Reprinted with permission from: ABA JOURNAL August, 1996, page 18

Mood-altering Verdict
Judge suspects Prozac settlement though case went to jury

BY JOHN GIBEAUT
 

Circuit Judge John W. Potter couldn't shake his suspicion that the parties had secretly settled a case involving the antidepressant Prozac — and let him send it to the jury anyway.

 

A settlement would explain the plaintiff's decision during the trial not to introduce potentially damaging evidence against the defendant drug maker, Eli Lilly & Co.

 

It also would explain the decision of the plaintiffs not to appeal the Louisville, Ky., jury's finding that Prozac did not cause a gunman's deadly rampage.

 

Acting on his suspicions, Potter scheduled a hearing to determine whether he should amend the judgment to read that the case was resolved by a settlement rather than a jury verdict. The Jefferson County judge took the action even though state court rules and case law did not give him explicit authority to do so.

 

On May 23, a unanimous Kentucky Supreme Court agreed in Potter v. Eli Lilly & Co., 1996 WL 277906, that Potter could proceed. It relied on the gelatinous inherent-powers doctrine, which allows courts to protect the integrity of the proceedings before them.

 

"In this case, there was a serious lack of candor with the trial court and there may have been de- ception, bad faith conduct, abuse of judicial process or perhaps even fraud," the justices wrote.

 

Experts say the decision is not all that surprising, although the lawyer who represented Eli Lilly at trial believes the justices went too far. "We feel like the Supreme Court stretched in granting these inherent powers to the trial court," says Paul L. Smith of Dallas. "We did nothing improper."

 

Courts have used the inherent powers doctrine to justify a smorgasbord, indeed "a complete dog's breakfast" of actions, including contempt citations and Rule 11-type sanctions, says Stephen C. Yeazell, a law professor at the University of California at Los Angeles and a civil procedure expert.

 

"The inherent powers doctrine is pretty ill-defined," he says. "It gets hauled out of the attic at unpredictable times to deal with oddball cases like this."

 

Indeed, the Kentucky justices had to reach back more than 50 years, to the 1944 U.S. Supreme Court case of Hazel-Atlas Co. v. Hartford Co., 322 U.S. 238, to allow Potter to reopen the judgment to guard against possible fraud.

 

Although rarely invoked, the doctrine is powerful. "You find it here and there," says Cornell Law School Professor Charles W. Wolfram, another civil procedure expert. "It's a robust concept."

 

Much Money at Stake

 

To be sure, the stakes were high for Lilly. Prozac accounted for more than $2 billion in sales in 1995. The Louisville case was the first of 160 to go to trial on claims that Prozac caused erratic and dangerous behavior in some patients.

 

The Louisville jury's determination was important to Indianapolis-based Lilly, both for public relations and for leverage in settlement negotiations in other cases, says company spokesman Ed West.

 

West also acknowledges that the parties did reach an "agreement" just before the end of the 47-day trial, after Potter decided to allow presentation of potentially damaging evidence about the company's failure to report deaths caused by an arthritis drug called Oraflex.

 

West declines to describe the pact as a settlement. "If a settlement had happened, why would we want it to go to a jury?" he says.

 

The agreement provided that both sides would not present further evidence and would not appeal the outcome. In exchange, the plaintiffs were to receive undisclosed financial compensation, regardless of the verdict.

 

How much did the plaintiffs receive? "The amount boggles the mind," says Louisville lawyer Cecil Blye Sr., who represented a plaintiff in an unrelated divorce.

 

[note: the article above identifies Paul L. Smith of Dallas as the lawyer who represented Eli Lilly at trial. In fact, he is the attorney who represented the plaintiffs in the case.]

[Dr. Breggin testified as a medical expert on behalf of the plaintiffs in this case.]