Subject: California Bars Foreigners' Filing Product Liability Claims in State Date: Published: 11/22/91 (141 lines) Source: Wall Street Journal. Copyright Dow Jones & Co. Inc. Law -- Legal Beat: California Bars Foreigners' Filing Product Liability Claims in State ---- By Milo Geyelin and Ron Winslow Staff Reporters of the Wall Street Journal Foreigners injured by products manufactured in California and sold abroad may have no choice but to sue in their native land, where the law in product liability cases is less favorable to plaintiffs. That is the message of a California Supreme Court decision that could, if adopted elsewhere, have ramifications for all U. S. manufacturers who market products abroad. The case is the first by a state supreme court to adopt the reasoning enunciated by the U. S. Supreme Court 10 years ago in Piper Aircraft Co. v. Revno, in which the court said that public policy can be a "relevant consideration" when deciding which legal forum -- foreign or U. S. -- foreign plaintiffs should be allowed to choose. Yesterday's decision concerned allegedly defective heart valves manufactured by Shiley Inc., of Irvine, Calif., a unit of Pfizer Inc. The California high court ruled that the families of two Scandinavian patients who died after receiving the valves -- one in Norway; the other in Sweden -- must pursue their suits in their native lands. The two cases are among 460 lawsuits filed against Shiley, most of which are in California. About 80 involve claimants in Sweden and Norway. In their decision, the justices ruled that the public policy considerations weighed in favor of Shiley in this instance because foreign claimants would add to California's already overburdened court system. Moreover, the court reasoned that California's interest in deterring allegedly improper conduct by Shiley could be satisfied by suits pending against the company filed by California residents, should they prevail. The opinion most immediately affects the families of eight Scandinavian heart patients who died after receiving the valves, said Bruce A. Finzen, a lawyer with the Minneapolis law firm of Robins, Kaplan, Miller & Ciresi which represents the plaintiffs. All have filed negligence and breach of warranty claims against Shiley, including the two just decided. The chances of those plaintiffs prevailing in Sweden and Norway would be limited by those countries' legal codes. Neither, for example, allows for pretrial exchange of testimony, as is normal in the U. S. Exchange of documents is also extremely limited. And neither country allows punitive damage awards, intended in the U. S. to deter future wrong conduct. Lawyers also may not work on a contingent fee basis in Sweden and Norway, which means they cannot work in exchange for a percentage of the damage award if they prevail. "The systems are just completely different," said Mr. Finzen. In a statement, Pfizer praised the decision as "helpful to California taxpayer and businesses and fair to the parties involved." The case is binding only in California, but it is expected to be persuasive with other state courts. It had been closely watched by the U. S. business community, including the U. S. Chamber of Commerce, which filed a friend-of-the-court brief on behalf of Shiley. "Primarily, we would take the position that foreign plaintiffs have recourse in their own courts of law, and you don't want to encourage forum shopping by plaintiffs," said Kenneth Alexander, an assistant general counsel for the chamber. Pfizer is facing 460 product liability suits over allegedly defective artificial heart valves, but only a few involve patients who died. Most of the suits have been brought on behalf of patients who are claiming injury from anxiety and emotional distress since learning of the defects in 1985, when Shiley took the Bjork-Shiley Convexo-Concave valves in question off the market because of a high rate of breakage. The company began trying to locate the 55,000 people implanted with the device within the past year. So far, most of the suits against Shiley and Pfizer have been filed in California, where Shiley is based. California is considered a favorable venue for plaintiffs in products liability cases, one reason why Shiley sought to keep foreign litigants from filing there. "Why should the state of California invite those lawsuits? " said Shiley's attorney Malcolm E. Wheeler, of the Denver law firm Parcel, Mauro, Hultin & Spaanstra. (Stangvik v. Shiley Inc. ; Mikaela v. Shiley Inc. ; California Supreme Court) --- MOTION BY HEMOPHILIACS group seeks to avert disruption of drug supply. The National Hemophilia Foundation filed the motion in an effort to intervene in a patent case between Rhone-Poulenc Rorer Inc. and Baxter International Inc., each of whom makes a purified form of a blood clotting agent called factor VIII. The action reflects an emerging area of legal conflict in biotechnology -- the clash of interests between companies protecting patented products and people who stand to benefit from them. Rhone-Poulenc, after a favorable U. S. Court of Appeals decision in Washington, D. C., asked a U. S. District Court judge in Wilmington, Del., to enjoin Baxter from selling its version of factor VIII. Rhone-Poulenc is licensee of a patent held by Scripps Research Institute, San Diego. Baxter, Deerfield, Ill., holds about twothirds of the $250 million market for the purified agent and the foundation argues that forcing the company out of the market could restrict supplies. "We're neutral on the merits of the patent case," said Alan P. Brownstein, foundation executive director. "We just want to make sure the supply is adequate." Rhone-Poulenc Rorer, a U. S. unit of Rhone-Poulenc S. A. of France, said it is prepared to meet increased demand if the judge grants its request for an injunction. Baxter said an injunction wouldn't serve the interests of hemophilia patients. Most of the 20,000 U. S. hemophiliacs depend on one of the products to control spontaneous bleeding. The purified, monoclonal blood factors -- Rhone-Poulenc's Monoclate and Baxter's Hemophil Mcame on the market four years ago and are safer than previous versions which became contaminated by the virus that causes AIDS. In its motion, the hemophilia group argues that "the public interest in enforcing valid patents does not outweigh the public interest in the market availability of life saving drugs." Another current legal dispute raises a similar issue. A federal jury in San Francisco recently ruled that an antibody developed by Centocor Inc., Malvern, Pa., to treat an often-fatal blood infection infringed on a patent held by Xoma Corp., Berkeley, Calif. But Centocor, which has also been issued a patent, appears likely to win marketing approval first. One question is whether the judge in the patent trial will block Centocor from selling its drug, which saves lives in some cases. [This article is made available here by Dow Jones Co. for the personal and non-commercial use of callers to this bbs, in the hope that it will be of some help to those who are suffering from the disease and others who are seeking to help them.]