19.     The Class is composed of no fewer than tens of thousands of persons nationwide and is sufficiently numerous for class treatment. The joinder of all Class members individually in one action would be impracticable, and the disposition of their claims in a class action will provide substantial benefits to the parties and the Court.

20.     Plaintiff's claims are typical of the claims of the Class, and plaintiff has no interests adverse to the interest of the other members of the Class.

21.     This dispute raises questions of law and fact that are common to all Class members. Those common questions predominate over questions that arise on an individual basis for Class members. The common questions of law and fact include, without limitation:

(a)     Whether Hitachi's representations, omissions, and conduct regarding the Televisions were misleading or false;

(b)     Whether Hitachi's representations and conduct were likely to deceive consumers into believing that the Television operated properly;

(c)     To the extent State laws prohibiting consumer deception are applicable, whether Hitachi violated the respective laws of those States;

(d)     When Hitachi initiated the deceptive marketing campaign;

(e)     Whether Hitachi undertook a course of conduct to hide the existence of the Defect from the members of the Class;

(f)      Whether the Defect constitutes a manufacturing or design defect;

(g)     Whether the Defect constitutes a breach of Hitachi's warranties;

(h)     Whether the members of the Class have been injured by Hitachi's conduct;

(i)      Whether the members of the Class have sustained damages and are entitled to restitution as a result of Hitachi's wrongdoing and, if so, what is the proper measure and appropriate formula to be applied in determining such damages and restitution; and

(j)      Whether the members of the Class are entitled to injunctive relief.

22.     Plaintiff will fairly and adequately protect the interests of the Class and has retained counsel experienced and competent in the prosecution of class action litigation.

23.     A class action is superior to other methods of the fair and efficient adjudication of the claims herein asserted. Plaintiff anticipates that no unusual difficulties are likely to be encountered in the management of this class action.

24.     A class action will permit a large number of similarly situated persons to prosecute their common claims in a single forum simultaneously, efficiently, and without the duplication of effort and expense that numerous individual actions would engender. Class treatment also will permit the adjudication of relatively small claims by many Class members who could not otherwise afford to seek legal redress for the wrongs complained of herein. If a Class or general public action is not permitted, Class members will continue to suffer losses and Hitachi's misconduct will continue without proper remedy.

25.     Hitachi has acted and refused to act on grounds general applicable to the entire Class, thereby making appropriate final injunctive relief or corresponding declaratory relief with respect to the Class as a whole.

FIRST CAUSE OF ACTION

Unfair and Deceptive Acts and Practices Under State Laws

(Against All Defendants)

26.     Plaintiff fully incorporates by reference each of the preceding paragraphs 1 through 3 as though fully set forth herein.

27.     To the extent that these laws are applicable to Hitachi's conduct in this matter, the practices discussed above constitute unfair competition or unfair, unconscionable, deceptive or fraudulent acts or business practices in violation of the state consumer protection statutes listed in 31-75.

28.     Defendants have engaged in unfair competition or unfair or deceptive acts or practices in violation of Cal. Bus. & Prof. Code § 17200, et seq.

29.     Defendants have engaged in unfair competition or unfair or deceptive acts or practices in violation of Alaska Stat. § 45.50.471, et seq.

30.     Defendants have engaged in unfair competition or unfair or deceptive acts or practices in violation of Ariz. Rev. Stat. § 44-1522, et seq.

31.     Defendants have engaged in unfair competition or unfair or deceptive acts or practices in violation of Ark. Code § 4-88-101, et seq.

32.     Defendants have engaged in unfair competition or unfair or deceptive acts or practices in violation of Cal. Bus. & Prof. Code § 17200, et seq.

33.     Defendants have engaged in unfair competition or unfair or deceptive acts or practices in violation of Colo. Rev. Stat. § 6-1-105, et seq.

34.     Defendants have engaged in unfair competition or unfair or deceptive acts or practices in violation of Conn. Gen. Stat. § 42-110b, et seq.

35.     Defendants have engaged in unfair competition or unfair or deceptive acts or practices in violation of 6 Del. Code. § 2511, et seq.

36.     Defendants have engaged in unfair competition or unfair or deceptive acts or practices in violation of D.C. Code § 28-3901, et seq.

37.     Defendants have engaged in unfair competition or unfair or deceptive acts or practices in violation of Fla. Stat. § 501.201, et seq.

38.     Defendants have engaged in unfair competition or unfair or deceptive acts or practices in violation of Ga. Stat. § 10-1-392, et seq.

39.     Defendants have engaged in unfair competition or unfair or deceptive acts or practices in violation of Haw. Rev. Stat. § 480, et seq.

40.     Defendants have engaged in unfair competition or unfair or deceptive acts or practices in violation of Idaho Code § 48-601, et seq.

41.     Defendants have engaged in unfair competition or unfair or deceptive acts or practices in violation of 815 ILCS § 505, et seq.

