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High court will consider liability of device makers

Justices won't hear case on agreement over generic drug

WASHINGTON -- The Supreme Court yesterday accepted a case that could hurt medical device manufacturers, turned down another that could have harmed pharmaceutical companies, and put off deciding on the Enron scandal.

The justices, in a busy day for business-related cases, agreed to consider whether federal approval of medical devices shields their makers from product liability lawsuits in state courts. Most federal appeals courts have ruled that the Food and Drug Administration's regulation of medical devices does pre empt such lawsuits.

Some confusion on the issue remains, however, which may have prompted the justices to take the case. In 2004 the Bush administration argued against the suits -- a switch from the position the Clinton administration took.

"When even the federal government can't make up its mind on the plain meaning of the statute, it shows the need for an authoritative voice," said Allison Zieve, a lawyer for the plaintiffs.

Separately, the justices turned down an appeal from consumers who alleged that two pharmaceutical companies conspired to monopolize the market for a drug used to treat breast cancer.

At issue in the case was whether an agreement not to market a generic drug violates federal antitrust law.

Lawyers for the consumers said that an arrangement between generic drug maker Barr Pharmaceuticals Inc. and AstraZeneca PLC resulted in the extension of a monopoly on AstraZeneca's drug tamoxifen. The agreement resulted in Barr distributing unbranded tamoxifen at a price 5 percent less than Zeneca's Nolvadex brand.

Generic drugs are usually priced 30 percent to 80 percent below brand-name products, the consumers' lawyers said.

The justices also refused to hear an appeal by Lorillard Tobacco Co., a subsidiary of New York-based Loews Corp., in a trademark infringement case that some considered critical to the fight against counterfeit goods.

The case involved the sale of counterfeit Newport cigarettes by a small retailer in Denver.

Finally, the justices put off deciding on the Enron scandal, taking no action in a securities fraud case with billions of dollars at stake for victimized investors.

The case asks whether Enron shareholders can pursue a lawsuit against Wall Street investment banks that did business with the Texas energy company.

The justices have already agreed to consider a similar suit accusing two equipment manufacturers, Motorola Inc. and a unit of Cisco Systems Inc., of colluding with cable TV provider Charter Communications Inc. to deceive investors.