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| In 2007, Lieff Cabraser attorneys,
with local co-counsel, obtained a $50
million verdict against Daimler Chrysler in a wrongful death
action. Our firm has participated in over forty-two $100 million-plus
settlements and verdicts, including eleven
cases in excess of $1 billion. |
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| For updates
on lawsuits of widespread public interest and settlements in class
actions, please click here
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News
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Fall
2002
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| December 30,
2002 |
The
New York Times, "Finding Wrongs, Through the
Prism of Silicon Valley" |
Seeking
to mirror its aggressive pursuit of executives on Wall Street, the Justice Department
is putting a new focus on Silicon Valley, pursuing managers of the technology
boom who are suspected of crossing the line into securities fraud and insider
trading.
The United States attorney
here is under pressure from Washington to mount prosecutions swiftly. The effort
was punctuated last month by the indictment last month of Phillip E. White, the
former chief executive of Informix, a database company that was based in Menlo
Park, Calif., and has since been bought by I.B.M. Prosecutors assert
that the company lied about its revenue, leading it
to inflate the value of its stock by hundreds of millions of dollars.
The government has also
brought charges or received convictions in the last year against executives or
employees at least nine high-technology companies, including Critical
Path, the e-mail network company.
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| December 10,
2002 |
The
Recorder, "Exxon Valdez Award Reduced -- But
Only To $4B"
|
On
December 6, 2002, Senior U.S. District Judge H. Russel
Holland of the District of Alaska reinstated a near-record
punitive damages award even though the 9th U.S. Circuit
Court of Appeals ruled last year that the original $5
billion verdict was excessive. Holland's award of $4 billion
was a surprise to followers of the case, particularly
Exxon Mobil Corp., which immediately vowed to appeal.
The move could tack on several more years of litigation
stemming from the infamous Exxon Valdez oil spill that
happened more than 13 years ago.
Spokesman
Tom Cirigliano said Exxon Mobil was disappointed that
Holland didn't issue a "Solomon-like decision that
could have brought closure to this case." But plaintiffs'
lawyers representing thousands of Alaskans who make their
living from Prince William Sound, the site of the 11-million
gallon spill, praised Holland.
Last
year, a unanimous three-judge panel ruled that the record
award "must be reduced," holding that it was
inconsistent with intervening Supreme Court precedents
about punitive damages such as BMW of North America
v. Gore, 517 U.S. 559 and Cooper Industries Inc.
v. Leatherman Tool Group Inc., 121 S. Ct. 1678.
The
9th Circuit decision in In re: Exxon Valdez,
270 F.3d 1215, was authored by 9th Circuit Judge Andrew
Kleinfeld, who sits in Alaska and once served on the district
court bench with Holland. Kleinfeld -- who did write that
Holland did a "masterful job" with the litigation
-- held that the company's conduct was not violent and
did not cause any deaths. He also wrote that the award
must be rationally proportional to the award of compensatory
damages. But Holland and the 9th Circuit apparently disagree
on what compensatory damages have been paid.
Calling
it "the most troubling aspect" of the 9th Circuit's
ruling, Holland challenged the higher court's determination
that prejudgment settlements cannot be counted toward
the compensatory figure. "The briefing of the parties
and the court's independent research suggest that authority
in support of the foregoing proposition is nonexistent,
and what sparse authority does exist reaches a contrary
conclusion," Holland wrote.
"This
court does not understand how or why encouraging settlements
should be a part of the due process analysis of a punitive
damages award made in a case which went to trial. Moreover,
this court thinks a contrary argument is more logical."
Holland also wrote that although the jury could not consider
environmental damages, "the entire fabric of Prince
William Sound and Lower Cook Inlet was torn apart."
That statement seemingly contradicts Kleinfeld's statement
that this was merely "a case about commercial fishing."
That unquantifiable harm, Holland wrote, could be used
under the ratio test of BMW to "accommodate the unknowns
by allowing a higher ratio to pass muster."
Note: Lieff Cabraser serves as co-counsel for the
Alaska fishermen and other plaintiffs in the Exxon Valdez
litigation. To read a copy of Judge Holland's order
(in Adobe Acrobat format), click
here.
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| November
5, 2002 |
Capitol
News Service, "U.S. Urges Court of Appeal to
Throw Out Slave Labor Suit"
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A
class action brought by a Korean immigrant seeking compensation for himself and
others who were seized by the Japanese government and forced to labor for Japanese
firms during World War II should be thrown out, a Justice Department
lawyer argued yesterday before this district's Court
of Appeal.
In Jeong's case,
Los Angeles Superior Court Judge Peter Lichtman upheld the statute and ruled
that the suit could proceed. The Court of Appeal stayed the trial
court proceedings and granted an order to show cause
why a writ of mandate or prohibition should not be granted.
Attorneys for defendant Taiheyo Corporation argued that
all claims for injuries suffered by Korean nationals
during World War II must be addressed by the Japanese
and North and South Korean governments through "special
arrangements" under the 1951 San Francisco Treaty.
But the appellate panel raised a number of questions, including whether the treaty
is binding on Korean nationals, given that Korea was not a party, and whether
the treaty implicitly bars claims in American courts.
Claims
by the defendant corporations that they were forced
by the government to use slave labor as part of the war effort, Lee said, can
be addressed in the trial court as affirmative defenses but do not constitute
a basis for throwing out the suit.
The
fact that a ruling against a foreign company might endanger
relations between the defendant's home country and the
United States, he added, is no grounds for granting
such companies immunity from suit. "Foreign companies
are in our courts every day," he said.
Note:
On January 15, 2003, the Court of Appeal ruled in favor
of Mr. Jeong and ordered that case proceed.
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| October
9, 2002 |
San
Francisco Volunteer Legal Services Program Celebrates
Its 25th Anniversary
|
At
a fund raising dinner, the Volunteer Legal Services Program ("VLSP") of the San Francisco Bar
Association marked its 25th Anniversary, and renewed
its commitment to bring about permanent change in the
lives of the San Francisco Bay Areass most vulnerable
residents. Honored at the event were Tanya Neiman, Director of the VLSP for 20
years of service, James J. Brosnahan, founder of the VLSP, and Elizabeth
J. Cabraser, who received the organization's first
Champion of Justice award. To learn more about the VLSP,
click here.
