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Senate | June 10, 2014 | Committee Room | Judiciary I

Full MP3 Audio File

Test. Senate J1, June 10th. [SPEAKER CHANGES] folks get in the door and get calmed and situated, we'll get started. Good morning everybody. Let me make a couple announcements before we get started with the introductions of the pages and the sergeant at arms. The Chair is called for all amendments on Senate Bill 648, previously to be turned in this morning. We will extend that a few minutes to make sure everybody's had a chance to do that. We want to make sure that we've got everything before us so we can handle this is an orderly manner. We are going to take some public comment this morning and so if you have not gotten your name on a list to address the bill please speak to the sergeant at arms. Depending on how many folks we have that want to make comment we'll determine how much time we're able to allot to each person. We do anticipate doing that for about thirty minutes so we'll probably have public comment until about 9:40 and then we are going to take up the bill in full force and address amendments and so forth. So I hope all the committee members are aware of that and have gotten your amendments in if you seek to have amendments and that the public will be prepared to make public comment. I'm going to ask the speakers, when they do make public comment, to come forward to the microphone and so I will call out your name if you're on deck. I hope everybody that's intending tos peak is listening carefully. I will call out your name to be on deck and when you hear that if you would make your way over here to this area in general so that we don't have to wait for people to make their way to the mic because time is important. Okay, so good morning everybody. Thank you for coming, again, to the illustrious Judiciary 1 committee. We have a lot of work before us this morning. Let's see if I can get this volume to not give me any feedback. I hope that's a little better. Let me begin by introducing our pages. can everybody hear me in the back of the room okay? Okay, alright. Thank you guys, thank you Cody. So our pages that are with us today, if you would please stand and give us a wave. Give us your beauty pageant wave. That would make me appreciate it. First we have Eliza Darden Smith from Wilson, courtesy of myself. Welcome Eliza, I hope you learn something today. We have Amanda Spence. Amanda, where's Amanda? [SPEAKER CHANGES] She's back there. [SPEAKER CHANGES] Back there. Thank you Amanda, we appreciate you being here today. She's from Raleigh, courtesy of Senator Krawiec. It looks like I have, now forgive me for the writing so if I mispronounce your name I apologize, is it Maria Samoson? Did I say it right? Is it Maria? Marita, okay, from Selma, courtesy of Senator Robinson. We have an Alex Straud[?] from Aberdeen courtesy of Senator Tillman. Thank you, coach. We have Grant Buchanon[?] from Wilson, courtesy of myself, thank you. Amelia Fox, Greensboro, Senator Berger. Hanna Lunsford[?] from, it looks like Leasburg, Senator Woodard, is that right? And Will Soul from Raleigh, Senator Stein. Thank you all, I hope you learn something today and this week and I encourage you all to ask your sponsoring Senator's questions about the process this week and what all is going on so you can come away with a great understanding of what we do to help here in the General Assembly. And we sergeant at arms today but I don't see a list. Do we have that somewhere? I see Bernie and a bunch of guys here. Ernie, Matt, and Ken. Is that all? We need more of you to keep order here. Thank you, gentlemen. If you have any questions please speak to one of the Sergeant at Arms and we'll see what we can do to take care of it. So this time we're going to take back up Senate Bill 648, which we had a motion to take up that PCS in the last meeting and it is still before us. I don't believe we require another motion to go back in to that bill

And before I take public comment, I just want to first ask the bill sponsor if there’s anything at this moment that he’d like to add. It’s been a while since you’ve spoken, Senator Jackson, and I’ll give you an opportunity later on as well if you’re on, but we’ll go right into public commentary and then dive back into the bill, and if at any time you want to address any of the amendments and stuff that come forth, just make it clear and I’ll certainly give you an opportunity to do that. So at this time, we’re going to go into some public comment, and I know that we have a new list. Thank you very much. And we’ll make that decision real quick. Let’s go with four minutes. We’re going to ask people to limit their comments to four minutes, hard and fast. We will cut the mic off if necessary because we’ve got to keep this moving along. I’ll work my way down the list here. First I’ve got John Del Giorno. Is that right? And then we’ve got Scott… I can’t make it out. It looks like Praywist or something like that. Scott Praywist? Is that…? [SPEAKER CHANGES] Prewitt. [SPEAKER CHANGES] Prewitt. I’m sorry. Scott, if you’d make your way up to be on deck, we’d appreciate that, and then we’ll go from there. So first I have Del Giorno, and you will… if you’ll please identify yourself, who you’re with, and the section of the bill that you wish to address. [SPEAKER CHANGES] Thank you. [SPEAKER CHANGES] Please come forward, sir. Thank you. [SPEAKER CHANGES] Thank you Mr. Chairman, members of the committee. My name’s John Del Giorno with Brubaker & Associates – they represent the pharmaceutical manufacturers and researchers of America – to talk about the FDA defense part of the bill. The elephant in the room is a big misconception about what this defense actually does. It is not in any stretch immunity for drug companies. As a matter of fact, if a product is recalled because the manufacturer failed to live up to the standards that the FDA prescribed at approval, defense fails. Furthermore, if the manufacturer withholds or misrepresents information that it gets about the performance of its drug or its safety profile while it’s marketed and doesn’t tell the FDA, and that information would have lead to a recall or even a label change, the defense fails. Now it’s important for everyone to understand that the FDA and the medical community have long recognized that there’s no such thing as an absolute safe drug, but the agency balances the risk associated with the drug against the competing risk associated with not having the drug available. That’s why these drugs are available by prescription only and prescribed under a doctor’s care. The adverse effects associated with a specific drug are usually the result of a drug’s composition and are inseparable from the drug’s beneficial effects. Instead of requiring the absolute proof that no short term or long term risks exist, which would mean withholding potentially lifesaving or life-enhancing medicines from the public, the FDA conducts a risk-benefit analysis to determine what risk is reasonable in light of its expected therapeutic benefits. This FDA defense strikes a perfect balance, fairness to the manufacturers. If there’s any kind of fraud or misrepresentation on the part of the manufacturers, the claimants have full access to all the remedies available by law. Thank you. [SPEAKER CHANGES] Thank you, sir. Thank you very much. So we have Scott Prewitt? [SPEAKER CHANGES] Yes. [SPEAKER CHANGES] Scott, if you would come forward and say who you are and who you’re with and which part of the bill you want to address. [SPEAKER CHANGES] My name is Scott Prewitt, and I’m just here representing my daughter and to speak against section three of this particular bill. My wife’s name is Cheryl. I also have a son named Will, and we’re from Arden, North Carolina. In June of 2009, Britney, which is this is my daughter, finished her freshman year of high school on Tuesday. The following Saturday, she was preparing for a…

On a trip. Cheryl and Brittany, letting Mandy, her new little dog out to play in the yard just before we were to leave. Brittany then put her dog in a crate and went out to the vehicle to put the dog in the vehicle, and she suddenly took off running across the front yard, tripped and fell, and when I reached her, I asked her how she was doing. She was pretty much in a daze, didn't know how she got there, and she was unaware of what had just happened. I got her up and inside the house, and Brittany said she was having a hard time breathing. We called the night clinic, and while on the phone with the nurse at the night clinic, Brittany fell out of her chair, started throwing up, shaking, unresponsive. We called 9-1-1 and the ambulance left the yard with our 15-year-old daughter, and she died on the way to the hospital. Brittany was involved with church and school, she played on three softball teams, and she played catcher and first base. Brittany loved holidays, and was involved in many aspects of our family's life. She wanted to be a nurse, but she'll never have that opportunity, because she died of a blood clot that Saturday in her lungs, from the result of a prescription drug approved by the FDA. The drug was normally prescribed for birth control, but the company marketed it to girls for acne. Brittany had seen an advertisement for the drug in magazines, and she took it with Cheryl to the dermatologist, who then prescribed Yaz for her acne. The company was aware of the increased risk of blood clots in the medication. Advertising directly at young women self-conscious of acne is very powerful. The advertising influenced her, and it said that it could do a lot to make her better, for which it did not. It ended up taking her life. This legislation would protect manufacturer's profits, whether the manufacturer is located in another state, another country, or around the world. It removes personal responsibility from the wrongdoer, and makes the innocent bear the emotional and financial burden of loss. If this bill passes, this situation could result in innocent victims from ??, Carolina to keep them from holding manufacturers, like Bayer, responsible. Do domestic and foreign drug companies deserve immunity from claims by North Carolina people? I don't think so. We hope that no one has to go through what we went through, but I can assure you, it's very devastating, and laws should be fair, and this one is not. Please vote against the bill. [SPEAKER CHANGES] Thank you, Mr. Prewitt, thank you very much. All right, if I could, I'm sorry; I didn't call out the next person that was on deck. If I could have, I think, Julia White with the AG's office wanted to address this part of the bill, if I understood from my notes correctly. If she could make her way forward, and then I have Janet Ward Black, and then I have Wanda Queen. Okay. In that order. Okay. Miss White? Thank you. If you'll state who you are, and who you're with, and what you want to speak about. [SPEAKER CHANGES] Sure. My name is Julia White, I work for the Attorney General's office, I've expressed to members of the committee previously concerns about the product liability provision that would

