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Michigan has
suffered through a one-state recession since 2006 -- the only
state in America to experience negative gross domestic product
over that period. Our unemployment rate is the highest in the
country.
Judging from
her State of the State address last week, however, it appears
Gov. Jennifer Granholm is committed to helping at least one
ailing industry in Michigan -- the frivolous lawsuit industry.
The governor proposed curtailing Michigan's drug-shield law --
which protects pharmaceutical companies from abusive litigation
and which the trial bar has trying for years to repeal.
This reform was
signed into law by then-Gov. John Engler back in 1996 as part of
a comprehensive package of legal reforms. Under the drug-shield
provision, companies that receive approval for a drug's safety,
efficacy and labeling under rigorous Federal Drug Administration
rules cannot then face tort lawsuits on those drugs, unless
there was fraud in the approval process or certain other
exceptions apply.
The legislation
was designed to ensure that pharmaceutical research dollars
continue to flow into the drug development pipeline, not into
the over-stuffed pockets of trial lawyers. Developing a new drug
typically requires about $1 billion and 15 years of work -- and
even then only about three out of 10 FDA-approved drugs ever pay
for themselves. With the lives, health, and jobs of so many
people on the line in pharmaceutical research, the cost of
frivolous lawsuits can be staggering.
At the same
time, the authors of that Engler-era reform struck a careful
balance between discouraging frivolous lawsuits and protecting a
citizen's right to sue. The drug-shield law has spared Michigan
from more than 10 years' worth of needless, lottery-style
lawsuits by lawyers looking to hit it big. And the overall
reform package has given Michigan a well-earned reputation for
protecting the business community against frivolous lawsuits.
As the trial
lawyers see it, however, the drug-shield law has denied them 10
years' worth of forced settlements and outlandish jury awards.
And so they are seeking not merely to repeal the law, but to
repeal it retroactively to 1996. Every grievance of the last
decade could then be dredged up again to fill the dockets of
Michigan's civil courts.
Trial lawyers
have made no secret of their desire to turn the pharmaceutical
industry into the next target for massive, asbestos-style
litigation. And as the recent guilty pleas and indictments of
trial lawyer kingpins like Bill Lerach (kickbacks to plaintiffs)
and Dickie Scruggs (allegedly bribing judges) make clear, some
trial lawyers will stop at nothing in pursuit of
multimillion-dollar paydays.
If Granholm and
her allies in the Michigan Trial Lawyer's Association succeed
here, the repeal of other reforms could easily follow. The
entire business community must join together to defend hard-won
victories that protect families and jobs.
I favor the law
on the merits, but I also have a personal stake in this issue.
As a chronic sufferer of rheumatoid arthritis, I got my life
back from a drug that might never have been available if
Michigan had allowed trial lawyers to raid the research budgets
of the medical research industry.
Millions of
Americans could tell their own, much more dramatic stories about
the life-saving good that drug companies can do.
For
entrepreneurs and companies trying to create new businesses and
jobs in Michigan, the one bright spot has been our state's
exemplary civil justice system. Granholm now wants to repeal the
law that helped make that system possible. It will fall to the
Legislature to remind her that the people of Michigan and our
state's economy need that law more than ever.
Dan Pero, former chief of staff to Gov. John Engler, is
president of the American Justice Partnership, a national
organization headquartered in Lansing seeking legal reform at
the state level. E-mail:
letters@detnews.com.
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