Ruling May Partially Shield Maker of Heart Valve From Foreign Litigants

Shiley Inc., the Irvine medical-products firm sued over allegedly faulty heart valves, has won a partial reprieve from scores of civil lawsuits in an appellate court decision that could have significant ramifications for foreigners using California courts.

The state Court of Appeal in Santa Ana decided in two cases that heart-valve customers in other countries are not automatically entitled to have their cases tried in California, where jury awards often are higher than those in foreign courts.

The ruling, released last week, could reduce the potential damages that the company may ultimately pay by forcing foreign litigants to bring suits in their own countries. It also could affect any California manufacturer that sells products overseas.

“It could apply--and we believe it would apply--to product-liability cases for any kind of product made in California and exported outside the United States,” said Robert C. Ross, assistant general counsel for Pfizer Inc., Shiley’s New York-based corporate parent.

Contending that foreign litigants unfairly burden taxpayers and other litigants and “may also threaten to involuntarily exile some of our leading businesses . . . and high technology manufacturers to other jurisdictions,” the state appellate court decided that foreigners may be required to use the legal systems of their homelands to fight their consumer battles.

The three-judge court said it was attempting to discourage “forum shopping,” in which a plaintiff tries to pick a court favorable to its cause and a jury likely to return big judgments.

“Modern litigation in this state features burgeoning public expense, inadequate and crowded facilities, an overworked judiciary and, in our larger counties, routine five-year delays in bringing most tort actions to trial,” the court said in a unanimous opinion by Justice Thomas F. Crosby Jr.

Lawyers for the plaintiffs say they will appeal the decision to the California Supreme Court.

The decision directly contradicts opinions in two other districts, including a Los Angeles appellate court decision on another suit filed against Shiley by foreigners.

In 1986, an appellate panel in Los Angeles determined that a plaintiff had a right to sue in the state where the allegedly defective valve was manufactured. The California Supreme Court declined to hear the case on appeal.

In 1984, an appellate panel in San Francisco refused to dismiss an action brought by British plaintiffs against Syntex Laboratories for injuries resulting from the use of oral contraceptives.

While dismissing the conflicting state appellate court decisions, the court in Santa Ana sided with a U.S. Supreme Court ruling that said foreigners do not have an absolute right to choose where their case will be adjudicated unless they have no remedy at all in their native courts.

The appellate court’s 24-page opinion reverses an Orange County Superior Court decision last January that had upheld the rights of relatives of two deceased heart-valve recipients in Sweden and Norway to file their suits in California.

If allowed to stand, the recent decision could push out of Orange County Superior Court at least 92 cases that foreign residents have filed against Shiley for manufacturing the allegedly faulty heart valves.

Joseph Dunn, a lawyer for the plaintiffs, contends that the Santa Ana appellate court is in error. Because the decision has potentially “far-reaching effects” and is inconsistent with the decision of at least one other appellate court, he said, he hopes that the state Supreme Court will take the case on appeal.

But Pfizer rejoiced over the latest appellate court decision, which accomplished at least in a limited way what the company so far has failed to achieve through federal and state legislation.

As with all appellate court decisions, the recent ruling is not binding on other appellate panels throughout the state but sets a precedent for Orange County, where most of the Shiley lawsuits have been filed.

And U.S. residents still can bring similar suits against Shiley in Orange County.

244 Fractures Reported

The U.S. Food and Drug Administration reports that as of June, there had been 244 fractures of Bjork-Shiley convexo-concave heart valves, resulting in 157 deaths. It is not certain exactly how many lawsuits have been filed nationwide involving the valves.

Dunn’s firm, Robins, Kaplan, Miller & Ciresi in Newport Beach, has filed about 125 heart-valve cases against Shiley in Orange County, including eight involving deaths. The remainder are for emotional suffering by recipients of valves that may be prone to defects.

Of the 125 lawsuits that his firm has filed, Dunn said about 92 are by foreign heart-valve recipients or their heirs.

Consumer advocates complained that the appellate court decision promotes unfair discrimination against foreign citizens in U.S. courts.

“It says people who live in a foreign country and are killed or injured by a product aren’t as worthwhile as people who live in the United States and are killed or injured,” said Dr. Sidney Wolfe, executive director of Public Citizen Health Research Group, a Washington organization founded by Ralph Nader.

Wolfe said that under the American legal system, Shiley has been settling wrongful death lawsuits involving its heart valves for up to $1 million a case.

The litigants in the Orange County case--the heirs of a 54-year-old Norwegian father of three teen-agers and a 26-year-old Swedish man whose heart valve broke when he was playing with his 2-year-old daughter--”would receive a fraction of the damages they would receive in California” if they are forced to pursue their lawsuits overseas, Dunn said.

Pfizer has argued that California manufacturers are at a competitive disadvantage with companies in other states and overseas because of California’s generally stronger consumer-protection laws.

“I think the court here was really looking at a competitive disadvantage that California companies have,” Ross said.

Legislation Died in Senate

State legislation that Pfizer proposed earlier this year to reduce the number of foreign litigants with product liability cases in California courts died in a state Senate committee.

However, Ross said Pfizer will continue to support proposed federal legislation designed to keep more foreign-consumer lawsuits out of the country. “The reason we are trying to get federal legislation is that we would like a single law dealing with foreign plaintiffs suing in the U.S. to avoid any advantage to sue in one state versus another,” he said.

Les Jacobson, spokesman for Baxter International, whose Irvine-based Edwards Cardiovascular Systems division also has had a recent problem with some faulty heart valves, said Baxter is trying to have dismissed a foreign case filed in Texas, where an allegedly faulty Edwards valve was manufactured.

“We feel the court made the correct decision in the Shiley case, and we hope it sets a precedent not only in California, but across the nation,” Jacobson said.