Prevent, or have the potential to prevent collections both our medicated fraud investigative unit and our consumer protection unit which makes claims on behalf of consumers in North Carolina and also is able to uh collect monies that may be due to department of corrections for example, the state uses through inmate medical costs and even the state health plan. I urge your consideration of protecting tax payers of north Carolina on this provision, thanks. [SPEAKER CHANGES] Thank you very much, Thank you Miss White. So next we have Janet Ward Black and you're going to speak on section 3? [SPEAKER CHANGES Yes thank you, I'm Janet Ward Black. I'm a lawyer from Greensboro. And I'm here to speak against section 3. All we want is a fair fight. There is six reasons in North Carolina that it's already not a fire fight for somebody to be able to recover like the Pruits. One is the fact that we have contributory neglegences in absolute defense, only one of 4 states who do. We are also one of 5 states that do not have strict liability for a defective product, that's number 2. Number 3 we have the shortest or almost the shortest statute of repose in the nation. 31 States don't even have a statute of repose. Number 4 we have required 12 person unanimous verdicts in North Carolina. That means all 12 citizens have to agree whether or not a company acted unreasonably and what the amount of the damage is. We have in number 5 specific protections for drug companies that say as long as they warn the doctor and even if the doctor didn't tell you, the company cannot be held liable. And number 6 we have conservative jurors that take their job very seriously. If this provision is passed this will make North Carolina the most anti consumer state in the nation. It would shift product safety away from the people with the most knowledge, the manufacturer and put it on bureaucrats. It would just absolve the company from identifying information. It would make bureaucrats responsible and give immunity to individuals and corporations for making decisions rather than putting it on those who know the most. It would then make North Carolina a place where you would dump products that our neighboring states there would be accountability in those states, but what kind of products am I talking about? Baby formula, car seats, exploding pinto gas tanks, nuclear fuel rods, ??, hip implants, fin fin, toys and even airplanes. This section number 3 isn't just about drugs. It's about all products. It doesn't effect frivolous lawsuits. It effects all lawsuits. Let's take an example from last week. Last week a German manufacture paid 650 million dollars to resolve cases in the United States. Do we want to say when settlements like that happen we don't want North Carolinian's to get recovery. that we don't want medicare and Medicaid and insurers to be able to get their money back? IF we don't have that the burden falls on the tax payer. It falls on the insurer. It falls on medicare and Medicaid. And if it's an on the job defective product it ends up putting the burden on the employer because worker compensation will then pay the bills. IT takes the burden off the responsible party and allows a shield to be put up as a result of government approval in any way. It is not a fair fight. IT was not a fair fight in North Carolina before this provision was considered. I ask you, lets hold people accountable. Lets hold corporations accountable. Personal responsibility is what we should be looking for and not for decisions by bureaucrats being the way we ensure the safety of the people of North Carolina. Thank you very much. [CHANGE SPEAKER] Thank you Miss Black. And then I have Wanda Queen. Ma'am If you would step up and tell us your name and who you're with. [CHANGE SPEAKER] Thank you, my name is Wanda Queen. I'm the retail president for Vantage South Bank here in Rowley. I'm here speaking on behalf of Number 3. When I was asked or when I was told about this build and asked if I would share my story I was hesitant because it's a very personal story. It's one i don't tell my friends. I haven't told a lot of my family members and yet today because this issue is so important I'm going to tell a room full of strangers. There is a commercial on television right now a lot of you have seen from attorneys about trans vaginal mesh and what does that mean? Well I'm the face of that. But also your wife, I'm your mother, I'm your sister, or i'm your daughter. Now I'm going to tell you a little bit about my stories briefly as I can. I grew up in a very small town where my father told me you can do anything you wanted to as long as you put your mind to it. So I put myself through school as best I could, I raised two children by myself and I'm sitting where I am today by the grace of god that I have the position

I have, in a community that I have. Five years ago my husband and I came back from traveling because we like to travel a lot. And I had something happen to me that I wasn’t aware of could happen and it’s called Pelvic Organ Prolapse. It’s where a female may lose the insides of her body without even recognizing that it’s happening to you. So I go to my doctor who I feel very comfortable with. I’ve known her and have used her for years and she shares with me what this is. She shares with me how this can be fixed through a product that she’s encouraged to use by the manufacturer. She shared with me what this product was, told me would get me back on the road and ready to do my job and do the things that I enjoy doing with my family. So I had this surgery and was ensured that I’ll go back to work and I’ll be able to live my life. My life was; had children, grandchildren, I ran, I exercised, I was out a lot. I had this surgery made on a Thursday, November the 25th just before Thanksgiving 2008. The next day I went home. It was an out-patient surgery; I went home the next day. I thought I was dying; my insides were being ripped out. So I called my doctor. Take some Oxycodone. My husband, he was a great husband and he gave it to me every four hours as prescribed or as needed. So he would wake me up and give it to me. That kept me knocked out enough so that I could get through to a Monday so I could see my doctor again. I was in agony. My doctor said, “Oh! Let’s look.” Apparently some of this product was tearing through my insides. So when my, in her office without an anesthesia she tried to cut this loose. Let me imagine. Let me let you as females imagine what that might be like. Needles tearing through your insides. So she sent me home with Oxycodone. It didn’t help. I was back the next day. I was back the next day. I’ve been back for very month or every week for the last five years. I’ve now had thirteen surgeries trying to get this out of me. I was fortunate enough that somehow I found somebody legally to help me understand that this product had been initially approved by the FDA but you know; as this was placed in my body there was a warning that came out from the FDA that said perhaps we shouldn’t use this. There are a lot of women that are having problems with this. Perhaps just because this product was similar to another product that was used for something else we don’t have to do additional testing. Perhaps we’ll just place it in women without any testing. And so they placed it in me and I’m looking at another surgery. I can care my little grandchildren, I do what I can but I also know that my life is not going to be what it ever will be again. And I’m looking forward to another surgery in a few months. So please think about this and overwhelmed, under informed governmental agency should not tell us what we can do. Thank you. [SPEAKER CHANGES] Thank you Ms. Duyn. I have Bill Graham and if I could, I’m not sure if there’s anybody else who has signed up to address Section three which is the part that we’ve been addressing with public comments all along. If time permits I have some folks that want to address Section two. We may come to that later in the meeting but for now I’m not going to cover that. So if I can have Bill Graham up. Bill, you do want to address Section three, is that right? [SPEAKER CHANGES] No, I don’t want to. [SPEAKER CHANGES] Okay. Then we’ll, then we’ll scratch that. Okay. Alright, so this time committee we’re going to take up this bill and discussion. [SPEAKER CHANGES] Thirty ?? [SPEAKER CHANGES] Yes. [SPEAKER CHANGES] I had signed up and I really want to address three. I also would like two but I have something to say on three. My name is Kirk Warner. I should be on that list. [SPEAKER CHANGES] Mr. Warner, I have you down for Section two. [SPEAKER CHANGES] Okay. I’d also like to be down for two. I also want two ?? but I’d like to address three ??. [SPEAKER CHANGES] Mr. Warner, if you’ll come forward we’ll give you three minutes to address number, Section three. I believe you addressed this last time on Section Two primarily I believe. Is that right? [SPEAKER CHANGES] Yes. [SPEAKER CHANGES] Okay. So we’ll, we’ll let you address Section two since we still have some time. Section three, excuse me. Okay. [SPEAKER CHANGES] Thank you very much. Again, my name is Kirk Warner. I’m with the Smith Anderson Firm, also representing the North Carolina Association Defense Attorneys. First of all I wanted to mention the very sad story from the ??. That is sad but that would not be barred under the statute because that’s ?? Labor used which is illegal and is not a defense under the statute.

