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A deadlocked U.S. Supreme Court upheld a lower court decision against Pfizer Inc's Warner-Lambert unit over withdrawn diabetes drug Rezulin in a ruling announced on Monday, allowing the case to go forward.

By a 4-to-4 vote, the court affirmed a federal appeals court ruling that reinstated the lawsuit against the world's biggest drugmaker by Michigan residents who said their injuries were caused by the diabetes drug.

The split occurred because the court's ninth member, Chief Justice John Roberts, took no part in the case because he owns Pfizer shares. The court's one-sentence ruling does not address the merits of the dispute.

Rezulin, first approved in 1996, was pulled from the market in 2000 after about 100 people who took the medicine needed liver transplants or died. Pfizer has fought thousands of lawsuits claiming the drugmaker failed to warn the public about the drug's toxic effects.

The high court's action clears the way for the case to proceed in federal court in New York.

At issue in the Supreme Court case was a Michigan state law that provides pharmaceutical companies immunity from such suits except when it can be proven that the manufacturer defrauded the U.S. Food and Drug Administration.


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