In re West Virginia Rezulin Litigation

• Citation: 585 S.E.2d 52,214 W.Va. 52
• Decision Date: 03 July 2003
• Docket Number: No. 30958, No. 30963.
• Court: Supreme Court of West Virginia
• Parties: In re WEST VIRGINIA REZULIN LITIGATION and State of West Virginia, ex rel. Sandra McCaffery, et al., Petitioners, v. The Honorable John A. Hutchison, Judge of the Circuit Court of Raleigh County; Warner-Lambert Company; and Parke-Davis, Respondents.

585 S.E.2d 52

214 W.Va. 52

In re WEST VIRGINIA REZULIN LITIGATION and

State of West Virginia, ex rel. Sandra McCaffery, et al., Petitioners, v. The Honorable John A. Hutchison, Judge of the Circuit Court of Raleigh County; Warner-Lambert Company; and Parke-Davis, Respondents.

Nos. 30958, 30963.

Supreme Court of Appeals of West Virginia.

Submitted February 26, 2003.

Decided July 3, 2003.

Marvin W. Masters, Esq., Richard A. Monahan, Esq., Masters & Taylor, L.C., Scott S. Segal, Esq., Deborah L. McHenry, Esq., The Segal Law Firm, Charleston, Carl N. Frankovitch, Esq., Frankovitch, Anetakis, Colantonio & Simon, Weirton, James C. Peterson, Esq., Hill, Peterson, Carper, Bee & Deitzler, Charleston, H. Blair Hahn, Esq., Richardson, Patrick Westbrook & Brickman, Mt. Pleasant, SC, Guy R. Bucci, Esq., Bucci, Bailey & Javins, Charleston, J.C. Powell, Esq., Powell & Majestro, Charleston, Thomas W. Pettit, Esq., Pettit & Damron, Barboursville, for Sandra McCaffery, et al., Plaintiffs below.

Michael J. Farrell, Esq., Tamela J. White, Esq., Farrell, Farrell & Farrell, L.C., Huntington, Charles P. Goodell, Jr., Esq., Richard M. Barnes, Esq., Goodell, DeVries, Leech & Dann, L.L.P., Baltimore, MD, David Klingsberg, Esq., Maris Veidemanis, Esq., Robert Grass, Esq., Kaye Scholer, L.L.P., New York, NY, for Warner-Lambert Company and Parke-Davis, Defendants below.

Jeffrey M. Wakefield, Esq., Michelle M. Marinacci, Esq., Flaherty, Sensabaugh & Bonasso, Charleston, for Joe A. Shy, D.O., et al., Defendants below.

Holly S. Bayhan, Esq., Jennifer B. Hagedorn, Esq., Morton, Herndon & Yeager, Wheeling, for Michael Renforth, M.D., Defendant below.

Karen Kahle, Esq., Heidi Kossuth, Esq., Steptoe & Johnson, Wheeling, for West Virginia University, et al., Defendants below.

Mark W. Browning, Esq., Shuman, McCuskey & Slicer, Charleston, for Louis Ortenzio, M.D., et al., Defendants below. STARCHER, Chief Justice.

In this appeal from the Circuit Court of Raleigh County, we are asked to examine a circuit court order denying a motion to certify a class action for users of an allegedly defective prescription drug. After consideration of the briefs, the arguments of the parties, and all other matters of record, we conclude that the circuit court erred, and reverse and remand the case for proceedings as a class action.

I. Facts & Background

This case is a consolidation of several lawsuits filed by numerous plaintiffs who used Rezulin, an oral drug that was approved by the U.S. Food and Drug Administration ("FDA") in January 1997 to treat Type II (adult onset) diabetes. Rezulin is a trade name for the drug troglitazone. The defendants in the underlying action, and appellees and respondents before this Court, are Warner-Lambert Company and Parke-Davis & Company (a division of Warner-Lambert). From February 1997 until March 2000, the defendants marketed and sold Rezulin.

The plaintiffs allege that the defendants submitted Rezulin to the FDA for evaluation in 1993, and touted the drug as a significant improvement on existing diabetes medications, while being just as safe to use. However, after reviewing data submitted by the defendants, an FDA investigator concluded in September 1996 that "the company has provided no proof that this drug ... constitutes a major therapeutic advance." The researcher also indicated that the data on Rezulin raised "some worrisome questions" because, compared to patients taking a placebo, significant numbers of patients taking Rezulin appeared to sustain liver damage.¹

The plaintiffs allege that employees of the defendants met with the researcher's superiors at the FDA, resulting in the researcher's removal from the FDA's Rezulin evaluation. The researcher's reservations about the drug were never presented to the full committee investigating Rezulin, and the drug was approved for sale on January 29, 1997.

