- April 15, 2024
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National Legal Briefs (Tampa edition)
Lincoln Electric to Fight Lawsuits by Sick Welders
Lincoln Electric Holdings Inc., the world's largest maker of welding equipment, will fight thousands of personal-injury claims by workers who claim they were poisoned by gases emitted while welding.
"The entire welding industry steadfastly maintains these cases are meritless and we will vigorously defend them," Chief Executive Officer Anthony A. Massaro told analysts in a conference call. "The plaintiffs' bar is mistaken if they think welding litigation is the next windfall."
Lawyers who won billions of dollars from the tobacco and asbestos industries are spearheading the suits against Lincoln Electric, General Electric Co. and other welding-rod makers, claiming manganese fumes breathed by welders caused Parkinson's disease and similar illnesses. While the industry has lost a single $1 million verdict, plaintiffs' lawyers predict multibillion-dollar judgments.
"The industry is going to be bankrupt," said Don Barrett, a Lexington, Miss.-based plaintiffs' lawyer who earned millions of dollars helping states win a $246 billion tobacco settlement in 1998.
Manganese is a common mineral, present in the human body and found in such everyday products as tea and peanuts. It is released as a gas when welding rods are heated to 9,000 degrees.
The cases may turn on scientific debate about whether the fumes cause irreversible damage to the central nervous system. Both manganese poisoning, called manganism, and Parkinson's disease have symptoms that include slurred speech, loss of bladder and bowel control, facial tics and impaired judgment.
Plaintiffs' lawyers are assembling scientists, doctors and industry reports to bolster their arguments. The industry's defense attorney John Beisner said no medical evidence links manganese exposure to the illnesses.
Massaro addressed the welding cases in his discussion of fourth-quarter and annual earnings with analysts. Lincoln Electric reported net income of $54.5 million, or $1.31 per diluted share, in 2003, compared with $29.3 million, or 68 cents per diluted share, in 2002.
Barrett's team of lawyers videotaped a "tutorial" for courts handling welding claims. It features interviews with expert witnesses and sick welders, who display slurred speech, contorted facial features and uncontrollable shaking.
The video cites decades-old industry and insurance company documents, including a 1938 pamphlet by MetLife Inc., suggesting that high levels of manganese exposure may pose health risks. Plaintiffs' lawyers said the evidence shows the industry hid the dangers for decades.
Underscoring the divergent views on the medical evidence, both sides point to a 2000 study of 15 sick welders financed, in part, by the National Institutes of Health.
While the study said welding might expose workers to something that accelerates the onset of Parkinson's, researchers also found that the sick welders studied had family members with similar illnesses, suggesting a genetic cause.
Lincoln Electric faces 8,405 welding claims, the company reported in its annual report to securities regulators. The company is appealing its $1 million loss last year. Since 1995, welding-rod makers has won dismissal of 360 cases and won six verdicts, according to SEC filings.
U.S. District Judge Kathleen O'Malley in Cleveland is overseeing almost 150 cases grouped together for pre-trial proceedings. In addition to Lincoln Electric, General Electric and 18 other companies are named in many of the suits.
Barrett blamed the welders' losing court record on inexperienced attorneys short on resources. He said his team of lawyers has spent several million dollars building cases.
Lilly's Zyprexa:
'Lifeblood' of the Company
Eli Lilly & Co.'s Zyprexa is the "lifeblood" of the company that funds research into new drugs, a company lawyer said as he urged a U.S. judge not to allow generic-drug makers to make copies of the schizophrenia drug.
"This is part of the lifecycle of drug research," Lilly lawyer Charles Lipsey told U.S. District Judge Richard L. Young in Lilly's hometown of Indianapolis.
Lipsey's comments came in closing arguments Feb. 12 in a trial in which Lilly is seeking to protect its patent on olanzapine, the key ingredient in the drug that accounts for one-third of Lilly's revenue. Zyprexa sales last year were $4.28 billion, including $1.6 billion outside the U.S. The judge, who presided over a three-week trial, likely will not rule for several months.
Generic-drug makers Ivax Corp. and India's Dr. Reddy's Laboratories Ltd. are challenging a patent issued in July 1993 that would block generic competition until 2011.
