Plaintiffs Lose Round in Shiley Valve Fight : * Law: Appellate panel rules that out-of-state recipients of Irvine firm’s potentially faulty device cannot sue in California, whose courts are more disposed to emotional distress cases.

The state Court of Appeal has handed a setback to a group of out-of-state recipients of potentially faulty Shiley Inc. heart valves who want to sue the Irvine-based firm in California, where courts have been more favorable to plaintiffs in cases of emotional distress.

In a decision handed down here earlier this week, the Fourth District Court of Appeal rejected Orange County Superior Court Judge William F. Rylaarsdam’s May 8, 1991, ruling that cleared the way for the cases to be heard here.

The appeals court said there is no reason that the 39 out-of-state recipients should not have sued in their home states.

Attorneys for the plaintiffs said they intend to appeal the ruling to the state Supreme Court.

In November, the state Supreme Court ruled that foreign recipients of Shiley heart valves have no grounds to bring suit in California courts.

Shiley has claimed all along that the out-of-state plaintiffs were “forum shopping,” looking for the jurisdiction likely to be most favorable to them.

The appeals court has sent the case back to Rylaarsdam for reconsideration.

The 39 plaintiffs and their spouses are among about 400 people nationally suing Shiley, alleging fraud and emotional distress related to fear that their valves might fail.

Courts in other states have rejected such distress claims, but a California appeals court ruled in 1990 that patients could sue if they could prove fraud by the manufacturer.

The Court of Appeal, in a unanimous decision written by Judge Henry T. Moore Jr., said such suits should be filed where the patients live, as long as those states’ statutes of limitations have not expired. The proper jurisdiction, Moore wrote, is where an action can be brought, not where it is most likely to be won.

The panel added that allowing cases to be filed on the basis of which jurisdictions are most favorable to the plaintiff “would undermine important public interests, particularly the interest in avoiding congesting California courts and overburdening California taxpayers.”

Gregory Hull, a partner in the San Jose law firm representing the heart valve patients, said his firm plans to petition the state Supreme Court to overturn the Court of Appeal decision.

And Vance Simonds, an Irvine attorney representing 240 other patients suing Shiley in separate cases, said that while he is sure Shiley “is cheered” by the decision, “we don’t feel it has any significant effect on our clients.”

About 55,000 people have received implants of the artificial valves, which were manufactured by Shiley, a subsidiary of pharmaceutical giant Pfizer Inc.

The valve has been blamed for about 265 deaths, and Pfizer has paid undisclosed settlements to families of patients who died when their valves fractured.

In January, Pfizer offered to spend up to $205 million to settle lawsuits brought by patients whose valves were still working.

Officials at Shiley and Pfizer could not be reached for comment on the Court of Appeal ruling.