Judge in Meningitis Cases Approves Trustee's Plan

By Walter F. Roche Jr.

A federal judge in Boston has given her assent to a proposed $100 million settlement of claims against a Massachusetts drug compounding firm by approving a procedural plan proposed by the bankruptcy trustee for the defunct pharmaceutical firm.

In two separate orders issued Thursday, Judge Rya W. Zobel rejected claims by lawyers for Nashville's Saint Thomas Outpatient Neurosurgical Center that the trustee's plan to limit depositions and halt further action against some of the defendants in dozens of pending civil suits was "overly broad and vague."

Zobel noted that the trustee, Paul Moore, had argued that the limits were "critical to the implementation" of proposed settlements with the owners of the New England Compounding Center and related parties.

Those settlements with NECC's owners, insurers and other related parties emerged in a parallel bankruptcy case, also in federal court in Massachusetts.

NECC, according to state and federal regulators, shipped fungus tainted steroids to medical facilities across the country, including the Saint Thomas clinic, triggering the outbreak of fungal meningitis that killed 64 patients and sickened 751.

"I find that the trustee's proposed order is sufficiently clear and reasonable," Zobel wrote, adding that it does not prevent lawyers from the Nashville clinic from pursuing affirmative defenses.
"The court has determined that the requested stay of these proceedings and limitation of discovery with respect to the settling parties is warranted," she concluded in a five-page order.

Zobel did, however, order a stay effectively stopping the clock on statutory claims that might otherwise expire.

Lawyers for victims of the outbreak, many of them in Tennessee, said they were pleased with Zobel's decision.

“We are glad that discovery is moving forward and we are focusing on the clinics in Tennessee.  We look forward to presenting our case to a jury as soon as possible,” said Gerard Stranch, one of the attorneys representing victims of the fatal 2012 outbreak.
Saint Thomas' attorney Chris Tardio said, "The decision allows us to begin the process of discovering how NECC contaminated these medications despite promising their customers that they followed the proper safety standards. We have asked for that opportunity, and the decision allows us to do that."
Zobel is presiding over hundreds of cases stemming from the outbreak that were merged in her court. The number of those cases Zobel is overseeing has been steadily increasing as statutes of limitations in affected states are running out. 
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