42.     Defendants have engaged in unfair competition or unfair or deceptive acts or practices in violation of Kan. Stat. § 50-623, et seq.

43.     Defendants have engaged in unfair competition or unfair or deceptive acts or practices in violation of Ky. Rev. Stat. § 367.110, et seq.

44.     Defendants have engaged in unfair competition or unfair or deceptive acts or practices in violation of La. Rev. Stat. § 51:1401, et seq.

45.     Defendants have engaged in unfair competition or unfair or deceptive acts or practices in violation of 5 Me. Rev. Stat. § 207, et seq.

46.     Defendants have engaged in unfair competition or unfair or deceptive acts or practices in violation of Md. Corn. Law Code § 13-101, et seq.

47.     Defendants have engaged in unfair competition or unfair or deceptive acts or practices in violation of Mass. Gen. L. Ch. 93A, et seq.

48.     Defendants have engaged in unfair competition or unfair or deceptive acts or practices in violation of Minn. Stat. § 8.31, et seq.

49.     Defendants have engaged in unfair competition or unfair or deceptive acts or practices in violation of Vernon's Missouri Stat. § 407.010, et seq.

50.     Defendants have engaged in unfair competition or unfair or deceptive acts or practices in violation of Mont. Code § 30-14-101, et seq.

51.     Defendants have engaged in unfair competition or unfair or deceptive acts or practices in violation of Neb. Rev. Stat. § 59-0601, et seq.

52.     Defendants have engaged in unfair competition or unfair or deceptive acts or practices in violation of Nev. Rev. Stat. § 598.0903, et seq.

53.     Defendants have engaged in unfair competition or unfair or deceptive acts or practices in violation of N.H. Rev. Stat. § 358-A:1, et seq.

54.     Defendants have engaged in unfair competition or unfair or deceptive acts or practices in violation of N.J. Rev. Stat. § 56:8-1, et seq.

55.     Defendants have engaged in unfair competition or unfair or deceptive acts or practices in violation of N.M. Stat. § 57-12-1, et seq.

56.     Defendants have engaged in unfair competition or unfair or deceptive acts or practices in violation of N.Y. Gen. Bus. Law § 349, et seq.

57.     Defendants have engaged in unfair competition or unfair or deceptive acts or practices in violation of N.C. Gen. Stat. § 75-1.1, et seq.

58.     Defendants have engaged in unfair competition or unfair or deceptive acts or practices in violation of N.D. Cent. CODE § 51-15-01, et seq.

59.     Defendants have engaged in unfair competition or unfair or deceptive acts or practices in violation of Ohio Rev. Stat. § 1345.01, et seq.

60.     Defendants have engaged in unfair competition or unfair or deceptive acts or practices in violation of Okla. Stat. 15 § 751, et seq.

61.     Defendants have engaged in unfair competition or unfair or deceptive acts or practices in violation of Or. Rev. Stat. § 646.605, et seq.

62.     Defendants have engaged in unfair competition or unfair or deceptive acts or practices in violation of 73 Pa. Stat. § 201-1, et seq.

63.     Defendants have engaged in unfair competition or unfair or deceptive acts or practices in violation of R. I. Gen. Laws § 6-13.1-1, et seq.

64.     Defendants have engaged in unfair competition or unfair or deceptive acts or practices in violation of S.C. Code Laws § 39-5-10, et seq.

65.     Defendants have engaged in unfair competition or unfair or deceptive acts or practices in violation of S.D. Code Laws § 37-24-1, et seq.

66.     Defendants have engaged in unfair competition or unfair or deceptive acts or practices in violation of Tenn. Code § 47-18-101, et seq.

67.     Defendants have engaged in unfair competition or unfair or deceptive acts or practices in violation of Tex. Bus. & Com. Code § 17.41, et seq.

68.     Defendants have engaged in unfair competition or unfair or deceptive acts or practices in violation of Utah Code § 13-11-1, et seq.

69.     Defendants have engaged in unfair competition or unfair or deceptive acts or practices in violation of 9 Vt. § 2451, et seq.

70.     Defendants have engaged in unfair competition or unfair or deceptive acts or practices in violation of Va. Code § 59-1-196, et seq.

71.     Defendants have engaged in unfair competition or unfair or deceptive acts or practices in violation of Wash Rev. Code § 19.86.010, et seq.

72.     Defendants have engaged in unfair competition or unfair or deceptive acts or practices in violation of West Virginia Code § 46A-6-101, et seq.

73.     Plaintiff and members of the Class have been injured by reason of Defendants' unfair and deceptive acts and practices in regard to their manufacturing, marketing, sale, and warranty practices relating to the defective Televisions. These injuries are of the type that the above State consumer protection statutes were designed to prevent, and are the direct result of the Defendants' unlawful conduct.

SECOND CAUSE OF ACTION

Breach of Express Warranty

(Against All Defendants)

74.     Each of the above allegations is incorporated herein.

75.     Hitachi's affirmations of fact and/or promises relating to the Televisions creates express warranties that the products purchased by Plaintiff and the Class would operate properly and without defects, and would therefore portray video without extraneous artifacts which would impair the viewing of the video program.

