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“That which we call a rose by any other name would smell just as sweet.” William Shakespeare uses this line in his play Romeo and Juliet to convey that the naming of things is irrelevant. We may not always agree with that (for instance, this blogger is Washington Football Fan – enough said). But when it comes to fraud and warranties, we think Mr. Shakespeare knew of what he spoke. If the whole claim turns on the name of the product – we think plaintiffs doth protest too much.

The court in Allen v. Pfizer Inc. thought so too. 2022 U.S. District LEXIS 28089 (S.D.N.Y. Feb. 16, 2022). Between July and September 2021, the drug Chantix was recalled due to the presence of nitrosamines, an alleged carcinogen (the one found in things like bacon and processed foods), exceeding the FDA’s acceptable level. Id. at *2. Plaintiffs (one from NJ and one from NY), purchasers of the drug, brought a proposed economic loss class action seeking damages for the tablets they consumed (the cost of unused product was rebated). Id. at *3n2. Plaintiffs do not seek recovery for any personal injury and their claims are limited to fraud and warranty. Therefore, at the outset the court noted that to survive defendant’s motion to dismiss, plaintiffs had to have plausibly alleged that defendant “represented or warranted that their product was free of nitrosamines – or at least that [defendant] had a duty to disclose any nitrosamine contamination.”  Id. at *5. Plaintiffs failed on both counts.

While the court starts its analysis with plaintiffs’ fraud claim, plaintiffs allege the same two misrepresentations to support all their claims (1) it was misleading to call the drug Chantix because it was no longer Chantix when it was contaminated and (2) defendants did not disclose that the drug contained nitrosamines. Id. at *9. On the first allegation, the court found that much like Shakespeare’s rose, the

presence of a contaminant does not render the brand name on the label false – contaminated Chantix is still Chantix.

Id. Plaintiffs alleged no facts to suggest that the Chantix they purchased differed from FDA approved Chantix arguably at all and certainly not so much as to no longer make it Chantix.

As to allegation number 2, at best plaintiffs’ alleged that by late 2020, after both plaintiffs had purchased the drug, defendant may have had knowledge of a risk of contamination. Id. at *10. But that is insufficient to give rise to a “strong inference” that defendant had knowledge of their misrepresentation and an intent to induce reliance. Id.

Further, as plaintiffs allege fraud by omission, such a claim is only allowed if defendant owed a duty to disclose. Under both New Jersey and New York law, absent a special relationship between the parties there is no such duty unless some other requirement is met like the need to clarify a prior statement. Id. at *10-11. Plaintiff argued that the product and its label was misleading because they did not disclose the contaminant.

But that omission does not render either the brand name “Chantix” or the active ingredient label “varenicline” false or misleading — those terms correctly identify the product that the plaintiffs actually purchased. Accordingly, the [complaint] has not plausibly alleged a claim for fraudulent omission.

Id. at *12.

Plaintiffs’ negligent misrepresentation claim was dismissed because negligence claims are not allowed where plaintiff alleges only an economic loss; economic loss claims sound in contract. Id. at *14. Plaintiffs tried to get around the economic loss doctrine by arguing that defendant’s “misrepresentations induced the plaintiffs to enter into the contract in the first instance.”  Id. at *15. But a negligent misrepresentation claim must arise from a duty independent of the contractual relationship. Here, the statement at issue – that Chantix is Chantix – is not an inducement to the contract; it is the contract that plaintiffs allege defendant breached. Id. Moreover, a label identifying the product as Chantix and its active ingredient as varenicline is not misleading because it is in fact what plaintiffs received. Id.

The last two fraud claims are statutory – violation of the New Jersey Consumer Fraud Act (“NJCFA”) and violation of New York Business Law (“GBL”). An NJCFA violation requires a misrepresentation or omission of a material fact with the intent that others will rely on it in connection with the sale or advertising of a product. Id. at *12. And, where the claim is based on an omission, intent is required. So, this claim fails as well because has not pleaded any facts to show that the Chantix brand name or label were inaccurate. If the claim is based on omitting the presence of nitrosamines from the label, the claim fails the intent requirement because plaintiffs have not alleged defendant knew the product was contaminated at the time plaintiffs purchased it. Id. at *13. The GBL prohibits false advertising or deceptive acts in the conduct of business. For this claim plaintiffs had to allege that defendant materially misled the consumer leading to injury. Id. at *16. The standard is whether a “reasonable consumer” would have been misled. We already know plaintiffs have not alleged any misleading statement and it was “not enough to allege the plaintiffs inferred from this label that the product did not contain [nitrosamines]. Id. at *16-17. An “incorrect impression” is not enough – it must be “reasonably traceable to a misleading statement” which we know we don’t have here.  Id. at *17. And like with the New Jersey claim, if the GBL claim is based on an omission it requires actual knowledge.

Plaintiffs’ warranty claims are based on the same allegations about the name of the product – that defendant warranted the product was Chantix with the active ingredient varenicline. Presence of a contaminant did not make it no longer Chantix or no longer contain varenicline. Id. at *18. So, to the extent the name of the product was a warranty, defendant did not breach it. For this claim, plaintiff tried to rely on a decision in In re Valsartan that we decried here.  We think that case was wrongly decided, but the court did not have to go there instead distinguishing as dealing with a generic drug label and therefore inapplicable. Id. at *19.

As for plaintiffs’ breach of implied warranty claim, it fails because plaintiffs do not and cannot allege that the drug failed to fulfil its stated purpose. In fact, at the time of the recall, the FDA “urged patients to continue taking the drug” as there was “no immediate risk.”  Id. at*21. The New York plaintiff’s claim also failed for lack of privity between plaintiff and defendant in a non-personal injury case. Id. at *20.

Finally, having dismissed all plaintiffs’ other claims, their unjust enrichment claim could not stand on its own – it is not a “catchall” when all other claims fail. It is not an independent tort claim. Id. at *21-22.

Having said all of that we return to the beginning of the decision. All of plaintiffs’ claims were premised on one thing only – the FDA recall of a contaminated product. “But the Food, Drug, and Cosmetic Act does not create a private cause of action.”  Id. at *4. So, the recall had to also support common-law claims. It did not.