Alabama Legal Update July-August 2014

Duty to Warn

Under Alabama law, a plaintiff claiming personal injury from a generic drug may have a cause of action for fraud or suppression against the drug company that manufactured the brand name drug. Does this mean that the Alabama Supreme Court has broken down traditional tort concepts of foreseeability and reliance, or flung open the product liability gates in non-pharmaceutical contexts? No, not at all.

In Wyeth, Inc., v. Danny Weeks and Vicki Weeks, the Supreme Court of Alabama (Special Term, 2014; 1101397; August 15, 2014) answered a certified question from the United States District Court for the Middle District of Alabama, Southern Division (Case No. 1:10 cv 602). On Application for Rehearing, Justice Bolin delivered the high court’s opinion. While creative litigants may cite this new Alabama case to extend duties to warn and to enlarge fraud causes of action against brand name manufacturers in personal injury cases stemming from another manufacturer’s generic equivalent product, Wyeth v. Weeks contains distinguishing features highly peculiar to the pharmaceutical world.

The Weekses asserted that Wyeth owed a duty to warn Danny Weeks’ physician concerning risks associated with a name brand medication; and that, as third-parties, the Weekses had the right to sue Wyeth when allegedly injured after taking a generic medication manufactured by a different company. Wyeth unsuccessfully argued that the claim really was just a products liability claim. Along the way, the Alabama Supreme court restated that the AEMLD does not subsume negligence or wantonness claims; and that fraudulent suppression likewise is a separate claim. In answering the question in favor of the Weekses, Alabama’s high court provided reasons that set this case apart from more commonplace duty to warn or products liability cases: the uniqueness of the pharmaceutical industry, with extensive FDA regulation and control; specific labeling rules; the learned-intermediary doctrine; and the peculiar nature of weighing the benefits of life-saving medication against the risks of sometimes serious side-effects. These are not at issue when the products are machine guards, mascara and motor boats.

The Alabama Supreme Court made clear that this holding concerned “a product that, unlike any other product on the market, has unprecedented federal regulation. Nothing in this opinion suggests that a plaintiff can sue Black & Decker for injuries caused by a power tool manufactured by Skil based on labeling or otherwise.” And for the products liability practitioner, the high court articulated that the Weeks’ case was “premised upon liability not as a result of a defect in the product itself but as a result of statements made by the brand name manufacturer that Congress, through the FDA, has mandated be the same on the generic version of the brand name drug.” Therefore, non-pharmaceutical manufacturers of most consumer goods need not linger too long over this interesting case.

Read the full opinion.

Insured/Judgment Debtor’s Bad Faith Claim Against Insurer Not Considered An Asset In Post-Trial Punitive Damages Hearing

A potential bad faith action against an insurance carrier can no longer be included among a Defendant insured’s assets for purposes of a Hammond/Green Oil analysis of that Defendant’s ability to pay a judgment.

Frank Gillis, M.D. v. Joey Frazier, as executor of the Estate of Florine Bryant, deceased.

Frazier, as personal representative of his mother’s estate, sued Dr. Frank Gillis alleging wrongful death and medical malpractice stemming from care rendered to Frazier’s mother while she was taking the drug Coumadin. The evidence showed that Dr. Gillis diagnosed Frazier’s mother with atrial fibrillation and prescribed Coumadin. Dr. Gillis testified that Coumadin required patients to be monitored such that their blood pressure did not become too thin. Over the next few months, the patient’s international normalized ratio (“INR”) levels increased from 1.9, within the normal therapeutic range, to 44.7. She was instructed to stop taking Coumadin and was referred to a hematologist. On November, 16, 2005 the patient suffered a massive brain hemorrhage and subsequent laboratory studies revealed profound abnormalities and a large subdural hematoma. The patient was removed from life support on November 17, 2005. At the conclusion of the trial, the jury awarded Frazier $5,000,000 in damages for the wrongful death of his mother.

Dr. Gillis moved for judgment as a matter of law, or alternatively a new trial, or a remittitur of the damages award, arguing that the jury’s verdict was unsupported by the evidence presented by Plaintiff and was instead motivated by sympathy or bias. He further argued that he was entitled to a remittitur of the jury’s punitive damage award based on its excessiveness, offering evidence of his age of 76 years old, and his inability to pay $3,000,000 of the judgment – the amount above his liability-insurance coverage of $2,000,000. Finally, Dr. Gillis argued that the Court should revive § 6-5-547, Ala. Code 1975, capping damages in medical malpractice actions at $1,000,000. The Court had previously found § 6-5-547 unconstitutional. These post-trial judgments were denied and Dr. Gillis appealed.

On June 4, 2013, the case was remanded to the trial court for the limited purpose of conducting a Hammond/Green Oil hearing pertaining to the jury’s punitive-damages award. Dr. Gillis challenged the trial court’s subsequent order denying his motion for remittitur on the grounds that, in calculating Dr. Gillis’s assets, the trial court improperly included a potential bad-faith claim against his liability insurance carrier. Dr. Gillis asked the Court to overrule its previous decision in Boudreaux v. Pettaway, 108 So. 3d 486 (Ala. 2012), “to the extent that it held that a potential bad-faith claim and/or negligent-failure-to-settle claim against a liability-insurance carrier may be considered as an asset for purposes of a Hammond/Green Oil review and remittitur analysis.” The Court agreed to overturnBoudreaux, holding that “[b]ecause at the time of a Hammond/Green Oil hearing the third-party action has not yet accrued and is speculative in nature, it cannot be considered as part of the defendant’s net worth in determining a defendant’s assets for purposes of Hammond/Green Oil and the remittitur analysis.” The Court reversed the judgment as to this issue and remanded the case such that the trial court could conduct aHammond/Green Oil hearing without taking into consideration the potential bad-faith and/or negligent-failure-to-settle claim against Dr. Gillis’ insurer. The Court further directed the trial court not to consider Dr. Gillis’s wife’s portion of their jointly owned assets.

Read the full opinion.