Meningitis Lawyers Give Opposiite Liability Arguments

By Walter F. Roche Jr.

With the fate of the claims of dozens of victims in the balance, opposing lawyers Thursday gave a federal judge totally opposite interpretations of Tennessee laws on health care and product liability.
Appearing before U.S. District Judge Rya Zobel, George Nolan, a Nashville attorney representing victims of the 2012 fungal meningitis outbreak, said it was absolutely undisputed that a Nashville clinic did seek and obtain compensation for vials of a steroid that sickened and killed unsuspecting patients.
C.J. Gideon, the lawyer for the Nashville and other Tennessee clinics, said Nolen was wrong and Tennessee's unique product liability does not apply to claims by victims and their survivors.
There was no bill for the steroid, Gideon said, adding that the invoices from the Saint Thomas Outpatient Neurosurgery Center, were for a complete medical service.
It was, he said, "a fixed one time fee for the entire process."
Gideon said that as a result, all of the claims fall under Tennessee's health liability law.
The question of which law applies is critical to the outcome of the dozens of pending cases.
If Zobel adopts the position of the clinics, any award to victims will be limited by the state's health care liability law, which sets strict limits on the amount victims can recover. Those caps don't apply to the product liability law.
Nolan, who spokes first in the 80-minute session, said that there are claims that fall under the health care law, but the product liability claims are separate.
"Some of our claims do fall under the health care liability law. No question about it," Nolan said."
But, he added "there is no question money changed hands. A sale has occurred," he said citing deposition testimony from the clinic manager, Debra Schamberg.
Gideon said that a recent Tennessee Supreme Court decision bolstered the clinic argument and he added that under Tennessee law, when there is a conflict between two statutes, the new law should be applied. The health care law went into effect long after the product liability law, he said.
"This is clearly a transaction involving medical services," Gideon said.
Nolan cited a provision of the product liability law that provides that when the manufacturer of a defective product is bankrupt, the seller becomes liable. He also cited another Tennessee Supreme Court case, which, he said, backs the plaintiffs' argument.
The New England Compounding Center, which produced the fungus tainted steroids, filed for bankruptcy on Dec. 21, 2012, a few months after the deadly outbreak became public. That, Nolan said, triggered the product liability law.
Federal court records show 778 patients from across the country were sickened in the outbreak and 76 of them died. In Tennessee 153 patients were sickened and 16 of them died.
The two sides also argued over what so-called bellwether cases will be heard first. Lawyers for Saint Thomas charged that the plaintiffs were maneuvering to eliminate cases with little or no liklihood of  substantial awards.
"It's simply not fair," said Marcy Greer, one of the clinic lawyers.
Gerard Stranch, a Nashville lawyer for victims, said the issue was "much ado about nothing."
Zobel took both issues under advisement.
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