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| September
30, 2002 |
90%
of Disabled California High School Students Failed Latest
Exit Exam; Lieff Cabraser Challenges Test
|
Sacramento,
CA -- The California Department of Education revealed
that more than 90% percent of the disabled students,
or 26,393 students, that took the March 2002 California
High School Exit Exam did not pass the test. Commencing
with the Class of 2004, any California student who has
not passed the exit exam will not receive a diploma.
With the Oakland-based Disability Rights Advocates,
Lieff Cabraser is challenging the exam as discriminatory
against disabled students for denying them the opportunity
to pass the exam and obtain a diploma with reasonable
accommodations or modifications.
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| September
30, 2002 |
Elizabeth
Cabraser named to California Daily Journal's
"Top 100 Lawyers" |
On
September 30, 2002, the legal newspaper the California
Daily Journal named Elizabeth J. Cabraser to its
list of the Top 100 Lawyers, the fourth year Ms. Cabraser
has received this award.
To learn more, click here.
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| September
26, 2002 |
Los Angeles Times, "Dismissal
of Holocaust Case Rejected"
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A
federal court Wednesday rejected efforts of Italian and
Swiss insurance companies to dismiss a case by Holocaust
victims and surviving family members seeking payments
on Nazi-era insurance policies. Italian insurance company
Assicurazioni Generali SpA and Zurich Life Insurance Co.
of Switzerland sought to get a judge to dismiss the litigation,
claiming that the United States was not the proper venue
to decide the case.
Attorneys for the insurance companies argued that courts
in European countries in which the policies were issued
should be used to resolve the case. They also said a private
commission--the International Commission on Holocaust
Era Insurance Claims--had been set up to deal with such
issues.
But U.S. District Judge Michael Mukasey rejected those
arguments, ruling that the case could go forward in the
United States. The judge also found that the ICHEIC was
not an adequate alternative forum for the resolution of
the plaintiffs' claims, suggesting a possible conflict
of interest on grounds that the commission was financially
dependent on the European insurance companies.
"Today's decision represents a victory for the tens
of thousands of persons whose parents or other relatives
perished in the Holocaust, and who are the potential beneficiaries
of insurance policies issued by Generali or Zurich Life,"
Morris Ratner, [Lieff Cabraser
partner and] an attorney for the plaintiffs. Ratner said
his side was seeking not only payoffs of known insurance
policies from the Nazi era but a full accounting of policies
held by the insurance companies during the German campaign
of genocide against Jews and others during World War II.
"There may be people who are heirs or beneficiaries
who don't even know the policies existed," Ratner
said.
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September
25, 2002
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Lieff
Cabraser Donates Holocaust Case Legal Fees To Columbia
Law School
|
New
York, NY -- Lieff Cabraser today presented to Columbia
Law School a check for $1.5 million, representing its
attorneys' fees earned in the settlement of the litigation
against Swiss banks for allegedly preventing Holocaust
survivors and their families from reclaiming money that
they deposited in the banks or that the Nazis had looted
and stored in the banks. The funds will be used to endow
a chair at the law school in support of its human rights
legal training programs.
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September
21, 2002
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Los
Angeles Times, "Judge Orders Nationwide
Tobacco Suit"
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Laying
the groundwork for a tobacco case that would dwarf all
others, a federal judge in Brooklyn, N.Y., ordered that
millions of injured smokers be lumped into a nationwide
class that would share a single pot of punitive damages
from cigarette manufacturers. If upheld on appeal, the
novel ruling late Thursday by U.S. District Judge Jack
B. Weinstein could result in cigarette makers paying billions
of dollars into a giant fund, to be divided by a formula
among all Americans who can show proof of smoking-related
injuries since 1993.
The ruling is meant to reform what amounts to a lottery
system in which a few plaintiffs may reap a windfall in
damages while a greater number suffering from identical
smoking-related ailments win nothing at all. No estimates
have been made of the potential size of the class. But
given estimates that more than 400,000 Americans die prematurely
each year from smoking-related causes, it could be enormous.
Tobacco industry lawyers said they would seek reversal
of the order, and in his own ruling Weinstein suggested
that the panel entertain an appeal. Widely regarded as
brilliant and unconventional, the 81-year-old Weinstein
is known for crafting sweeping settlements involving toxic
substances such as asbestos and Agent Orange. He had long
signaled his desire to create a structure for reaching
a global resolution of tobacco litigation, so his ruling
wasn't unexpected.
Elizabeth
J. Cabraser, a San Francisco lawyer whom Weinstein
appointed lead plaintiffs' counsel, said the ruling would
help tobacco victims who want to sue but can't find a
lawyer to do battle with the industry. Several hundred
individual claims are pending in courts around the country,
but there would be more if there were lawyers willing
to take them.
The ruling "gives smokers the opportunity to hold
the tobacco companies fully accountable for all of the
harm their conduct and their products have done over the
years," Cabraser said.
The
order establishes a class of all U.S. residents who have
smoked since 1993 and been diagnosed with at least one
of 16 identified diseases, including emphysema and heart
disease. There is no provision for members to opt out
of the class and pursue claims on their own. However,
excluded from the class are nonsmokers stricken with these
ailments and those whose suits against the industry have
been resolved. Also excluded are class members in Engle
vs. R.J. Reynolds, a Florida case in which tobacco companies
were ordered to pay $144.8 billion in punitive damages
to a statewide class of injured smokers. The state court
verdict in July 2000 is on appeal.
Weinstein's
order sets a Jan. 20, 2003, start date for the first stage
of a three-part trial. According to the plan:
|
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In the first phase, the jury would determine whether
cigarette makers are liable and estimate the value
of compensatory damages that would be owed to all
members of the class. Compensatory damages wouldn't
be paid out, but the amount would be used as a benchmark
to set the punitive damages. The jury also would resolve
the individual claims of the 14 class representatives.
- In
phase two, jurors would determine whether punitive
damages were warranted. If the answer was no, the
case would end without a third phase.
- In
phase three, jurors would decide the total punitive
damages to be awarded and the amount to be allocated
to each disease.
|
Finally,
the order says, the court would distribute punitive
damages to individual class members "submitting
appropriate proof." The order does not say whether
the proof means first winning compensatory damages at
a separate trial, or whether medical records alone would
suffice. The order says punitive damages not divided
among class members would be spent on medical research.
