As anyone can tell from our class action scorecards (federal and state), plaintiffs have not done very well lately – lately being the last couple of decades – with class actions involving alleged injuries caused by prescription medical products. Between the general predominance of individualized issues in personal injury cases and the specific focus on the actions of prescribing physicians in prescription-only product cases (thanks to the learned intermediary rule), plaintiffs have suffered defeat after defeat. While things aren’t perfect, all in all successful class actions for purported prescription medical product injuries are pretty rare.
Each defeat drives the class action purveyors further towards the margins, and recently, in In re Avandia Marketing, Sales Practices & Products Liability Litigation, 2015 WL 1736976 (E.D. Pa. April 16, 2015), one of the more marginal class action damages theories we’ve seen was swept away.
In Avandia, the would-be class representative did not claim to be injured in the slightest – either by the drug’s risks or by deprivation of the drug’s benefits. As stated in the opinion, “Plaintiff received the drug she was prescribed, took the drug, and alleges neither that the drug failed to do its job (controlling Plaintiff’s blood sugar levels) nor that she was injured by taking the drug.” Id. at *3. The only damages that the plaintiff (and supposed class) sought were of the existential variety – some difference in subjective “worth” beyond what was reflected in the purchase price of the drug, purchase price being how value is necessarily determined in a free-market economy. The complaint itself, doubtless to suppress the numerous individualized issues bubbling below the surface, was appallingly generalized and superficial. The court observed:
Plaintiff does not allege when or for how long she took Avandia or how much she paid for it; nor does she identify the prescribing physician or allege any facts regarding her medical treatment. Plaintiff also does not allege that Avandia was ineffective in treating her Type II diabetes, whether she took or would have taken another drug instead of Avandia, or the cost of such other drugs. Plaintiff seeks damages “equal to the difference between the actual value of Avandia and the value of Avandia had it been as represented by Defendant.”
Id. at *1 (quoting complaint).
Unsurprisingly, the court dismissed the case for failure to plead any legally cognizable damages. We were pleased that Avandia did not couch that conclusion as a failure of constitutional standing, as some courts have done. We recently discussed those concerns, that dismissal for want of standing is without prejudice, and if it occurs in a CAFA-removed case, can land the defendant right back in state court where it didn’t want to be in the first place. Failure to allege cognizable injury, on the other hand, yields a much more satisfying dismissal with prejudice.
That’s what happened in Avandia. The court held that even the attenuated and inchoate “economic loss” alleged in the complaint satisfied the “very generous” standing requirement of “injury in fact,” id. at *1, relying on a prior Avandia decision involving a different state’s (California’s rather than Missouri’s) consumer protection statute:
[T]the plaintiff’s allegations are sufficient to establish Article III standing even though, as set forth herein, they are legally insufficient to provide a basis for relief. . . . [C]onsidering the similarities of the allegations in the two cases . . ., and that [defendant] raised similar standing arguments . . . the Court considers that ruling dispositive on the standing issue in this case.
Id. at *2 (quoting In re Avandia Marketing, Sales Practices & Products Liability Litigation, 564 F. Appx. 672, 673 at n. 4 (3d Cir. 2014)).
The existential nature of the damages, though, could not support a cause of action. The Missouri consumer protection statute (like many of its ilk) requires an “ascertainable loss.” Avandia, 2015 WL 1736976, at *2 (quoting Vernon’s Ann. Mo. Stat. §407.025.1). Plaintiff claimed that an unrealized increased risk, not affecting either the user’s actual safety or the efficacy of the drug, was a deprivation of some unknown portion of her “benefit of the bargain.” Id. The only case plaintiff advanced was a case decided under looser Missouri state class certification standards, under which “whether a plaintiff is able to prove a theory is irrelevant because the sole issue is whether the certification requirements were met.” Id. at *3 (quoting Plubell v. Merck & Co., 289 S.W.3d 707, 715 (Mo. App. 2009)). As the court observed, id., that isn’t the federal certification standard – which is why CAFA matters.
Since Plubell “did not rule on whether the plaintiffs could prove such loss,” id., it did not bear on whether the Avandia plaintiff had stated the damages element of her cause of action. Several other courts had already concluded that the existential lost “value” theory didn’t allege the statutorily-required ascertainable loss. See Thompson v. Allergan USA, Inc., 993 F. Supp.2d 1007, 1012 (E.D. Mo. 2014) (“Plaintiff has thus not alleged that the [product] was anything other than what it has always purported to be. . . . Accordingly, Plaintiff has failed to allege that she did not receive the benefit of the medication”); Mikhlin v. Johnson & Johnson, 2014 WL 6084004, at *3 (E.D. Mo. Nov. 13, 2014) (“[a]lthough Plaintiffs contend that they would not have purchased [the product] if they had known the ‘true facts,’ they obtained the ‘full value’ of the product before learning the truth so they have not suffered any economic damage from their purchase”); Carter v. Alcon Labs., Inc., 2014 WL 989002, at *4 (E.D. Mo. March 13, 2014) (“Plaintiff has not suffered an ascertainable loss. Plaintiff does not allege that the medication she purchased was anything other than represented or that it did not perform as intended.”); In re Bisphenol-A (BPA) Polycarbonate Plastic Products Liability Litigation, 2011 WL 6740338, *3 (W.D. Mo. Dec. 22, 2011) (“Plaintiffs essentially are claiming that their purchases, ipso facto, caused an economic loss. There is “no authority, in Missouri or otherwise, for this proposition.”); Polk v. KV Pharmaceutical Co., 2011 WL 6257466, at *5 (E.D. Mo. Dec. 15, 2011) (“Plaintiff has not alleged the [product] was anything other than what it has always purported to be” and “failed to allege he did not receive the benefit from the [product] for which he bargained; i.e., the [product] did not perform as intended”); In re Bisphenol-A (BPA) Polycarbonate Plastic Products Liability Litigation, 687 F. Supp.2d 897, 913 (W.D. Mo. 2009) (plaintiffs who “obtained full use of those products before learning the truth . . . obtained full value from their purchase and have not suffered any damage”).
The Avandia court agreed with this precedent. “While [plaintiff] may contend she would not have purchased the goods had she known about the alleged risks of use, Plaintiff received 100% use (and benefit) from the product and has no quantifiable damages.” 2015 WL 1736976, at *3 (citations and quotation marks omitted). The Avandia plaintiff’s position was worse than wrong – it was “absurd”:
Plaintiff’s proposed liability theory, which requires no demonstrable loss of any benefit, would lead to absurd results, and therefore Plaintiff cannot state an ascertainable loss. The absurdity is inherent in the nature of Plaintiff’s claimed loss, which is based only on the idea that Avandia is inherently worth some unspecified amount less than whatever Plaintiff might have paid for it. The logical extension of this argument in the prescription-drug context is that there is some price point at which a patient would agree to take a drug, despite the risk of side effects and despite the existence of other, equally effective drugs that do not carry such risk. The Court cannot imagine what that price point might be.
Id. (citation, quotation marks and footnote omitted) (emphasis added). Thus the action was dismissed with prejudice, id. at *4, and the defendant will never have to contend with the lax Missouri “Don’t Show Me” state-law class action standards that certify classes first and, only after that – with the extortionate effect of a certified class weighing on the defendant to settle – consider whether damages actually exist or can be proven.