What’s left of the OxyContin litigation produced a recent decision that addresses a myriad of procedural and substance issues, some of which we often see and others not so much. If you don’t recall, in 2007, Purdue Frederick Corp. and some of its executives pled guilty to criminal charges related to the marketing of OxyContin and paid approximately $600 million in fines. That was almost 7 years ago. The plaintiff in Luberda v. Purdue Frederick Corp., 2014 U.S. Dist. LEXIS 41951 (D.S. Car. Mar. 28, 2014), on the other hand, filed his complaint in 2013 in South Carolina – six years after those guilty pleas and ten years after he became addicted to OxyContin. Although the court’s opinion doesn’t provide much detail on the background of the case, it appears that the plaintiff was asserting negligent and fraudulent failure to warn claims and attempting to assert a private right of action under South Carolina’s criminal statute on misbranding. He sued nine companies within the Purdue Frederick family of companies and almost two-dozen executives.
This history created a background ripe for motion practice.
Many of the individual defendants moved to be dismiss for insufficient service of process and/or lack of personal jurisdiction. Two of them won their insufficient service of process motions. They never signed for the certified mail that carried their summons and complaint. Id. at *12-13. Those two defendants and approximately 20 others also won dismissal because they did not have sufficient minimum contacts with South Carolina to be sued there. The court laid out a useful primer on the procedure for analyzing personal jurisdiction:
The party seeking to invoke personal jurisdiction over a nonresident defendant bears the burden of proving the existence of personal jurisdiction. ESAB Group, Inc. v. Centricut, LLC, 34 F.Supp.2d 323, 328 (D.S.C.1999). At the pretrial stage, the burden of proving personal jurisdiction over a nonresident is met by a prima facie showing of jurisdiction either in the complaint or in affidavits. In determining whether a prima facie showing has been made, the Court may consider the uncontroverted allegations in Plaintiff’s pleading. However, whenever the allegations in Plaintiff’s pleading are contested by sworn affidavit, Plaintiff can no longer rest on those allegations. Instead, it then becomes Plaintiff’s burden to present an affidavit or other evidence proving that jurisdiction exists over the nonresident defendant. See Wolf v. Richmond Cnty. Hosp. Auth., 745 F.2d 904, 908 (4th Cir. 1984); Clark v. Remark, 993 F.2d 228 (table), 1993 WL 134616, at *2 (4th Cir. 1993).
The Court summarily dismissed a multitude of defendants because plaintiff simply didn’t make a prima facie showing of personal jurisdiction. Id. at *11-12. For four of the defendants, however, the court determined that their affidavits and the complaint didn’t clarify whether they were involved in company’s decision-making regarding the marketing of OxyContin. Id. at *15. So the court denied the motions of these defendants, but without prejudice to their raising the arguments again at the summary judgment stage after the plaintiff had a chance for “jurisdictional discovery.” Id. at *16.
Learned Intermediary Doctrine
The court also applied the learned intermediary doctrine to the plaintiff’s negligent failure to warn claim. Plaintiff’s allegations were, in essence, this: “Defendants owed Plaintiff a duty to properly warn of the potential for and/or risk of addiction associate (sic) with their product.” Id. at *17. That’s wrong. South Carolina recognizes the learned intermediary doctrine, and as we all know under that doctrine the manufacturer’s duty to warn runs to the prescribing doctor, not the patient. Id. at *17-18. The plaintiff has the burden to show – and allege – that the “undisclosed risk was sufficiently high that it would have changed the doctor’s [prescribing] decision.” Id. at *18. The court dismissed the claim but gave the plaintiff a chance to amend his pleading to add factual allegations suggesting that his doctor would have changed his prescribing decision had there been a different warning. Id.
The plaintiff also appears to have brought a failure to warn claim sounding in fraud. Fraud claims must satisfy a heightened pleading standard under FRCP 9(b), one that is more demanding than the ordinary TwIqbal pleading standard. Given that plaintiff’s complaint didn’t sufficiently state a negligent failure to warn claim, it certainly didn’t sufficiently state a fraud claim. The court dismissed this claim too.
Negligence Per Se
The plaintiff tried to manufacturer a negligence per se claim from South Carolina’s criminal code on the misbranding of drugs. But a statute, simply by its existence, does not come with a private right to enforce it in civil court. The legislature must have intended that. In fact, South Carolina applies a three-part test – the statutory purpose doctrine – to determine whether a plaintiff has such a private right of action:
(1) whether the legislature intended to create a private rather than public liability; (2) whether the person injured is a person or member of a class for whose benefit the law was intended to protect; and (3) whether the injury complained of was the type the statute was intended to prevent.
Id. at *22. The plaintiff didn’t get past step one. The plaintiff could point to no authority “indicating that South Carolina intended to create a private cause of action for violating the statute.” Id. The court dismissed this claim – no right to amend.
Statute of Limitations
Finally, defendants moved to dismiss the entire action under South Carolina’s three-year statute of limitations. The plaintiff had pled in his complaint that he became addicted to OxyContin by 2004. But he didn’t sue until 2013. So, defendants argued that plaintiff filed his complaint well after the limitations period had run. That seems like a reasonable argument. But it lost. The court saw a small window: maybe the plaintiff didn’t know he was addicted:
[T]he allegations of the Amended Complaint in this case are not sufficiently clear that the case is barred by the statute of limitations. It merely alleges that Plaintiff became involuntarily addicted by October of 2004, not that the plaintiff knew he was addicted or that a reasonable person in his circumstances would have known that he was addicted. This may at a later time in the case be a viable defense. However, the motions to dismiss under Rule 12(b) (6) based upon the statute of limitations, at this stage, are denied.
Id. at *27. Now, the plaintiff had been engaged in drug-seeking behavior and using OxyContin that was not prescribed to him, so it seems hard to imagine that he didn’t know that he was addicted. But the court saw it differently, denied the motion, and gave the defense the opportunity to take discovery on the issue and possibly try again at a later date.
All in all, this was not a bad outcome for most defendants. Many of the defendants were dismissed, the failure to warn and negligence per se claims were dismissed, and defendants will have the opportunity later in the litigation, if they need it, to address the jurisdictional issues that they lost.