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September
20, 2002
|
The
Associated Press, Boston woman rewarded for
fight to win Holocaust money
|
Greta
Beer nestled into her black leather swivel chair with
her cordless phone on Friday. Her frail hand with turquoise
rings raised a tissue to her eyes as her voice cracked
into the phone. "Judge Korman, thank you,"
she said. "You are a human being. You have given
me a ray of hope, a ray of sunshine." U.S. District
Judge Edward Korman was on the other end of the line.
He ruled on Wednesday to give Beer a $100,000 incentive
award for her services to relatives of Holocaust victims
trying to retrieve funds left in Swiss bank accounts
for safekeeping during World War II.
Beer, 79, whose family lost all its possessions to the
Nazis during the war, is among more than a half-million
potential claimants in a class-action case waiting to
receive their share of a $1.25 billion settlement by
Swiss banks. Korman is overseeing the distribution of
the funds.
Beer's father was a Romanian Jewish businessman. He
owned a successful textile company but because of political
instability in the late 1930s, Beer's father put the
money in what he thought was a safe Swiss bank account.
He died in 1940 from a kidney ailment.
"He told us, 'Don't worry. There are dark clouds
overhead, but you are all provided for. The money is
in Switzerland,"' she said. Beer wasn't captured
and taken to concentration camps. She was in Hungary
when her father died. She fled to Romania.
In 1960, Beer went with her mother to Switzerland to
find the money. But like many Jews, they were turned
away, told the accounts didn't exist. Since then, she
has spent thousands of dollars on trips to Switzerland,
New York and Washington. She had to move to Boston because
she could no longer afford her New York apartment.
"My father deposited the money and now it's gone,"
she said. "They expunged it. They did away with
it. Where did it go?" Beer testified before the
Senate Banking Committee in 1996 as part of her campaign
to get access to an account opened by her father.
Thursday was the first time she has seen monetary reward
for her efforts. The settlement money has not yet been
divvied up. "For a long time, she was one of the
only visible Holocaust survivors out there raising the
issue publicly, at a time when most Holocaust survivors
were in too much personal pain to do anything through
public activism," said Morris
Ratner, [Lieff Cabraser partner and] a New York
attorney who helped negotiate the settlement. It was
not a time "to individually take on some of the
companies that profited from Nazi misconduct,"
he said. "And she did it. She took them on. On
her own, very early on."
The book shelves in her one bedroom apartment in Jewish
Community Housing for the Elderly center in Boston's
Brighton neighborhood are filled with art and philosophy
books. But three are testimony to her struggle: "Nazi
Gold," "Swiss Banks" and "Hitler's
Silent Partners." When the 1998 settlement was
agreed upon, many thought it was too little, too late.
Not Beer. "To me, $10 is a lot," she said.
Beer's voice tapered off. She looked to the floor. "I've
never been in a concentration camp," she said.
"But I've gone through hell."
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September
13, 2002
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The
News and Observer (Raleigh, North Carolina), "Mixed
Views on Officer's Harley"
|
A
federal safety agency investigated the model of motorcycle
involved in a Raleigh police officer's death for front-wheel
wobble of the type that initiated the crash. Officer
Charles Radford Paul III, 30, lost control of his Harley-Davidson
motorcycle Tuesday after its front wheel began to wobble
as he was passing a tractor-trailer at 85 mph on the
Beltline, the police report said.
The
National Highway Traffic Safety Administration knew
of seven wrecks, none fatal, when the two-year study
was closed in 2000. The study concluded that "the
occurrence of wobble and weave does not necessarily
mean a motorcycle defect exists" because of the
many reasons that cause the condition. "The relatively
low rate of instability reports and alleged crashes
... indicates that no design and/or defect trend currently
exists," the report said. A spokesman for Harley's
corporate office said the company "is not aware
of any issues with any of our motorcycles at this time.
Several
other sources, however, have noted stability problems
with the FLH series of Harley-Davidson, also known as
the Electra Glide, Road King and Ultra Classic, which
are widely used by law enforcement officers in the Triangle.
"A
Harley, when you get it to high speed, has what you
call a high-speed wobble," said Sgt. R.N. Stallings
of the state Highway Patrol. Stallings supervises the
patrol's motorcycle officers and said he had experienced
the phenomenon at 100 mph. In an otherwise glowing article
in 1999, Motorcycle Consumer News described "an
oscillation in the chassis that keeps the bike from
feeling steady, both while cornering and at elevated
speeds." The writer attributed the problem to an
offset between the front and rear tires.
A
wrongful death suit has been filed in Arizona by the
family of a man who crashed his FLH allegedly because
of front-end wobble or weave. And Lieff Cabraser Heimann
& Bernstein, a law firm with offices in San Francisco,
New York and Nashville, Tennessee, has posted information on Harley-Davidson
high-speed wobble cases on its Web site.
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Summer
2002
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| August
15, 2002 |
Chattanooga
Times/Chattanooga Free Press, "Six months
later, suits dominate Noble case"
|
Six
months after the first uncremated bodies were found at
the Tri-State Crematory in Noble, Ga., attorneys involved
in the scores of civil cases say the legal aftershocks
are expected to last for years. So far, 80
lawsuits ranging across three states have been filed
since the news broke on Feb. 15 of the more than 300 bodies
found on the crematory grounds. The lawsuits include
a far-reaching federal court case involving plaintiffs from
Georgia, Tennessee and Alabama.
Lead
attorneys from both sides said they hope the federal court
case, overseen by U.S. District Court Judge Harold Murphy,
will set the pace for the civil suits working their way
through the state systems in Georgia and Tennessee. Coordination
of efforts is needed considering the size of the litigation,
they said.
Lead
plaintiff attorney Elizabeth
Cabraser said she hopes the schedule for depositions,
evidence sharing and hearings set by Judge Murphy will
be used as a model for the state-level cases. Judge Murphy
said he hopes to decide whether the federal lawsuits will
be granted class-action status by the end of the year,
with a trial coming as early as October 2003.
