Drug & Device News

New England Compounding Center Is in Everyone's Sites

Invoking his Fifth Amendment right against self-incrimination, Barry Cadden, one of the founders of the New England Compounding Center (NECC), declined to testify on Nov. 14, 2012, before the Congressional House Energy and Commerce oversight subcommittee. Cadden's silence was not unexpected, as NECC is accused of running an unsanitary operation that contaminated its steroid injection pharmaceutical products, which then were administered to patients. At least 39 people have died as a result, and hundreds more have been sickened.

A week later, Judge Dennis Saylor of the U.S. District Court for the District of Massachusetts entertained motions seeking pre-judgment attachment of NECC's assets, brought by the plaintiffs in two purported class actions (Cole v. New England Compounding Pharmacy Inc. and Erkan v. New England Compounding Pharmacy Inc.). Plaintiff Robert Cole and plaintiff Michelle Erkan asked the court to attach up to $461 million belonging to NECC and to related companies and individuals (including Barry Cadden), noting that although class certification is not usually granted in personal injury cases, this case might warrant a class-action designation as a “limited fund” case. This type of class action allows courts to distribute damages fairly to a group of plaintiffs when the defendant's assets are inadequate to cover everyone's losses. The plaintiffs' attorney, Thomas Sobol, a partner in the Boston office of Seattle-based Hagens Berman Sobol Shapiro, urged the court to attach the defendants' assets because “these rare circumstances cry out for this court to do something in the short term to protect the status quo.” That plea was heard, and Judge Saylor ordered $5 million in assets attached, although they will remain in the physical custody of the defendants and may continue to be used to conduct ordinary business. They may not be sold or transferred to new owners, however, and dividend payments to stockholders of NECC may not be made.

Supreme Court Will Hear Vaccine Case Attorney-Fee Dispute

The U.S. Supreme Court announced Nov. 20, 2012, that it will take up the case of Sebelius v. Cloer, in which the federal government challenges a ruling of the U.S. Court of Appeals in favor of a claimant whose vaccine claim was untimely filed, yet she was awarded attorney fees and costs when her claim was thrown out. Below, the Federal Circuit had split 7-6 in favor of upholding the award of the claimant's fees and costs, concluding that because the Vaccine Act permits fee awards whether claimants win their cases or not, she was entitled to relief so long as she brought a reasonable claim in good faith. The case involves a woman who was injured by a vaccine, understood that she was ill, but was not aware of the cause of her ailments until the time for filing a claim under the Act had passed. Under the terms of the Act, the time limit for filing a claim is measured from the time an injury is discovered; once such discovery is made, however, the clock is not tolled simply because the cause of the injury is not yet known.

State-of-Emergency Concerns Trump Failure to Obtain Consent

New York's Appellate Division has determined that, once a national health emergency has been declared, state common-law and statutory claims concerning actions taken to deal with that emergency are precluded. The case, Parker v. St. Lawrence County Public Health Department, arose when a health care worker administered an H1N1 flu vaccine to a child in 2009 without obtaining her parent's permission. In accordance with the federal Public Readiness and Emergency Preparedness (PREP) Act, the U.S. Department of Health and Human Services had declared a health emergency that year because of the H1N1 pandemic. New York Governor David Paterson followed suit, then authorized state and local health departments to set up public vaccination programs. The kindergarten student at the heart of this case was immunized under one of these programs. The appeals court held that the mother's state-law tort claims against those who immunized her child without her consent must fail because “[l]iability protections for pandemic countermeasures taken by certain 'covered persons' in response to a declaration of a public health emergency by the Secretary are specifically provided for in the PREP Act.” The unanimous court went on to conclude, “We must presume that Congress fully understood that errors in administering a vaccination program may have physical as well as emotional consequences, and determined that such potential tort liability must give way to the need to promptly and efficiently respond to a pandemic or other public health emergency.”

New England Compounding Center Is in Everyone's Sites

Invoking his Fifth Amendment right against self-incrimination, Barry Cadden, one of the founders of the New England Compounding Center (NECC), declined to testify on Nov. 14, 2012, before the Congressional House Energy and Commerce oversight subcommittee. Cadden's silence was not unexpected, as NECC is accused of running an unsanitary operation that contaminated its steroid injection pharmaceutical products, which then were administered to patients. At least 39 people have died as a result, and hundreds more have been sickened.

A week later, Judge Dennis Saylor of the U.S. District Court for the District of Massachusetts entertained motions seeking pre-judgment attachment of NECC's assets, brought by the plaintiffs in two purported class actions (Cole v. New England Compounding Pharmacy Inc. and Erkan v. New England Compounding Pharmacy Inc.). Plaintiff Robert Cole and plaintiff Michelle Erkan asked the court to attach up to $461 million belonging to NECC and to related companies and individuals (including Barry Cadden), noting that although class certification is not usually granted in personal injury cases, this case might warrant a class-action designation as a “limited fund” case. This type of class action allows courts to distribute damages fairly to a group of plaintiffs when the defendant's assets are inadequate to cover everyone's losses. The plaintiffs' attorney, Thomas Sobol, a partner in the Boston office of Seattle-based Hagens Berman Sobol Shapiro, urged the court to attach the defendants' assets because “these rare circumstances cry out for this court to do something in the short term to protect the status quo.” That plea was heard, and Judge Saylor ordered $5 million in assets attached, although they will remain in the physical custody of the defendants and may continue to be used to conduct ordinary business. They may not be sold or transferred to new owners, however, and dividend payments to stockholders of NECC may not be made.

Supreme Court Will Hear Vaccine Case Attorney-Fee Dispute

The U.S. Supreme Court announced Nov. 20, 2012, that it will take up the case of Sebelius v. Cloer, in which the federal government challenges a ruling of the U.S. Court of Appeals in favor of a claimant whose vaccine claim was untimely filed, yet she was awarded attorney fees and costs when her claim was thrown out. Below, the Federal Circuit had split 7-6 in favor of upholding the award of the claimant's fees and costs, concluding that because the Vaccine Act permits fee awards whether claimants win their cases or not, she was entitled to relief so long as she brought a reasonable claim in good faith. The case involves a woman who was injured by a vaccine, understood that she was ill, but was not aware of the cause of her ailments until the time for filing a claim under the Act had passed. Under the terms of the Act, the time limit for filing a claim is measured from the time an injury is discovered; once such discovery is made, however, the clock is not tolled simply because the cause of the injury is not yet known.

State-of-Emergency Concerns Trump Failure to Obtain Consent

New York's Appellate Division has determined that, once a national health emergency has been declared, state common-law and statutory claims concerning actions taken to deal with that emergency are precluded. The case, Parker v. St. Lawrence County Public Health Department, arose when a health care worker administered an H1N1 flu vaccine to a child in 2009 without obtaining her parent's permission. In accordance with the federal Public Readiness and Emergency Preparedness (PREP) Act, the U.S. Department of Health and Human Services had declared a health emergency that year because of the H1N1 pandemic. New York Governor David Paterson followed suit, then authorized state and local health departments to set up public vaccination programs. The kindergarten student at the heart of this case was immunized under one of these programs. The appeals court held that the mother's state-law tort claims against those who immunized her child without her consent must fail because “[l]iability protections for pandemic countermeasures taken by certain 'covered persons' in response to a declaration of a public health emergency by the Secretary are specifically provided for in the PREP Act.” The unanimous court went on to conclude, “We must presume that Congress fully understood that errors in administering a vaccination program may have physical as well as emotional consequences, and determined that such potential tort liability must give way to the need to promptly and efficiently respond to a pandemic or other public health emergency.”