Meningitis Trial Dates Set; First Payments Possible in June-July

By Walter F. Roche Jr.

A federal judge has set a mid-July date for the first trial in the cases brought by Tennessee victims of a fungal meningitis outbreak against the Nashville clinic where they were injected with fungus laden spinal steroids.
In a 45-minute session in her Boston, Mass. courtroom U.S. District Judge Rya Zobel said the trial in the first case would begin around July 15 to be followed by a second trial a month later.
The first case will be the claim of Jane Wray, who was sickened following a steroid injection on Aug. 31, 2012.
In the same session, Zobel was told that, depending on ongoing negotiations, some victims of the outbreak could get initial payments in early June or July from a $200 million trust fund.
The action came amid arguments between lawyers for the victims of the 2012 outbreak and the lawyer for the Saint Thomas Outpatient Neurosurgical Center, the Nashville clinic where many of the victims were injected.
C.J. Gideon, representing the clinic and related parties, urged Zobel not to reverse her prior decision to dismiss claims made under Tennessee's product liability law.
"You were right the first time," Gideon said.
Mark Chalos, one of the attorneys representing victims, said that Zobel could allow the liability claims to go forward in the upcoming trials and let the juries make a decision.
At issue is  a recent ruling in which Zobel concluded that Tennessee's medical liability law precluded claims made under the state's product liability statute. Victims' lawyers have appealed that decision and asked Zobel to reconsider.
Chalos, however, noted that the issue of which law should apply has not yet been ruled on by a federal appellate court or the Tennessee Supreme Court.
"We believe the two statutes can be read in harmony," Chalos argued.
Gideon, however, said the two statutes were "completely irreconcilable" and "inextricably at odds with each other."
Zobel asked both sides to submit further written arguments.
The judge then questioned lawyers about when victims might actually get paid from a $200 million trust fund established in the bankruptcy case of the New England Compounding Center, the company blamed for producing the fungus tainted methylprednisolone acetate.
Frederic Ellis, who has been handling negotiations with federal officials, reported that "significant progress" had been made recently in an attempt to reach a settlement.
At issue is how much the Medicare and Medicaid programs will get from the proposed settlement to reimburse the costs the programs paid for the medical care of the victims. Federal officials already have rejected a request to waive any such claims
Ellis said the median age of the victims was 64 and many were on Medicare when they were sickened.
He said it was possible that payments to some victims whose claims have not been disputed could be made as soon as June or July. There are some 1,200 claims in that category. He cautioned, however, that the negotiations are still ongoing and the outcome is far from certain.
Kristen Johnson, another attorney for victims, noted that the initial payments will not be for the full  amount that victims are entitled to and the final payments will come at a later date, after all claims have been processed.
Ellis said talks also have been progressing with major insurance companies which are also are seeking reimbursement for costs of victims' medical care they have underwritten.
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