"We think that's realistic," Ms. Cabraser said. Although
he called the timeline "ambitious," Robert Brinson,
lead attorney for the funeral home defendants, said he
hopes state court judges will take their cue from Judge
Murphy, as well.
Criminal
investigators said they believe Tri-State Crematory operator
Brent Marsh did not begin his alleged practice of storing
bodies in burial vaults, sheds and makeshift graves on
his Noble property until 1997. Lawyers in the civil suits
claim the Marsh family had been mixing ashes with cement
and performing other "adulterations" since the
1980s.
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| August
9, 2002 |
The
Recorder, "Alsup turning up the heat in
securities fraud lawsuits"
|
If
you're a corporate executive, U.S. District Judge William
Alsup may be your worst nightmare. Through a series of
increasingly striking orders, Alsup has made it known
that he is hellbent on making crooked executives who benefit
from corporate fraud pay, even if it means raiding their
personal assets.
"Are
there any individual defendants in this case?" Alsup
asked plaintiffs lawyers at one recent hearing for In
re NorthPoint Securities Litigation, 01-1473. "Well,
there will be no settlement approved in this case until
you depose every one of them, and I don't mean just taking
declarations. You have to depose them, find out where
their houses are, their cars, their bank accounts, everything
they've got that can be used to respond to a judgment."
Alsup
may be intent on cleaning up Silicon Valley. But whether
finding all the information he can about personal assets
before approving a settlement hurts or helps investors
who've lost money is a different question.
A
possible outcome is the elimination of individual defendants
from fraud complaints. "Other than egregious frauds,
you're not going to see directors and officers named,"
said Wilson Sonsini Goodrich & Rosati securities defense
lawyer Boris Feldman. That would reverse a trend. "[Plaintiffs
lawyers] have said for a while that their institutional
clients have been pushing them" to sue executives,
Feldman said.
|
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| August
8, 2002 |
The
Baltimore Sun, "Perdue settles class action
suit; Poultry producer to pay employees $10 million"
|
Perdue
Farms Inc., the Salisbury-based poultry producer, has
agreed to pay $10 million to settle a 1999 lawsuit that
claimed hourly chicken processing employees were cheated
out of pension benefits and required to work off the clock.
The
settlement of the class action lawsuit, which received
preliminary approval yesterday from the U.S. District
Court for the District of Delaware, is subject to final
approval after notice has been sent to about 60,000 workers
eligible to make claims. A final approval hearing is
set for October, and workers could receive lost wages
early next year
The
settlement follows another multimillion-dollar settlement
Perdue reached in May with the U.S. Department of Labor.
In that case, Perdue agreed to pay about $10 million in
back wages after the government said the company had violated
the Fair Labor Standards Act by failing to pay workers
for time needed to put on and take off protective clothing
needed to perform their jobs.
Plaintiffs
argued that not paying workers for the time it took to
dress and undress in protective gear and to clean equipment
at the end of the day violated federal and state wage
laws. In addition, the lawsuit claimed that workers were
cheated out of pension benefits because they were not
given credit for all the time worked.
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| August
7, 2002 |
The
Washington Post, "FDA Rebukes Maker Of
Diet Drug Meridia"
|
The
Food and Drug Administration has told the maker of the
diet drug Meridia that it violated federal regulations
by failing to properly report the deaths of patients taking
the drug.
In
a letter to Abbott Laboratories made public yesterday,
the FDA said that information about seven deaths associated
with Meridia was not reported properly to the agency,
that one death was not reported at all, and that reports
on three other deaths were incompletely reported.
The
FDA is reviewing whether the drug caused or contributed
to those and other deaths. The letter, dated July 19,
is part of an ongoing FDA examination of the potentially
harmful effects of Meridia. The advocacy group Public
Citizen has filed a petition with the FDA to have the
drug removed from the U.S. market, and it has called for
a criminal investigation of the drugmaker's adverse-reaction
reports.
The
letter to Abbott said that problems with the adverse-event
reporting came up in a spring inspection. "Although
your firm has taken some corrective actions," the
letter stated, "you have not addressed many of our
concerns."
In
a statement, the company said that it "takes very
seriously its responsibility for full, accurate and timely
reporting of adverse events to FDA and other regulatory
agencies, and it has instituted various process improvements
in its reporting system to ensure it meets reporting requirements."
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| August
4, 2002 |
The
Atlanta Journal and Constitution, "Heavy
Legal Hitters: Several Law Firms Specialize in Pursuing
Major Bias Cases; Significant Resources Necessary"
|
When
it comes to representing workers against their employers
in class-action race bias cases, several law firms stand
out. Among the firms is Oakland, California-based Saperstein,
Goldstein, Demchak & Baller. It, along with San
Francisco-based Lieff, Cabraser, Heimann and Bernstein, sued Home Depot on behalf
of female employees and job applicants. That case resulted in a 1998 settlement
for $87.5 million and changes in the Atlanta-based retailer's hiring, promotion
and compensation practices.
Many
of the firms are engaged in other sorts of class-action
litigation. Lieff Cabraser Heimann and Bernstein,
for example, represented several states' attorneys general
in winning a $206 billion settlement from the tobacco
industry in 1998. Among its current cases, the firm
is investigating, or suing, nearly five dozen funeral
homes on behalf of bereaved families in the Tri-State
Crematory case in Walker County.
Note: For an update on the Tri-State Crematory
case, click here.
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| August
2, 2002 |
Class
Action Reports, "Martin County Paying
$3.25M For Damages in October 2000 Coal Spill"
|
Martin
County Coal agreed to pay $3.25 million in compensation for starting one of the
nation's worst coal sludge spills in Kentucky, state officials said. The Company
will pay $1.75 million in penalties, $1 million for damage
to the environment and $500,000 to pay back the state
for the cleanup.
The spill occurred
in October 11, 2000, when more than 300 million gallons of water and sludge broke
through the bottom of the impoundment pond on a mountaintop
outside Inez, Kentucky and poured into the underground
coal mine portals, out into the two creeks and into the Big Sandy River.
As
a result, lawns were buried up to 7 feet deep in the
molasses-like mixture, all fish were killed in two streams, and drinking water
supplies were fouled along 60 miles of the Big Sandy River, AP reports. The Environmental
Protection Agency called the spill one of the worst environmental disasters ever
in the Southeast.