76.     Alternatively, Hitachi's descriptions of the Televisions became part of the bases of the bargains between consumers and Hitachi, creating express warranties that the product purchased by Plaintiff and the Class would conform to Hitachi's representations.

77.     In fact, the products purchased by the Plaintiff did not so conform.

78.     As a result of the foregoing, Plaintiff and the Class have suffered damages. THIRD

CAUSE OF ACTION

Violation of Magnum-Moss Act (15 U.S.C. § 2301 et seq.

(Against All Defendants)

79.     Each of the above allegations is incorporated herein.

80.     Plaintiff and the Class are consumers as defined in 15. U.S.C. § 2301(3).

81.     Defendants are suppliers and warrantors as defined in 15. U.S.C. § 2301(4)(5).

82.     The Televisions are consumer products as defined in 15. U.S.C. § 2301(6).

83.     By reason of Hitachi's breach of its express written warranties stating that the Televisions would operate properly, were free from material defects, and that it would repair or replace any such defects, Defendants have violated the statutory rights due the Plaintiff and the Class pursuant to the Magnuson-Moss Warranty Act, 15 U.S.C. § 2301 et seq., thereby damaging Plaintiff and the Class.

FOURTH CAUSE OF ACTION

Breach of Implied Warranty

(Against All Defendants)

84.     Each of the above allegations is incorporated herein.

85.     Hitachi's affirmations of fact and/or promises relating to the Televisions created implied warranties that the products purchased by Plaintiff and the Class would operate properly and without defects, and would therefore portray video without extraneous artifacts that would impair the viewing of the video program.

86.     Alternatively, Hitachi's descriptions of the Televisions became part of the bases of the bargains between consumers and Hitachi, creating implied warranties that the product purchased by Plaintiff and the Class would conform to Hitachi's representations.

87.     In fact, the products purchased by Plaintiff and the Class did not so conform.

88.     As a result of the foregoing, Plaintiff and the Class have suffered damages.

PRAYER FOR RELIEF

WHEREFORE, Plaintiff respectfully requests that this Court enter judgment as follows:

A.       Declaring that this action is properly maintainable as a class action and certifying Plaintiff as a class representative;

B.       Awarding damages to Plaintiff and the other Class members for Hitachi's breach of contract;

C.      Awarding restitution and disgorgement as a result of Hitachi's unfair business practices and untrue and misleading advertising;

D.      Requiring Hitachi to inform the public of the Defect possessed by its Televisions and enjoining Hitachi from refusing to perform its warranty obligations;

E.       Awarding pre and post judgment interest;

F.       Awarding attorneys fees, expenses and costs; and

G. Providing such other and further relief as this Court may deem just and proper.

JURY DEMAND

Plaintiff demands trial by jury and has tendered herewith the appropriate fee.

DATED: ________ 2008.

Respectfully submitted,

Eric D Pearson 

State Bar No. 15690472 

John W. Pate 

State Bar No. 24040092 

HEYGOOD, ORR, REYES, PEARSON & BARTOLOMEI 

2331 W. Northwest Highway, 2nd Floor Dallas, Texas 75220 

(214) 526-7900 Telephone 

(214) 526-7910 Facsimile

ATTORNEYS FOR PLAINTIFF

OG Nation Engages Leading Litigation Law Firm; Files Multi-Million Dollar Lawsuit Against InvestSource and Others Responsible For Disseminating False, Misleading and Unauthorized Press
Monday, January 28, 2008 / Gilbert, Arizona

OG Nation, Inc. (OTC: OGNA), on behalf of its shareholders and its board of directors, has engaged the law firm of Heygood, Orr, Reyes, Pearson & Bartolomei (www.reyeslaw.com) and charged them to aggressively prosecute an action against a number of parties, including InvestSource, Inc., as well as other individuals and entities, related to their dissemination of false and misleading information about the company.
Commenting on the unauthorized, false and misleading information that was recently disseminated by InvestSource through MarketWire, as well as other activities InvestSource and others have been undertaking – to the detriment of the company and its shareholders - Giovanni Luciano, CEO of OG Nation stated, “We are not in the business of filing lawsuits.  On the contrary, we are in the business of designing, marketing and selling delicious beverages to our customers.  However, when our executive team and our board were shocked by the issuance of the recent press release about our company, and of course the subsequent dramatic drop in the price of our stock on unusual volume, we decided that we would not stand by while these bullies tried to put their boots on our corporate neck.”
“Filing this lawsuit is our response to the business practices of the parties that we trusted to help make this company a publicly traded company.  Heygood is the right law firm to help us get our message across to the defendants – that we are not going to stand by and let them destroy our company – our ability to obtain financing, our ability to operate and our ability to create value for our shareholders.”
Mr. Luciano added, “Just as we are proud that we have stood up to the bullies at InvestSource, we are even happier to report that the allegations made in the InvestSource press release are patently false.  We currently have thousands of cases of Hydro Power and Atomic Dogg in inventory.  And we are in the final stages of our negotiations with one of the largest beverage distributors on the Eastern Seaboard.  We cannot guarantee the success of everything we are doing, but as of the date of the InvestSource press release we were in an outstanding position to roll out our products and serve our markets.  Just like our founding shareholder Jim Brown did when he faced formidable odds in the NFL, we intend to fight on, use our strengths and continue to break through all barriers, including the most recent ones put in front of us by the defendants to this lawsuit.

