In a closely watched decision, a divided Supreme Court is leaving intact a ruling favoring people who sued a drugmaker, saying they had been harmed by a medicine to fight diabetes, the Associated Press reports.

The dispute stems from several suits over the Rezulin diabetes drug that was sold by Warner-Lambert, which is now owned by Pfizer. The pill was yanked in 2000 after links to nearly 400 deaths and hundreds of cases of liver. The Supreme Court split 4-4 in the case, with Chief Justice John Roberts not participating, the AP writes. UPDATE: Roberts sat this one out because his financial disclosure form filed last May indicated he held Pfizer stock between $10,000 and $50,000, according to the AP.

A group of 27 Michigan plaintiffs, including relatives of six Rezulin patients who died from liver damage, sued the drugmaker in 2000 for negligence and defects in the design and manufacture of the drug. Michigan law, however, prohibits product-liability suits against meds approved by the FDA. But it allows the suits to proceed if plaintiffs can show that a drugmaker misrepresented or withheld info from the FDA that would have prevented the agency from approving the drug. The plaintiffs contended Warner-Lambert misled the FDA about the extent of liver damage among patients in its clinical trials.

“The appellate decision stands, but it’s only the appellate court - not the Supreme Court - speaking,” says Mark Hermman, a partner at Jones Day, whose clients include drugmakers, and who is one of two attorneys who write The Drug and Device Law blog. “We’re thus left in exactly the situation today that we were in two weeks ago: The appellate courts are divided, and we don’t know what the law is nationally.”

The Supreme Court action “will allow Michigan residents harmed by drugs that are unsafe or provide inadequate warnings to have a fair chance in our courts, and hold companies accountable for their actions,” says Jon Haber of the Association for American Justice, which represents trial lawyers. “While those plaintiffs will get justice in the courtroom, we hope the Supreme Court’s decision in Levine v. Wyeth this fall will continue to allow Americans in any state to hold drug companies accountable.”

The 2nd U.S. Circuit Court of Appeals in New York ruled that the exception to the Michigan law was not preempted by federal regulations, enabling the plaintiffs to pursue the case, which Pfizer appealed. However, the Rezulin dispute doesn’t apply to all pharmaceutical suits, because it focuses only on whether state courts can consider allegations that a drugmaker misled the FDA to win approval for its med. The larger preemption issue involving product-liability claims, in general, will be heard later this year. That case involves Wyeth and you can read about it here.

“Most serious adverse effects are not fully discovered until a drug has been on the market for several years. The reality is that patients will be injured in the interim. At a time when the FDA is, by its own admission, underfunded, lacking in the resources of the industry, and lacking the expertise to adequately protect the public health, the ability of injured patients to hold drug companies liable for injuries caused by their products is particularly important,” says Allison Zieve, an attorney at Public Citizen, which handled the Supreme Court briefing and argument for the plaintiffs.

Today’s outcome is in contrast to another preemption ruling last month concerning medical device makers. In that case, the US Supreme Court voted to 8-1 that patients can’t file lawsuits against device makers when their products were approved by the FDA. The court reviewed a lawsuit that pitted Medtronic against a woman whose now-deceased husband suffered a disabling injury when a balloon catheter burst during angioplasty. Medtronic argued that the Food, Drug, and Cosmetic Act expressly preempts state law claims brought by patients who were hurt by devices that received premarket FDA approval.