For
more information on this case, click
here.
|
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| July
25, 2002 |
The
National Journal, "Shareholder Suits Down
in Early 2002"
|
With
huge corporate scandals making headlines almost daily, this could become a boom
time for plaintiffs' securities class action firms. But so far it isn't. The
plaintiffs' firms have filed fewer suits in 2002 than during the
same period last year. They are facing economic and
legal obstacles to recovering damages from the widely publicized corporate scandals.
And, while they have added some new attorneys to their staffs, this is largely
the result of a long-term growth in class action work, not a response to any
wrongdoing at Enron, Global Crossing, WorldCom, Arthur Andersen or any of other
companies being investigated.
Still, with all the recent allegations of corporate
wrongdoing, why haven't the numbers gone up for 2002?
Part of the reason is that some firms haven't yet jumped
into the fray. Houston's Susman Godfrey, for instance,
hasn't filed any suits relating to the ongoing corporate
scandals, but "I expect we will be involved in
some way," said name partner Stephen D. Susman.
Another major class action firm -- San Francisco's Lieff
Cabraser Heimann & Bernstein -- has filed only
in the Enron case. "We don't normally file on the
heels of news reports," explained Richard
M. Heimann, who heads the firm's securities practice
group. "We are actively investigating 12 to 20
potential cases, and we are deciding which cases we
want to be involved in and how."
Choosing
whom to sue isn't easy, because it's not enough to prove
that a corporation is liable. Even if a company is found
guilty of a billion-dollar fraud, shareholders in a
class may recover relatively little because the assets
are just not there. Attorneys are searching for deep-pocket
defendants, but they are hampered by the law Congress
passed in 1995. "The PSLRA makes it difficult to
plead to the standards required to go after lawyers
and accountants who advised malefactors," said
Heimann. "For instance, it will be very difficult
to plead a case against the lawyers who assisted Enron."
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Spring
2002
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| June
25, 2002 |
The New York Times, "Suits Say
Wal-Mart Forces Workers to Toil Off the Clock"
|
After
finishing her 10 p.m. to 8 a.m. shift, Verette Richardson
clocked out and was heading to her car when a Wal-Mart
manager ordered her to turn around and straighten up the
store's apparel department. Eager not to get on her boss's
bad side, she said, she spent the next hour working unpaid,
tidying racks of slacks and blouses and picking up hangers
and clothes that had fallen to the floor. Other times
after clocking out, she was ordered to round up shopping
carts in the parking lot.
Some
days, as soon as she walked in a manager told her to rush
to a cash register and start ringing up purchases, without
clocking in. Sometimes, she said, she worked for three
hours before clocking in. "They wanted us to do a
lot of work for no pay," said Ms. Richardson, who
worked from 1995 to 2000 at a Wal-Mart in southeast Kansas
City. "A company that makes billions of dollars doesn't
have to do that."
Ms.
Richardson and 40 other current and former Wal-Mart workers
interviewed over the last four months say Wal-Mart has
done just that, forcing or pressuring employees to work
hours that were not recorded or paid. Federal and state
laws bar employers from making hourly employees work unpaid
hours. Wal-Mart's policies forbid such work. Many current
and former workers and managers said an intense focus
on cost cutting had created an unofficial policy that
encouraged managers to request or require off-the-clock
work and avoid paying overtime.
Wal-Mart
officials insist that the off-the-clock phenomenon is
minimal considering that the company has 3,250 stores
and a million employees in the United States. The officials
say the company, based in Bentonville, Ark., has a strong
policy against such work, a policy that is spelled out
in the handbook distributed to every employee. But in
depositions and in interviews with The New York Times,
Wal-Mart employees in 18 states described these types
of off-the-clock work:
Former
employees at stores in California, Louisiana, New York,
Ohio, Oregon and Washington said that many evenings when
their stores closed, managers locked the front door and
prevented workers -- even those who had clocked
out
-- from leaving until everyone finished straightening
the store. Workers said these lock-ins, which aim to prevent
theft, forced many employees to work an hour or two unpaid
and enraged parents whose school-age children worked at
Wal-Mart. Wal-Mart officials acknowledged that employees
were sometimes locked in but said the policy was to pay
workers for every hour they were.
Note: Lieff Cabraser is representing current and
former Wal-Mart employees in class action lawsuits against
the company for wage and hour and employment law violations.
To read more about this litigation, click
here.
|
| |
| June
23, 2002 |
San Francisco Chronicle, "Fraud
Squad "
|
It
wasn't too long ago when criminal prosecution for suspected securities fraud
in the Bay Area was a rarity.
Although
Silicon Valley was already brimming with high-tech
activity, the number of criminal prosecutions for fraud was at
most two or three per year prior to 2000. That stood
in contrast to the mounting civil class-action lawsuits by investors against
local companies and executives.
But
times have changed.
Ever since the formation
of the Securities Fraud Unit in the U.S. attorney's office in San Francisco in
January 2000, the number of criminal prosecutions against misguided
executives and unscrupulous insider traders has jumped
drastically.
Since
the unit's founding, prosecutors have brought 31 indictments
in the Northern District of California, up from 10 from 1996 to 1999. Most have
resulted in guilty pleas or convictions, while the rest are pending.
|
| |
| June
19, 2002 |
The Wall Street Journal, "Court
Review of Home Depot No Longer Needed, Women Say"
|
Some
female employees who alleged discrimination at Home Depot
Inc. (HD) joined the company this week in asking a federal
judge in California to end court supervision of the retailer's
employment practices.
In
1997, Home Depot agreed to pay $87.5 million and establish
a new hiring process to settle a class-action suit alleging
discrimination against women. The company never admitted
any wrongdoing in the case.
In
the class-action suit, female employees had alleged that
women were funneled into cashier jobs instead of sales
positions in the store aisles. This was critical because
the applicants for department supervisor, assistant store
manager and store manager were largely drawn from the
sales floor -- not the cash register lane.