Top Court Limits Shareholder Fraud Suits
By JESS BRAVIN and KARA SCANNELL
January 16, 2008; Page A4

WASHINGTON -- In the latest of a series of victories for Wall Street, the Supreme Court sharply limited the ability of shareholders defrauded by a company to sue other parties, including advisers, lawyers and accountants.

If the ruling had gone the other way, it could have expanded the power of defrauded shareholders to sue, invigorating the multibillion-dollar field of securities class-action lawsuits.
 

WSJ's Ashby Jones on the recent Supreme Court ruling that says investors can't bring private lawsuits against third parties in corporate-fraud cases unless they relied on actions by those parties when making investment decisions.

Instead, the court's opinion maintains a status quo and extends Wall Street's winning streak on securities cases. This is the fifth securities matter to come out in favor of business since 2004. Wall Street has successfully argued that Congress intended only the Securities and Exchange Commission to police fraud, not to open the door to lawsuits by private shareholders.

In particular, the ruling dims the hopes for shareholders in big accounting frauds, such as Enron Corp., where the perpetrator is bankrupt but firms that allegedly contributed to the fraud remain in business.

Yesterday's 5-3 vote illustrated a close division not only among the justices but within the Bush administration. The SEC took the position that federal law permits private lawsuits against third parties. But the White House, responding in part to concerns from Wall Street, overruled the SEC and directed the Justice Department to argue against allowing the shareholders suits.

There has been an intense public-relations battle over the case between two deep-pocketed enemies: the trial bar and big business, both of which mustered an array of supporters to file briefs in the case.

The spotlight now shifts to the SEC, which the court found has exclusive authority to pursue actions against third parties. With control of the SEC up for grabs in this year's presidential election, it raises November's stakes.

In light of the decision, "one of the most important questions that will be decided by the 2008 [election] is the SEC," said Rep. Barney Frank, the Massachusetts Democrat who heads the House Financial Services Committee. While praising the current Republican chairman, Christopher Cox, Mr. Frank said the "big issue is who fills the SEC vacancies."

The Stoneridge case, as it is known, revolved around an episode near the end of the 1990s dot-com bubble. Charter Communications Inc., a St. Louis cable provider, engaged in accounting fraud to meet analyst expectations. Four former Charter employees were indicted and pleaded guilty to conspiracy. The company also agreed to pay $144 million to settle a class-action suit led by one of its shareholders, Stoneridge Investment Partners of Malvern, Pa.

Stoneridge also sued Motorola Inc. and Scientific-Atlanta, now a unit of Cisco Systems Inc. Both vendors agreed to charge artificially high prices for cable boxes they sold to Charter. They used the extra money to "buy" advertising from Charter, money Charter used to inflate its bottom line.

At issue was what role third parties must play in order for them to face liability. Companies contend that private lawsuits are limited to cases in which investors rely on fraudulent statements. They also say suits can be brought only against those who control the fraud. The court agreed.

"We conclude the private right of action does not reach the customer/supplier companies because the investors did not rely upon their statements or representations," Justice Anthony Kennedy wrote in the majority's opinion. He said investors must rely on deceptive acts in order for a civil lawsuit to succeed.

He was joined in the majority by Chief Justice John Roberts and Justices Antonin Scalia, Clarence Thomas and Samuel Alito. In dissent, Justice John Paul Stevens, joined by Justices David Souter and Ruth Bader Ginsburg, complained that the court was on a "continuing campaign to render" private shareholders' right to sue "toothless." Justice Stephen Breyer recused himself. He owns Cisco Systems shares.

Still, the complexity of securities law means the potential for certain third-party suits -- and the exact implications for the Enron cases -- may be unclear. The University of California lost in the lower courts when it sued Wall Street banks, including Merrill Lynch & Co., which worked with Enron. It has its own appeal pending at the Supreme Court.

Spokesmen for Merrill Lynch and the SEC declined to comment.

(Stoneridge Investment Partners v. Scientific-Atlanta Inc. and Motorola Inc.)

