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Teva and Baxter appeal $505 million Nevada propofol verdict

We've extensively discussed this case here, here, and here, as well as its consequences here. Now the defendants in this travesty have filed their appeal brief to the Nevada Supreme Court (3 MB PDF):

The $505.1 million verdict at issue in this appeal rests on layers of legal errors by the trial court, which ultimately denied the jury critical evidence on liability and punitive damages. In this case concerning whether Appellants'’ generic prescription anesthetic Propofol was responsible for Plaintiff Henry Chanin’'s Hepatitis C, the jurors were not permitted to hear: (1) evidence of what actually happened during Plaintiff Henry Chanin'’s medical procedure that led him to contract Hepatitis C and instead were ordered by the trial court that they must find that his Hepatitis C was caused by the reuse of a vial of the anesthetic Propofol, thereby preventing the jury from considering the hotly contested issues of actual and proximate cause; (2) the jurors were not permitted to hear evidence, despite specifically asking for it, of whether and to what extent the product at issue and its labeling were regulated by U.S. Food and Drug Administration (“FDA”) and could be changed with or without FDA prior approval, as well as Appellants'’ understanding of and compliance with those requirements, even though that evidence is highly relevant to causation, the adequacy of the product'’s warnings, the absence of malice, and other elements of the claims and defenses being litigated; and (3) the jurors were denied any understanding of the relative roles and responsibilities as between branded drug manufacturers and generic drug manufacturers with respect to prescription drug development, labeling, medical literature monitoring, or communications with medical professionals, even though Appellants'’ conduct was shaped and constrained by those factors. In short, the jury was asked to render a verdict without hearing the full story because of a series of legal errors by the trial court. This is not a case in which a defendant sought to withhold evidence from the jury'’s consideration—to the contrary, Appellants repeatedly and throughout the trial urged the trial court to allow the jury’'s consideration of all relevant evidence. Had the jury heard this evidence, as it should have been allowed to do under settled law, the result of the trial would assuredly have been different. Therefore, as set out more fully below, this Court must reverse or vacate the judgment.

In this case, Henry and Lorraine Chanin (collectively, “Plaintiffs”) sought damages for Mr. Chanin'’s alleged exposure to Hepatitis C during a routine colonoscopy procedure at the Desert Shadow Endoscopy Center (“DSEC” or “the Clinic”) in Las Vegas. Plaintiffs alleged that Mr. Chanin became infected with Hepatitis C when: (1) a Certified Registered Nurse Anesthetist (“CRNA”) at the endoscopy clinic injected uncontaminated prescription
anesthetic Propofol, manufactured by Appellants Teva Parenteral Medicines, Inc. (“TPMI”) and Sicor, Inc. (collectively “TPMI/Sicor”) and distributed by Appellant Baxter Healthcare Corporation (“Baxter”), into a patient who was already infected with Hepatitis C; (2) the CRNA then reused the now-contaminated syringe and/or needle to withdraw additional Propofol from the same vial, thereby contaminating the vial of Propofol with Hepatitis C; and then (3) the CRNA administered the now-contaminated Propofol to Mr. Chanin during his endoscopy procedure — all directly contrary to the Propofol warning label, basic medical standards of care, and common sense. Under Plaintiffs'’ theory, Mr. Chanin could not have become exposed to Hepatitis C at the clinic without the wrongful, indeed potentially criminal, conduct of the clinic and its medical personnel.

Nonetheless, the trial court ruled prior to trial and over Appellants’' objections that (1) evidence of how the CRNA actually administered the Propofol to Mr. Chanin (evidence that directly contradicted Plaintiffs’ theory of the case) was excluded; (2) Appellants'’ experts could not testify as to their actual opinions on causation; and (3) Plaintiffs’' settlements with the clinics and the medical personnel who actually performed his procedure—including settlements for zero dollars with some of the parties—were in "“good faith"” such that Appellants were prohibited from pursuing cross-claims against those entities. The case proceeded to a four-week jury trial against Appellants alone on Plaintiffs'’ claims for strict products liability under design defect and failure-to-warn theories, breach of the implied warranty of fitness for a particular purpose, and loss of consortium. During the trial, the trial court’s ruling effectively precluded Appellants from presenting any defense by improperly withholding from the jury abundant evidence refuting every facet of Plaintiffs'’ claims. The jury returned a verdict in Appellants'’ favor on the design defect claim and in Plaintiffs'’ favor on the failure-to-warn and breach of implied warranty claims, awarding Mr. Chanin $3.25 million in compensatory damages and Mrs. Chanin $1.85 million in damages for loss of consortium. The jury further awarded Plaintiffs $500 million in punitive damages.

The trial court'’s rulings were consummate legal error, as further described below. This Court should reverse the judgment against Appellants, or in the alternative, vacate and remand the case for a new trial.

Daniel Fisher has more details.

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Rafael Mangual
Project Manager,
Legal Policy

Manhattan Institute


Published by the Manhattan Institute

The Manhattan Insitute's Center for Legal Policy.