So that is a great story but there is still an opportunity for them. A company has to do the research, test, do it clinically, go to the government to get approval for drug use in this country. A government, then looks at it, reviews, researches, evaluates and then approves a drug for a specific use. Then it requires a specific language in its labeling. The manufacturer cannot use anything other than that label. How then can it be determined that a manufacturing company, a pharmaceutical company can be negligent which means unreasonable in putting drugs out to the public when the government has actually said - this is what you’re required to do. You have proven, correctly what it does and it can only be used for a specific use. So, as long as the company has not sent back the government, it has and everything it’s supposed to do before bylaw and how can that fall below the standard of care required of a manufacturing pharmaceutical company. Right now it’s only considered in North Carolina as a factor to be determined by a jury. It should be a defense. Because that proves that you’ve acted reasonably by going through the process and following the steps. So therefore, we’re in support of 648 in section 3. Thank You. [SPEAKER CHANGES] Thank You, Mr. Warner. In light of the additional come-ins, I’m gonna give one more comment to Miss Van Leningham who I believe is an attorney for Miss Queen and if you could address section 3 and particularly the FDA process and so forth, we would appreciate that. Thank You. [SPEAKER CHANGES] Please state your name for the record. [SPEAKER CHANGES] Thank You, my name is Allison Van [Leningham]. I’m an attorney at Greensboro and I’ve been representing women who have been injured by transvaginal mesh and multi district litigation proceedings. What that is, when there’re a lot of these cases of folks who have been injured by a particular product, they gather them under one umbrella with one particular judge. So last summer, I tried a case in the southern district of West Virginia which is where this in deal is proceeding. The first trial was a Georgia Woman named Donna [Sisson]. The second trial was to be a North Carolina woman, Von De Queen who you’ve heard from and so I represented these women, I represented a woman from Mississippi, I represented a woman from Minnesota, all of these women’s cases were to be tried as the exemplar cases of this particular product with this particular manufacturer. This manufacturer had made Hernia Mesh for a lot of years. Hernia Mesh, of course, is pull in the abdomen between the layer of muscle and fat and so they used that product when they went to the FDA to get this product approved and what they did, there was a process at the FDA called substantial equivalence. It’s called the 510k process. So, instead of having to do any clinical trials, instead of having to do any testing that involves what going to happen when they put a product into a person, what they did was they said – this mesh product that we’re getting ready to put in women transvaginally is the exact same thing as hernia mesh. So, the FDA allowed them to market this product. It’s not a product that’s only abdomen between muscle and fat. It is a product that is placed in through the vagina into the internal portions of the body. There are arms on this product that are placed in through the sides by a gigantic hook. It is a totally different location, it is a totally different process, it is a totally different application and the first time anybody knew what was gonna happen when they put it in women was when they started selling it and implanting it surgically in women. The thing that is insidious about this product is that it cannot be removed because of the way it anchors in through the sides. It was never tested, it was never clinically examined before it was placed into people. So, the first trial that we had resulted in a 2 million dollar verdict on behalf of this Georgia woman. There was a finding that this was a defective product, there was a punitive damages finding against this manufacturer. Under the bill, under section 3, Von De Queen, the North Carolina plaintiff that was next for trial would not have been able to file her suit in my opinion. She would have been dismissed. So, we’re not only putting a process, this 510k process, out in a way that it should not be a defense of these manufacturers; we’re putting North Carolina plaintiffs, people who are injured and byproducts of North Carolina at tremendous disadvantage.

There is a law in other states. I’ve looked at the law for all these different plaintiffs. And, this would make North Carolina absolutely the most restrictive. I would ask you to vote against it. [SPEAKER CHANGES] Thank you very much. Senator Hartsell? [SPEAKER CHANGES] Can I ask a question of anyone one of these people? [SPEAKER CHANGES] Yes. Thank you Senator Hartsell that’s exactly where we were getting ready to go. Senator Hartsell’s recognized to ask his question. [SPEAKER CHANGES] My question is for Mr. Warner. [SPEAKER CHANGES] Mr. Warner if you could step into the horseshoe here where everybody can hear you. [SPEAKER CHANGES] My question is did you see 60 minutes Sunday night a week ago? [SPEAKER CHANGES] I did not. [SPEAKER CHANGES] Follow up? [SPEAKER CHANGES] Did any of the speakers see 60 minutes Sunday night a week ago? The reason I phrase that is. There’s a segment on 60 minutes dealing with FDA testing and the failure of the testing to take into account differences in women over time. That’s what it was on. Just because the way the tests are designed. That’s doesn’t necessarily say the tests aren’t appropriate, it just says there may be some inconsistencies. Because, most tests are done on men, for various sundry reasons but don’t take into account the effect on women. At least, that’s what I took from it. I’m just curious if anybody has any other facts that are about these folks. [SPEAKER CHANGES] Thank you. Senator Hartsell? [SPEAKER CHANGES] If any of the speakers or anybody here, am I incorrect in my what I’m perceiving in terms of this test? [SPEAKER CHANGES] You’re the only one in America who watched that program (laughter). [SPEAKER CHANGES] Somehow, that’s true. [SPEAKER CHANGES] Ms. Martin, did you want to comment on Senator Hartsell’s question? Please step forward. For any of the members of the public that are asked a question, please step forward to the kind of middle horseshoe of the tables where everybody can hear you and state your name again so that our record is clear who you are and Ms. Black you’re recognized. [SPEAKER CHANGES] I’m (??) Black. In regard to Mr Hartsell’s question. It is my understanding that that is correct in history. A lot of times women were eliminated from clinical trials because they had menstrual cycles and they got pregnant. And, if there wasn’t the stability in that kind test results. So, oftentimes women were eliminated from testing. I did not see the show, but that’s what I understand from the history of the FDA. [SPEAKER CHANGES] Thank you Ms Black. Any other questions Senator Hartsell, at this moment? Okay. Chair recognizes Senator Goolsby. [SPEAKER CHANGES] Yeah, I had a question for the representative from the attorney general’s office. [SPEAKER CHANGES] Ms. White? Is that who you wanted to do the? [SPEAKER CHANGES] Yes. Thank you Mr. Chair. Ms. White. Regarding this law, the section that we’re talking about right now. I understand that it’s the fear of the attorney general’s office that if we pass this you will lose your ability to basically get those large settlements that we get now when we find that people have been harmed by products produced by pharmaceutical firms? [SPEAKER CHANGES] If it would be alright, I would like defer to someone.. [SPEAKER CHANGES] Certainly. Come forward. State their name and who they’re with. Again, so we can keep the record clear, please. Thank you Ms. White. [SPEAKER CHANGES] I would say just as a general proposition. We would certainly continue to try to make the argument. The state still could still bring these claims. The experience in Michigan with a similar provision, as far as I know, the only one in the state so far has what has been going there. I’ll let these gentleman introduce themselves. [SPEAKER CHANGES] Alright, which one wants to go first? [SPEAKER CHANGES] I’ll go first. Good morning. My name’s Stephen McCallister, assistant attorney general with Mackey investigations (?). [SPEAKER CHANGES] Good morning. I’m Kevin Unison, senior assistant deputy attorney general and director of super (?) division. [SPEAKER CHANGES] Which one of you would like to address Senator Goolsby’s question? [SPEAKER CHANGES] I’ll go first, and Stephen, he’ll chime in. I thank the Senator. It’s a good question. Currently, there’s no doubt on our ability to recover for the state. There’s nothing in the law that casts any doubt on that. I think that if this bill were to pass at is written now, there’s be lots of things lawyers would argue about on both sides. The main point is that there would be lots of doubt passed on our authority under this bill and there’s lots of arguments we would have to make. Ultimately, it might have to be litigated with court making the decision. That would be a big difference from what we have now where’s just no doubt currently in the law on our ability to obtain these recoveries for…

