Product Liability

Pharmaceutical and Medical Devices Product Liability

Merck & Co Inc and Merck Sharp & Dohme (Australia): In one of the largest product liability class actions in the Asia-Pacific, Clayton Utz represents Merck & Co Inc and Merck Sharp & Dohme (Australia) Limited in the defence of representative proceedings involving claimants who are alleging they have suffered cardiovascular injuries due to their consumption of VIOXX, a COX-2 inhibitor. There was a hearing of the lead applicant's claim during the first half of 2009. The court has reserved its judgment.

This is a particularly large and significant product liability dispute. The defence of the Australian proceedings has required a co-ordinated international approach and involved analysing complex scientific and medical issues.

Copper 7 Litigation: Clayton Utz represented GD Searle & Co and its subsidiaries in the defence of a large number of product liability claims that were made in relation to the Gravigard and Mini-Gravigard intra-uterine contraceptive devices ("IUDs") (known as the Cu-7 and Mini-Cu-7 in other countries). In excess of 300 plaintiffs commenced proceedings against GD Searle & Co (a subsidiary of Monsanto Corporation). We conducted the defence of these claims in Australia and New Zealand in a coordinated international effort involving similar actions in the United States and the United Kingdom. The proceedings in Australia were conducted as a quasi-class action. The trial judge dismissed the claims of the lead plaintiffs on the basis that they had failed to demonstrate a sufficient causal relationship between their use of the IUDs and their alleged injuries. In his judgement, the trial judge described the case as "the longest running and most complex product liability action in Australian legal history". The successful defence of these proceedings turned on our ability to successfully marshal and present complex epidemiological, medical and scientific (materials science and polymer chemistry) evidence exonerating our clients.

Pharmaceutical company: Clayton Utz represents a major pharmaceutical client in the defence of the first Australian proceedings commenced by a plaintiff involving its drug used for the treatment of a specific mental illness. The plaintiff has alleged that he developed diabetes as a result of taking the drug and that the pharmaceutical company failed to warn of the side effects of the drug, including the possible association with metabolic issues, hyperglycaemia and diabetes.

This is the first claim in Australia against our client in relation to this drug, which has been the subject of over 10,000 claims in the United States and Canada. As a number of other significant class actions are taking place in the United States and Canada, the defence of these proceedings will require a co-ordinated approach with US counsel. It is expected that the Australian proceedings will raise a number of complex scientific, medical and epidemiological issues in determining causation questions.

This was the Australian arm of the high-profile Fen-Phen litigation. In stark contrast to the US litigation and trials, we were successful in having the Australian Federal Court proceedings dismissed as a class action at a series of interlocutory hearings. Hence, this matter never proceeded to trial. While dismissal of the class action proceedings did not bring an immediate end to the litigation (individual plaintiff proceedings were commenced in the New South Wales Supreme Court), it effectively broke the momentum of the litigation and the state court proceedings were ultimately discontinued. During the Federal Court proceedings, we worked very closely with an international defence team. This work included the identification of Australian expert witnesses, one of whom was ultimately used by our client successfully in the litigation in Canada and the US.

St Jude Pacemaker Class Actions: We defended two class actions in the Federal Court of Australia involving implantable cardiac pacemakers. These actions raised a number of unique issues in relation to both product liability law and class action procedure. The cases are of particular significance as they are the first Federal Court class actions involving a drug or medical device that proceeded to a final judgment. Indeed, one of the cases made it to the High Court of Australia. Both actions involved novel product liability claims under Part V Division 2A of the Trade Practices Act. These took the form of an implied contractual warranty, notwithstanding an absence of privity. They also involved claims that a product can be "defective" within the meaning of the legislation, and thus entitle the claimant to compensation, in circumstances where the product is one of a group included in a "hazard alert" but where the specific device continues to function normally. The actions were also the first in Australia to articulate a claim for medical monitoring.

Breast implant litigation: In 2001, we brought to an end the Baxter breast implant litigation. We have acted for Baxter Healthcare Corporation since 1995 in connection with breast implant proceedings in both the Federal Court of Australia and various State courts.

Automotive product liability

Toyota Motor Corporation Australia Ltd: Our team has worked closely with Toyota's product liability team, in dealing with owner care issues in the automotive sector. Our background in motor vehicle risk management enables us to effectively assist Toyota in dealing with single customer complaints or demands extending through to the management of substantial model year concerns. Our team also assisted Toyota in the co-ordinated and timely implementation of customer care bulletins, safety checks and, where required, product recalls.

