In last June's Pliva v. Mensing ruling, the U.S. Supreme Court held that generic drug makers aren't liable for failing to warn users about dangerous side effects because federal law requires them to use the same labels the Food and Drug Administration has approved for the brand-name versions of their drugs. Kirkland & Ellis, which won the Mensing case at the high court, had a particularly pressing reason to be excited about the Supreme Court's opinion: Kirkland's longtime client Teva was in a terrible jam in Las Vegas, where more than a dozen plaintiffs had accused the generic drug maker of contributing to an outbreak of Hepatitis C by selling propofol (a light anesthetic often used in colonscopies) in vials that promoted multiple uses.

The generic and its codefendant Baxter were slammed for more than $500 million in actual and punitive damages in a Las Vegas state court trial last year--the biggest verdict of 2010. But Kirkland, which Teva brought in to appeal the 2010 verdict, believed Mensing would protect Teva in subsequent propofol trials in Las Vegas. Teva's label on the drug, after all, was precisely the label approved by the FDA, and that's exactly the scenario the Mensing ruling addresses. If, as the Las Vegas plaintiffs alleged, a negligent clinic spread hepatitis by injecting multiple patients from the same tainted vial of propofol, that's the clinic's fault, not Teva's-and particularly not after the Mensing ruling.

If jurors in the latest propofol trial had been Supreme Court clerks, that reasoning would probably have been good enough to get Teva off the hook. But they weren't. On Thursday, state court jurors ruled Teva and two codefendants owe three Hepatitis C victims a total of $20 million in compensatory damages, with a $700 million punitive damages claim still to be decided. Even though the jury found that propofol is not a dangerous drug, jurors agreed with plaintiffs lawyer Robert Eglet, who said in closing arguments (according to the FiercePharma blog) that the large vials in which Teva sold the anesthetic promoted reuse. (Teva was represented at trial by Goodwin Procter and Greenberg Traurig.)

Kirkland's post-Mensing brief to the Nevada Supreme Court in Teva's appeal of the $500 million 2010 propofol verdict asserts that the Supreme Court's ruling protects Teva under any failure-to-warn theory--including the theory that seems to have swayed jurors in the latest trial. "Claims that a plaintiff can permissibly bring against a brand drug company based on the alleged inadequacy of a product's warnings cannot, as a matter of law, be brought against a generic manufacturer," the Kirkland brief said. "This result applies with respect to all types of labeling of a generic product, which includes the package insert, the labels on the vial, and any type of Dear Doctor letter."

A Teva spokesman said the company intends to appeal last week's verdict as well. "We think the verdict was clearly erroneous under Mensing," he said.

The Nevada Supreme Court hasn't yet heard oral arguments in the first Teva case. But now it looks like Teva's got more than ever riding on Mensing.

(Reporting by Alison Frankel)

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