And I echo the sentiments. I believe that this bill would compromise our ability to recover in a lot of circumstances, including, but not limited to, off-label marketing. And I would point to Michigan as an example of the concern that we have. And I'll read to you from the Michigan Court of Appeals opinion. They said, “Here, because plaintiffs' claims are based on representations about the state of the inefficacy of Vioxx, they're barred because the FDA approved Vioxx. And they are absolutely barred under the Michigan Product Liability statute, which is very, very similar to the one being considered here. So we are very concerned. And it's not a hypothetical or a theoretical concern, it's based on something that actually happened in another state, and we're concerned that that's gonna happen here. [SPEAKER CHANGES] If I could add one more thing... [SPEAKER CHANGES] Yes. [SPEAKER CHANGES] ...Both of these divisions act in concert with other states on multi-state investigations and recoveries, so this would have the potential of recoveries being barred in North Carolina, that are otherwise going on in other states. [SPEAKER CHANGES] Thank you. Senator Goolsby, do you have a follow-up? [SPEAKER CHANGES] I didn't get to...How much money do the people of North Carolina...how much did we get last year from these recoveries from pharmaceutical firms, for the injuries done to North Carolinians and what we've paid out in tax dollars? Do you know? [SPEAKER CHANGES] I know that it's tens of millions of dollars. I can speak to one particular case with Janssen Pharmaceuticals, involving Risperdal and Invega. And there, the settlement reached was $39 million. And the concern is, that if North Carolina has this law and other states don't, we're not going to be able to participate in these settlements. Other states are gonna receive these recoveries, and North Carolina's gonna be left on the sidelines. [SPEAKER CHANGES] Like Michigan. [SPEAKER CHANGES] Yes sir. [SPEAKER CHANGES] Senator Goolsby? Okay. Senator Stein. [SPEAKER CHANGES] I'd like to follow up on this line of inquiry, if I may, Mr. Chair. [SPEAKER CHANGES] ?? [SPEAKER CHANGES] There are some cases where it's off on the marketing, and of course the council Senator ?? spoke about earlier, he said off-label cases aren't covered, which would be litigated, and so you'd have to fight that because it introduces a level of uncertainty. But aren't there cases where it's not off-label, but it's instead apt to warnings? You all sent us a memo which pointed to the Purdue Pharma case, where they were selling it for the purpose that the FDA approved, and the state still had grounds for litigation...a lawsuit that generated millions of dollars to North Carolina consumers on Medicaid. [SPEAKER CHANGES] That's absolutely right, Senator Stein. Your first point is correct in that the statement you made—that off-label cases would be allowed to go forward under this bill—that's not specifically in the bill. The bill refers to immunity if there's an approval that's relevant to the harm caused. There are lots of arguments that could be made about that. So again, that issue is an ?? that would have to be litigated, so I think you're correct on that. And then, with respect to the second point, it's also true that a lot of our cases don't involve off-label marketing and involve situations where...you had a case where the drug had been approved, but the drug had been contaminated in a facility in Puerto Rico, and the company knew that and went ahead and sold these contaminated drugs anyway. So it had been approved by the FDA, but it was contaminated due to the poor conditions in the plant, and they knew that and they marketed it anyways. And so it doesn't seem like FDA initial approval of drugs should grant immunity to it, because it was a contaminated drug. And there are other situations like that. I think even the FDA, if you look at its website, recognizes the limitations of its own approval process, and speaks of a cost-benefit analysis it does. But it recognizes that knowledge about harm comes to light after the approval process, and the federal lawmakers and the FDA itself have not granted it any sort of immunity through the FDA process. [SPEAKER CHANGES] Thank you. Senator Stein, any other questions? Okay, Senator Blue. [SPEAKER CHANGES] I do have one, Mr. Chairman. There was a representation made that if you discovered the defect of a product, that you could still be held liable. And I'm trying to figure out—I'm looking at page 7, lines 44 through 47. And it says “intentionally, and in violation of applicable regulations, withheld or misrepresented...”. Why wouldn't a normal negligence standard apply there? And I'm addressing this to the drafters, I guess, or whoever had this specifically put in. An intentional standard is much higher than a negligent standard

For example, the question about Puerto Rico. If the company should have known by doing normal procedures if this thing was effective or had been corrupted that's one thing but if you got to show they intentionally withheld the corrupted drug, it's a totally different thing. So I was trying to square that with the records and patient earlier about this did not affect recalls, when recalls should occur. [SPEAKER CHANGES] Thank you Senator Blue. Senator Jackson do want to answer that or if you like you can defer to someone else if you prefer. [SPEAKER CHANGES] [inaudible] [SPEAKER CHANGES] Okay, alright. Bill would you like to.. [SPEAKER CHANGES] With respect to the Chair, I do not know why it was intentional rather than negligent. That's the standard in this but I think that Senator Blue is correct in saying that that's a much higher standard than that we've shown. It's also intentional and in violation of that, well regulation. So two things that make it a higher burden to come within this particular exemption. [SPEAKER CHANGES] Senator Jack... [SPEAKER CHANGES] Rush Chairman, also Kurt might have some input on this if you would like please. [SPEAKER CHANGES] Okay [SPEAKER CHANGES] Chair recognizes Kurt Warner, is that correct? [SPEAKER CHANGES] Yes [SPEAKER CHANGES] State your name again please and who you're with. [SPEAKER CHANGES] Kurt Warner, standards and compliance association [??]. Senator Blue, the intentional is really about knowingly but you have negligence without knowing it. The example brought up by my collegue at the AD's office, that clearly is not covered by this defense that's in the statute because it's been adulterated or contaminated. That's in the process, you can be sued for that. That's negligence but what you're specifically talking about is intentional. That's to require that it being a knowing misrepresentation as opposed to any other standard. Negligence you can have without knowing it at all. One thing that you have done the research and done it and you just dont' know and you've represented everything correctly then you later find out it's been misrepresented, that's different then you don't have [??] but the intentional is about knowing, that's the key. I would use those synonymous with knowingly. [SPEAKER CHANGES] Senator Blue? [SPEAKER CHANGES] What I'm worried about in this probation is recall because if you got to show that somebody intentionally did not advise the agency that there was some signals that this thing may not be working right. Those signals, if one has the safeguards in place, should appear using regular prudence and reasonable standards but if you got to show an intentional standard when it comes to, especially recalled products. If you did not let the Food and Drug Administration or whoever the licensing agency is, know that we're getting some signs of that this thing might need to be checked a little more closely, you created what seems to be an unreasonable because it says maintaining. That's the word that I'm throwing out. That you're maintainning their approval process and if you got to intentionally show that you didn't show something or perceive something as opposed to the negligence you allow, the environment to allow this to clear. It's almost impossible requirement it seems. If that made sense. [SPEAKER CHANGES] Thank you. Mr. Warner, more or less unless somebody has a question for you we're passed...or a comment...there may be somebody who wants to ask you a question if you'll stand by. Any other questions Senator Blue? Okay Senator Wade. [SPEAKER CHANGES] Thank you Chairman. Mr Warner, if you don't mind, let me ask a couple of question. I'm not an intern and I'm doing this for all sitting here who are not interns. If you just like to have some straight facts about this wheel. I don't see anywhere in here that it says anything about off label. To me "off label" would be me taking that as a doctor and using it in a way that it has not been approved and I would think you would be liable for that. [SPEAKER CHANGES] That's true. [SPEAKER CHANGES] Since you're doing that. Now I do understand that if you're producing a particular drug and you've put it through all the regulations you're supposed to, do the testing, that when it comes out and you even put it in the general population, there's going to be some people that have a reaction. I don't care how many tests you put it through it's just going to end up that way. I don't see anything in here that would say that you're liable for that, which I...

