After a fierce lobbying war, a state senator says he will likely give up his attempt to close a legal loophole that is helping an Orange County manufacturer of defective heart valves successfully resist potentially huge product liability claims.
In recent weeks, the Irvine-based Shiley Inc., its corporate parent, Pfizer Pharmaceutical of New York, and the 900-member California Manufacturers Assn. have mobilized a team of lobbyists--as well as dozens of company chief executive officers--to block a bill that would make it harder to dismiss lawsuits filed by out-of-state plaintiffs.
As a result, the bill's sponsor, Sen. Quentin L. Kopp (I-San Francisco), says he is thinking of dropping the bill. "(The lobbying) generated opposition from (Senate) members, which in turn has an effect on the future of the bill," Kopp said Wednesday.
At stake is the potential for monumental court judgments against Shiley, which is facing an onslaught of lawsuits over defects in Bjork-Shiley heart valves.
Food and Drug Administration records show that 395 of the valves have failed, leading to an estimated 261 deaths. Heart valve recipients and a congressional committee report accused the company of selling 86,000 of the mechanical devices, manufactured between 1979 and 1983, while suppressing evidence that tiny wire struts in the device were prone to break and cause fatal hemorrhaging. The issue has yet to come to trial. Settlements so far have been made out of court.
Half of the valves were implanted in foreign patients, and they now represent half of the estimated $800 million in liability claims against the Irvine-based firm for actual damages and emotional suffering.
The high-stakes issue spilled over into the Legislature in late March when Kopp sought to amend present law to delete an obscure, 24-word sentence that allows judges to dismiss lawsuits involving foreigners if an overseas trial is deemed more convenient. Kopp said the sentence was a "fluke" and should be stricken even before it is scheduled to expire on its own by 1992.
However, Shiley has fought mightily to keep the sentence, which the company has used in its legal strategy in trying to get suits dismissed that were brought by foreigners, arguing that the suits should be brought in the country where the defendant resides rather than in California. In December, the firm's use of this argument succeeded in getting a case thrown out of court in Orange County.
The company says it is not using the language of the law to duck its obligations. "We freely acknowledge Shiley's interests in containing legal costs, but that is not the same thing as suggesting we are trying to avoid or evade legal responsibility," spokesman Robert J. Fauteux said.
But critics say the company is trying to do just that.
"What Shiley has done is appear in the Orange County Superior Court in the foreign cases and said: 'This is an inconvenient place for us to litigate these cases,' " said Joseph Dunn, a Newport Beach attorney who is handling 280 suits against Shiley. "They say that despite the fact that their headquarters is a mere five miles from the courthouse."
Sen. Bill Lockyer (D-Hayward) said Shiley naturally would prefer to defend such suits in countries like Britain, where product liability awards "give you 20 dollars and a gold watch."
The Consumers Union and California Trial Lawyers Assn. lobbied on behalf of Kopp's bill but were apparently outmatched by Shiley and the manufacturers' group, which called on corporate presidents to inundate the Legislature with letters supporting the loophole.