In July, generic drugmakers won a big decision in the multidistrict litigation alleging that the heartburn medication ranitidine, best known under the brand-name Zantac, causes cancer. U.S. District Judge Robin Rosenberg concluded that all of the claims against companies that made generic versions of the drug were pre-empted by federal drug labeling regulations.
Now those generics defendants are trying to sock MDL plaintiffs for millions of dollars in defense costs.
Is this a brilliant strategy that will prompt future MDL plaintiffs and their lawyers to think twice about filing questionable lawsuits? Or is it a “callous and meritless” bullying scheme that will chill good-faith claims?
Right now, the fight over defense costs is focused on transparency. In August, drug makers advised the judge that they intended to move for plaintiffs to pay some of their costs under Rule 54 of the Federal Rules of Civil Procedure and Section 1920 of Title 28 of the U.S. Code.
The brief also said defendants would ask for plaintiffs to pay their share of the fees for the MDL’s court-appointed special master. Those invoices, defendants argued, should also be sealed, at least in early filings, because they revealed how defendants allocated the cost of the special master.
The Sept. 13 opposition brief by lead plaintiffs’ counsel in the MDL said defendants are potentially seeking “millions of dollars,” and, moreover, are going to ask for joint-and-several liability that would leave each plaintiff on the hook for all of the costs approved by the court.
Plaintiffs lawyers urged Rosenberg not to allow the generics companies to file their demand for costs under seal.
The Zantac generics companies are not the first MDL defendants to demand cost reimbursement after defeating plaintiffs’ claims.
MDL maven Elizabeth Burch of the University of Georgia, who has written about the role of special masters in consolidated proceedings, has not previously heard of an MDL defendant attempting to shift its share of special master fees.
Burch pointed out that it will surely be plaintiffs lawyers, rather than their clients, who actually end up paying whatever costs the court decides to award to the Zantac generics defendants. But depending on the size of the Zantac award, and the number of firms that bear the cost, a ruling for the generics could “potentially have a chilling effect,” she said, especially on claims asserting novel theories or challenging precedent.