What do you get when no one has been injured and the most you can say is that maybe someone received medicine made from an active pharmaceutical ingredient that may have contained—but was never actually observed to contain—a harmless contaminant? Add to that that you can’t really tell who might have used the product that may (or may not) have been affected. Why, of course, you get a consumer class action—one where patients received exactly the therapeutic benefit they bargained for and probably did not pay for it themselves anyway, but they still want money.
This is what class actions in the pharmaceutical space often look like—no-injury classes seeking partial or full refunds of the purchases prices for products that worked, but allegedly were not all they were supposed to be. Take for example a New Jersey case from a couple of months ago, Fenwick v. Ranbaxy Pharmaceuticals, Inc., No. 3:12-cv-07354, 2018 WL 5994473 (D.N.J. Nov. 13, 2018), where the district court denied certification of a putative nationwide class on the basis that it was impossible to ascertain who would be in the class and that individualized issues predominated.
In Fenwick, the defendant voluntarily recalled multiple lots of its generic cholesterol medicine after manufacturing employees noticed blue particles in the raw material used to make the product. The tiny particles were glass from glass liners on machines used in the manufacturing process, so the manufacturer discarded that batch. Id. at *1. Another batch was later shipped from the same facility to another facility, where it was made into pills, which were then sent to the distribution center of 35 different companies. No one had actually observed particles in this later batch, but the manufacturer nevertheless voluntarily recalled the pills made from the batch and eventually recovered about 85 percent of the bottles shipped.
The rest were distributed to pharmacies, where some portion was further repackaged and dispensed to patients. Id. at *1-*2. Exactly who those patients were was anyone’s guess, and whether any of the recalled product was actually affected by any manufacturing issue was similarly a matter of speculation. The manufacturer and the FDA agreed that the possibility of any health consequences was “extremely low” and that “patients who have the recalled medicine can continue taking it.” Id. at *1.
Five individuals who allegedly purchased the drug filed a class action purporting to represent a nationwide class of consumers who were not injured and did not even necessarily use a contaminated product.
The heart of the order denying class cert is the district court’s discussion of the ascertainability of the proposed class. There was a time when federal courts did not necessarily require that plaintiffs prove that it was possible to ascertain a class’s members, but the requirement is now well established. The district court described it in the following very quotable passage:
Ascertainability functions as a necessary prerequisite (or implicit requirement) because it allows a trial court effectively to evaluate the explicit requirements of Rule 23. In other words, the independent ascertainability inquiry ensures that a proposed class will actually function as a class. . . . The ascertainability inquiry is two-fold, requiring a plaintiff to show that: (1) the class is ‘defined with reference to objective criteria’; and (2) there is ‘a reliable and administratively feasible mechanism for determining whether putative class members fall within the class definition.’ . . . [A]scertainability only requires the plaintiff to show that class members can be identified. . . . However, a party cannot merely provide assurances to the district court that it will later meet Rule 23’s requirements . . . [n]or may a party ‘merely propose a method of ascertaining a class without any evidentiary support that the method will be successful.’
Id. at *4 (internal quotations and citations omitted). The gist is that the putative class representatives do not have to identify each class member before moving for class certification, but they have to prove that they can do it through an objective and reliably feasible method.
And that is where the class in Fenwick failed. The plaintiffs relied on their damages expert, who sampled dispensing information from four retailers and opined that he could identify class members by reference to the timeframe during which recalled and non-recalled pills were available and National Drug Code, the unique FDA number that identifies a drug and its manufacturer. Id at *6. This method, however, did not pan out: It was based on a sample of only four companies; it did not include consumer-level data for most of the companies; it did not identify any individual consumers; and it included consumers who bought pills from non-recalled lots. Id. If there were ever a case calling for application of the Daubert reliability standard at the class certification phase, this was it. Regardless, the opinion was not close to meeting the objective and reliably feasible standard for ascertaining putative class members.
At bottom, it is simply not possible to identify class members based primarily on NDC numbers, at least not without a host of additional information, including “a means to identify consumers.” Id. “Plaintiffs have not shown that the data they have provided includes this necessary information.” Id.
The district court could have stopped there, but it also ruled that the plaintiffs failed to prove that common issues would predominate. They were purporting to assert claims for breach of implied and express warranties and unjust enrichment on behalf of a nationwide class. To avoid predominating individual issues inherent in the application of 50 states’ laws, the plaintiffs urged application of New Jersey law to the entire class. The district court, however, conducted a choice-of-law analysis and concluded that each individual class member’s home state had the most significant relationship to the plaintiffs’ warranty claims. With the application of multiple states’ laws, common issues could not predominate.
The story here is a lack of ascertainability, and this class died when the plaintiffs’ expert agreed that there is “likely no feasible way to accurately identify” individuals who actually bought the recalled product. Id. at *8. The correct result for the correct reason.