Law

It is not often that we get the opportunity to discuss an opinion from a panel of judges including two former professors from our law school.  Diane Wood is the Chief Judge of the 7^th Circuit and taught us Civil Procedure at the University of Chicago Law School a long time ago.  Richard Posner is the reason we took a course in Law and Economics, and it is hard for us to think about economics, M&A, securities, or even – wait for it – tort causation without recalling some of his graphs, equations, and, most importantly, insights.  The fact that Wood and Posner were both brilliant members of the same remarkable faculty does not mean they always agree.  For instance, there was quite a judicial kerfuffle not too long ago when Wood took Posner to task for conducting his own outside-the-record experiment to determine how long it really would take a worker to change in and out of special clothing.  

But Wood and Posner, along with Judge Bauer, did agree in Houston v. United States, 2016 WL 403310 (7th Cir. Feb. 3, 2016), where the court held that failure to warn and design defect claims against a generic manufacturer were preempted. No outside-the-record experiments were required.  The plaintiff claimed that he had been permanently disfigured by Stevens-Johnson Syndrome caused by ingestion of allopurinol. Allopurinol is a generic version of Zyloprim.  It is used to treat gout by reducing uric acid in the body.  The plaintiff took the generic version and sued the manufacturer of the generic.  The plaintiff also sued various health care providers for medical malpractice. Those health care providers were federal employees under the Public Health Service Act, which explains why the lead defendant was the United States.  The claims against the federal employees were dismissed for failure to exhaust administrative remedies.

The Seventh Circuit's application of the Supreme Court decisions in Mensing and Bartlett was straightforward, so we'll try to make this post equally straightforward.  The opinion is in the form of an Order from the entire panel, but the clear language and absence of footnotes make us think that Posner had a hand in the drafting.  The court reasoned that the generic manufacturer's "duty of sameness" "preempts a state law claim against a generic manufacturer if, as here, that claim would require the manufacturer to redesign its drug, change its labeling, or exit the market to avoid liability."  That is a nice formulation that might find its way into more than a few defense briefs going forward.  All the claims against the generic manufacturer were dismissed.

Desperate to hang liability on someone, anyone, the plaintiff then sought permission to amend the complaint and add the brand manufacturer, even though the plaintiff had not taken the brand drug. The Seventh Circuit decided not to decide whether it would embrace or reject the Conte absurdity, instead holding that the statute of limitations had already run out against the brand manufacturer.  That is fine as far as it goes, but it also represents something of a missed opportunity.  A decision by the Seventh Circuit smacking down Conte would have overturned some lower court mischief.  In any event, the Houston Order, while not the typical one-two punch against both generic and brand liability that we often applaud, amounts to a win for both the generic and brand manufacturers, as well as for common sense.