understand because what other caution precautions could you have taken, but what I'm hearing in this room, and correct me if I'm wrong, is that we want you to be responsible as the drug company or manufacturer for everything that could possibly ever happen. Even though there's no way you could ever know. Is that what I'm hearing? [SPEAKER CHANGES] That's what the current state of affairs is, that the, it's essentially a strict liabilities standard, except in North Carolina, but it's essentially that under warranty that the drug manufacturer can be sued for anything, off label, on label, idiosyncratic reactions, is what you're referring to. They can be sued right now. But this bill is to give them a defense against against, if you've used it correctly, used it as the label intends, and used it as the FDA has approved, then you will have a defense. If there were enough idiosyncratic defenses, then that would raise another issue as to whether or not it's appropriate anyway, and that's what vaccine courts are set up for anyway, because that's the type of protection the companies need in that type of arena. So yes. Now that duties just on the approval. There's a continuing duty to monitor the field and provide information to the FDA under the reporting regulations. And at that point, there's another decision by the FDA, that's how they keep track of whats going on in the field. They can make decisions and require either broader labeling, or restrictive use, or require recall. So the recall rules are actually different then the, then the actual approval rules. So it's a different standard that's involved in the recall process. [SPEAKER CHANGES] If I could before I follow up, I'd like to make a comment from the chair. Miss ?? you just basically annunciated to this committee as if North Carolina has a strict liability standard, which we do not. And, and, and I want to be clear about that with Senator Wade and other members of the committee. North Carolina does not have a strict liability standard. So, what what this bill would do would basically immunize any of, any of the product manufacturers, whether it be pharmaceutical or otherwise, and they don't even have to run the risk of there being a lawsuit. It's not a question of the plaintiff proving their case. In North Carolina right now they have to prove their case. But what, what this bill would do would say that you can't even have a case. And we heard Miss [XX] testimony earlier, about the trans-vaginal mesh. And I would remind you and the committee that was an approved product, that apparently wasn't tested for the purpose for which it was used, and obviously had many significant consequences for Miss [XX] and many others. And if I understand this bill and the presentation so far from you and others; she would not be able to pursue anything in that case at all. She would just be flat out barred. And, you know, were talking about folks without means. Like Miss ?? she has a good job I assume she has health insurance. But if we're dealing with the lower income folks of this state, then the state's gonna pick up the tab for all the medical expenses that come down the line through Medicaid. So those are the types of things that this committee needs to take into account. How this bill would help North Carolinian's, and presumptively there's some sort of economic basis for this section. And I still have not heard any testimony yet about how this is gonna create jobs for North Carolina, or, or, or any any of the pros are, I don't, I don't hear any of the pros, and t that's just a comment from the chair. I don't hear any pros about why we need this section other than we need to eliminate lawsuits like Miss ??. And so if you care to comment on that and then we'll turn it back over to Mrs. Wade, Senator Wade. [SPEAKER CHANGES] The pros are to enable research and advancement in medicine. That's the pro. The cons, [XX] the other pro, the con is without this guess what happens to the cost of medications for the state of North Carolina, and for all it's citizens. All that liability cost has to rolled into the cost of the product, and your price of any type of prescription drug has to accommodate that cost. So, as manufacturers get sued the cost goes on and the cost gets relayed back to the citizens and to the state; it's reimbursement policies. [SPEAKER CHANGES] Of course every state would need to adopt this standard for that to hold true. That, Senator Wade, and then we'll come back to Senator Van Duyn. [SPEAKER CHANGES] Well that, that was as dumb as what I was gonna ask you in the follow up was. If, if you were a manufacturer I would think you would be hesitant if there weren't rules governing what you could be sued for. To...

develop new products because certainly there would be risk so would you just explain in common terms that if I develop a certain drug, I go through the FDA, I take years and money to get it approved, I get it through everything, what is my liability when I come out? What can I be sued for if I followed all of the procedures, I’ve done all of the studies, and I’ve done everything I'm supposed to do by law? [SPEAKER CHANGES] Right now, you’re still at the mercy of twelve people sitting on a jury, evaluating whether you acted reasonably or not. The position for this statute, this defense to the lawsuit is that you are presumed to have acted reasonably if you have gone through the correct process and been approved by the government for the specific use for which it’s being used. That’s what the defense is. [SPEAKER CHANGES] One quick follow up – [SPEAKER CHANGES] One quick follow up and then we’ve got - now we’ve got three senators whose hands have gone up. [SPEAKER CHANGES] Well maybe I should be quiet. [SPEAKER CHANGES] Go ahead. [SPEAKER CHANGES] So what you’re telling me is that if something happens when I take a medication, then I can sue you any time I want to. And it will be up to a court of law to decide whether I have a case or not. [SPEAKER CHANGES] Yes. Right. [SPEAKER CHANGES] Is that basically the law now? [SPEAKER CHANGES] Right now, whether you have complied with the regulations from the FDA warnings and things like that is only a factor to be determined. It is not a defense – a complete defense. So you can still be liable for whatever reason, but for twelve people in North Carolina, even though you complied with everything. [SPEAKER CHANGES] And this bill makes it [SPEAKER CHANGES] Follow up [SPEAKER CHANGES] … sorry, this bill makes it so that I’ve got to – If I’m suing you – that I have to give you - prove a reason that you didn’t follow the protocol that you did by law. [SPEAKER CHANGES] Or have some other reason – it’s adultered, it’s contaminated, it’s off label, whatever. And then of course you have the prescribing physicians that prescribed it off label, and that’s another potential issue. [SPEAKER CHANGES] Medical malpractice. Senator Van Duyn. [SPEAKER CHANGES] Yes, Mr. Warner, I have a question for you. I’m a homeowner, and I work hard to keep my house and my yard in good repair, but if a gust of wind comes up and knocks a tree over onto my neighbor’s yard, I’m responsible for that. And so, I take out homeowner’s insurance to indemnify myself against that risk. At the beginning of the meeting, we talked about how any drug has a potential to harm people, and that process the FDA looks at is a cost/benefit analysis. So if we accept the fact that there is potential for all of these drugs to do harm, shouldn’t a cost of doing business being indemnifying ourselves against – to protect those people that will inevitably be harmed? [SPEAKER CHANGES] One, that’s what your personal medical insurance is about, is part of the balancing of risk, and the FDA also looks at that as part of a balancing of risk. Like the tree that fell on your neighbor’s yard, you’re not responsible unless you negligently maintained that tree. Like if it’s ready to fall down, that’s the only time, and you should have taken it down, that’s the only time you would ever be liable for that tree falling on your neighbor’s fence. That aside, this is the process of which prescription drugs in the United States follow and every country in the world. They have to go through some process and evaluation before they can be put into public use and it’s a very rigorous process in most cases. So, once that’s approved, how can it be negligent, unreasonable of a company that’s has gone through the process, done the right things, and followed the rules, how can that be negligence for which they’re culpable? [SPEAKER CHANGES] Follow up? Ok, Senator Stein, and Senator Rucho, and Senator Hartsell. [SPEAKER CHANGES] And a question for Ms. Black. [SPEAKER CHANGES] Ms. Black if you would come forward please. [SPEAKER CHANGES] And we've been focusing on pharmaceuticals, and provisions and I find myself in the ironic position relative to the cosponsor of having less confidence in government’s ability to look out for people, but it not only applies to pharmaceutical companies. I’m thinking of the Conavra?? case in Garner?? where people were killed and dozens of people injured. It was a faulty hot water heater, but that hot water heater had been approved by the consumer product safety council. What would have been the effect of

[speaker]This family being able to recover through the negligent actions of a corporation [Jennifer Black]Well if provision three was passed then it would be this circumstance. If the President of the company could recover from the property damaged from the explosion that occurs, but if his son was killed in the same explosion, he would be barred. That would be the difference. So tt depends on how you value. If you want to value the people more or you value the property more. This is about stopping people's lawsuits and not property law suits. [New Speaker] So look explain how the property lawsuits would be able to go forward. I mean, I think probably lawsuits should come to court. I just don't think people should xxxx [Jennifer Black] All the six things I identified earlier on those were roadblocks for personal injury claims. They are not roadblocks that stopped the ability to recover from damaged property. [Speaker] Thank you. {Jennifer Black] Just one other example the recent GM recall. For example Senator Sator there you have an incidence were Mifad did not respond until ten years after GM knew there was a problem and so all these people who died and all the people who were injured for those ten years the company had better information than the government did.l If this law passes then for people after the days of the mifad approval the recall occurred those people who were referred after that would be able to recover but the people at the time the company knew until the Misaw act of recall would not be able to recover. [Chairman] Okay Senator Richard and then Senator Horton. [Senator Richards] I appreciate it and everyone of us here is concerned of making sure there is public safety and that unfortunately whenever a product or service is delivered there is always a risk of accidental end of life. But I guess I have a fundamental concern in one of the issues is because the fact that there seems to be a lot frivolous lawsuits because there just happens to be people who are willing to take a case to court and their attorneys are willing to crowd those courts whether they are frivolous or not and there are many cases where because the cost gets so high on the legal end potential lawsuits it's almost like legal extortion against many businesses many in North Carolina. Which I look at and say that impacts the ability of North Carolina businesses to compete with low cost services or manufactured goods. I guess the question that I have for the gentlemen whom excuse me I forgot his name. I apologize. [Chairman] Oh are you talking about Mr. Warner? Are you talking about Mr. Warner. Okay. [Senator Richards] Does this actually allow for or reduction or elimination of frivolous lawsuits so that North Carolina businesses will have an opportunity to be innovative and provide a willingness to invest in and also like a capital get a hold of products that will make the life of people of North Carolina and the country better? [Mr. Warner] It will indirectly, but it won't prevent people from suing. Because it's a defense and not a community but a lawsuit can be brought and then perhaps a discovery or whatever and then there will be a motion to be dismissed based on or a motion based on some judgment based on this defense. However, the fact that this defense exists would bring hesitation to those defenses and so the indirect effect to this is yes. [Chairman] Follow up [Senator Richards] Follow up. This still allow somewhat for some frivolous lawsuits for whatever claim they claim have. So it does get xxx any legal party can still bring it forward but at least there is a chance of whether it is frivolous or not so that it could be stopped short rather than being dragged on for 30 or 40 years and that actually xxx. [Mr. Warner] It would save millions to companies because they would have an appropriate early exit rate. [Chairman] okay I have Senator Horton next and then I'll come back to Senator Wade. [Senator Horton] How will this affect action under the ucc xxx

