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Tennessee victims in U.S. meningitis outbreak win new avenue for lawsuits

By Tim McLaughlin

BOSTON (Reuters) - Victims in Tennessee of a deadly U.S. meningitis outbreak won the right to pursue a new avenue of litigation against healthcare facilities and doctors there, after a ruling by a U.S. bankruptcy judge this week.

Tennessee was the second hardest-hit state, behind Michigan, in a meningitis outbreak that has injured or killed more than 700 people nationwide. There were about 65 healthcare facilities and doctors in Tennessee on the customer list of New England Compounding Center, which U.S. authorities said made and shipped the fungus-tainted steroid cited in the deadly outbreak.

U.S. Bankruptcy Judge Henry J. Boroff on Wednesday declared NECC insolvent, clearing the way for meningitis victims from Tennessee to file product-liability claims against medical providers, health clinics and other sellers of the tainted product.

Without the insolvency declaration, meningitis victims in Tennessee would only have been able to pursue professional or medical negligence claims, according to Tennessee law.

Framingham, Massachusetts-based NECC filed for Chapter 11 bankruptcy protection in December.

The winning motion was filed by lawyers representing Bertram Walker Bryant Jr., a Tennessee man whose wife died from a steroid injection she received at a medical center in Nashville.

Overall, there have been 15 deaths and 153 meningitis-related cases in Tennessee, according to the U.S. Centers for Disease Control and Prevention. Michigan has had 17 deaths and 264 total cases.

Before the judge's ruling, Paul D. Moore, the trustee in the NECC bankruptcy case, opposed the motion, saying it could open "the floodgates to third-party litigation."

The ruling allows plaintiffs to bring product-liability claims via the Judicial Panel on Multidistrict litigation, where a number of meningitis-related lawsuits are being consolidated.

(Reporting By Tim McLaughlin; Editing by Leslie Adler)

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