Daniel Fisher

Daniel Fisher
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Daniel Fisher is a writer, financial analyst and former senior editor with Forbes magazine. He previously worked for Bloomberg Business News and newspapers in Texas and Wisconsin.

Opioid Litigation Has Liability Lessons Every CEO Should Worry About

When an Oklahoma judge ordered Johnson & Johnson to pay $572 million for causing that state’s opioid crisis, business leaders were understandably distressed. Not only did J&J have a tiny share of the market—estimated at around 1 percent—but the state didn’t present evidence of a single physician who prescribed its products improperly because of J&J’s marketing tactics. The company recently settled with two Ohio counties accusing it on the same grounds, hoping to push off federal multi-district litigation.

Watching the charges play out, it’s reasonable to ask: If J&J can be held liable for creating a “public nuisance” by selling a perfectly legal product under a government-approved label, who isn’t liable? Alcohol kills tens of thousands of people a year, and cell phones probably aren’t far behind. Distracted driving is a major cause of death on the nation’s roads.

Now that they’ve won in Oklahoma, ever-inventive trial lawyers are sure to test the public nuisance theory with cell phones, alcohol and other products, as they’ve already done with guns, lead paint and global warming. But history suggests they won’t get far. Congress responded to a wave of nuisance litigation against gun manufacturers in 2005 with a law barring most claims over crimes committed with their products. And federal judges on both coasts have rejected public nuisance lawsuits against big oil companies.

“As a tort expert, I know that sometimes something comes along that society gets in an uproar about, and courts relax traditional standards to assign blame,” says Victor Schwartz, author of a popular text on tort law and co-chair of the Public Policy Practice at Shook Hardy & Bacon in Washington. “But right now (the Oklahoma opioid) opinion looks confined to what was before it.”

The lesson business executives should take from opioid litigation is that sometimes a product is too successful for its own good, Schwartz says. And when that happens, courts can get awfully creative at finding ways to hold companies liable for the harms their products cause, regardless of what most people would consider to be the normal standards of tort law.

That’s what happened with asbestos, a miracle substance that saved untold lives during World War II as a fireproofing material but also had the unfortunate side effect of causing the deadly cancer of the chest lining known as mesothelioma. Dozens of companies have been driven into bankruptcy because they handled the stuff at some point, often with little or no evidence they did anything wrong.

Now it’s the pharmaceutical industry’s turn in the grinder. Schwartz’s advice to clients who are troubled by what happened to J&J is to take a hard look at their own products and the potential liability that might arise from them. One danger sign is a niche product that is suddenly selling like hotcakes—like fenfluramine and phentermine, once-ignored drugs that, when combined, became fen-phen, a wildly popular weight-loss cocktail that generated billions of dollars of liability after doctors learned it also caused pulmonary hypertension and heart valve abnormalities.

The biggest potential liability is over failure to warn. For that, Schwartz recommends companies hire tort lawyers to examine proposed warning labels for flaws worth suing over. He gives his clients an example from a long-ago trip to the Baltimore Aquarium, where he observed a strange thing: If a shark passed up a piece of meat that was thrown into the tank, all the other sharks did too.

“If you get a plaintiff lawyer who okays a warning, his brothers and sisters are very unlikely to bring a claim,” says Schwartz, laughing. It’s understandable for executives to hate trial lawyers, he adds, but “hate isn’t a good emotion. If hiring a plaintiff lawyer can help you, why not?”

What Will Conservative Justices Mean For Business?

The U.S. Supreme Court’s fall term is sprinkled with business cases—none as momentous as the Obamacare lawsuit of 2012—but a useful window into how the court’s two newest justices will treat matters such as employment discrimination and environmental law.

Let’s Make A “Deal Tax”

They call it the “deal tax”: When a public company announces a merger or acquisition, it is greeted with one, two or half a dozen lawsuits, sometimes drafted and filed within hours of the announcement.

To Fight New Breed Of California Lawsuits, Manufacturing CEOs Need A...

Recent lawsuits suggest courts have a new requirement for manufacturers: clairvoyance. You can guess where these lawsuits are happening (hint: think West Coast), but do CEOs have to worry about liability law across the country?

When Lawyers Run Wild

Multimillion dollar settlements that benefit no one who was actually harmed have the Supreme Court asking: Should lawyers earn money for nothing?

Anything Goes AGs Target Corporate Independence

The Martin Act in New York is a pretty broad mandate, perfectly suited for an AG who wants to attack a politically unpopular company—or an entire industry.

How Plaintiff Counsel Ads Create A Mass Tort Fiasco

A recent case involving Johnson & Johnson shows how lawyers will run ads to sway juries against companies in lawsuits. Here’s what you have to know.

Brett Kavanaugh Would Mean A Pro-Business Court For Decades

Lost in the dramatics of Brett Kavanaugh’s confirmation is hearing is how Justice Kennedy’s hand-picked replacement would give the highest court a pro-business slant for years to come.

Just Say Pay: Public/Private Lawsuits Threaten Companies With Rough Justice

Some of the biggest lawsuits pending in federal courts today involve products that are completely legal, heavily regulated and used by millions of consumers every day. But none of that matters when private lawyers join forces with public entities to sue.

When Your Law Firm Becomes The News

CEOs shouldn’t avoid a good law firm simply because one of its clients is the subject of bad publicity, experts say, but be advised of the challenges it will pose to your company.
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