Illegals and business: A glimpse of the future?
Feds’ fierce probe of meatpacker Swift seen an ominous sign for employers
By Susan Berfield
updated 5:43 p.m. CT, Fri., Jan. 4, 2008

Sometime soon, perhaps by the end of this month, Christopher Lamb may plead guilty to harboring an illegal alien. Lamb, 37, was a human resources assistant manager at Swift & Co., among the largest beef and pork processors in the U.S. As immigration emerges as one of the most contentious issues of this election season, his case is emblematic of newly aggressive tactics against management by the U.S. Immigration & Customs Enforcement Agency, or ICE.

Selling off your life insurance may be a bad policy
Thursday, November 29, 2007
Anita Huslin, The Washington Post

The deal the broker discussed with his well-heeled client seemed like a good idea: Buy a $10 million life insurance policy, and if the client wanted to raise some cash, the broker could sell the policy to an investor for a tidy profit.

So the client took advantage of the offer. The broker resold the $10 million policy later that year, yielding a $550,000 windfall for the client.

The investors who bought the policies, who remain unidentified, took over payment of the premiums and became the new beneficiaries. The client followed up that transaction by selling a second $5 million policy on his life, earning $850,000. Another unknown investor became the beneficiary.



MICHAEL HOGUE/DMN

Then the client had second thoughts. In a lawsuit, he claimed he was not fully apprised of the ramifications of what he was doing. Further, he contended that the broker failed to tell him that the new policies, now in an outsider's hands, would significantly reduce his ability to buy additional life insurance.

The client, CNN talk show host Larry King, thus became the subject of a cautionary tale in what insurance regulators say is a quietly but rapidly booming trend among wealthy Americans: selling one's life insurance to strangers.

Patchwork of info

Comprehensive data on the secondary market for insurance policy sales is incomplete, in part because states regulate the industry and do not collect information uniformly. But industry analysts suggest that if the pace of life insurance policy resales over the past several years is any indication, the $30 billion that traded hands last year could easily grow to more than $150 billion over the next decade.

"The lure of easy money is seducing participants into the secondary market for life insurance and putting life insurers in compromising positions," Fitch Ratings said in a special report in September. "The flow of capital to date and the potential for this market have created a gold rush atmosphere, increasing risks for all involved."

Improprieties alleged

In Larry King's case, the talk show host alleges that Bethesda, Md., insurance broker Alan Meltzer did not properly review the tax implications for Mr. King if he sold the policies. The suit claims that Mr. Meltzer did not disclose the full amount of commissions, fees and payments he received, nor did he act in good faith to find prospective purchasers who would pay a higher price. The broker also did not properly advise Mr. King on whether he would have been better off keeping the new policies and selling older ones, the suit claims.

Mr. Meltzer, through his office, declined to comment. He denied the accusations in a response to Mr. King's suit, filed in California. Mr. Meltzer contends in the response that Mr. King was "very interested in selling his insurance on the marketplace at a substantial profit. This is what happened."

The broker also alleges that "Larry King pretends that he was interested in purchasing additional life insurance. ... During each of the transactions complained of, [we] expressly told Larry King's advisers that Larry King was better off keeping the new insurance rather than selling."

Mr. King's attorney, Marshall Grossman, described the practice of flipping insurance policies as "an issue that has been hidden from view for too long, in part because many people who have been victimized are quite likely embarrassed and have sufficient means so that they just move on."

Bigger questions

Industrywide, there are bigger questions about the ethics and legality of brokers selling policies so they can then flip them.

"If somebody owns several million dollars of insurance on my life who I don't know ... it would make me a little nervous to know someone had an interest in having me dead quick," said Joseph Belth, editor of Insurance Forum. "Because not only do they not want to have to wait for their money, but they don't want to pay for the premiums for long."

Prohibitions against stranger-initiated life insurance date back to 16th-century England, when people would bet on whether ships and seamen would return to port. To remove overt financial incentives for a third party to take out a policy on a person and then see him dead, English courts mandated that individuals have a personal or economic interest in a person to buy insurance on him.

But the sale of insurance policies to third parties came into favor in the 1980s as a way for AIDS patients to get cash from their life insurance policies before they died. Those transactions were legal because the policies were not bought with the intent of flipping them. In recent years, however, with the number of wealthy baby boomers rising, the opportunities for brokers to make commissions on policies for them have grown.

Over the past year, at least a half-dozen states have warned consumers about predatory insurance brokers who offer to sell individuals expensive policies with the intent of turning around and selling them to third-party investors who will pay the premiums in exchange for becoming the policies' beneficiaries.

"It is not illegal for somebody to approach Larry King and say, 'There's great value in a life insurance policy and I'll loan you the money to pay for it,' " said Doug Head, executive director of the Life Insurance Settlement Association. "But if there is a prearranged agreement to sell ... or kickbacks to the policy owner to incentivize them to get into the deal, they're all illegal right now, in our view."

Corporate version

There is also a corporate version of stranger-owned life insurance policies that some in the industry would like to address. Last year, Wal-Mart Stores Inc. ran into trouble for taking out life insurance policies on employees. The company reasoned that it had an economic interest in the employees' well-being, making the policies valid.

