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Tort reform expert questions $500 million verdict against drug makers


By Sean Whaley, Nevada News Bureau: A tort reform expert said in a conference call today he was puzzled at how a jury could find two drug manufacturers liable for the transmission of hepatitis C to a patient at a Las Vegas endoscopy clinic.

Victor Schwartz, general counsel to the American Tort Reform Association, said his review of the case raises questions of how the jury could even get to the point of finding the drug maker responsible, let alone agree next on a massive $500 million punitive damage award.

Schwartz, who said he has no financial interest in the case, made his comments during a telephone conference call with a number of Nevada news media hosted by the Nevada News Bureau. He did not attend the trial but reviewed the facts of the case.

Schwartz said there are three ways to show a product is defective: That the product was manufactured improperly, that it was defective in design, or that there was a failure to warn of how to use the product. None of these issues can be found in the case, he said.

A Clark County District Court jury on Friday awarded the punitive damages to Henry and Lorraine Chanin, who filed suit after Henry Chanin contracted hepatitis C during a colonoscopy at Desert Shadow Endoscopy Center in Las Vegas in 2008. The award was made against Teva Parenteral Medicines and Baxter Healthcare Corp., which manufacture the anesthetic propofol used in endoscopy procedures.

Lawyers for the Chanins argued the propofol vials, which were intended to be used on only one patient, were too large and encouraged nurses at the center to use them on more than one patient, leading to a number of cases of Hepatitis C.

But Schwartz said the vial was clearly marked to indicate it should be used for only one patient.

“I can’t see how a warning could be more clear,” he said. “One patient only.”

“So before we even get to the punitive damage issue, I am troubled, having studied product liability law for almost 40 years, as to whether this product is defective or not,” Schwartz said.

“If you are going to hold companies liable when a clear unequivocal warning is violated, the consequences for product manufactures, or for consumers in terms of availability of products, is not a good consequence,” he said. “That is very odd. I just have never seen it before.”

Schwartz said the punitive damage verdict, if upheld on appeal, could affect product availability in Nevada, forcing consumers to go out of state for some treatments.

Any medical device can be misused by a rogue doctor or clinic, he said.

Providers of medical devices might become more cautious about who they provide their products to in Nevada as a consequence of this verdict, Schwartz said.

The verdict could be a case of attorneys going after the companies with deep pockets if the now-closed clinic and physician did not have adequate insurance, he said. Such practices permeate the law, Schwartz said.

It could also be a consequence of the caps on medical malpractice liability that are in place in Nevada, Schwartz said. If there are liability limits for health care providers, then the “orphan” liability can end up being transferred to a drug company or some other deep pocket, he said.

Schwartz said he does not have the data to show however, that such a transfer of liability is actually is occurring in states with medical malpractice limits.

The American Tort Reform Association calls itself the only national organization exclusively dedicated to reforming the civil justice system.

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