In
the motion filed this week in U.S. District Court in San
Francisco, attorneys representing the employees and Home
Depot said the company exceeded benchmarks for hiring
women in the most recent six-month reporting period under
the consent decree, which covers 10 states in the Western
U.S. This agreement isn't set to expire until September
2003.
|
| |
| June
16, 2002 |
The Dallas Morning
News, "Drug
Makers Under Pressure; Public Anger Over Prices Helps
Fuel a Tide of Lawsuits"
|
From
Main Street to Capitol Hill, prescription-drug buyers
have a blunt message for the pharmaceutical industry:
They're sick of rising prices. And their remedy is turning
into a legal headache for drug makers. Citizen groups,
state governments and federal regulators are piling on
with lawsuits reminiscent of the initial legal challenges
that confronted the tobacco industry in the 1990s.
Bristol-Myers
Squibb Co. has been sued by 29 state attorneys general,
who accuse the firm of using several fraudulent tactics
to keep generic versions of its cancer-fighting drug Taxol
off the market. Another lawsuit accuses Astra-Zeneca PLC
and Barr Laboratories of colluding to block a generic
version of another cancer treatment, Tamoxifen.
Bayer
Corp. has been hit with a lawsuit over its antibiotic
Cipro. And several employees of Schering-Plough Corp.
have been subpoenaed to appear before a federal grand
jury in Philadelphia, apparently over drug pricing. The
industry's trade group, the Pharmaceutical Research and
Manufacturers of America, has had little to say about
the legal offensive.
By
any measure, Americans are spending a lot on prescription
medications. The total hit $ 154.5 billion last year,
according to the National Institute for Health Care Management.
That sum -- which excludes, for example, drugs dispensed
by hospitals -- is up from $ 78.9 billion in 1997.
The
lawsuits filed so far charge that the brand-name drug
companies have unlawfully blocked the introduction of
generic drugs. In some cases, they contend that the pharmaceutical
manufacturers have paid generic-drug companies to keep
their less costly products off the market.
|
| |
| June
7, 2002 |
Los Angeles Times, "R.J. Reynolds
Fined for Ads Aimed at Teens"
|
A
San Diego judge fined R.J. Reynolds Tobacco Co. $20 million
Thursday after finding that the nation's No. 2 cigarette
maker was targeting teenagers by advertising Camels and
other brands in magazines such as InStyle, Spin and Hot
Rod.
The fine is the first financial penalty imposed for a
violation of the 1998 settlement of lawsuits against tobacco
firms filed by the attorneys general of 46 states. Under
that settlement, the cigarette makers pledged to pay the
states $246 million over 25 years. At issue in this case
was the companies' agreement to take no action, "directly
or indirectly, to target youth." Although the 1998
settlement made no specific mention of magazine advertising,
California Atty. Gen. Bill Lockyer charged RJR last year
with breaching the agreement by placing ads in magazines
popular with readers under age 18.
San Diego County Superior Court Judge Ronald S. Prager
agreed that such advertisements violated that ban, and
he ordered RJR to "reduce youth exposure" to
its cigarette ads and to demonstrate its compliance.
Lockyer said the ruling would help meet one of the key
goals of the tobacco litigation and settlement, which
was to keep children from taking up smoking. "When
hundreds of your customers die every day, the only way
to stay in business is to hook new ones," he said.
"But targeting children in your quest for new consumers
is unlawful, shameful and will not be tolerated in California."
RJR's top lawyer said the company would appeal, and he
maintained that its advertising strategy complies with
the settlement by avoiding any publication that draws
25% or more of its readership from youths.
Note: To read a copy of this order (in Adobe Acrobat
format), click
here. In the tobacco litigation that resulted in the
1998 settlement with the tobacco industry, Lieff Cabraser
represented 18 cities and counties in California and jointly
prosecuted the California tobacco lawsuit with the California
Attorney General.
|
| |
| June
1, 2002 |
San Francisco Chronicle, "Hip
Implant Settlement Okd; Sulzer To Pay $1 Billion To Patients
Fitted With Defective Devices"
|
Sulzer
Medica agreed yesterday to a $1 billion settlement for
patients who received the Swiss company's defective hip
and knee implants. Many of them are Bay Area residents.
The settlement, which affects about 32,000 people around
the country, pays the estimated 3,500 people whose implants
had to be replaced about $206,000 each, which winds up
at about $160,000 each once attorney fees are taken out.
Their spouses or significant others receive about $1,600
each after attorney fees.
The majority of people who received defective implants
but did not need surgery to correct the problem get about
$1,000 each with no attorney fees. If it turns out they
need surgery before June 5, 2003, they will be eligible
for the highest level of compensation. The payments will
be made during the next 6 to 18 months.
The case stems from a recall Sulzer announced in December
2000 after discovering that machinery oil had contaminated
some of the implant parts manufactured in the company's
plant in Austin, Texas. While many patients were not affected
by this defect, others had to have the part removed because
it failed to adhere to the bone.
|
| |
| May
30, 2002 |
Chicago Tribune, "AARP Aids Lawsuits
Against Drugmakers"
|
The
embattled pharmaceutical industry will face a powerful
new foe in the growing legal assault against drugmakers
by consumer groups and federal and state regulators. AARP,
the nation's largest senior group, said it will become
co-counsel in at least three class-action lawsuits that
allege certain brand-name and generic drugmakers have
kept lower cost medicines out of consumers' hands. The
suits, alleging drugmakers have illegally kept less expensive
generic drugs off the market, were filed in the last year
by Boston-based Community Catalyst, a consumer group that
has been stepping up litigation against drug companies
through its coalition known as Prescription Access Litigation
Project.
With the addition of AARP, formerly known as the American
Association of Retired Persons, the coalition believes
it will broaden its attack given the clout of the senior
group, which has more than 35 million members and is known
as one of the most powerful lobbies in Washington. It
is the first time AARP has entered the federal courts
as co-counsel on an antitrust issue against the drug industry.
"AARP's support adds significant new legal firepower
to our litigation team, and will strengthen our capacity
to take on drug companies that profit at the expense of
American consumers," said Robert Restuccia, executive
director of Community Catalyst.
|
| |
| May
23, 2002 |
San Francisco Chronicle, Sulzer
Stalls Decision on Implant Case; Hip, Knee Patients Sued
Manufacturer Over Defective Devices
|
Sulzer
Medica has delayed until May 31 its decision whether to
accept a $1 billion settlement agreement over defective
hip and knee implants. Attorneys for the maker of artificial
joints, which is based in Switzerland but operates an
orthopedics unit in Austin, Texas, hope to persuade a
reluctant group of plaintiffs to accept the deal. In December
2000, Sulzer admitted that because of an error in the
manufacturing process, trace amounts of a lubricant had
contaminated artificial hips and knees used on more than
30,000 patients. About 3,500 so far have required corrective
surgery.
