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US High Court Revives W Virginia Suit Vs Bayer Cholesterol Drug

Published Thursday, 16th June 2011 11:10 pm - © 2011 Dow Jones

--Unanimous ruling reinstates lawsuit against Bayer.

--Plaintiffs allege economic losses.

--Bayer says it will continue to defend the case.

(Updates with comment from the parties and additional detail on the case.)

By Brent Kendall


WASHINGTON -(Dow Jones)- The U.S. Supreme Court on Thursday reinstated a West Virginia class-action lawsuit over Bayer AG's (BAYRY, BAYN.XE) cholesterol-lowering drug Baycol, which was withdrawn from the U.S. market in 2001.

At issue was a Minnesota federal judge's 2008 injunction that barred the West Virginia case from proceeding in that state's courts. The judge, who had overseen thousands of Baycol lawsuits from around the country that were consolidated in his court, said the lawsuit couldn't go forward in West Virginia because he had already ruled that a different group of West Virginia plaintiffs didn't meet the standards for allowing the case to proceed as a class-action suit.

Class-action lawsuits allow plaintiffs to pool their smaller individual claims into one large lawsuit.

Plaintiffs in the current case brought claims for economic losses, alleging in part that Bayer violated a state consumer protection law by selling them a hazardous product.

The plaintiffs said they were unaware of the previous West Virginia lawsuit and had a legal right to have their own day in state court.

The Supreme Court, in a unanimous opinion by Justice Elena Kagan, agreed, saying the injunction went too far by interfering with another state's proceedings.

"This case does not even strike us as close," Kagan wrote. "The issues in the federal and state lawsuits differed because the relevant legal standards differed. And the mere proposal of a class in the federal action could not bind persons who were not parties there."

Baycol was on the U.S. market from 1997 until 2001. The drug was withdrawn after it was linked to 31 deaths. Bayer says it has paid $1.17 billion to resolve claims from users who allegedly suffered serious side effects.

The company said none of the West Virginia plaintiffs suffered an injury caused by the drug.

A Bayer spokeswoman said the company was disappointed in the ruling and would "continue to defend this case, including on the issue of class certification, should it move forward at the state level."

Richard A. Monahan, a lawyer for the plaintiffs, said the ruling "takes a great step toward protecting consumers."

The case is Smith v. Bayer Corp., 09-1205.

-By Brent Kendall, Dow Jones Newswires; 202-862-9222;

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