If yesterday was the unofficial end of summer, for many of us today is the unofficial start of Fall – in other words, back-to-school day. Lunches and backpacks packed, pencils sharpened, flip flops traded for sneakers and slick new hair cuts. In the Philly/New Jersey area it is a soggy first day of school, but you can feel the excitement nonetheless. The kids are excited to see who is in their class and learn what their friends have been up to all summer. The parents – well, we all know why we’re excited. At least until the first major project is due that our child forgot to tell us about and now it’s Sunday night around eight pm and you’re driving around trying to find a store that is still open that sells glue sticks and poster board. But, let’s not get ahead of ourselves. Instead, we’ll sit back and wave to our kids as they head for the buses and schoolyards and we’ll bring you a nice piece of news from the District of Oregon. Well, it’s not all nice and that’s why we decided to post about it today — when we mourn the end of summer but celebrate a new school year.
The case is Teater v. Pfizer, Inc., 2012 U.S. Dist. LEXIS 122848 (D. Ore. Jun. 27, 2012) and it involves alleged off-label promotion of the drug Neurontin. Plaintiff was prescribed Neurontin for her post-traumatic stress disorder (“PTSD”) which was an off-label use. Plaintiff alleged that she suffered a whole host of side effects, including depression and attempted suicide. Id. at *3-4. Plaintiff’s complaint alleged causes of action for: (1) violations of RICO; (2) fraud; (3) violations of the Oregon Unlawful Trade Practices Act (“UTPA”); (4) unjust enrichment; and (5) products liability (breach of warranty, strict liability and negligence) – all based on allegations of off-label promotion. Id. at *7. The court dismissed all but her products liability claims and here is how the court did it.
RICO – no standing. To sustain a RICO claim, plaintiff has to demonstrate an injury to “a specific business or property interest” and “a concrete financial loss.” Id. at *8. Plaintiff Teater alleged that she suffered a business injury when side effects from her use of Neurontin rendered her unable to make payments on business equipment, which was then auctioned off. Id. at *9-10. Not so said the court. “Plaintiff has only pled injuries that derive from the alleged psychological side effects and/or emotional distress caused by her consumption of Neurontin.” Id. at *11-12. This is nothing more than standard monetary damages alleged to be the result of side effects of a prescription drug – “hallmark personal injury damages.” Id. at *11. Not a RICO injury.
Fraud-based claims—failed to plead with particularity. The court dismissed all three of plaintiff’s fraud causes of action – fraud, violations of the UTPA and unjust enrichment – because you can’t allege off-label promotion in the air. As the court explained,
Plaintiff asserts she justifiably relied upon Defendant’s misrepresentations and, accordingly, consumed Neurontin as prescribed by her physicians in the treatment of PTSD, but Plaintiff fails to mention any pharmaceutical representative that called her clinic or when this allegedly took place. Accordingly, Plaintiff’s allegations are insufficient to meet the pleading standards for fraud-based claims.
It is not enough under Rule 9(b)’s heightened pleading standard to allege that statements were made without also providing “the who, what, when, where, and how of the misconduct charged.” Id. at *18. Applying this standard, with which we wholeheartedly agree, plaintiffs alleging off-label promotion as a basis for fraud can’t get passed the pleadings stage without identifying the pharmaceutical representative who allegedly promoted the drug off-label, what the representative said to plaintiff’s prescriber, when such statements were made and how they impacted the physician’s decision to prescribe the drug to plaintiff. All of that was lacking in Teater.
Those same holes in plaintiff’s allegations also led the court to find that plaintiff had failed to sufficiently allege causation to support her UTPA violation claim. Plaintiff’s complaint failed to alleged “any connection between Defendants’ marketing or advertising campaigns and Plaintiff’s unnamed physicians’ decision to prescribe her Neurontin.” Id. at *24.
Plaintiff does not identify a single statement or misrepresentation by Defendants to which Plaintiff or her prescribing physicians were even exposed, no less relied upon, nor does she allege any facts regarding her healthcare provider’s decision to prescribe Neurontin. Even accepting Plaintiff’s allegations as true, Plaintiff has failed to plead factual content that allows a reasonable inference to be drawn that Defendants are liable for the misconduct alleged.
Id. at *24-25.
Now, we were somewhat disheartened that the court didn’t apply this same rationale to the products liability claims. From the allegations cited in the decision, it appears plaintiff’s strict liability, negligence and breach of warranty claims were premised on the same flawed and deficient allegations of off-label promotion. If plaintiff failed to allege that her physician relied on statements by defendant in making his prescribing decision – we believe that is likewise fatal to her products claims. But, the decision doesn’t contain much of a description of why the court came out the way it did, so we won’t belabor the point.
Finally, the court decided to give plaintiff one more try – not surprising given the Ninth Circuit’s extremely liberal amendment policy. Id. at *27. This leads to the other aspect of this case that we weren’t particularly happy with — plaintiff gets the chance to depose a sales rep before she files her amended complaint to presumably see if she can uncover some facts to support her bare bones allegations. Wait, isn’t that the very definition of a fishing expedition that the Supreme Court said wasn’t allowed:
We decline respondent’s invitation to relax the pleading requirements on the ground that the Court of Appeals promises petitioners minimally intrusive discovery. . . . Because respondent’s complaint is deficient under Rule 8, he is not entitled to discovery, cabined or otherwise.
Ashcroft v. Iqbal, 129 S. Ct. 1937, 1953-54 (2009) (emphasis added). A disappointing shunning of Supreme Court precedent.
Now we know that more often than not, even after the depositions of sales reps and prescribers, it is difficult for plaintiffs to establish that specific statements were relied on in making prescribing decisions for any given plaintiff. So, we remain optimistic that the court’s rulings on what is necessary to establish fraud and causation will carry over to an eventual win – either on the amended complaint or at the summary judgment stage. If we find out, we’ll let you know.