The plaintiffs contend that the defendants marketed Rezulin aggressively, and sought to convince both patients and doctors of the efficacy and safety of the drug. One of the advertisements produced by the defendants described Rezulin as a drug with breakthrough effectiveness and as having "Side Effects Comparable to Placebo." The defendants apparently made this claim despite the fact that their own clinical trial data showed Rezulin users were three to six times more likely to suffer liver injury than patients taking the placebo. The FDA later accused the company of making "false and misleading" statements. The plaintiffs suggest that after a year of selling Rezulin, gross sales had exceeded $1 billion, and over 900,000 patients were taking the drug. At the same time, it appears that some patients were having severe liver problems as a result of taking Rezulin—and several had died. The plaintiffs contend that the defendants knew of these problems, but did little to advise doctors, patients, or the general public.² Further, to encourage doctors to prescribe the drug, the defendants appear to have offered doctors an indemnity plan that gave any doctor—who agreed to follow the Rezulin label—"experienced legal counsel," "reimbursement of litigation expenses," and "indemnification from liability" for prescribing the drug.

The defendants assert that as problems were discovered, the label on Rezulin changed, so that doctors could avoid or discover adverse liver reactions in patients. Despite changes in the labeling of Rezulin, and an increase in the frequency of liverfunction testing of patients, the mortality of Rezulin users climbed.³ Accordingly, on March 21, 2000, the defendants withdrew the drug from the marketplace.

The plaintiffs filed several lawsuits in circuit courts in several West Virginia counties, and those separate lawsuits were transferred to the Circuit Court of Raleigh County and consolidated into the instant action.⁴ The plaintiffs generally asserted that the defendants knowingly put a defective chemical—a drug—on the market, which they knew or should have known was defective at the time. The plaintiffs contended that the defendants' product caused the plaintiffs to be subject to an increased risk of liver disease and injury.

The plaintiffs' actions against the defendants sought, inter alia, to recover the costs of medical monitoring necessary to determine whether the plaintiffs have sustained, or will develop in the future, any injuries from using Rezulin. West Virginia law allows a cause of action for the recovery of medical monitoring costs, "where it can be proven that such expenses are necessary and reasonably certain to be incurred as a proximate result of a defendant's tortious conduct." Syllabus Point 2, Bower v. Westinghouse Electric Corp., 206 W.Va. 133, 522 S.E.2d 424 (1999).

The tortious conduct alleged by the plaintiffs included, inter alia, that the defendants sold a product that was defective because it was unreasonably dangerous for its intended use. The plaintiffs assert that Rezulin was defective in both its design and manufacture, and defective because of insufficient labels and warnings. We set forth the standard for a defective product in Syllabus Point 4 of Morningstar v. Black and Decker Mfg. Co., 162 W.Va. 857, 253 S.E.2d 666 (1979), where we stated:

In this jurisdiction the general test for establishing strict liability in tort is whether the involved product is defective in the sense that it is not reasonably safe for its intended use. The standard of reasonable safeness is determined not by the particular manufacturer, but by what a reasonably prudent manufacturer's standards should have been at the time the product was made.

Another tort alleged by the plaintiffs is that the defendants, in their advertising and marketing of Rezulin, withheld material facts from patients and the public about problems with Rezulin, and thereby engaged in deceptive practices in violation of the West Virginia Consumer Credit and Protection Act, W.Va.Code, 46-6-101, et seq. ("Consumer Protection Act"). In addition to medical monitoring costs, the plaintiffs sought damages under the Consumer Protection Act and sought punitive damages.

The plaintiffs subsequently filed a motion seeking class certification under Rule 23 of the West Virginia Rules of Civil Procedure [1998]. The plaintiffs' definition of the proposed class was: "All persons who either consumed the drug Rezulin in West Virginia or consumed the drug Rezulin after having had the drugs prescribed or sold to them in West Virginia." The plaintiffs estimate that there are approximately 5,000 people who meet this class definition.

The circuit court held a two-day hearing on the plaintiffs' class certification motion, and on December 12, 2001, issued an order denying the motion.⁵ In reaching this conclusion, the circuit court made legal findings that, in effect, found that the plaintiffs could not prevail on the merits of their case.⁶ The circuit court even went so far as to conclude that "the evidence shows that Rezulin was not a defective product" for the plaintiffs. Finally, the circuit court found that the plaintiffs failed to meet any of the requirements for the formation of a class action, as required by Rule 23 of the Rules of Civil Procedure. The plaintiffs subsequently filed a petition with this Court to appeal the circuit court's ruling denying certification.

After the circuit court denied their motion for class certification, the plaintiffs filed a motion asking the circuit court to remand their individual cases back to the original circuit courts from whence they were transferred, arguing that the circuit court's findings established that the plaintiffs' claims did not contain "common questions of law or fact" and were not properly consolidated before the circuit court under the terms of Rule 26.01 of the Trial Court Rules [1999]. Rule 26.01(c)(b) allows for cases to be consolidated in one circuit court if there are "two (2) or more civil actions pending in one or more circuit courts ... involving common...