Zyprexa, recently approved by U.S. regulators to treat bipolar disorder, became Lilly's best-selling medicine after it lost patent protection for the antidepressant Prozac. Zyprexa came about after years of research that Lilly had likened to the Manhattan Project, which developed the atom bomb.
The generic-drug companies admit that they infringed the patent and the Indianapolis trial centered on whether it should have been issued by the U.S. Patent and Trademark Office. Olanzapine is a member of a family of chemical compounds whose patent protection expired in 1995. Accordingly, generic-drug makers argued that there was no new invention to merit a second patent.
To get the 1993 patent, Lilly had to prove to the patent office that there was something unexpected and special about olanzapine. Ivax and Dr. Reddy's contend that Lilly officials came up with that unexpected result by manipulating the outcome of a test of the compound on beagle dogs.
Lilly said that one unusual property is that high doses of olanzapine didn't increase cholesterol levels in dogs, contrary to results from high doses of another compound explicitly described in the earlier patent. Tests by Ivax showed the same results, Lipsey argued, while a test by Dr. Reddy's lasted just six weeks so it wasn't comparable.
Harrods Ltd. Sues
Wall Street Journal
Harrods Ltd., the London department store owned by Mohamed Al-Fayed, was libeled by an article published two years ago in the Wall Street Journal entitled "the Enron of Britain."
The piece appeared in a column in the Journal on April 5, 2002, after Harrods issued an April 1 press statement announcing it would sell shares to the public on a "first come, first served" basis. The release was posted on Al-Fayed's Web site and those interested were told to contact Loof Lirpa - April Fool spelled backward.
James Price, representing Harrods, told the London court that the Journal's article asked if the store was Britain's Enron, and "was an extraordinary attack" by the newspaper. He said it was "quite predictable" Harrods would object to an attack on its trustworthiness.
Dow Jones & Co., the publishers of the Wall Street Journal, denied the article injured Harrods' reputation. Gavin Millar, representing Dow, told the court only 10 copies of the U.S. version of the Wall Street Journal were sent to subscribers in the U.K.
Harrods had no evidence anyone in the U.K. had read the article, or that it had suffered damage to its business because of it, Millar told the jury. The reason we're here is because Mr. Al-Fayed "can't take a joke," Millar said Feb. 16.
Price and the law firm Kendall Freeman are acting for Harrods, while Millar and Finer Stephens Innocent are representing Dow Jones.
Pfizer Wins Appellate Ruling in Celebrex Patent Lawsuit
A U.S. appeals court upheld the dismissal of a multibillion-dollar lawsuit that claimed Pfizer Inc., the world's largest drugmaker, impermissibly used a university's patent for the Celebrex painkiller.
The U.S. Court of Appeals for the Federal Circuit said a trial judge was correct to rule that a patent owned by the University of Rochester was invalid. The patent was related to a class of painkillers known as Cox-2 inhibitors, including Celebrex. The university sought more than $3 billion in damages.
Celebrex, which Pfizer got when it purchased Pharmacia Corp., was first sold in 1999 and prescriptions have been written for 10 million patients since then. It's the best-selling arthritis drug. Sales in the fourth quarter were $810 million.
The Washington-based Federal Circuit, which specializes in U.S. patent law, said the patent was invalid because the university didn't adequately describe what it claimed to have invented.
Bonds' Trainer and Others Plead Innocent in Probe
Four men, including the personal trainer of baseball player Barry Bonds, pleaded not guilty in federal court to charges they distributed anabolic steroids to professional athletes.
The men, including Bonds's trainer Greg. F. Anderson, entered their pleas Feb. 13 to Judge Maria-Elena James in San Francisco. The other men pleading not guilty were Victor Conte, owner of the Bay Area Laboratory Co-Operative, or BALCO, James Valente, the company's vice president, and Remi Korchemny, a Castro Valley, Calif., track coach.
A grand jury in San Francisco returned a 42-count indictment against the men, alleging conspiracy, money laundering and distribution of steroids to dozens of elite athletes, including professional baseball and football players. No athletes were indicted.
Prosecutors claim there is evidence the four men were "advising people to coordinate their stories," said Assistant U.S. Attorney Jeff Nedrow.
