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Debra Acree, As Independent Administrator of the Estate of William v. Watson Pharmaceuticals

October 26, 2012

DEBRA ACREE, AS INDEPENDENT ADMINISTRATOR OF THE ESTATE OF WILLIAM ACREE, JR., DECEASED, PLAINTIFF,
v.
WATSON PHARMACEUTICALS, INC., ET AL., DEFENDANTS.



The opinion of the court was delivered by: Matthew F. Kennelly, District Judge:

MEMORANDUM OPINION AND ORDER

Debra Acree, the administrator of the estate of her late husband William Acree, has sued Watson Pharmaceuticals, Inc.; Watson Laboratories, Inc., a Nevada corporation; Watson Laboratories, Inc., a Delaware corporation; and Watson Pharma, Inc. (collectively, Watson) for wrongful death, alleging negligence and strict product liability. Acree initially filed the case in the Circuit Court of Cook County, Illinois. Watson removed the case to federal court based on diversity of citizenship. The parties agree that Illinois law governs Acree's claims.

Watson has moved for summary judgment on three grounds: (1) Acree's claims are preempted by federal law; (2) she cannot establish the defect or causation elements required in strict product liability cases; and (3) two of the defendants, Watson Pharmaceuticals, Inc. (WPI) and Watson Laboratories, Inc., a Nevada corporation (WLI--Nevada), are not proper parties to this case. For the reasons stated below, the Court denies Watson's motion.

Background

In its response to Acree's Local Rule 56.1 statement of material facts, Watson responds to almost every one of Acree's statements by summarily contending that the facts are "[d]isputed but irrelevant." See generally Defs.' Resp. to Pl.'s L.R. 56.1(b)(3) Statement of Material Facts. This general response does not comport with the requirements of Local Rule 56.1. The rule requires a party's response to the opposing party's statement of facts to contain, "in the case of any disagreement, specific references to the affidavits, parts of the record, and other supporting materials relied upon." N.D. Ill. R. 56.1(a). Watson's response contains only one citation to the record-at a spot where Watson agrees with Acree's statement that it included testimony from Dr. Prausnitz in its summary judgment brief. Although it does not affect the outcome of the motion for summary judgment, the Court finds Watson's response noncompliant with Rule 56.1. See Ammons v. Aramark Uniform Servs., Inc. 368 F.3d 809, 817 (7th Cir. 2004) ("[A] district court is entitled to expect strict compliance with Rule 56.1."). If the Court sees similar noncompliance by Watson with the federal or local rules in the future, it will not hesitate to impose an appropriate sanction.

Watson manufactures an FDA-approved fentanyl transdermal system patch that is the generic version of the brand-name Duragesic patch. Fentanyl is an opioid used to relieve pain. Watson's patch has five layers that in theory function as a time-release system, emitting a consistent dosage level of fentanyl over a seventy-two hour period. A consumer therefore wears each fentanyl patch for three consecutive days. The dose of fentanyl depends on the size and type of patch and ranges from 2.5 to 10 milligrams. At the time relevant in this case, Watson sold its fentanyl patches in four strengths-25 micrograms per hour, 50 mcg/hr, 75 mcg/hr, and 100 mcg/hr. (Watson has since begun selling a 12 mcg/hr patch.) Watson's patch has a reservoir design-the patch contains a membrane which releases a fentanyl and alcohol-based gel, stored in a reservoir, directly onto the skin where it is absorbed into the body.

To obtain Food and Drug Administration (FDA) approval of its generic fentanyl patch, Watson filed an Abbreviated New Drug Application (ANDA) with the FDA, as required by federal law and FDA regulations. According to Acree, although Watson submitted its ANDA on March 31, 2003, the FDA did not give final approval for its fentanyl patch until August 20, 2007. During the interval, the FDA and Watson discussed the scientific comparison between the Duragesic fentanyl patch and Watson's generic fentanyl patch. Watson's Senior Vice-President of Research and Development, Charles Ebert, testified that while Watson's ANDA was awaiting approval, Mylan (a Watson competitor) began selling a generic-patch alternative to the Duragesic patch. Mylan's patch has a matrix design, with the fentanyl stored within a solid matrix in the patch that may or may not include a rate-controlling membrane to regulate the amount of fentanyl that the skin is absorbing.

According to Acree, WPI is the parent corporation of the other four Watson defendants. A Delaware district court recently discussed the structure of Watson as follows:

[WPI] organizes its operations not by corporation, but by division--Generic, Brand, and Distribution. Generic Division, which is responsible for developing and submitting ANDAs, relies on contributions from Pharmaceuticals, Laboratories, and Pharma; the Generic Division's president is a Pharmaceuticals employee, and the Generic Division's products are manufactured by Laboratories and marketed and sold by Pharma.

Cephalon, Inc. v. Watson Pharm., Inc., 629 F. Supp. 2d 338, 343 (D. Del. 2009).

Ebert testified that while acting as Senior Vice-President of Research and Development at WPI, he oversaw the design phase of the Watson fentanyl patches. WPI's website describes the corporation as a "global pharmaceutical company engaged in the development, manufacturing, marketing, sale and distribution of generic, brand and biologic pharmaceutical products." Pl.'s Ex. BB. Watson employee Stephen Kaufhold testified that WLI--Nevada pays for all of the raw materials that are used to manufacture Watson's fentanyl patch. It is undisputed that WLI--Nevada submitted the ANDA for the Watson fentanyl patch. Watson disputes, however, WPI's role in the development of the fentanyl patch, claiming that WPI is merely a holding company.

William Acree (Mr. Acree) began wearing fentanyl patches in May 2005, due to chronic back pain that he suffered as the result of an automobile accident in 2001. Dr. Srinivas Sunkavally, Mr. Acree's doctor, prescribed him 125 mcg/hr of fentanyl, which required Mr. Acree to wear one 100 mcg/hr patch and one 25 mcg/hr patch simultaneously. Acree testified that she helped apply these patches to Mr. Acree's arm every three days. Acree contends that the 125 mcg/hr dose of fentanyl should have given Mr. Acree a fentanyl concentration of 3.1 ng/ml in his bloodstream.

According to Acree, she applied two new fentanyl patches on Mr. Acree's arm on the morning of January 19, 2009. Mr. Acree went to bed that evening around 7:30 p.m. and was not awake when Acree left for work around 4 a.m. the next morning. Acree called home around 9:40 a.m., during her break, and her son, William Daniel Acree (Daniel), told her that he would awaken his father. Daniel testified that when he approached Mr. Acree, he was pale and his eyes were open. Daniel called 911, and paramedics tried to resuscitate Mr. Acree, removing his fentanyl patches at some point in the process. The paramedics transported him to a nearby hospital, where he was pronounced dead. The fentanyl patches were not recovered.

Dr. J. Scott Denton, a forensic pathologist, performed an autopsy on Mr. Acree. Denton concluded that Mr. Acree's death was caused by "fentanyl intoxication," and his report listed a concentration of 23.6 ng/ml of fentanyl in Mr. Acree's bloodstream. Defs.' Ex. D at 5. Denton testified that the elevated level of fentanyl, together with the circumstances surrounding Mr. Acree's death-which Denton concluded were "classic kind[s] of opiate ...


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