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Thursday, June 17, 2010

Supreme Court to Hear Zicam Shareholder Lawsuit Appeal

The U.S. Supreme Court announced this past Monday that they will hear a company’s appeal against a shareholder lawsuit alleging the company did not let its investors know users of Zicam Cold Remedy products complained about losing their sense of smell. The company, Matrixx Initiatives, is the subject of over 200 lawsuits related to Zicam.

In 2004, a shareholders’ lawsuit was filed with the claim they didn’t know that Zicam was defective. A federal judge dismissed the lawsuit the next year, but the 9th U.S. Circuit Court of Appeals reinstated the suit last year. Matrixx then appealed this ruling.

Last June, the Food and Drug Administration issued a warning letter about Zicam after they had received numerous complaints the cold medication triggered a condition known as anosmia, or loss of smell. Zicam was then recalled and withdrawn from the shelves.

The outcome of this appeal may impact many pharmaceutical companies because SCOTUS will address when companies should disclose to investors reports of potential adverse side effects to users of drugs or medical products. One of the big questions that will arise in the hearing this fall is when can a shareholder sue a pharmaceutical company for failing to disclose claims of side effects.

Prior to this, three appeals courts ruled that companies have no duty to disclose reports of side effects. The 9th Circuit ruled that a jury should decide whether investors should be privy to this information.

When large pharmaceutical companies put out defective drugs that harm users, investors of the company should be able to decide if they still want to be associated with these problems. Simply because Zicam did not affect thousands of people, this should not preclude shareholders from knowing what some of the drug’s problems are.

If you or a loved one has been injured by taking a defective drug, please contact the experienced pharmaceutical litigation attorneys at the Cochran Firm. We serve clients nationwide.

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posted by Benjamin A. Irwin at 8:39 AM

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