Because if in fact you… in a personal injury context, they would be subsumed because they are all based on the products liability portion of it. The UCC portion of it, if it is in fact… the UCC only provides for reimbursement of the product cost and things like that. The replacement parts, things like that. It wouldn’t effect it in that sense, so in a personal injury standpoint, it probably would be effective because it would be a defense ?? and the other warranty are yet to prove a defect, and that’s the same type of standard you have for the defense of the products to start with, so if you have a defense to that claim, it would also bar a warranty claim, unless for example you provided the wrong numbers or an economic-type situation in which the product you provided was damaged, and those still come into play. [SPEAKER CHANGES] Senator Hartsell, did you want to address that same question to anyone else? [SPEAKER CHANGES] Well I see that Black is standing up, and I’ve never known her to be shy about saying something. ?? [SPEAKER CHANGES] The Chair recognizes Ms. Black. [SPEAKER CHANGES] I respectfully… I disagree with Mr. Warner about that ??. I will note that this says “no manufacturer or seller shall be liable in any product liability action if any one of the following apply”. It is all product liability actions. It is completely open-ended. [SPEAKER CHANGES] Thank you, Ms. Black. Senator Hartsell, any other follow-up questions, or…? Because I have other hands up. [SPEAKER CHANGES] ?? [SPEAKER CHANGES] Yes sir, Senator Hartsell. [SPEAKER CHANGES] Senator, saying that, it is a… Are you saying that this is a defense both to a court action and a UCC action? [SPEAKER CHANGES] A breach of warranty action, yes. [SPEAKER CHANGES] Senator Wade and then Senator Brown. Senator Wade. [SPEAKER CHANGES] Thank you, Mr. Chairman. Mr. Warner, I’m sorry I’m wearing you out, but if you could come up here one more time, I just want to piggyback on what Senator Rucho had to say. My understanding is there’s nothing in section 3 that prohibits anyone from suing a manufacturer for an injury. Only thing is that you have to prove in a court of law that you’ve been injured and they are liable. Is that correct? [SPEAKER CHANGES] Correct. Correct. There’s nothing in there that bars the bringing of a lawsuit. That would be true immunity, if they could defend “you can’t sue us”. That’s not the case. This is a defense. [SPEAKER CHANGES] So you just have to prove your case? [SPEAKER CHANGES] You have to prove your case. [SPEAKER CHANGES] Thank you. [SPEAKER CHANGES] Senator Brown and then Senator Barringer and then Senator Goolsby. [SPEAKER CHANGES] Thank you, Mr. Chairman. I’ve got to say, I’m not an attorney either, so I’ve got to work through this. It talks about manufacturing, it talks about the seller, and I’m trying to get a distinction here because a manufacturer may produce a product, and down the road, that product could have a problem, but that manufacturer could be out of business, and as a seller, you’ve sold this particular product, and all of a sudden this lawsuit comes to a seller who has absolutely nothing to do with making that particular product. Walk me through that. How could that seller be liable, and how does this maybe change that when a seller wouldn’t know about that issue? [SPEAKER CHANGES] Would you like staff to take a crack at that to begin with, Senator Brown? [SPEAKER CHANGES] And everyone else at this point. [SPEAKER CHANGES] Let’s start with staff and then we may have someone else address it if they choose to. Bill? [SPEAKER CHANGES] I apologize; I just need to hear the question one more time. [SPEAKER CHANGES] He was asking how if… I’m going to try and summarize it. If the manufacturer’s gone out of business, what – [SPEAKER CHANGES] Or may still be in business. [SPEAKER CHANGES] Or may still be in business, but the seller of the product, who wasn’t involved in the manufacturing of the product but is the seller of the product, what kind of liability if any do they have or would they have under this bill? Is that…? Bill, if you’d like to… Do you want…? I’m seeing a couple hands in the public. Senator Brown, I will address two people. Mr…. [SPEAKER CHANGES] Del Giorno. [SPEAKER CHANGES] Del Giorno first and then Ms. Black, who I also see wanted to stand. We’ll try and keep this moving along. Time’s running out. We’re going to need to move along with some amendments, shortly. [SPEAKER CHANGES] Sellers are generally protected from liability unless at the pharmacy – you’re talking about pharmacists here and drug contexts – unless the pharmacist somehow adulterated the product before he sold it, or he mis-prescribed it, gave the wrong dosage.

Something along those lines. In other words, pharmacists ?? put together some kind of action that caused the product to be defective for that to be ?? is liable. So pharmacists are generally never held liable in these product liability cases against them ??. [SPEAKER CHANGES] All right, let me just address it quickly and then Senator ?? if we can get that addressed and follow up. [SPEAKER CHANGES] Just really quickly Senator Brown. In our current 99 day provision to it says seller's opportunity to inspect, so if the seller didn't change the product, you get it from the manufacturer and you sell it and it's still in the same sealed container, the seller can't be liable under our current law. So unless the seller did something to change it and made it more dangerous, then in fact a seller could be liable. But this instance is one of the rare times that ?? like a drugstore is not going to be liable in the case ?? [SPEAKER CHANGES] All right. [SPEAKER CHANGES] ?? [SPEAKER CHANGES] Senator Brown. [SPEAKER CHANGES] I want to bring up a situation. I know where a car or a vehicle with a defect ?? for an individual, sue the manufacturer and the car dealer and the car dealer was found liable for a defect of a car that they just sold, they didn't produce. Explain how that could happen. [SPEAKER CHANGES] I'm not sure the car instance ?? but I'm sure that our college pharmaceutical program, or the Pharmacist Association would agree that only in instances where there was negligence on the part of the pharmacist or some kind of intentional act to alter the drug some way or screw up the prescription somehow would the pharmacist be liable. [SPEAKER CHANGES] The chair would just observe that my understanding on what both the speakers have said there would have had to have been some kind of finding or determination in the court and by a jury that the seller had done something to the product, had altered it, changed it in some way, not knowing the case, you know, if there was, I don't know, changed the transmission, changed the tires. I don't know, I'm just speculating, I wouldn't know. We need to keep moving along because I know we're going to take up some minutes. It's already 10:10, so Senator Barringer and then Senator Goolsby and then we're going to take a very quick recess and look at the amendments we've got and try to get through those. Senator Barringer. [SPEAKER CHANGES] My question is for Miss Black again, I would like to have clarification on, I think it's really a follow up to Senator Hartsell's question about warranty. Am I correct in my understanding that the two warranties that you were discussing were the warranty of merchantability, which meant that the product is just and average quality and then also fitness for particular purpose, which I think is a very important warranty to explain regarding the transvaginal mesh because under our law as it currently stands the manufacturers say that what they put out there is fit for the particular purpose which was being marketed which was that. Am I correct? Could you comment on that? [SPEAKER CHANGES] Yes, so in a typical action for products liability we have to prove that the corporation acted unreasonably and that unreasonableness would include a breach of an implied warranty or a breach of an expressed warranty, and those we don't really talk about them in the big UCC claims so much, but the product ?? So you are correct. [SPEAKER CHANGES] Thank you. [SPEAKER CHANGES] OK. Senator Goolsby. [SPEAKER CHANGES] Thank you Mr. Chairman and I appreciate everybody coming to speak in here today and talking with us. I've been here, this is the end of my second term and I'll be going home to practice law when this is over. When I first got here, we dealt with the difficult task of tort reform and medical malpractice reform. Trial lawyer and plaintiff's lawyer, it was tough to make those decisions but I felt like we made those decisions for the best, for the best for North Carolinians overall. The thing that really scares me about this, and I really won't, I just don't think it's coming out in this meeting, is how radical a departure this section of the bill is from anything that any other state has done. We keep hearing about passing costs on to the system, but you have a lady in here who's a banker who is going to bear that cost all on her own. We got people that are in business to make money and they make products. I provide legal services.

