Isn’t enough for standing that is. And, likely not enough for plaintiff’s case to survive, but that question was left for another day. We’ve done a few posts on “slack fill” which is defined by the FDA as the difference between the capacity of a container and the volume of product inside. Slack fill lawsuits have been filed against food and beverage makers, and OTC drug manufacturers, who leave empty space in a container. The reasons for such empty space could be, for example, to protect the contents or to comply with shipping requirements. But slack fill is acceptable so long as the container or packaging is not misleading – it contains the quantity, the product weight, the number of servings, etc.
Today’s case is similar to a slack fill case, but also sort of the opposite. Instead of empty space being the issue, too much product is what the plaintiff in Williamson v. Genentech, Inc., 2020 WL 1281532 (N.D. Cal. Mar. 18, 2020) was complaining about. Not slack fill but excess fill. The problem was, he really didn’t have a problem.
Plaintiff was diagnosed with follicular lymphoma and prescribed a medication that was sold in single use vials. For each round of treatment, plaintiff was prescribed approximately 770 to 780 milligrams of the drug. Defendant manufactured the drug in 100 mg and 500 mg vials. So, for each treatment, the hospital had to use a combination of vials totaling 800 mgs, meaning that there were 20-30 mgs that plaintiff did not receive – wasted medication. Id. at *1.
Plaintiff filed a purported class action alleging that the vials sold by defendant resulted in wasted medication and therefore violated California’s Unfair Competition Law (“UCL”) because class members were forced to purchase more medication than they could use. Id. at *2. The case was removed to federal court the Class Action Fairness Act (“CAFA”). After which, the court sua sponte raised the question of whether it had subject matter jurisdiction – or phrased differently, whether plaintiff had Article III standing to bring his claim. The court’s concern was whether plaintiff had alleged an injury in fact. For standing, an injury in fact must be “particularized and concrete,” not “conjectural or hypothetical.” Id. at *2. The court also noted that the UCL similarly requires a plaintiff to “allege that he has suffered injury in fact and has lost money or property as a result of a violation.” Id.
The only out-of-pocket cost to the plaintiff for his treatments was a single payment of $231.15 in March 2017. But nowhere in his complaint did plaintiff allege that his payment would have been different (less) if the amount of wasted medication was less. In fact, in his briefing on subject matter jurisdiction, plaintiff clarified that the payment was actually the remaining amount of his insurance deductible and was not tied to the cost of the medication at all and would not have been different if less medicine was dispensed. Id. at *3. Therefore, plaintiff had no factual support for his allegation of financial injury.
Instead, plaintiff argued that he could establish standing based on California’s collateral source rule. Under the collateral source rule, a defendant’s liability for a plaintiff’s financial damages is not reduced by any payments that the plaintiff receives as to those very same damages from a third-party source. This happens most often in connection with a plaintiff’s medical bills. While the plaintiff’s insurance pays all or most of those bills, the defendant remains liable to plaintiff for the entire amount. Clearly not a defense favorite as it runs counter to a core purpose of tort law, which is to compensate plaintiffs for damages actually suffered. So the plaintiff gets a double recovery—once from the collateral source and once from the defendant.
Plaintiff here tried to take this one step further. His argument was that the collateral source rule allowed him “to recover the entire amount his insurance company paid on his behalf for wasted medicine due to the absence of a smaller vial size.” Id. at *4. But the court looked at what the UCL requires for a claim of restitution –
A restitution order against a defendant [ ] requires both that money or property have been lost by a plaintiff, on the one hand, and that it have been acquired by a defendant, on the other.
Id. (citation omitted, emphasis in original). By definition, restitution is designed to return the status quo. To return to plaintiff something that he owned that defendant took by means of unfair competition. Here plaintiff isn’t out anything, by his own admission. So there is nothing to be returned. “The collateral source rule does not allow Plaintiff to recover as restitution monies his insurance company paid on his behalf.” Id. at *5.
In each case cited by plaintiff, the plaintiff had sustained an injury (i.e. stolen art, damage boat) for which he was insured and received compensation from the insurance company. But none of those cases helped plaintiff here. First, none concerned Article III standing. Second, in each the plaintiff was able to allege he suffered the damages for which recovery was sought. In Williamson, however, plaintiff’s only possible injury was being forced to pay for more medicine than he needed. But plaintiff conceded he did not in fact suffer that injury.
The rule does not apply where a person cannot plead he suffered the damages for which recovery is sought. It is thus unsurprising that no court has used the collateral source rule to find Article III standing. This Court is not persuaded that it should be the first.
Id. at *6.
While the court’s analysis led it to conclude that it did not have subject matter jurisdiction, the same analysis should support a finding that plaintiff also doesn’t have statutory standing under the UCL. The federal court left that question for the state court upon remand “should Mr. Williamson decide to pursue his claim.” Id. A word of caution perhaps? Hopefully it is heeded. Because sometimes too much of something isn’t a problem at all.