But opponents argued that employers should not collect death benefits from workers without their knowledge. Wal-Mart paid $5.1 million – the amount it collected after employees died – to settle a class-action suit brought by the workers' estates and families.

Insurance companies generally support efforts to regulate the growing secondary market for life insurance. At least 85 percent of life insurance policies lapse or are dropped by policyholders without companies ever having made any payout, according to Mr. Head and other industry officials. Prices for policies are set with that in mind.

If more and more policies wind up in the hands of investors seeking returns, insurance companies say they may have to raise rates.

Anita Huslin, The Washington Post

Attorney: Scruggs will face uphill, very public battle
11/29/2007
LegalNewsline.com
by John O'Brien
 
Editor's note: This story is the second of two featuring the thoughts of David Rossmiller, an insurance attorney and partner at Dunn Carney in Portland, Ore., on the Wednesday indictment of trial lawyer Richard Scruggs.

JACKSON, Miss. - When the FBI raided Richard "Dickie" Scruggs' office Wednesday, it was safe to assume it had something to do with the federal criminal contempt charges he is facing in Alabama.

Instead, the search produced allegations of attempted bribery, and apparently an even stronger case than the one already filed against him.

The 13-page indictment against Scruggs and four others makes a very strong case against them, said David Rossmiller, an insurance attorney and partner at Dunn Carney in Portland, Ore., who has been analyzing the Gulf Coast's insurance situation for Legal Newsline.

And the charge itself is sure to make many more headlines than criminal contempt, he said.

"Even after I heard about the FBI raid, I didn't want to speculate about it," Rossmiller said. "In part, because it's not fair to Scruggs, but also because I couldn't imagine what it could be about. I thought it was along the lines of the documents with the prosecutions in Alabama."

In Alabama, special prosecutors appointed by U.S. District Judge William Acker hit Scruggs with the contempt charges, claiming he defied an order when he refused to return documents to a claims-handling company working with State Farm Insurance Cos., instead handing them over to Mississippi Attorney General Jim Hood. Hood has a class action suit against five insurance companies over their claims-handling practices after Hurricane Katrina.

The recent indictment, though, struck a nerve. Scruggs is alleged to have offered a state judge $40,000 to enter a favorable order in a lawsuit between his firm and another as they dispute how $26.5 million in attorneys fees from one of Hood's settlements should be divided.

"You have some question whether you think defying a judge's injunction is a big deal," Rossmiller said. "I've seen lots of people say it's not a big deal, but I think it is a big deal to defy a judge's order because that's the bargain you make to keep your license -- obeying and respecting the judge's wishes.

"But nobody is going to say bribery is not a big deal. That's more to the heart of undermining the justice system."

According to the indictment:

-Scruggs and four co-conspirators (son Zack Scruggs and Sidney Backstrom of the Scruggs Katrina Group and Timothy Balducci and Steven Patterson of Balducci and Peterson) decided to attempt to influence the outcome of the suit.

-Balducci received an e-mail with a proposed order asking Lafayette County Circuit Judge Henry Lackey to compel arbitration from Backstrom, and Balducci faxed it to Lackey. On May 9, Balducci had a recorded conversation with Lackey where he said:

"(M)y relationship with Dick is such that he and I can talk very private about these kinds of matters and I have the fullest confidence that if the court, you know, is inclined to rule... in favor... everything will be good.


"The only person in the world outside of me and you that has discussed this is me and Dick... We, uh, like I say, it ain't but three people in the world that know anything about this... and two of them are sitting here and the other one... the other one, uh, being Scruggs... he and I, um, how shall I say, for over the last five or six years there, there are bodies buried that, that you know, that he and I know where... where are, and, and, my, my trust in his, mine in him and his in mine, in me, I am sure are the same."

-After that conversation, Balducci continued to talk with Lackey. In September, he agreed to pay Lackey $40,000 cash. Patterson talked it over with Balducci, who then delivered half of it to Lackey. The feds heard Balducci tell Patterson, "All is done, all is handled and all is well," over the phone.

-Patterson told Balducci to call Scruggs on Oct. 18 after asking what was happening with the order, and Balducci, on the same day, delivered another $10,000 to Lackey. Later that day, Scruggs called Patterson and told him to bring the signed order to his office and cut a $40,000 check for Balducci. To cover it up, Scruggs classified the payment as compensation for jury consulting work.

-On Nov. 1, Balducci, gave another $10,000 to Lackey, who eventually turned everyone in to the FBI.

"It looks solid," Rossmiller said of the indictment. "Sometimes you look at a criminal complaint of indictment and say it looks thin, but in this case they have some really solid stuff. They have things on tape, they have the telephones tapped. It looks like the only thing they apparently don't have is Scruggs voice on tape."

Rossmiller added that Scruggs will be the main target the rest of the way.

"The way the feds work is they put the squeeze on smaller people to get the big ones," he said. "They can get whatever they lack in evidence now, but it already looks strong.