When I screw up I have legal insurance, malpractice insurance, that pays the foot to the person I damaged. These folks are in here today asking us to let them off scott free. Now, we talk about Senator Rucho was worried about frivolous lawsuits. I’m in court, but I’m not here everyday. We have alternate dispute resolution in this state. My courts in New Hanniber county are shut down by about Wednesday most of the civil courts, most weeks. We don’t have, we’re not a litigious state. As Ms. Brax said, and I would agree. Our juries are tough. I try jury trials and personal injury cases all the time. Nobody’s ever given any of my clients a payday that was just unbelievable pennies from heaven. It’s tough. I trust the people in North Carolina. I trust our judges. I trust our legal system. What we are talking about doing here my friends is literally giving a pass to huge corporations, just because some federal bureaucracy is said you got to okay for now. They pass the costs unto this lady, Baker, who just sucks it up herself. So, do we let the people who are in business for the harm they do, just off scott free? If we do that, somebody pays the price. The person who pays the price is the innocent consumer who just wanted the drug, the lawn mower, the car whatever it is to work the way they were told it was going to work. I tell you, if we do this, civil justice in North Carolina has taken a step back to the dark ages. I just urge, caution and reflection. Nobody does this in the United States and we do not need to do this to our people. If it’s a frivolous lawsuit, it gets kicked out. This doesn’t stop frivolous lawsuits, Senator. People can still file frivolous lawsuits, but they get kicked. And, we have things in place. [SPEAKER CHANGES] That’s long enough. Senator Rucho. [SPEAKER CHANGES] I see Senator. I do have to pay. We all have to pay. If we don’t do that sir, it passes on to the innocent consumers. [SPEAKER CHANGES] Not always. [SPEAKER CHANGES] Not always. [SPEAKER CHANGES] (gavel raps). Let me stop you for just second because of time. Senator Apodaca, you will get before this meeting is over. If you want to address this point, I will recognize you. [SPEAKER CHANGES] But, sir. I’m concerned. [SPEAKER CHANGES] I understand. I understand your concerns. We’re going to try to get through this meeting orderly. I will certainly give you an opportunity to respond to Senator Goolsby.. hang on just a second Senator Rucho. Senator Goolsby, are you finished with your comments? I don’t want to cut you off from doing that. I just wanted to get some order back. [SPEAKER CHANGES] I appreciate it. I would just urge caution and that we don’t do anything radical that no other state has done. The people of North Carolina deserve a civil justice system that gives them a jury trial where 12 people get to decide what occurred, what happened based upon reasonable negligence and additional circumstances. [SPEAKER CHANGES] Okay, at this time, and I know there are some other hands from senators. If my committee will bear with me. Then, we have at least ten or more amendments that have been put forth and we’re going to work through. I’m certain that many of your comments…that there will be an opportunity for you to address those comments. So, we’re not going to take any more comments from this committee at this moment. [SPEAKER CHANGES] Mr. Chair. Point of information. [SPEAKER CHANGES] Point of information Senator Rucho. [SPEAKER CHANGES] According to Senator Goolsby’s testimony he shouldn’t have… [SPEAKER CHANGES] Senator Rucho, I’m not going to go out at this moment. I will give you an opportunity to address that and shortly. What we need to do is to take a three minute recess to take a look at these amendments and start taking up these amendments. You will have an opportunity, I’m certain when those amendments come forth to address Senator Goolsby’s comments. If you will please allow me to keep that kind of order because we are already at a quarter after ten and we do need to move forward on this bill. Okay? At this time we are going to take try to be a no more than five minutes, actually a three minute recess and we’ll come back to order if members will stay close by. Passing out three amendments. The first one we will take up is offered by Senator Barringer. In just a moment I’ll recognize her to tell us what the amendment is. Then we have an amendment from Senator Apodaca that we’ll take up. We’ll go in that order. Then Senator Hartsell. Following Senator Hartsell’s amendment, there may be other amendments, depending on how that amendment goes. I think after that Senator Rucho is going to have an amendment. Yes.

So at this time, I think all the members are back in place and hopefully the public will come to order. Senator Barringer sends forth an amendment. And at this time Senator Barringer is recognized to explain the amendment. [SPEAKER CHANGES] Thank you, Mr. Chair. This particular amendment. [SPEAKER CHANGES] One or two? Which one? I didn’t know there were two. [SPEAKER CHANGES] This is the one that amends [SPEAKER CHANGES] Number 2 or 4? [SPEAKER CHANGES] Number 4. [SPEAKER CHANGES] Number 4. [SPEAKER CHANGES] Thank you. [SPEAKER CHANGES] Let’s make sure we’ve got the right amendment before the members. Please tell Bill which one you’re dealing with. [SPEAKER CHANGES] ATG-68 version 4, is that correct? [SPEAKER CHANGES] That’s correct. [SPEAKER CHANGES] Senator Barringer, you’re recognized. [SPEAKER CHANGES] Thank you. What this amendment does is it conforms part 4 which is the preventive use of patents, with the language that was passed by the House in the bill which has now come over to the Senate. We want to make sure that the 2 bills are the same, so that we don’t have technical changes between the 2. I’ll be happy to address any questions that are here but that’s basically what this does. [SPEAKER CHANGES] Thank you Senator Barringer. Any comments on the committee on this conforming amendment? This amendment that conforms. We have a motion for a favorable on the amendment. Any further discussion? There being none, all in favor of the amendment please say aye. [SPEAKER CHANGES] Aye [SPEAKER CHANGES] Any opposed? The ayes have it. The amendment is to be engrossed. Thank you. Thank you Senator Barringer. Senator Apodaca has an amendment that should have been given out. And you just had one, is that correct, Senator Apodaca? The Chair recognizes Senator Apodaca to explain the amendment. [SPEAKER CHANGES] Thank you Mr. Chairman. This is the identical language to your amendment you offered on the budget bill. We just thought this was another vehicle that we needed to attach it to, with a 3 judge panel, to hear constitutional issues. I can go into the long drawn-out explanation but it is exactly what we passed in the budget a few weeks ago. [SPEAKER CHANGES] Thank you, Senator Apodaca. So I hope that all the members are already familiar with this provision as we’ve already debated it on the floor. I see a motion for a favorable report, unless there is a strong comment. Senator Stein, you are recognized. [SPEAKER CHANGES] Thank you. Does this include the provision that says that if this 3 judge panel concludes that the people of North Carolina will suffer irreparable harm if the law goes forward but nevertheless the General Assembly says to the court that the law must go forth? [SPEAKER CHANGES] Senator Apodaca? Have to go back and read it? [LAUGHTER] Hal Pell is recognized to explain. Thank you. [SPEAKER CHANGES] The provision for the ?? if the ?? rules it is not an automatic stay on that. There is on the ?? as a ?? challenge, where the state is a party. There’s not a next day. But the 3 judge panel decision is not included in that automatic stay provision. [SPEAKER CHANGES] Thank you Mr. Pell. Follow up. [SPEAKER CHANGES] What the legislature is saying to the judiciary and to the people of North Carolina is that if, by the way, when the Democrats were in power, they passed on Constitutional laws. You all have been passing on Constitutional laws. It happens. That’s the whole balance of power. That’s why we have a judiciary to oversee us, to make sure we don’t disrespect the Constitution. And sometimes when we pass on Constitutional law, if that law were to go forward, it would create irreparable harm to the people. And that’s why courts issue a stay. That is the standard of why you would issue a stay. And what this says if it’s the same as what was in the budget is that notwithstanding the fact that the people will experience irreparable harm, if the courts want to issue a stay, no stay can be issued even by a 3 judge panel, let alone the 1 judge, until the Supreme Court has finally ruled. Which means the law goes forward, the image to the people notwithstanding. That is terrible policy, and in fact I’m willing I think the 3 judge panel will rule that this is unconstitutional when it goes before them. And so I would like to offer up a perfecting amendment that strikes that provision in this amendment. [SPEAKER CHANGES] Okay. While we are preparing that, I’m going to recognize Hal Pell again.

