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Spartanburg County, South Carolina

Spartanburg County is the jurisdiction of choice for lawsuits against pharmaceutical companies by contingency-fee lawyers hired by South Carolina Attorneys General.

In the past three years, plaintiffs’ lawyers at Harrison, White, Smith & Coggins PC have repeatedly sued drug companies on behalf of the state in Spartanburg County, each time summoning defendants to appear before Circuit Court Judge Roger L. Couch.

Eli Lilly settled such a suit that challenged the marketing of its antipsychotic drug, Zyprexa, in 2009. The state attorney general signed a contingency-fee agreement with John White Jr. of Harrison, White, which is based in Spartanburg; John Simmons of the Simmons Law Firm in Columbia, S.C.; and Kenneth Bailey Jr. of Bailey Perrin Bailey in Houston, Texas. The case settled for $45 million, which, at that time, was the largest monetary settlement any state in the U.S. had won from Lilly, and it was the second-largest state settlement in South Carolina history.

But the state broke all records in 2011 with Judge Couch’s decision to level a $327 million penalty against Johnson & Johnson subsidiary Janssen Pharmaceutica Inc. for marketing its antipsychotic drug Risperdal in a manner that allegedly downplayed a possible link between the drug and diabetes. Judge Couch assessed the company $300 for every sample box it gave out and a $4,000 penalty for each “Dear Doctor” letter it published. The drug manufacturer appealed to the South Carolina Supreme Court in March, but it has yet to announce its decision in the case.

After that blockbuster award, AstraZeneca Pharmaceuticals LP decided to settle for $26 million in August 2012 over the state’s allegation that it deceptively marketed its antipsychotic drug Seroquel. The final tally included $20 million in damages and restitution to the state, $5 million in penalties, $1 million in costs, and $4.35 million for an attorneys’ fees fund. This can be compared to AstraZeneca’s $68.5 million settlement of similar lawsuits in March 2011 with attorneys general from California ($5.2 million), Texas ($3.8 million), New York ($3.1 million), Ohio ($2.7 million), New Jersey $1.85 million), the District of Columbia and 34 other states. Many other states, including Maryland and Nevada, received settlements in the $1 million to $2 million range. The private lawyers representing South Carolina sought massive civil fines ($5k for each prescription) and would have collected a contingency fee based on those penalties if they had moved to trial.

So why Spartanburg, a county that is nearly one hundred miles from the state capital? John White of Harrison, White, Smith & Coggins PC proudly proclaims his office on Main Street in Spartanburg. His firm bio highlights his connection to Judge J. Mark Hayes II, one of three Circuit Court judges – along with Judge Couch – to call Spartanburg their home bench. Judge Hayes was one of the name partners in the firm along with White, until Hayes was elected to the bench in 2003. Despite the South Carolina Supreme Court’s footnoted admonishment that, “[t]he location of a lawyer’s office should not enter into the analysis of whether a defendant resides in a particular county for purposes of venue,” it appears that, at least when it comes to the state’s pharmaceutical complaints, that prescription is not followed.

STATEWIDE REFORM HAS HELPED

South Carolina has enacted reforms that have leveled the playing field for defendants in previously plaintiff-friendly jurisdictions within the state. For example, the South Carolina Fairness in Civil Justice Act, which went into effect in 2012, placed various safeguards on punitive damage awards and protected the ability to appeal an adverse judgment, among other reforms.

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