"This is a real tough one. This one's nasty."

Scruggs gained fame by representing the State of Mississippi in its lawsuit against tobacco manufacturers. His firm earned $1.4 billion in fees, and the movie "The Insider" (starring Russell Crowe and Al Pacino) depicted Scruggs' role.

He continued to stay in the spotlight, most recently as one of the loudest voices in Katrina litigation. He claims insurance companies misrepresented to policyholders the amount of damage done by wind (covered by the policies) and flood (covered by a national flood insurance program).

If convicted of the bribery charge, he will be disbarred, Rossmiller said. He also faces up to 75 years in prison and $1.5 million in fines, the Jackson Clarion-Ledger reported.

"Everything that he has done is going to be examined here with a stronger eye, asking did he cut corners here, does it look like he cut corners there," Rossmiller said. "There were already people questioning his message and legacy, and this questions his whole body of work even more.

"It's really shocking to me and quite sad, because I like the guy. I don't know him, but there any many things to admire. He's a terrific advocate and creative lawyer, very smart, hard-working and dedicated.

"Fortunately I have not (known anyone charged with bribing a judge). Some of this nature, I'm not familiar with. I've heard things in far-off places like Illinois or something. Fortunately, this is kind of a rare thing."

Forget Fair; It’s Litigation as Usual
By JOE NOCERA
Published: November 17, 2007

They had the kits ready to go. The “trial package,” they called it.

Then again, as we mass tort aficionados know only too well, the plaintiffs’ bar always develops a trial kit when a mass tort gets to a certain point; it’s one of the weapons trial lawyers use to put pressure on the company they are attacking. The big-time lawyers who bring the early cases — “the keynote cases,” as Russ Herman, a New Orleans plaintiffs’ lawyer, calls them — can wind up spending $1 million to $1.5 million developing their case. They hunt down expert witnesses. They do the discovery. They take the depositions. They hire the jury consultants. Through trial and error, they figure out which documents, which lines of questioning, which approaches, work best.

And then they put their collective knowledge in a neat little package of documents and videotaped depositions and suggested lines of attack, so that all the other lawyers who have sued the same company can partake of their acquired scholarship, and bring their own trials — for a lot less money. “Ours would have allowed a lawyer to try a legitimate case for under $200,000,” said Mr. Herman, with no small touch of pride. He was talking, of course, about the Vioxx litigation, which the drug’s manufacturer, Merck, settled late last week for the tidy sum of $4.85 billion.

Mr. Herman has 120 of the 27,000 cases — that’s right, 27,000 — that were brought against Merck, which took Vioxx off the market three years ago after a study made it clear that the medication increased the risk of a heart attack or stroke. He was also one of the key architects of last week’s settlement. When I spoke to him a few days ago, he defended the settlement as a fair one, which, as he put it, “balances the scales between two competing parties.” He made it sound like standard business negotiation. Which it was.

But he also said something plaintiffs’ lawyers don’t often say out loud — at least not when a reporter is within hearing distance. “A corporate defendant cannot afford to defend thousands of cases where there is an alleged mass disaster at one time,” Mr. Herman said. So true. If we’ve learned anything as mass torts have evolved over the last decade, it is that it scarcely matters anymore whether the facts are on the plaintiffs’ side — not when a thousand lawyers are armed with those kits.

When the litigation got under way in 2004, Kenneth C. Frazier, then Merck’s general counsel, vowed to defend every case. But that was never a believable statement. When you are a corporation facing 27,000 lawsuits, the question is never whether you’re going to settle. The only questions are when and for how much.

Well, actually, there is one other question, though in a society as litigious as ours, it is rarely raised. Is a mass tort really the right mechanism to settle disputes about product safety, or to punish corporate wrongdoing?

Vioxx was hardly Merck’s finest hour. I’ll readily concede that point. The company did things it shouldn’t have. For decades, Merck was the most admired pharmaceutical company in the world, with a sterling reputation for producing high-quality, innovative drugs. But like its competitors, it caught a serious case of blockbuster fever in the 1990s. In its effort to crank out drugs with $1 billion or more in annual sales — the definition of a blockbuster drug — it over-reached. The Vioxx fiasco was the result.

Vioxx, you may recall, was a painkiller that was originally aimed at a pretty small group of patients: people who suffered serious stomach problems as a result of taking aspirin regularly. But Merck spent hundreds of millions of dollars marketing Vioxx, largely through direct-to-consumer advertising, portraying it as some kind of miracle pain reliever. So instead of having a few hundred thousand users in the short time it was on the market, it had 20 million. Its annual sales grew to $2.5 billion a year.

Even before the drug was approved by the Food and Drug Administration, there were rumblings in the scientific community that Vioxx might increase the risk of heart attacks or strokes. It’s not quite right to say that Merck completely ignored those potential problems — but the company certainly tried to avert its eyes.