5 or 7 at the bottom, will I still be able to find 3? It combines that in that session, if the trial court ?? there's a mandatory stay and that's the provision that's in this bill. However it says on the next page that the subsection. [SPEAKER CHANGES] Can you site the page and line please, Hal. [SPEAKER CHANGES] On the next page of the amendment. [SPEAKER CHANGES] Of the amendment. [SPEAKER CHANGES] ?? of the amendment. This subsection does not apply to ?? County's prejudge panel, in other words that part of the bill that says there shall be a stay on a trial judge doesn't apply to the prejudge panel. That does not mean that ?? that a prejudge panel like any other court or could file their own motion to stay or seek a stay from the Supreme Court. So I'm not sure that what is being said, that there's still not an option by that prejudge panel to seek a stay of that or not, it's just that the provision that says stay is not mandatory for a trial judge does not apply to the prejudge panel. That would be the judgement. So that is the same as is in the budget. [SPEAKER CHANGES] Thank you, Hal. If I could, how long will it take to have the. [SPEAKER CHANGES] Mr. Chair. [SPEAKER CHANGES] Yes Senator Stein, if I understand correctly what Mr. Pavel's saying, the part of the bill that you want to be taken out by amendment isn't in there, so I'm not sure what part based on Mr. Pavel's explanation would be the part that you want taken out. And that's, I would ?? [SPEAKER CHANGES] Senator Stein I'm going to ask you to take the choice out of your ?? please. [SPEAKER CHANGES] If you would on, consider. [SPEAKER CHANGES] Off ??. [SPEAKER CHANGES] Off, that's what I was going to ask you if you'd consider. The other thing I was going to say is we'll just place this, Senator Apodaca's amendment, and come back to it, OK. All right. So you'll move it to the floor. All right, any other discussion on this Amendment offered by Senator Apodaca. We have, Senator Blue, we have a motion before us so Senator Blue. [SPEAKER CHANGES] Just a quick comment, Mr. Chairman. Just because I was ?? seeing this in the budget, so am I ?? but I'm glad that you brought it to the judiciary committee and I made that argument about the budget. If we are to do our duty as the judiciary committed, we ought to take this amendment and parse it and then look at it line by line and see what it does to the existing law and then see why we want to change it. Just to give it a quick 2 minute, 3 minute dip in this committee. I think that there's a mockery of what judiciary committees are really created for, to answer the questions, not only that Senator Stein is raising, but to be sure when we bring it out that we're comfortable on what it does to the entire judiciary, how it changes procedures and what some of the other applications are. [SPEAKER CHANGES] Thank you Senator Blue. Not seeing any other hands on this amendment, we have a motion before us. All those in favor of the amendment by Senator Apodaca, please indicate by saying aye. [SPEAKER CHANGES] Aye. [SPEAKER CHANGES] Opposed. [SPEAKER CHANGES] No. [SPEAKER CHANGES] The ayes have it. The amendment is engrossed. We have an amendment from Senator Hartsell that should have been circulated and this goes more to the heart of the bill and what we've been discussing, so at this time the Chair recognizes Senator Hartsell to explain the amendment. [SPEAKER CHANGES] Thank you, Mr. Chairmen, members of the committee. The amendment eliminates sections 2 and 3 of the bill but in place it puts in the requirement for study of those issues raised by that section of the bill as well as looking at the overall issue of ??, strict liability, professional liability, one several liability and otherwise. It will be done in 6 months so we can come back and look at that very thoroughly next session. My concerns as an associate and also with this issue of warranty, ?? an issue. It is not to say that there is not merit in sections 2 and 3. There is merit unfortunately in sections 2 and 3, but what we're doing by adopting either or both of those sections is creating a real aberration in our law. And I think there is merit in probably looking at that but as we look closer it seemed to me that we need to kind of flatten this out. We don't need to create again winners and losers associated with a particular kind of product, a particular kind of situation or otherwise. If we pointed out the law is fair, it needs to be addressed from both sides, looking ahead quite appropriately. That's not to say that some of these more important ??

For the time being, I think we really should take the opportunity to look at very seriously at those issues in the course of the (inaudible). Those are the (inaudible) such as pit bulls (inaudible). The offices such as your might see, somebody need to really really look at the (inaudible) [SPEAKER CHANGES] I’m afraid there might be unintended consequences associated with that. [SPEAKER CHANGES] Thank you Senator Hartsell. So, at this time, this being a very substantitive amendment. Chair will take comments, discussion, from the committee members. Anybody care to or wish to be recognized? Senator Harrington? [SPEAKER CHANGES] I just have a question. If I may, can we have reponse or comment on the… [SPEAKER CHANGES] Yes, he’s had a rut back here. I was going to do that before we break, I promise. While we were waiting for Senator Jackson to look at the ammendment, are there are other questions or comments from committee members on this amendment? Okay. Senator Jackson? [SPEAKER CHANGES] Thank you Mr. Chairman. First, I would just like to make a statement as a business owner and a business person. This bill as it was written is a great bill. As it was written, it was a great bill for a business owner. Anyone who has to deal with the FDA or any other government agency, there is more rules and regulations upon us than we can even begin to fathom or imagine. In light in listening to my lawyer friends, and I do consider you friends, I knew…Don’t mean I trust you, I just consider you friends (laughter). Let’s make that point clear. I knew we would have to tweak this language. At this time, I think Senator Fletcher’s amendment goes a little farther than I would be willing to tweak, and I would ask that you not support that amendment. There is one coming that I will ask you to support. Thank you. [SPEAKER CHANGES] Thank you Senator Jackson. Are there other comments or questions from the committee? Okay, there being none. Let’s go ahead and vote the amendment then. We need to move on. All those in favor of Senator Hartsell’s amendment indicate by saying “aye”. All those opposed? In the opinion of the chair, the aye’s have it. The amendment is engrossed. [SPEAKER CHANGES] Provisions? [SPEAKER CHANGES] Now, we haven’t done that in this committee Senator Apodaca. I will make an exception for you. Okay. The amendment has been engrossed. I know Senator Rucho has an amendment. Are there other amendments that need to be brought forth? Okay. If the sergeant in arms at this time would pass out Senator Rucho’s amendment. (papers rustling, crowd noises). [SPEAKER CHANGES] Mr. Chair? I would like to withdraw at this time. [SPEAKER CHANGES] Senator Rucho is going to withdraw the amendment? Is that correct? [SPEAKER CHANGES] Yes. [SPEAKER CHANGES] Are there other amendments that we need to take up? Okay, at this time not seeing any further amendments, the chair will entertain a motion for a favorable report as amended. Senator Hartsell? [SPEAKER CHANGES] I like to make a motion to roll it into a new committee subsitute. [SPEAKER CHANGES] Rolled into a new committee substitute? The motion before us is a favorable report as amended rolled into a new committee substitute? Any other discussion? I know Senator Apodaca wanted to vote. We might pause to make sure there is no comments or questions for the committee. As a courtesy to Senator Apodaca, we’ll pause for just a moment. [SPEAKER CHANGES] I think we should wait for a little while now. [SPEAKER CHANGES] I agree with Senator. I want everybody to tell him that I tried to wait. This bill…

Does your motion include the sequential referral to Finance? Okay, alright. Everybody clear about that? They referred to Finance. Alright, well have a motion before us. Let's, I don't think it's going to matter, let's go ahead and vote the motion. All those in favor please indicate by saying aye. Any opposed? [SPEAKER CHANGES] No. [SPEAKER CHANGES] Senator Wade, thank you for your vote. Alright, that is the bill before us and at this time we will go ahead and adjourn. Thank you.