San Francisco attorney Richard
Heimann, whose firm represents about 150 clients who
needed corrective surgery, praised Sulzer's decision in
the case, which is being handled in U.S. District Court
in Cleveland. "They're taking a responsible step
in not wishing to rush into a decision, but to take the
time they need to adequately analyze the opt-out situation,"
he said.
The "opt-outs" Heimann referred to are the 40
to 50 people who needed additional surgery to correct
the problem caused by the defective devices but who have
refused to sign on to the deal. The company fears those
people may pursue individual lawsuits, which could bankrupt
the company and prevent others from getting paid.
|
| |
| May
21, 2002 |
The
Recorder, "Billion Dollar Deadline Right Around
Corner"
|
Hundreds
of plaintiffs' lawyers around the country are holding
their breath as they wait to learn the fate of a billion-dollar
settlement in a class action over faulty artificial joints.
The unusual deal was pulled together by Richard Scruggs,
who has made a national reputation battling -- and beating
-- big tobacco, asbestos companies and HMOs. He has switched
sides to try to save the manufacturer of the artificial
joints, Texas-based Sulzer Orthopedics Inc.
The
estimated 30,000 plaintiffs had until last Wednesday to
opt out of the settlement, which was approved by U.S.
District Judge Kate O'Malley in Cleveland on May 9. In
re Inter-Op Hip Prosthesis Product Liability Litigation,
No. 01-4039. May 22 is the key date, says Scruggs. That's
the day that Sulzer will decide if so many plaintiffs
have opted out of the deal that it's economically unfeasible.
If that happens, he says, Sulzer might declare bankruptcy
rather than try to fight individual suits.
"This
one's going to go down to the wire," predicts Scruggs
of the Scruggs Law Firm in Pascagoula, Miss.
About
120 plaintiffs had opted out of the deal as of Friday,
say Scruggs and Eric Kennedy of Cleveland's Weisman, Goldberg
& Weisman, who were among a small group of trial lawyers
who hammered out the settlement. But the number of opt-outs
has been continually changing. Both attorneys say they
have been talking to the lawyers for the opt-outs to try
to get their clients to change their minds.
Once
the number of opt-outs is settled, Sulzer will do a risk-benefit
analysis of those cases to see how much it might cost
the company to fight each one in court. At a time when
many companies face huge liability problems, lawyers have
been watching the Sulzer deal closely all over the country.
Richard
Heimann
of San Francisco's Lieff Cabraser Heimann & Bernstein,
another attorney who helped hammer out the new settlement,
says the key to the analysis for Sulzer will not be the
number of cases necessarily but rather the severity of
injuries and complications to the plaintiffs who opt to
go to trial instead. In addition, the company has to look
at the likelihood that courts in different parts of the
country would come up with widely different verdicts and
damage awards, perhaps in the millions of dollars.
About
30,000 people make up the class that received Sulzer's
artificial implants. Of those, about 3,500 suffered complications
and had to have the implants replaced. Heimann, who represents
about 150 people who had to have knee or hip surgery again
because of the faulty devices, says that the "only
alternative to the deal is to declare bankruptcy,"
and that he was "not aware of any other settlement
like this."
|
| |
| May
17, 2002 |
San
Francisco Chronicle, "Eleventh Hour Tolls for
Hip Plaintiffs; Tiny Fraction Could Derail Settlement"
|
With
more than 99 percent of plaintiffs having signed off on
a $1 billion settlement over defective joint replacements
and a deadline fast approaching, attorneys from both sides
are hoping to persuade 132 holdouts to come on board.
They predict dire consequences if the settlement with
artificial-joint-maker Sulzer Medica Ltd. collapses.
Continuing legal battles could drive the company into
bankruptcy, the attorneys say, and nearly 30,000 other
plaintiffs might never see a dime.
Under
terms of the settlement, 3,500 people who required corrective
surgery for defective hip or knee replacements will receive
about $206,000 each, $40, 000 of which will go to attorney
fees. An additional 26,000 who received defective parts
but have not needed surgery will get about $1,000 each.
The
company has until Wednesday to decide whether to proceed
with the settlement, which was approved by a federal judge
last week. Sulzer, based in Switzerland, said Thursday
that the individuals who choose to opt out and fight for
more money in court could bankrupt the company.
If
the company goes bankrupt, it's very unlikely that anyone
would see any money, said Luke Ellis, an Orinda attorney
whose firm represents about 35 plaintiffs, all of whom
he expects to take the settlement. In addition, the threat
of pending lawsuits could hinder Sulzer's ability to borrow
the $425 million it needs to pay the plaintiffs, he said.
Ellis described the settlement as fair. "We're convinced
this is the best way to pay the most people something,"
he said. "It's not perfect, but this is a company
that does not have enough money to pay perfect."
Richard
Heimann, in the San Francisco offices of Lieff Cabraser
Heimann and Bernstein, LLP, said two of his 150 clients
are refusing the offer, but he declined to discuss their
cases. He said a third of his clients may be eligible
for more than the settlement allows through an "extraordinary
injury" fund of $100 million that has been set aside.
But the amount a single patient can receive caps out at
about $1 million, or $800,000 once attorney fees are taken
out.
|
| |
| April
29, 2002 |
Barrons,
"FTC Looking at Pharmaceutical Deals"
|
America's drug companies have long enjoyed the trust of
both patients and investors. But this is the year of antitrust.
This summer, the Federal Trade Commission will release
a study of the drug industry's alleged attempts to delay
competition from generic drugs valued at $20 billion in
annual sales, and research pipelines dry, lawyers have
become as important to pharmaceutical revenues as chemists
Late last month, FTC Chairman Timothy J. Muris previewed
the report to a Senate committee, saying the commission
indeed had found "a variety of potentially anticompetitive
strategies" in use by the sellers of both branded
and generic drugs.
