Analysis: Corporate defendants rack up wins in "test" trials

By Moira Herbst

AstraZeneca Plc <AZN.L>, Merck & Co <MRK.N> and Pfizer Inc <PFE.N> are among the companies to win closely watched bellwether cases in recent years.

A win by the defendant might prompt settlements or spur plaintiffs to drop other cases.

Upcoming test trials include the first in federal court against Bayer AG <BAYGn.DE> for allegations that its Yaz/Yasmin birth-control pill caused heart attacks and other medical problems. An Illinois federal court set the trial for January.

Beyond the drug industry, a California federal court set a February trial date for a bellwether case against Toyota Motor Corp <7203.T> involving allegations of unintended acceleration.

Plaintiffs in such cases used to have more say in picking which lawsuits went to trial first. But over the past decade, influence has become more evenly split with defendants.

Today, a judge commonly asks both sides to choose a handful of cases that would go to trial first and then adds several others to the pool. Cases are tried one after another, rotating from one party's choice to the next.

The shift has made it tougher for those suing big corporations, since plaintiffs already bear the burden of proof, their advocates say.

The defense also has an advantage, they argue, because the bellwether process can drag on for years and defendants have become adept at slowing down individual trials by filing procedural requests with the courts.

This favors defendants, who typically can afford to bankroll protracted litigation, said Paul Pennock of Weitz & Luxenberg, a plaintiff's attorney.

"There is a learning curve -- you learn a great deal on the job in each successive trial," Pennock said. "Defendants of multibillion-dollar corporations are far better financed than plaintiffs to endure it."

Judges often limit admissible evidence, said Pennock, who represented plaintiffs in lawsuits claiming AstraZeneca anti-psychotic drug Seroquel caused diabetes. By excluding key emails, he said, a New Jersey state judge "gutted" his 2010 liability case against the drugmaker.

Earlier this month, plaintiffs lost the fourth of five bellwether trials held so far against Merck & Co <MRK.N> in New York federal court over claims that the company's Fosamax osteoporosis treatment causes jaw damage.

A lawyer for the plaintiffs says he was hamstrung because U.S. District Judge John Keenan allowed only cases filed before January 2005 into the first phase of the bellwether trials. After that date, U.S. drug regulators had ordered that Merck include warning labels on the drug about jaw-bone problems.

"I've been trying these cases with one arm tied behind my back and another holding a bag of concrete," said Timothy O'Brien of law firm Papantonio Thomas Mitchell Echsner & Proctor.

O'Brien said he plans to appeal the most recent jury verdict, that there was insufficient evidence that Fosamax caused jaw-bone degradation in a 66-year-old Florida woman.

Merck still faces more than 1,600 related Fosamax lawsuits filed across the United States. The next bellwether trial is set for February, followed by another in May.

Merck, which did not respond to a request for comment, has a lot of experience with bellwether trials. Litigation over its Vioxx painkiller, which tens of thousands of consumers said caused heart attacks, strokes or other problems, was a prime example of the bellwether system at work.

After prevailing in all but one of five federal bellwethers over Vioxx, Merck agreed in 2007 to settle most of the cases for $4.85 billion, far below earlier estimates for total company liability of as much as $50 billion.

The lead counsel for Merck in the Vioxx litigation, Philip Beck of law firm Bartlit Beck, acknowledged that defendants in test trials have fared better than plaintiffs in recent years.

"Judges are more likely to say, 'If we are going to have a series of bellwether cases, we want them to be representative instead of simply plaintiff-friendly,'" Beck said.

Pfizer has also won some big cases. These include two of three bellwethers in 2009 and 2010 against plaintiffs who claimed an increased risk of suicide from its off-label epilepsy treatment, Neurontin.

In 2010, the company settled the third and final test case in the litigation, which was consolidated before a federal court in Massachusetts.

The victories caused scores of plaintiffs to drop their cases, said Pfizer attorney Mark Cheffo, a partner at Skadden, Arps, Slate, Meagher & Flom.

Defendants do not win all bellwethers. In lawsuits over alleged rice crop contamination, bellwether losses led Bayer to a $750 million settlement with farmers in 2009. Bellwether trials in lawsuits over Chinese drywall have gone entirely in favor of the plaintiffs, who had widely been expected to win these cases.

There may be no fair method of selecting bellwethers when lawyers are involved in choosing them, experts say. But randomly selecting cases from a representative sample could eliminate bias, said Alexandra Lahav, a professor at the University of Connecticut School of Law and an expert in complex litigation.

Even when one side has won a string of trials, such as in the Fosamax bellwethers, those outcomes can't predict how other cases will unfold, she said. "No statistical result is defensible if the sampling isn't random."

(Reporting by Moira Herbst; Editing by Martha Graybow and Lisa Von Ahn)