Mack Trucks: We have acted for and guided Mack Trucks through a number of individual product liability claims and in a class action commenced on behalf of the owners of all Mack Trucks manufactured over an eight year period. During the successful conduct of the defence of the proceedings, Clayton Utz provided advice on containing risks for Mack Trucks with all stakeholders and provided a complete strategy for the defence of future class actions. During the litigation, the company managed to maintain its customer focus with little disruption from such a substantial and potentially distracting claim.

Automobile client: We advised our client on the Australian Road Rules and relevant automotive design standards in relation to the provision of internet access in vehicles.

Product recall

Pan Pharmaceutical: We represented a number of sponsors and distributors of over-the-counter (OTC) pharmaceutical products in relation to the highly publicised Pan Pharmaceutical product recall. This involved a recall, in Australia and the Asia-Pacific region, of no less than 1643 different products. These products were manufactured by Pan, or included ingredients supplied by the company. This was one of, if not the, largest recalls ever undertaken anywhere in the world in relation to complementary medicines/pharmaceutical products. By way of example the recall notices published in Australian newspapers extended across 15 broadsheet pages of small print. It is unparalleled in both its scope and potential impact on an industry and has given rise to an extraordinary range of liability, regulatory and commercial issues.

Pharmaceutical company: Clayton Utz is advising a major pharmaceutical client in relation to potential liability and product recall issues which have arisen in relation to a hot pack distributed by our client to many hospitals throughout Australia. Our client recently received a complaint from a user of the hot pack after the user sustained burns from the pack. We are co-ordinating materials testing of the hot pack to determine whether to conduct a recall and what further steps to take.

Food law

While industry sensitivities prevent us from disclosing clients, some examples of our experience include:

• Assisting our client (a national retailer) with the implementation of its food compliance program and food profit project, and providing a label review service for direct imports. Further, we advised on the regulations determining the import of chocolate coated insects into Australia.
• Advising in relation to class actions involving oysters, peanut butter, pork rolls and defending class actions in relation to chemical contamination of cattle and water.
• Acting for a company in relation to an allegation that a claim an alcoholic beverage was of a nominated vintage and country of origin was false and advising in relation to the geographical indications of wines.
• Acting for a juice retailer in relation to claims that a juice was "fresh" were misleading when fortificants were added to the beverage.
• Advising in relation to contamination issues including ethylene oxide in herbs and spices and chloropropanols in soy sauce.
• Developing product recall procedures consistent with the Food Industry Recall Protocol and advising in relation to some of Australia's largest recalls of food products and providing crisis management advice in relation to a food contamination incident resulting in a product recall, coronial inquiry and class action.

International trade and customs

• Successfully defending a Federal Court judicial review application filed by Expo-Trade Pty Ltd. Justice Moore dismissed Expo-Trade’s application with costs and Expo-Trade did not appeal the decision. The litigation involved the dumping of ammonium nitrate exported from Russia by Expo-Trade. The Court found for Customs on all of the major issues, being country of export, price control and how the calculation of non-injurious price is affected by level of trade and deductions for importer’s costs and profits.
• Representing the Minister for Justice and Customs and the Australian Customs Service in judicial review proceedings in the Federal Court, challenging the decision to impose anti-dumping duties with respect to LG Electronics. The Minister and Australian Customs Service were successful at first instance with the application for review being dismissed with costs awarded to the respondents.
• Representing a US toy manufacturer in relation to heavy metal requirements for toys and discussions with Australian Customs Service.
• Advising medical device companies on establishing memoranda of understanding with Chinese manufacturing agencies.
• Advising on the applicability of the Sale of Goods (Vienna Convention) Acts and the difference between the uniform rules and implied warranties existing under other Australian state and federal laws.
• Liaising with Australian regulators including Australian Customs and Work Safety authorities in relation to the inadvertent entry into Australia of products packed in asbestos.
• Advising in relation to restricted imports such as pesticides (organochlorine chemicals such as DDT, dieldrin, heptachlor and chlordane), ozone depleting chemicals (including CFCs, HCFCs, HFCs, PFCs and HBFCs) and industrial chemicals (PCBs and PCTs) under the Customs Prohibited Import and the Customs Prohibited Export Regulations.
• International trade issues concerning medical devices including the Australia-European Community Mutual Recognition Agreement, Australia- European Free Trade Association Mutual Recognition Agreement and the Australia - Singapore Mutual Recognition Agreement.
• Importation and customs requirements for consumer goods, cosmetics and personal care goods in particular in relation to the Customs (Prohibited Imports) Regulations 1956 (Cth).
• Negotiations with the Australian Customs Service in relation to shipments of OTC products not meeting Australian labelling requirements.