WASHINGTON -(Dow Jones)- The U.S. Supreme Court on Tuesday questioned a federal judge's decision to bar a group of West Virginia plaintiffs from proceeding with a class-action lawsuit over Bayer AG's (BAYRY, BAYN.XE) cholesterol-lowering drug Baycol, which was withdrawn from the U.S. market in 2001.
The West Virginia plaintiffs were seeking to sue Bayer for economic losses, arguing they paid for a drug that turned out to be inferior.
A Minnesota-based federal judge, who has overseen thousands of Baycol lawsuits from around the country that were consolidated in his court, issued an injunction in 2008 that barred the West Virginia state-court case from proceeding.
U.S. Chief District Court Judge Michael Davis said the class-action lawsuit couldn't be considered by West Virginia's courts because he had already ruled that a different group of West Virginia plaintiffs, making similar claims, didn't meet the standards for allowing the case to proceed as a class-action.
Class-action lawsuits allow plaintiffs to pool their smaller individual claims into one large lawsuit.
Baycol was on the U.S. market from 1997 until 2001. The drug was withdrawn after it was linked to 31 deaths. Bayer says it has paid $1.17 billion to resolve claims from users who allegedly suffered serious side effects.
The company said none of the West Virginia plaintiffs suffered an injury caused by Baycol.
During an hour-long oral argument Tuesday, some members of the Supreme Court questioned whether Judge Davis went too far in issuing an injunction that barred the state-court class proceedings from taking place.
"The basic principle is you're entitled to your day in court," Chief Justice John Roberts said.
Justice Elena Kagan said there was an argument to be made that the West Virginia courts have a different approach to allowing class actions than the federal courts.
Justice Ruth Bader Ginsburg said federal judges "are not the last word on what the state law is." However, Ginsburg also questioned whether under the plaintiffs' approach, lawyers could file suits over and over again until they found a judge who would allow a class-action to proceed.
Bayer lawyer Philip Beck said the judge's injunction was needed to protect his ruling that West Virginia plaintiffs hadn't met the conditions necessary for proceeding with a class-action lawsuit. He said the plaintiffs were seeking to re-litigate the case.
Richard Monahan, a lawyer for the plaintiffs, said his clients hadn't been aware of the other similar West Virginia lawsuit. He said his clients had a legal right to be heard, an opportunity they hadn't been given.
The case is Smith v. Bayer Corp., 09-1205. A decision is expected by the end of June.
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