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July/August 2014 Issue
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It Isn't Paranoia If They're Really Out To Get You



Tracking the growing risks of nutraceutical litigation.



By Joseph Price, Esq. And Peter Goss



Published June 1, 2001
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When asked why he robbed banks, the notorious safecracker Willy Sutton replied, "That's where the money is." Similarly, as the nutritional and dietary supplements industry has grown into a multibillion-dollar business, it has become a target for plaintiffs' lawyers looking for new cases as litigation involving fen-phen, breast implants, tobacco and other products winds down. Consider the following:

• A jury in Anchorage, AL ordered the manufacturer of an ephedrine based product to pay Rosalie Talbert $13.3 million as a result of a stroke, including $12 million in punitive damages due to the company's "outrageous" behavior in marketing its product. According to the Washington Post, the company's founder and president were both assessed significant damages personally as part of the judgment.

• A recent U.S. News and World Report article reported a $4 million settlement in a Texas case against a supplement company for a stroke allegedly caused by its product, "Ultimate Orange." The same article reports that a California attorney has sued Meta­bolife on behalf of 13 clients who suffered strokes, brain damage, seizures and death, all as a result of taking its popular weight-loss supplement.

• New York plaintiffs' attorney Paul Rheingold, who for years has pursued litigation against the pharmaceutical and medical device industry, recently indicated that the American Trial Lawyers Association (ATLA) will likely create an ephedra litigation group. Mr. Rheingold invited plaintiffs' lawyers to form "teams" to pursue litigation against manufacturers of ephedra and PPA (phenylpropano­lamine), a common ingredient in over-the-counter cold and diet products. Plaintiffs' attorney strategies will be very similar for both products, despite the fact that one is an herbal supplement and the other is a drug.

• A national drug and medical device litigation reporting service (Mealey's Publications) sponsored a two-day seminar on PPA and ephedra litigation in March 2001. Approximately 200 lawyers attended the seminar, whose panelists included plaintiffs' lawyers from throughout the U. S. Many of the panelists were veterans of litigation relating to the Dalkon Shield, breast implants, L-tryptophan, fen-phen, Rezulin and Propulsid. A second seminar is planned for the fall. Mealeys also announced a PPA/Ephedra reporter to be published monthly beginning last month to cover ongoing developments in the litigation.

• Plaintiffs' lawyers are beginning to advertise for cases against nutraceutical manufacturers.

• Physicians who are willing and eager to serve as expert witnesses for plaintiffs against pharmaceutical and nutraceutical companies are beginning to advertise their availability on a national basis.

• Organizations like the Center for Science in the Public Interest are calling for increased government regulation of dietary supplements. They emphasize that recent large verdicts should "send a signal" to the supplement industry about the dangers of products that are not approved for safety and efficacy before they arrive on retail shelves.

Since the days of the L-tryptophan litigation, which generated thousands of lawsuits in the late 1980s and early 1990s, momentum has been building toward a major litigation offensive against nutraceutical manufacturers. As reported previously in Nutraceuticals World (October 2000), numerous factors suggest that supplements may be the next target for mass tort litigation, including the fact that supplements are now a big business, that consumers are more attuned to potential health risks from supplements and that regulatory oversight of the industry continues to be a source of controversy.

Of course, most nutritional supplement manufacturers are responsible, concerned companies interested only in selling high quality products to their customers. In addition, scientific studies generally support the safety and efficacy of most supplement products and studies suggesting the opposite often have serious flaws that undercut their validity. But it would be a costly mistake for the industry to assume that good intentions and good science will be enough to protect it from an onslaught of litigation. The plaintiffs' bar can mobilize rapidly and aggressively, with devastating results for defendants that do not recognize or understand the seriousness of the threat. Plaintiffs' lawyers are extraordinarily resourceful in finding (or inventing) weaknesses and exploiting them to their advantage-often before a company has had time to mount an effective defense.

So What Can We Do?