The financial bite of antitrust cases rarely comes
from the FTC, however. Antitrust cases brought by state
attorneys general, health-care insurers and class-action
lawyers win the big recoveries. Private antitrust actions
over nearly a dozen other drugs are pending around the
country, says class action lawyer Eric
B. Fastiff, with the San Francisco office of Lieff
Cabraser Heimann & Bernstein. Among the drugmakers
defending such private antitrust suits are Bristol-Myers,
GlaxoSmithKline, Pfizer and Schering-Plough.
|
| |
| April
22, 2002 |
Kiplinger
Business Forecasts, "Wave of Lawsuits
Centers on Pay Rules"
|
Employers increasingly are landing in court for allegedly
cheating workers out of pay, making wage and hour class-action lawsuits a new
hot-button issue for companies of all sorts. Although racial and sex discrimination
lawsuits get more press, there are just as many wage and hour class-action
claims in federal courts. And the number is sure to climb.
Seymour
combed through reports filed with the Administrative Office
of the U.S. Courts and found that 79 Fair Labor Standards
Act (FLSA) class-action lawsuits were filed in federal
court last year, compared with 77 federal race and gender
class-action claims. His survey is the closest picture
available since courts don't keep track of class-action
lawsuits or settlements.
Both blue- and white-collar workers are slapping employers
with class actions under the 1938 FLSA and companion state
laws. Retail clerks, nurses, restaurant workers, accountants,
insurance adjusters, engineers and chicken catchers are
among those who have sued and, in many cases, won big
settlements.
|
| |
| April
22, 2002 |
National
Law Journal, "Jury Returns $165M Punitive
Award"
|
A
California jury has returned a $165 million verdict for
punitive damages-nearly 29 times the actual damages awarded-against
a corporate defendant to deter fraudulent business practices,
according to two members of that jury. The $170.7 million
verdict on April 16 is the fourth highest of 2002, according
to The National Law Journal's running tally of top 10
verdicts.
The
case involved a British company named Edsaco Ltd., which
was sued for intentional fraud and conspiracy. The jury
found Edsaco liable on both counts for creating five shell
companies that pretended to purchase nonexistent software
from a Silicon Valley firm, Scorpion Technologies Inc.
Scorpion shareholders, who lost some $55 million when
the fraud was exposed, brought the class action in U.S.
District Court in San Francisco.
|
| |
| April
17, 2002 |
The
Recorder, "'Brazen' Sham Slammed With
$171M Verdict "
|
After
deliberating for mere hours, a federal jury Tuesday returned a $170.7 million
verdict on behalf of former shareholders of an allegedly sham software company.
Included in the unanimous eight-person jury's verdict is $165 million in punitive
damages, hailed as a signal that post-Enron juries are going to be tough on allegations
of financial fraud.
The
damages are attributable to "the absolute brazenness
of the [defendants'] conduct and their utter and complete
lack of remorse," said Lieff Cabraser Heimann & Bernstein
partner Richard
Heimann. "This was business as usual."
The
case is a successor to a shareholder suit over the
collapse of Scorpion Technologies Inc., which was raided by the
FBI and Securities and Exchange Commission in 1993.
Criminal charges against a number of former employees ensued. The present case
was brought against British company Edsaco Ltd. in 1998. Using overseas addresses,
Edsaco allegedly provided shareholders and directors for phony European companies
set up by Scorpion to purchase non-existent software. Such shareholders and directors
can help put a company in a more favorable tax situation, among other considerations.
Heimann
will now turn his efforts to recovering the $5.7 million
in compensatory damages and $165 million in punitives,
which is by no means assured -- Edsaco says it is now
dormant and does no business. "I think that's all
bogus," Heimann said, adding that he believes the
company's assets were shifted to new companies. "Now
that we've got the verdict, what I'm going to do now is go after the successor
companies."
|
| |
| April
13, 2002 |
Obesity,
Fitness & Wellness Week, "Group Asks
FDA to Ban Diet Drug Meridia"
|
The
consumer group Public Citizen is asking the U.S. government to ban the prescription
diet drug Meridia, arguing that its risks outweigh its benefits.
The
Food and Drug Administration (FDA) reported that 25
people worldwide who were taking the drug have died although it is not known
whether those deaths were related to Meridia. Sixteen of the deaths were related
to heart problems. A spokeswoman for the manufacturer, Abbott
Laboratories, said the company knows of 32 deaths of
people taking Meridia, including 28 in this country. But Melissa Brotz said there
does not appear to be a pattern suggesting the drug was to blame.
Public Citizen petitioned the FDA to pull the drug,
known chemically as sibutramine, calling it "unacceptably
dangerous." The group noted that FDA's scientific
advisers recommended against the initial approval because the drug had only minimal
weight-loss benefits but increased blood pressure and heart rate for some patients.
FDA spokeswoman Laura Bradbard said the agency regularly
monitors "adverse events," including death,
associated with drugs and will respond to the Public
Citizen petition. In approving the drug in 1997, the
FDA said it is "moderately effective" at
helping patients lose weight. In studies, they lost about 7
to 11 more pounds than mere dieters.
The FDA also said that Meridia did not appear to pose
the risk of heart valve damage that forced it to ban
the popular diet drugs Redux and fenfluramine, the "fen" in
fen-phen. At the time, the FDA cautioned that because of Meridia's side effects,
no one with poorly controlled hypertension, heart disease, or irregular heartbeat,
or who has survived a stroke should use the drug. And it said that it is only
for the seriously obese, as measured by a body mass index of 30 or greater. An
example would be someone who is 5 feet, 6 inches and weighs
185 pounds.
|
| |
| April
11, 2002 |
The
New York Times, "Methods Used For
Marketing Arthritis Drug Are Under Fire"
|
Centocor,
a subsidiary of Johnson & Johnson, has been providing
doctors with marketing materials that describe how they
can make extra money by prescribing a new drug, a practice
that health care fraud experts say may be illegal.
Some doctors have recently raised concerns about Centocor's
marketing of the new drug, Remicade, an expensive treatment
for rheumatoid arthritis. ''We need to utilize these medicines
based on their merits and not on their profit potential,''
said Dr. Arthur Weaver, a clinical professor of medicine
at the University of Nebraska Medical Center an | |