The drug makers’ huge win in the consolidated Zantac case shows that the process can work for the defendants

(Reuters) – If your only sources of information about consolidated multidistrict litigation in federal courts were companies like 3M Co and Johnson & Johnson, which have turned to bankruptcy courts in the face of sprawling MDLs, or defense groups like Lawyers for Civil Justice, which insists that With the MDL process ripe for reform, you’d probably be surprised to hear that a quartet of drugmakers dropped about 50,000 product liability cases in one fell swoop on Tuesday.

US District Judge Robin Rosenberg of West Palm Beach, Florida, found in a 341-page(!) opinion that the plaintiffs’ attorneys had failed to provide credible scientific evidence that the heartburn drug Zantac caused liver, bladder, pancreatic, esophagus or stomach cancer. Based on that conclusion, the judge awarded summary judgment to the defendants, which include GSK Plc, Pfizer Inc, Sanofi SA and Boehringer Ingelheim.

Rosenberg’s decision is not the end of the Zantac litigation. The plaintiffs’ attorneys, predictably, said they plan to appeal a ruling they called a “miscarriage of justice” to my Reuters colleague Brendan Pierson. Additionally, drugmakers still face tens of thousands of lawsuits in state courts alleging a link between Zantac and a variety of cancers, including some that were not debated in the MDL.

But the MDL ruling was a win big enough to send GSK and Sanofi shares up a combined $20 billion on the news. At the very least, the Zantac MDL outcome proves that the process can benefit the defendants even when the plaintiffs’ attorneys have tens of thousands of claims at their disposal.

One caveat: every MDL is different. The facts are not the same in two MDLs. And the federal judges who oversee them — each handpicked by the seven-judge Judicial Panel on Multidistrict Litigation — have broad discretion to decide how cases proceed. MDL critics can legitimately argue that the dismissal of drugmaker claims in the Zantac MDL means nothing to defendants, who, for example, cannot immediately appeal negative evidentiary decisions and demand early documentary evidence of plaintiffs’ claims.

However, the Zantac case offers at least two important procedural lessons for courts, defendants, and even plaintiffs’ attorneys (who, after all, bear the upfront cost of contingency fees).

Lesson 1: Firms with strong general causal defenses should consider early concessions to get their scientific evidence to court as quickly as possible.

From the start, the defendants have insisted the drug does not cause cancer, despite a 2020 request by the U.S. Food and Drug Administration to take the product off the market. The MDL judge Rosenberg also considered general causality to be the crucial threshold issue.

In part to ensure early consideration of their scientific evidence, defense attorneys (including Dechert, Williams & Connolly and Arnold & Porter Kaye Scholer) agreed to a registration system for plaintiffs’ claims that would affect the statute of limitations.

The system benefited plaintiffs’ attorneys, who didn’t have to worry about filing fees and deadlines. However, the plaintiffs also agreed that the plaintiffs would have to exit the registry and enter the actual litigation after the judge ruled general causality. This meant, in effect, that the plaintiffs would enter a process in which Rosenberg would weigh each side’s entire body of scientific evidence before either side engaged in discovering the claims made by the lead plaintiffs.

Anticipating general causality, of course, does not work for defendants in every MDL. But shutting out plaintiffs’ experts could be a silver bullet, said MDL board Elizabeth Burch of the University of Georgia School of Law, citing cases involving the drugs Zoloft, Mirena and Nexium, among others. “The Zantac process is not an outlier in this regard,” Burch said via email.

Lesson 2: A plaintiff registry system can have unanticipated benefits

Defendants’ major criticism of MDLs is that plaintiffs’ attorneys use advertising and other lead generation techniques to make large numbers of unverified claims. The sheer volume, MDL critics claim, can depress a defendant’s share price and create comparative pressure.

The Zantac registry asked plaintiffs to answer detailed questions about their use of the drug and their cancer diagnoses. The questionnaire was intended to discourage unverified claims.

The defendants have said that the system did not work as intended. They claim that despite the registry’s questionnaire, they have faced a large number of unjustified claims from plaintiffs who failed to meet the basic criteria to prove use of the drug and who were subsequently diagnosed with one of the cancers it allegedly causes.

But there was a silver lining. Because the registration system overruled the statute of limitations (and required no filing fee), it gave plaintiffs’ attorneys an incentive to file claims with the MDL rather than state courts. This, in turn, gave the MDL an edge over all competing litigation.

Tens of thousands of plaintiffs later dropped the MDL and filed it in state courts, many after the MDL Steering Committee decided to narrow down the cancers at issue in federal court proceedings. By this time, however, Rosenberg was already on the way to making a decision about the general scientific evidence.

In other words, prospective MDL defendants should consider the benefit of keeping early-stage mass litigation in a single forum when considering the prospect of a registry system that extends the statute of limitations and saves plaintiffs’ attorneys the cost of filing suits . If you’re confident that you can make an early profit on general causality, the tradeoff might be worth it.

Despite all the loud voices complaining about MDLs, defendants and their attorneys already know that consolidated federal trials are generally fairer, orderlier, and more efficient than piecemeal litigation in courts across the country. Bartlit Beck’s Adam Hoeflich, who was not involved in the Zantac case but served as lead defense counsel in more than a dozen MDLs, told me he was confident the process was working.

“The vast majority of MDL judges are doing an excellent job,” he said. “And both plaintiffs and defendants benefit from the process.”

Continue reading:

GSK and Sanofi shares rise as fears of a Zantac lawsuit ease

GSK, Pfizer and Sanofi fight off thousands of US lawsuits alleging Zantac’s cancer link

Is 3M Earbud Bankruptcy the Beginning of the End for Mass Crime MDLs?

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Alison Frankel

Thomson Reuters

Alison Frankel has been a Reuters columnist covering major trade disputes since 2011. A graduate of Dartmouth College, she has worked as a journalist in New York for more than three decades, covering the legal industry and the law. Before joining Reuters, she was a writer and editor at The American Lawyer. Frankel is the author of Double Eagle: The Epic Story of the World’s Most Valuable Coin.