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BENDECTIN APPEAL UPHOLDS LOWER COURT RULING BUT OVERTURNS DISMISSAL WITHOUT PREJUDICE OF CASES ORIGINALLY FILED BY NON-RESIDENTS IN OHIO COURT

Executive Summary

A U.S. Appeals Court decision to uphold a 1985 Bendectin jury verdict in favor of Merrell Dow over more than 1,100 plaintiffs overturns a section of an earlier post-trial order that dismissed without prejudice certain cases originally filed in Ohio state court. As a result, approximately 50 claims filed originally in Ohio state court by out-of-state residents and later transferred to federal court, where Merrell Dow conceded there was no federal jurisdiction, are dismissed without prejudice, thereby allowing the 13 complainants to file suit in Ohio state court. The U.S. Court of Appeals for the Sixth Circuit, Cincinnati made its ruling on Aug. 30. "We modify the district court order insofar as we find that the district court did have federal question jurisdiction over those Ohio plaintiffs who filed their complaints in federal court," the appellate court said. "We direct the dismissal without prejudice of those 13 actions brought by Ohio citizens in federal court in which Merrell Dow has conceded that no federal question jurisdiction was invoked." In their appeal, the plaintiffs had argued that the federal district court had no jurisdiction over actions initiated by Ohio plaintiffs, actions originally filed in state courts or actions originally filed in other federal courts and later transferred to Cincinnati Federal Court. Other issues raised on appeal included the court's decision not to allow the drug's FDA approval history as evidence, to prevent withdrawal from the common issues trial while permitting new transfers into the case, and to exclude visibly deformed plaintiffs. More importantly, the three-judge panel found that the district court's sole focus on the issue of whether or not Bendectin caused birth defects was proper, noting that Cincinnati Federal Court Judge Carl Rubin "appeared to be genuinely concerned with producing a trial that was as fair and free from error" as humanly possible. "In fact, to have broadened the issues beyond that of causation would have occasioned a real risk of overencumbering the jurors and impairing their ability to reach a knowledgeable and intelligent verdict based upon the evidence and upon the law applicable under the appropriate instructions," Chief Judge Albert Engel wrote. "Plainly Judge Rubin had a massive case management problem to resolve and chose to do so by trying the case on a separate issue that would be dispositive." In structuring the jury trial to focus solely on the causation issue, Rubin prevented any references to Bendectin's FDA approval history from entering the trial. The appellate decision notes that the record "offers no support for plaintiff's claim that a one-sided advantage was given to the defendant to argue that the FDA had approved its drug, while the plaintiffs could not argue to the jury that this approval had been procured through fraud." For Dow Chemical, the appellate decision could signal the beginning and end of a contingent liability assumed in 1981 when the company purchased the Merrell drug business from Richardson Vicks. Merrell Dow discontinued the marketing of Bendectin in 1983, however, the product remains FDA approved. The drug was marketed for 27 years as a treatment of nausea and vomiting associated with pregnancy but discontinued, Merrell Dow said, "because of the costs and pressures resulting from litigation." To date, there have been four trial verdicts in favor of individual plaintiffs, according to the company. Most recently, $ 95 mil. was awarded to a child in Washington, D.C. ("The Pink Sheet" July 27, 1987, T&G-5). A total of 22 jury verdicts, including the one recently upheld, have been in favor of the company.

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