Our hats are off at The Corporate Observer to Justice Elena Kagan for keeping it real. Consider the following hypothetical:
Ten users of contact lens cleaner suffer blindness as a result of using the lens cleaner. Although the sample (ten) is not statistically significant, since the company sells tens of thousands of cleaning solution bottles, would you want the information?
This is essentially the question Justice Kagan posed to counsel for Matrixx – the maker of Zicam, a homeopathic cold remedy which was recently pulled from shelves across the country amid concerns that it causes anosmia (the loss of the sense of smell).
The suit before the Supreme Court (click here for the New York Times article) was a shareholders’ class action suit against Matrixx for its failure to warn shareholders and consumers of known risks of anosmia and remove Zicam from the market. Instead, the company determined that the incidence of anosmia was not statistically significant and therefore did not merit action. The problem only received attention following a special on Good Morning America.
In the Zicam case, twenty-three people who used Zicam lost their sense of smell. Matrixx tried to argue that twenty three people were hardly statistically relevant and thus the information was not material. Justice Kagan wasn’t buying it. She “cut to the chase” with her hypothetical regarding blindness. Not surprisingly, in response to the hypothetical, Matrixx’s counsel stuck to his ridiculous position that ten people going blind would not impact him or be material. For her insightful questioning, and merely a rookie on the bench, Justice Kagan is our Person of the Week.
Assisted by Zachary Kady