“Once a drug has been approved, there is a marketing enthusiasm that takes over that doesn’t want to deal with the risks and wants to promote the drug,” said Bruce Psaty, a drug safety expert at the University of Washington. At Merck, Dr. Psaty added, “there was a kind of studied ignorance” of the possibility that Vioxx could increase the chances of a heart attacks — even after one study, called Vigor, suggested that the drug could quadruple the heart attack risk. Only in 2004, when another study confirmed the increased risk, did Merck finally react — by taking the drug off the market.

If Merck’s first mistake was overselling the drug, its last mistake was withdrawing it entirely. The company says it did so because it was putting patient safety first, but from a litigation standpoint, it was like walking into a bullring dressed in red. On the one hand, withdrawing the drug meant keeping it from the small population that really needed it. On the other hand, the act of pulling the drug turned a trickle of lawsuits into a torrent. In its naïveté, Merck thought that its move would win it plaudits for “doing the right thing.” Instead, its decision was viewed by the plaintiffs’ bar as an admission of guilt — and the perfect club with which to beat the company into submission.

There are many problems with viewing product liability lawsuits as a means to right wrongs, which is how we see them in this country. They often make lawyers rich while the people who say they were hurt wind up with very little. The legal system gives corporations zero incentive to step forward if there is evidence that a drug might have a harmful side effect — because, after all, they’ll get sued as soon as they make such an admission. Third, even the smartest lawyers aren’t the Food and Drug Administration, which is charged with making decisions about which drugs should be allowed on the market and how their risks should be disclosed. Mass torts have become a rogue form of regulation, and not necessarily in the public interest. And finally, when you get right down to it, litigation is a crapshoot, and it can be cruelly unfair.

That was certainly true of Vioxx, whose potential side effect is one of the most common serious conditions known to mankind: a heart attack. It is impossible to know what causes someone to have a heart attack, just as it is impossible to know why someone develops cancer. In the Vioxx litigation, the plaintiffs’ lawyers were arguing, in effect, that the way to punish the company’s bad behavior was to make it hand their clients large sums of money, even though they couldn’t prove that the clients’ heart attack had been induced by Vioxx. Meanwhile, the company argued that it was just as likely, if not more likely, that some other risk factor was involved, like smoking or obesity — even though it had put a product on the market that increased heart attack risk.

As a result, a handful of lucky people who may well have been victims of their own bad habits — and not of Vioxx — won large sums of money. (Although they haven’t seen a penny yet: every case the plaintiffs won is on appeal.) And some people who may well have suffered because of Vioxx lost their cases and didn’t get a penny. How does such a system even approximate “justice”?

Over the last year, Merck had gained the upper hand. It was winning most of the cases, as juries bought into its arguments that there was simply no proof that Vioxx had caused the plaintiffs’ heart attacks. And the plaintiffs’ lawyers, who had invested upwards of $100 million developing the litigation and had yet to receive a penny, were on the run.

So why, then, did Merck settle? Because it had no choice. The four judges managing most of the cases had decided that the time had come to settle the litigation, and Merck was not in a position to say no to the judges. If Merck had continued to fight, the judges could have piled on so many trials that the company would have been begging for mercy. Besides, Merck had won enough cases that it felt it could devise a settlement that it could live with.

Which it did. The sum is a very large one, but not nearly as large as Wall Street once feared; not surprisingly, the stock jumped when the $4.85 billion deal was announced. With the litigation behind it, Merck can focus on being a great pharmaceutical company again, something it was doing even before it settled the Vioxx mass tort.

The company is taking particular pride in the hoops claimants will have to jump through to wind up with some of the $4.85 billion. People who were the healthiest and took Vioxx the longest will get the most money — which is still not the same as saying that people who had Vioxx-induced heart attacks will get compensated. Because, after all, that can never be proved. There has to be better way, doesn’t there?

As for the plaintiffs’ lawyers, they are likely to pocket around $1.5 billion of the settlement money, which means that Merck will wind up feeding the beast, just like every other company that finds itself embroiled in a mass tort. That money will go to funding the next mass tort. In fact, shortly after the settlement, I heard Mark Lanier, the flamboyant Texas lawyer who won the first Vioxx case, tell CNBC that he would take his winnings “and put it back into more litigation to try to help hold the pharmaceutical industry accountable.”

When I spoke to him on Thursday, I asked which drug he was going after next. “I’m one of the leaders in the Avandia litigation,” he boasted. Avandia is a controversial diabetes drug marketed by GlaxoSmithKline; studies have suggested that taking it increases the risk of — wouldn’t you know it? — heart attack and stroke. Just this week, the F.D.A. strengthened the language on Avandia’s black box warning, though it’s still not tough enough to satisfy the drug’s critics.

Although GlaxoSmithKline says there are only 45 lawsuits filed so far, Mr. Lanier told me that he knows of at least 1,500 Avandia cases. He added that he expects the number to top out at 4,000. A judge in Philadelphia has been named to manage the growing litigation. Discovery is expected to begin shortly.

Here we go again.