What can a nutraceutical manufacturer do to avoid these sorts of lawsuits? The sad answer is, absolutely nothing. In our legal system, suits of dubious merit are filed every day and in many cases there is no "quick out" for the defendant-no matter how distorted and unfair the claims may seem.

While there is no avoiding litigation, manufacturers can nevertheless take action to reduce their liability exposure before it hits. Long and short term clinical testing showing the safety and efficacy of supplements will go a long way towards this end. Adopting and adhering to rigorous quality control standards will also reduce exposure. Carefully drafting warning labels to alert consumers to the established risks and avoiding health claims that are unsupportable or impermissible under FDA regulations will be of further benefit.

Voluntary industry-wide standards could quiet the increasing calls for heightened regulatory oversight of nutraceuticals. Similarly, industry sponsored public education efforts on the benefits and risks of taking supplements could help limit exposure for failure to warn. In particular, public education programs to warn consumers not to "self-medicate" serious medical conditions and to alert them to the risks of drug interactions would be especially valuable.

The industry also needs to make sure the public hears the positive story about nutraceuticals. The media needs to have the correct information about supplement benefits and not just the risks, so that consumers (including future jurors) will be provided a less biased account. Needless to say, the plaintiffs' bar will not hesitate to use the media to its advantage and the industry should therefore not hesitate to "set the record straight."

Finally, the industry simply needs to recognize that it is an attractive target for plaintiffs' lawyers. Companies should not feel invincible because their products are "natural" and have been used safely for decades, if not centuries-just ask the manufacturers of breast implants, who paid billions of dollars to plaintiffs and their lawyers despite the lack of scientific evidence validating their claims. Even the most cautious and conscientious manufacturers can be drawn into litigation. It would be a tragic mistake for nutraceutical manufacturers to adopt a "head in the sand" attitude, rather than positioning themselves for the best possible outcome before the lawsuits are filed.

Companies will be faced with de­fending multiple cases in multiple jurisdictions brought by a variety of lawyers, all working together toward the common goal of maximizing their financial gain. The plaintiffs' bar often accumulates large numbers of cases and uses them to leverage a lucrative settlement-which manufacturers often pay simply to avoid bankruptcy. This happened in asbestos, breast implants, fen-phen and other mass-tort litigation. The fact that the product itself may have caused little or no genuine injury is, unfortunately, irrelevant. In the breast implant litigation, which involved tens of thousands of claims, no valid epidemiological studies ever supported the theory that breast implants caused disease. The plaintiffs nevertheless forced huge settlements, mostly because the sheer numbers of claims threatened manufacturers with bankruptcy.

These cases can be defended successfully, but companies must be prepared for a substantial investment of time and money in managing a defense, including hiring a team of experienced litigators to prepare and coordinate cases throughout the country. To respond to plaintiff discovery demands, companies must collect, review, analyze and code massive amounts of documentation. They must interview and enlist witnesses to explain why the product is beneficial, safe and effective. They must recruit well-qualified and knowledgeable "thought-leaders" as expert witnesses in their fields, in contrast to the "hired guns" typically retained by plaintiffs' lawyers. Nutraceutical companies and their lawyers must be prepared to defend multiple suits in state and federal courts, including individual cases, class actions and consolidated multidistrict litigation.

The industry must face the looming issue of litigation sooner rather than later. The train has already left the station, and the plaintiffs have commandeered many of the first-class seats. By hesitating, nutraceutical manufacturers can expect to pay a premium price for a long, bumpy ride in the caboose.

NW

About the authors:

Joseph Price and Peter Goss are attorneys with the Minneapolis law firm of Faegre & Benson. Mr. Price leads the firm's Pharmaceutical and Medical Device Litigation group, which has served as national defense counsel for a wide range of drugs and medical products. He is also chair of the subcommittee on Nutritional and Dietary Supplements of the Defense Research Institute. They can be reached at 612-336-3000, e-mail: jprice@faegre.com or pgoss@faegre.com.


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