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Health litigation reverts to states

WASHINGTON-Telecom analysts said the mobile-phone industry’s legal exposure is heightened by the Supreme Court’s refusal last week to block health-related lawsuits from going forward in state court.

The high court Oct. 31 declined to review a divided 4th Circuit decision that said class-action lawsuits alleging cellular companies put consumers at risk by not supplying them headsets to limit radiation exposure are not pre-empted by federal law.

Justices John Roberts, Stephen Breyer and retiring Sandra Day O’Connor did not take part in considering industry’s petition seeking review of the 4th Circuit’s ruling earlier this year.

The Supreme Court ruling is a major legal setback for the $100 billion wireless industry because it means most headset lawsuits likely will go to trial in Georgia, Maryland, Pennsylvania and New York state courts. Another headset case could be transferred from Maryland’s U.S. District Court Judge Catherine Blake to a federal court in Louisiana.

In addition to moving the headset cases forward in state courts, the Supreme Court decision could hurt cellular industry efforts to have six brain-cancer lawsuits thrown out of the District of Columbia Superior Court on federal pre-emption grounds.

Jeffrey Morganroth, an attorney for the six brain-cancer plaintiffs, said he was encouraged by last week’s Supreme Court ruling. “We have stronger arguments for pre-emption than they [headset plaintiffs] had in their cases,” said Morganroth.

Also pending before the D.C. Superior Court is a health-related lawsuit filed by Sarah Dahlgren against Audiovox Corp. and others that seeks “to apply the state statutory protections afforded consumers from misrepresentations and omissions in consumer transactions.”

Top mobile-phone companies declined to comment, deferring to CTIA-the cellular industry trade association. CTIA decided not to issue a statement on the matter. The trade group’s decision to remain silent on such a high-profile matter triggered speculation industry had made a strategic decision to turn the health issue completely over to the lawyers.

The wireless industry has yet to lose a wireless health lawsuit since 1992, when a Florida man claimed his wife’s fatal brain tumor was caused by her cell-phone use.

Indeed, wireless companies were on a roll just a few years ago after Blake threw out an $800 million brain-cancer lawsuit and months later dismissed five headset cases. However, all of that began to change after Blake remanded six brain-cancer lawsuits to the D.C. Superior Court last summer. Then, in March this year, the 4th U.S. Circuit Court of Appeals in Richmond, Va., reversed Blake’s headset decision. Blake now must rule whether to remand a California brain-cancer lawsuit back to state court.

Last week’s Supreme Court ruling has made matters only worse for industry.

Telecom analysts have taken note. “The Supreme Court’s recent ruling confirms Precursor’s belief that the Pandora’s Box of joint and severable liability for health effects of cellphone radiation could plague cellphone manufacturers-especially Nokia Corp., L.M. Ericsson, Motorola Inc., Samsung Electronics Co. Ltd.-and possibly less so [for] service providers-especially Cingular Wireless L.L.C., Sprint Nextel Corp., T-Mobile USA Inc. and Verizon Wireless-with repeated cycles of protracted tobacco- and asbestos-style litigation that takes years to resolve, generating headline risk, even though the financial impact of limited damage awards is unlikely to be severe,” stated Rudy Baca in a Nov. 2 Precursor Bulletin obtained by RCR Wireless News.

Meantime, in separate litigation, the D.C. Superior Court judge overseeing six brain-cancer lawsuits against the mobile-phone industry asked lawyers to respond by Nov. 21 on how the headset cases rejected by the Supreme Court differ from personal injury cell-phone lawsuits. Judge Cheryl Long is poised to rule soon on industry’s motion to dismiss the six brain-cancer lawsuits on federal pre-emption.

Baca, predicting at least one health-related wireless case will go to trial before year’s end, added: “The ongoing dispute within the science community about the health effects of non-ionizing (cell-phone) radiation only increases the likelihood that the conflicting studies will be found admissible because a sufficient body of scientific case studies has been produced to meet the relatively minimal Daubert standard.”

The Daubert standard refers to a 1993 Supreme Court decision making federal judges gatekeepers and giving them wide discretion in evaluating scientific expert testimony. Generally, the court must find that techniques used by plaintiffs’ scientific experts are generally accepted as reliable in the relevant scientific field. Some states have adopted the Daubert standard, while others have opted for a slightly less rigorous threshold for admissibility of scientific evidence.

“The great significance [of last week’s Supreme Court action] is that industry is forced to play Russian Roulette because cases can be filed anywhere, whereas before they were only in one court with a federal judge who is capable and favorable to them,” said Rebecca Arbogast, a telecom and media analyst at Legg Mason. “This is the Rasputin issue for industry. It does not go away.”

At the same time, Arbogast said she does not expect a flood of new health lawsuits as a result of the high-court ruling.

Indeed, winning a wireless health lawsuit is a tall order for plaintiffs’ attorneys. U.S. and overseas health authorities say research to date does not point to a health risk from mobile-phone radiation, but add they cannot guarantee handsets are completely safe. With the publication in recent years of studies showing genetic damage and other biological effects from low-level radio frequency radiation, government officials around the world have called for additional research. Much of it is being conducted in Europe.

The Federal Communications Commission’s RF exposure standard has been upheld by the courts. That standard is undergoing revision, with new guidelines expected to be relaxed for mobile phones. RCR

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