Photo of Eric Alexander

We have seen a number of consumer fraud class action cases brought over a range of fairly ticky tacky issues about OTC drugs and consumer products.  California law and courts have been fairly favorable to these cases, which follow a pattern of a test plaintiff seeking to represent some large class because (s)he claims to have purchased some typically safe and effective OTC product due to a misimpression about some aspect of its labeling and packaging, with the alleged damages being measured as the cost of the product or some part of the cost paid that was purportedly excessive.  These cases, in California courts or elsewhere, can have problems with pleading, standing, preemption (like here, here, and here), class certification, and a myriad of other issues.  Even when the allegations include that the OTC product was not as effective as the plaintiff allegedly expected, these cases tend to have relief sought that is disproportionate to the alleged harms.  Presumably this is to encourage the defendants to settle if they cannot get rid of the case on early motions.

We saw much of this play out in Seale v. GSK Consumer Health, Inc., No. 2:23-cv-00842-AB-MRWx, 2024 WL 1040854 (C.D. Cal. Feb. 27, 2024), which is a somewhat scattered decision on a quite scattered amended complaint offering multiple state law theories of recovery over the basic allegation that six of defendant’s OTC children’s cough products cost too much because there was nothing special about them compared to equivalent adult products.  In addition to the price difference between the children’s products and the equivalent adult products, plaintiff sought to have the products recalled, their labeling and packaging destroyed, and a national ad campaign to correct the alleged deception.  Quite restrained.  Defendant moved to dismiss all claims on a number of grounds.

We will skip the discussion of standing—which plaintiff obviously won—and lead off with preemption.  OTC products have an express preemption provision in the FDCA that bars state requirements that are “different from[,] in addition to, or that is otherwise not identical with” federal requirements.  The parties apparently agreed that only two of the six products were covered by a monograph for cough and cold medications and thus had federal requirements that could lead to preemption of plaintiff’s claims.  Id. at *5.  As to the two products that contained dextromethorphan, of course the monograph did not provide anything like what plaintiff said made the labeling misleading—a failure to “disclose the similarity of is children’s and adult products” or to “prohibit[] on Defendant labeling a product as being suitable for children if it is pharmacologically the same as an adult product.”  Id. at *6.  These alternative criticisms are logically inconsistent, but they are certainly not parallel claims because “any finding of liability in [plaintiff’s] favor would conflict with preexisting regulations deeming Defendant’s Antitussive drugs ‘not misbranded.’”  Id. at *7.  The relief plaintiff sought—“to impose a specific labeling requirement or prohibition regarding children’s products that are pharmacologically equivalent to adult products”—would be preempted regardless of the particular state law theory of liability pursued.  Id.  Because any amendment would be futile, plaintiff did not get a third shot to plead a non-preempted claim against the two dextromethorphan products.

We might go a step further and note that the basic regulatory scheme for all drugs does recognize that pediatric indications exist, anticipates that the usage instructions for adults and children often differ, and, as a result, there will be various labeling differences when describing adult and pediatric use of any drug.  Plaintiff’s relief does not square with that scheme as to the four non-dextromethorphan products either.  To the extent plaintiff was urging that the defendant should stop selling these products, even further preemption analysis would have been appropriate.  Maybe preemption will come up again later in the case.

Defendant had other arguments as to the remaining four products, though.  As we have said many times, the order of analysis can matter and courts often make a mistake by only considering the adequacy of pleading after an analysis (e.g., on preemption) that essentially assumed the plaintiff had adequately plead a recognized claim.  That happened in Seale in the context of the economic loss rule.  The penultimate issue the court decided was whether plaintiff had satisfied the heightened pleading standards of Fed. R. Civ. P. 9(b) as to her fraud-based claims, all of them except for warranty and, to the extent they are claims and not just damages, “quasi-contract/unjust enrichment.”  Predictably, plaintiff did not satisfy them because she not allege when and where she bought any of the products, including the four non-dextromethorphan products she added in her amended complaint.  Id. at *11-12.  So, all her fraud-based claims were dismissed with leave to amend.  Earlier in the decision, however, the court had determined that the plaintiff satisfied the fraudulent inducement exception to the economic loss rule by “articulat[ing] affirmative representations” she allegedly relied upon in “purchas[ing] the Products at a premium.”  Id. at *9-10.  It makes no sense that pleading insufficient to support any fraud-based claims could establish a fraud-based exception to a defense to two of those claims.  In any event, it was an unnecessary to analyze the economic loss rule given the 9(b) ruling.

There were two additional arguments to address, each with two subparts.  As to the argument that plaintiff could not seek equitable relief without first establishing that legal relief would be inadequate, the court broke up restitution and everything else.  Plaintiff did not allege that the legal damages she sought were insufficient, so her request for restitution was stricken, albeit with leave to amend.  As to everything else equitable (e.g., forced recall and a corrective advertising campaign), the focus was on whether plaintiff had adequately plead alleged future harm.  We are befuddled by the court’s conclusion that plaintiff had.  Yes, plaintiff alleged she “would consider purchasing” the products again with the labeling she wanted and that the current labeling could “confuse or confound [her] and other consumer acting reasonably.”  Id. at *10.  But plaintiff—who is the focus absent class certification—would not purchase the products again with the labels as is, so the failure to impose the requested equitable relief would not harm her in the future in any way, shape, or form.

Warranties was another mixed decision.  Implied warranty was dismissed without leave to amend because plaintiff did not even allege privity with the defendant for OTC products.  The court wisely rejected plaintiff’s arguments about exceptions to the privity requirement, including a California quirk that you do not need privity to sue over implied warranties for food and drugs that are not fit for human consumption.  Of course, plaintiff did not allege there was anything wrong with the products themselves.  Id. at *13.  That is part of why cases like this are such stretches.  In terms of express warranty, plaintiff had trouble identifying any particular representation on the labeling that was “an affirmation of fact or promise or a description of the goods” that was not true.  However, the court allowed the claim based on the reasoning that, “even if these individual statements are factually true, they may coalesce into an express warranty that misleads reasonable consumers into believing that Defendant’s products are specifically formulated for children.”  Id. at *12.  That sure sounds like a stretch.  Indeed, if the individual statements that are supposedly part of the coalesced warranty were required or authorized by FDA, then the express warranty claim should be preempted.  Again, that may be for another day.